Secondary Market:
Secondary market is the place where investors buy and sell securities which they already own. Secondary market consider for both equity as well as debts market. Secondary market also known as known as the aftermarket, is the financial market, in which previously issued financial instrument such as stocks, bonds, future & options are bought and sell.
Role of Secondary Market:
Secondary market plays an important role in the stock market. It provides a well planned platform for trading of investors securities. For the management of the company secondary equity market consider as monitoring and control channel that guides management decisions i.e. By facilitating value-enhancing control activities Empower execution of incentive-based management performance
Collecting information
Features of Secondary Market:
Before to enter into the secondary market, all the securities are first created in the primary market.
All stocks are related to the secondary market, where shares are daily traded in the stock exchange.
Important role to play behind the developments of an efficient capital market.
Importance of Secondary Market:
Reasons to use secondary market and the role of secondary market research in an organization
Secondary market gives enough background information about the market so right planning can be done during primary market research.
Secondary market can help you to find or analyze the trend in the market.
It can also give you the correct customer information that is useful for the company, it can also help us to define which type of customers to target, which type of customers regularly buy the products.
It can also help us to take better and effective decisions.
Products of Secondary Market:
The main financial products or instruments consider in the secondary market, may be divided into share & bonds
Shares are very risky investments and offer higher returns at the cost of higher risk.
On the other hand, bonds are low risky investments and offer lower returns at the cost of lower risk.
Primary Vs Secondary Market:
Primary market and secondary markets both are the parts of the capital market.
Secondary Market
Difference between primary and secondary market:
The difference between these two markets just lies in the process that is used to collects the funds. These two markets refer to those markets which assist corporations obtain capital funding.
The primary market is a market where new securities are issued by the company that is to obtain capital and is sold directly to the investor.
On the other hand, secondary market is a market where securities that have been already issued are traded.
The main difference is that, in the primary market, the company is directly involved in the transactions, doesn’t matter transactions are occurred between investors or not, while in the secondary market, the company has no involvement until the transactions occur between investors.
Conclusion:
From the above information, we can analyze that in some places secondary market is very beneficial or in some places it is risky as well. Secondary market plays an important role for equity and debt.
