In the financial field, the primary market refers to the IPO market. In the primary market, companies can raise funds for business expansion and debt repayment by issuing new securities such as stocks and bonds to investors for financing. The issue price in the primary market is determined through negotiation between the company and the underwriter (usually an investment bank), and is usually relatively fixed.
The main participants in the primary market are companies, underwriters and institutional investors. Companies will issue new stocks or bonds to investors through underwriters, while institutional investors are the main buyers in the primary market, and they obtain investment returns by subscribing for newly issued stocks or bonds. Because the issuance price in the primary market is relatively fixed, the return on investment in the primary market is generally stable, but at the same time there are also relatively large market risks.
In the financial market, after the issuance of financial products such as stocks, bonds, and futures, investors can trade them through exchanges or other places. This trading place is called the secondary market. In the secondary market, investors can freely buy and sell issued financial products in the exchange, and the transaction price is determined by the market supply and demand, and has nothing to do with the issue price. The secondary market is an important channel for investors to obtain asset liquidity, and it is also an important source of price fluctuations in financial products such as stocks. In the secondary market, investors can earn the price difference through transactions and realize investment income.
The primary market and the secondary market are two important components of the financial market. The secondary market refers to the market where issued securities are traded on exchanges or other places. In the secondary market, the price of a security is determined by market supply and demand, and has nothing to do with the issue price.