Primary And Secondary Markets Essay

287 words - 2 pages

In the financial markets, there are Primary Markets and Secondary Markets. Explain and elaborate on the both markets. What are some differences to an Investor? Which market would an investor want to trade in if they knew there would be a large demand in a market on a later date?

There are two types of financial markets available they are Primary Markets and Secondary Markets. A Primary ...view middle of the document...

In the primary market all money made from stock sales go directly to the company that is selling the stock. In contrast to the primary markets are the Secondary Markets. In Secondary Markets the stocks are already in circulation and have been purchased by investors. The price each share sell for is relative to the amount of shares available and the demand for the stocks. The price that the stock sells for may be higher or lower than the original sale price that the stock holder paid for it. An investor that is looking to make a large profit is most likely going to trade in the secondary market. The investor is hoping to buy stocks when they are at a market low or selling below the original issue price. If they think the market is going to suddenly increase the ideal is to buy when the market is low in the secondary market and hold onto those stocks until they increase to what the investor thinks is the highest point and then they would sell those stocks for hopefully a large increase in the amount they paid for them.

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