What is the difference between the primary and secondary markets?

In finance, the primary market refers to the market where new securities, such as stocks or bonds, are issued and sold for the first time to investors. The purpose of the primary market is to raise capital for companies or governments that issue the securities.

The secondary market, on the other hand, is where investors buy and sell securities that have already been issued. The stock exchange is a common example of a secondary market, where investors can buy and sell stocks after they have been issued in the primary market.

In essence, the primary market is where securities are created and sold for the first time, while the secondary market is where investors buy and sell these securities after they have been issued.