Secondary markets

Extracted Attributes

• Core Function

  Providing liquidity and price discovery for existing securities

• Traded Assets

  Stocks, bonds, options, futures, intellectual property, real estate shares

• Alternative Names

  Aftermarket, Follow-on public offering

• Market Participants

  Investors, traders, underwriters, and broker-dealers

• Private Market Types

  Fund secondaries, secondary buyouts, and GP-led secondaries

• Sub-market Classifications

  First, Second, Third, and Fourth markets

Timeline

• The All-In Podcast discusses the Carta scandal where the cap table software provider breached user trust by misusing data for its secondary markets business. (Source: Document a7a96b3e-b0a7-41e7-a179-b42068a2117b)

  2024-01-12

Secondary market

The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. The initial sale of the security by the issuer to a purchaser, who pays proceeds to the issuer, is the primary market. All sales after the initial sale of the security are sales in the secondary market. Whereas the term primary market refers to the market for new issues of securities, and "[a] market is primary if the proceeds of sales go to the issuer of the securities sold," the secondary market in contrast is the market created by the later trading of such securities. With primary issuances of securities or financial instruments (the primary market), often an underwriter purchases these securities directly from issuers, such as corporations issuing shares in an initial public offering (IPO) or private placement. Then the underwriter re-sells the securities to other buyers, in what is referred to as a secondary market or aftermarket (or a buyer in contrast may buy directly from the federal government, in the case of a government issuing treasuries).

Web Search Results

• Understanding the Secondary Market: How It Works and Its Importance

  The secondary market is a platform where securities are traded post-initial issuance, contrasting it with the primary market where securities are first offered. Buying and selling stocks, bonds, or other securities means you're participating in the secondary market, often viewed as the stock market. Major exchanges like the NYSE and Nasdaq serve as examples of secondary markets, providing a centralized location for trades while being regulated for investor protection. This market is an [...] The secondary market allows investors to buy and sell securities among themselves, not from the issuing company. Stock exchanges like the NYSE and Nasdaq are examples of secondary markets. Secondary markets provide liquidity and enable smaller traders to participate in the financial system. Prices in the secondary market are driven by supply and demand rather than being pre-set by the issuing company. [...] The secondary market is where investors buy and sell securities, such as stocks, bonds, and mutual funds. Trades take place on the secondary market between other investors and traders rather than from the companies that issue the securities. People typically associate the secondary market with the stock market. National exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq, are secondary markets. The secondary market is where securities are traded after they are put up for sale

• Secondary market - Wikipedia

  The term may refer to markets in things of value other than securities. For example, the ability to buy and sell intellectual property such as patents, or rights to musical compositions, is considered a secondary market because it allows the owner to freely resell property entitlements issued by the government. Similarly, secondary markets can be said to exist in some real estate contexts as well (e.g., ownership shares of time-share vacation homes are bought and sold outside of the official [...] The major stock exchanges are the most visible example of liquid secondary markets—in this case, for stocks of publicly traded companies. Exchanges such as the New York Stock Exchange, London Stock Exchange, and Nasdaq Stock Market provide centralized, liquid secondary markets for investors who wish to buy or sell stocks that trade on those exchanges. Most bonds and structured products trade "over the counter "Over-the-counter (finance)")", or by phoning the bond desk of one's broker-dealer. [...] In the secondary market, securities are sold by and transferred from one buyer to another. It is therefore important that the secondary market be highly liquid. Originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly; this is how stock exchanges originated (see History of the Stock Exchange). As a general rule, the greater the number of investors that participate in a given marketplace, and the greater the centralization of that

• 2.4 Primary and secondary markets - The Open University

  2. Secondary markets deal in trading of what might be termed ‘second-hand’ or ‘pre-owned’ financial assets of various kinds: for example, securities, bonds, debentures/loan stock. They do not provide new funds, but allow holders of existing assets to sell them on to other investors. It is thought that a well-developed secondary market should reduce price volatility of traded assets through regular trading activities. Well-developed secondary markets are essential for diversification, risk [...] Public limited companies raise capital in primary markets. They do not raise capital in secondary markets. Why then are secondary markets very important for their ability to raise capital? ### Feedback One answer is liquidity. Investors value liquidity because they are more willing to buy shares and other securities if they know that they can easily sell them, when they have to or want to sell them. [...] Furthermore, unlisted public limited companies can offer their shares and debentures on the over the counter (OTC) market. That is, on a market that is not a stock exchange. ## Activity 7 Primary and secondary markets Timing: Allow about 10 minutes The purpose of this activity is to learn to distinguish between primary and secondary markets.

• Secondary Markets & Secondary Market Transactions - Carta

  Public secondary markets in the U.S. are often more transparent, which means the latest purchase price per share is visible to other market participants. Public companies must also disclose information about their earnings and finances. And public secondary markets are generally more accessible; just about anyone can open a brokerage account and start buying shares in most public companies. [...] There are many types of secondary markets, which can be private or public. The largest of these is the public stock market. ### The private secondary market vs. the public stock market [...] There are several other secondary markets across the broader private market landscape, including fund secondaries, secondary buyouts, and GP-led secondaries. Each offers one of the various participants in the private market ecosystem a path to liquidity. ### Fund secondaries A fund secondary deal involves one limited partner (LP) selling its stake in a private fund to another LP, usually because the first LP wants liquidity before the fund is able to provide it. ### Secondary buyouts

• The primary & secondary market | Trading | Common stock

  ### The secondary market After a stock is sold in the primary market, it trades in the secondary market. There are four subsections of the secondary market: First market Second market Third market Fourth market Although it sounds bizarre, the first market is part of the secondary market. Same with the second, third, and fourth markets. A security could trade in any of these submarkets depending on the characteristics of the transaction. [...] receive the proceeds from the sale (not AirBnB), making it a secondary distribution.