Explain Primary & Secondary Money Markets

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    Primary Markets

    • Primary markets can offer new government bonds and initial public offerings for new companies. The sale takes place between the company issuing the securities and the investor.

    Secondary Markets

    • Secondary markets offer securities that already have gone through the primary market. These securities can be offered through secondary markets such as brokerage firms and the stock exchange. Investors are provided with information in the form of a prospectus detailing the risks involved in the investment.

    Market Makers

    • Market makers are firms that buy, hold and trade securities from their own capital. They set the prices within the market depending on demand and supply. Market makers are brokers and dealers and, as such, are essential for the success of both the primary and secondary markets.

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