Q.Explain the following term/concept.
Secondary market

The secondary market is where investors trade securities that have already been issued, mainly through the stock exchange.

The capital market has two parts. The primary market is where a company issues new securities to raise fresh capital directly from investors. The secondary market is where these already-issued securities are later bought and sold among investors themselves. The company does not receive any money from these later dealings; the transactions take place between one investor and another.

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The secondary market is that part of the capital market where existing securities — shares and debentures already issued in the primary market — are bought and sold among investors. It is also called the stock market.

Once securities are issued in the primary (new issue) market, they are freely traded in the secondary market through recognised stock exchanges. This market provides liquidity and marketability to investors, allowing them to convert their securities into cash whenever they wish. It also gives a continuous valuation of securities through market prices. No fresh capital comes to the c …