secondary market (redirected from Secondary markets)

Secondary market

The market in which securities are traded after they are initially offered in the primary market. Most trading occurs in the secondary market. The New York Stock Exchange, as well as all other stock exchanges and the bond markets, are secondary markets. Seasoned securities are traded in the secondary market.

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secondary market

The market in which existing securities are traded among investors through an intermediary. Organized exchanges such as the New York Stock Exchange facilitate the trading of securities in the secondary market. Also called aftermarket. Compare fourth market, primary market, third market.

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Secondary market. When investors buy and sell securities through a brokerage account, the transactions occur on what's known as the secondary market.

While the secondary market isn't a place, it includes all of the exchanges, trading rooms, and electronic networks where these transactions take place.

The issuer -- company or government -- that sold the security initially receives no proceeds from these trades, as it does when the securities are sold for the first time.

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secondary market

A general description for the sale and purchase of financial instruments.The New York Stock Exchange is a secondary market for shares of stock. Although there is not a similar central exchange vehicle,trading in existing mortgages is also called the secondary market.

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Secondary Market

What Does Secondary Market Mean?

A market in which investors purchase securities or assets from other investors rather than directly from the issuing companies; exchanges such as the New York Stock Exchange and the Nasdaq are secondary markets. Secondary markets also are used by mutual funds, investment banks, and entities such as Fannie Mae to purchase mortgages from issuing lenders. In any secondary market trade, the cash proceeds go to an investor rather than to the underlying company or entity directly.

Investopedia explains Secondary Market

A newly issued IPO is considered a primary market trade when the shares first are purchased by investors directly from the underwriting investment bank; after that, any shares traded on an exchange will be on the secondary market. In the primary market, prices are often set beforehand, whereas in the secondary market, prices are determined by supply and demand. In the case of assets such as mortgages, several secondary markets may exist, as bundles of mortgages often are repackaged into securities such as GNMA pools and resold to investors.

Related Terms:
• Initial Public Offering—IPO
• New York Stock Exchange—NYSE
• Over the Counter—OTC
• Private Placement
• Stock Market