Secondary market

The secondary market is trading in securities after the initial issue; the sale of securities from one investor to another.

The term is needed in order to distinguish such trading from the initial issue of shares. In a primary market shares are sold by issuers to investors.

The most important secondary markets are securities exchanges, such as stock exchanges. The secondary markets for some securities may operate through dealers and brokers operating outside exchanges. Regulatory restrictions mean that access to markets other than exchanges is, in most cases, restricted to institutional investors.

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