The Stock and Bond Markets

Primary and Secondary Markets

The stock and bond markets are sub-divided into primary and secondary markets. The primary market, or 'new issue markets', is where newly created financial assets (for example a company that issues a bond certificate or a stock) are put on exchange. The secondary market deals with the trading of previously issued financial assets, where transactions between investors occur. The secondary market is where the highest volume of trading takes place.

Figure 5 Asset trading in the financial markets