Capital market consists of two types i.e. Primary and Secondary.
Primary Market #
Primary market is the market for new shares or securities. A primary market is one in which a company issues new securities in exchange for cash from an investor (buyer).It deals with trade of new issues of stocks and other securities sold to the investors.
Secondary Market #
Secondary market deals with the exchange of prevailing or previously-issued securities among investors. Once new securities have been sold in the primary market, an efficient manner must exist for their resale. Secondary markets give investors the means to resell/ trade existing securities. Another important division in the capital market is made on the basis of the nature of security sold or bought, i.e. stock market and bond market.