Secondary Markets

The secondary market, also known as the aftermarket, is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold. With primary issuances of securities or financial instruments, or the primary market, investors purchase these securities directly from issuers such as corporations issuing shares in an IPO or private placement, or directly from the federal government in the case of treasuries. After the initial issuance, investors can purchase from other investors in the secondary market.

The secondary market for a variety of assets can vary from loans to stocks, from fragmented to centralized, and from illiquid to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the New York Stock Exchange, Nasdaq and the American Stock Exchange provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade “over the counter,” or by phoning the bond desk of one’s broker-dealer. Loans sometimes trade online using a Loan Exchange.

The project explains the working of secondary markets in detail. It provides thorough knowledge of different aspects of trading in stock exchanges. The focus is basically on the Indian context.

The initial part of the projects gives the introduction of securities market, concept of stock exchanges, their role in economy, their characteristics, role of SEBI etc. The second part of the project explains the different methods of trading, which have been explained in detail.

The final part of the project explains the observations from the study which explains the relationship between growth and value; value investing; and relative volatility of stocks over time.

No comments:

Post a Comment