Abstract: The secondary market, also called aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. Another frequent usage of “secondary market” is to refer to loans which are sold by a mortgage bank to investors. Secondary markets provide the facility to allow a current owner of a security to sell it if the owner no longer wants the security. In contrast, someone else who would now like to own the security can buy it from the seller in the secondary market. Secondary markets do not raise money for the companies or governments that issue securities. In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market be highly liquid. As a general rule, the greater the number of investors that participate in a given marketplace, and the greater the centralization of that marketplace, the more liquid is the market.
Publication Year: 2011
Publication Date: 2011-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot