Primary Market

A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors.

Also known as "new issue market" (NIM).

The primary markets are where investors can get first crack at a new security issuance. The issuing company or group receives cash proceeds from the sale, which is then used to fund operations or expand the business. Exchanges have varying levels of requirements which must be met before a security can be sold.

Once the initial sale is complete, further trading is said to conduct on the secondary market, which is where the bulk of exchange trading occurs each day. Primary markets can see increased volatility over secondary markets because it is difficult to accurately gauge investor demand for a new security until several days of trading have occurred.


Investment dictionary. . 2012.

Look at other dictionaries:

  • primary market — Market of new issues of securities. Chicago Board of Trade glossary The issuance ( sale) of new securities. As distinguished from the secondary market. American Banker Glossary Where a newly issued security is first offered. All subsequent… …   Financial and business terms

  • primary market — n: the market in which newly issued securities are sold compare secondary market Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. primary market …   Law dictionary

  • Primary market — The first buyer of a newly issued security buys that security in the primary market. All subsequent trading of those securities is done in the secondary market. The New York Times Financial Glossary * * * primary market primary market ➔ market1 * …   Financial and business terms

  • Primary market — The primary is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. This is typically done through… …   Wikipedia

  • primary market — noun 1. : a wholesale market large enough to dominate the trade in some goods over a large area 2. : primary point …   Useful english dictionary

  • primary market — Fin the part of the market on which securities are first offered to investors by the issuer. The money from this sale goes to the issuer, rather than to traders or investors as it does in the secondary market. See also secondary market …   The ultimate business dictionary

  • primary market — The market into which a new issue of securities is launched. Compare: secondary market …   Accounting dictionary

  • primary market — The market into which a new issue of securities is launched. Compare secondary market …   Big dictionary of business and management

  • primary market — /ˌpraɪməri mɑ:kɪt/ noun a market where new securities or bonds are issued. Also called new issue market …   Dictionary of banking and finance

  • primary market — noun The part of the financial markets that deals with the issuance of new securities. See Also: secondary market …   Wiktionary

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