Capital Markets in general

Capital markets consists of Primary market and Secondary market.

Primary market is the market where a security is sold when it is first issued. The proceeds of selling the securities in a primary market go directly to the company issuing the securities. For example, a stock IPO (initial public offering).

Secondary market is the market where securities are traded through an exchange or over-the-counter subsequest to a primary market offering. The proceeds from trading in a secondary market go to the selling dealers and investors. Secondary market is far more important than the primary market.