Secondary Market
The market in which already-issued securities are traded between investors, with no money flowing to the issuer.
How it is identified
Test: both counterparties are investors and the issuer is not a party to the trade
Unit
qualitative
In depth
Almost all trading you will ever see is secondary market activity — the exchange screen, the order book, the daily volumes. Its function is not to raise capital but to provide liquidity and continuous pricing, which is what makes the primary market possible in the first place: few would buy a new issue if there were no way out afterwards. Because the issuer is absent, a rising share price does not put cash into the company, and a falling one does not take cash out; what changes is the price at which it could raise capital next time. The secondary market is where valuation is discovered, not where funding happens.
Worked example
You buy 100 shares at ₹450 from another investor. ₹45,000 moves from your account to theirs, less charges. The company's cash balance, share count and capital structure are all completely unchanged by the transaction.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Secondary Market” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.