Some basis information about Share market

In a share market, shares are bought and sold. The stock market is a share market, however besides shares of companies, other instruments like bonds, mutual funds and derivative contracts too are traded in the stock market.

A company enters the primary market to raise funds. It is in the primary market that a company gets registered to issue shares to the public and raise money. Companies generally get listed on the stock exchange through the primary market route. In case a company is selling shares for the first time, it is called an Initial Public Offering or IPO, after which the company becomes public.

In the secondary market, investor’s trade already listed securities by buying and selling them. Secondary market transactions are transactions where one investor buys shares from another at the prevailing price. Normally, these transactions are conducted through a broker. Secondary market offers investors a chance to sell all its shares and exit the financial market.