InvestorQ : What is meant by share market, stock market and primary market?
Priyanka Jain made post

What is meant by share market, stock market and primary market?

Answer
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Swati Naik answered.
1 year ago


Like any other market, the stock market is also a platform for buyers and sellers to come together. There is no difference between stock markets and share markets. In the West, it is popularly called a stock market while in India we refer to it as the share market. The stock market is the coming together of buyers and sellers of stocks in a single platform. Before BOLT was introduced in 1995, people used to trade standing in the trading ring. Nowadays, all trading happens in computer terminals at the broker’s office or on the internet. Share market and stock market is one and the same thing.

However, the stock market can be further classified into primary market and secondary market. When a company comes out with an initial public offer (IPO) it is called the primary market. The primary market allotment of shares happens directly into your demat account. You don’t need a trading account to invest in an IPO. The normal purpose of an IPO is to list the stock in the share market. Once the share gets listed it starts trading in the secondary market. Buying and selling shares is largely like buying and selling any other commodity. When we log into our trading systems and buy 10 shares of Infosys or sell 50 shares of Reliance Industries, we are actually dealing in the secondary market.