Primary market

The primary market ( new issue market also ) is the financial market for the first issue of financial capital, usually stocks or bonds. A company that needs capital, contacted his investment banker who typically assembles a syndicate of equity or bond traders that handles the issue of the security. The syndicate typically takes over the price, and the settlement risk ( " underwriting ").

The process of initial issue of shares is called Initial Public Offering or IPO. The selling banks charge a commission which is already factored in the issue price of the new shares with in general.

The primary market is a market with a lot of adjustment (for a given issue price ), the secondary market with such a price adjustment (for a given stock). On the primary market is thus decided ( by demand ), how many securities may issue an issuer; on the secondary market, the price at which they are traded.

• Financial market activities
• Financial market