C/F/16. What is the distinction between primary and secondary securities? If you want to own primary securities, what kind of financial institutions should you contact? Contrast the concept of primary and secondary markets with that of primary and secondary securities

Conclusion Primary securities are exchanged in the primary markets, while secondary securities in the secondary markets. Therefore both concepts are interlinked. Primary securities are issued by a firm to raise new capital and are distributed via an underwriter in the primary market. This market is not organised as an exchange, as only one transaction takes place, namely the transfer of security from a company to investor, and of capital from investor to the company. An underwriter plays a crucial role in the marketing and distribution of primary issues, especially in the US where they allocate new issues at discretion. Secondary markets in contrast are organizations where an exchange of so called second hand, or secondary shares takes place. No new capital is raised by firms in the secondary market, but fortunes are made and lost on the investors part through constant speculation.