Secondary Market Rate

Secondary Market Rate

The term secondary market rate means the price of the securities that are traded in the secondary markets. There are various secondary markets which have separate rates of their own. There are basically few predominant secondary markets like the stock and bond markets.

Stock Market Rates

The stock market rates are the prices of transaction in the stock markets. There are primarily three different stock market rates or prices – the opening price, the closing price and the listing price. The opening price is the one at which trading starts for the day.

The closing price of a stock is the one at which the trading stops for the particular day. The closing price also serves as the opening price for the coming trading day. The listing price of a particular stock is determined by the market regulator, along with the respective market, where the stock would be traded.

Bond Market Rates

There are two different types of bonds in the market as per the rates – the fixed rate bonds and the floating rate bonds. In the fixed rate bonds the interest rate stays the same.
It never changes throughout the entire term period of the bond.
The interest rate of the floating rate bonds are determined by a money market index. In the floating rate bonds a spread is grouped together with the rates of the governmental funds. The spread stays the same throughout the term period of the bonds.

The interest on the floating rate bonds are normally paid after every three months. There are certain bonds like the zero coupon bonds, which do not require the payment of interest.

Treasury Bill Rates

The maturity period for the treasury bills in the United States is not more than a year. There are other treasury bills available as well. Those treasury bills have maturity periods of one, three or six months. The minimum worth of a treasury bill is a thousand US dollars. The maximum price of a treasury bill is five million US dollars.

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Last Updated on : 22 July 2016

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