The term Secondary Stock Market means the place where the actual trading of stocks takes place. In the secondary stock market, an investor buys a stock from another investor instead of any particular issuing entity. The New York Stock Exchange is a good example of a secondary stock market.
The companies apply for the membership of the specific stock market. The companies are permitted to get into that stock market after the successful completion of their Initial Public Offerings. Once a company is registered in a certain stock market, it means the stocks of the same are then available for transaction.
The list price of the shares of a company in the secondary stock market is fixed by the market regulator. In the secondary stock markets, the shares of the enlisted companies are traded at steady intervals.
Secondary Stock Market and Globalization:
The phenomenon called globalization has had some impact on the various secondary stock markets at present. The secondary stock markets across the world have grown in keeping with the process known as globalization.
The advent of information technology has changed the way business is being executed throughout the world. The secondary stock markets are also looking at incorporating information technology into their business procedures.
The computers have contributed to the rise of more avenues of bringing up capital, that could be used for a variety of purposes like increasing the size of the company as well as making new investments. Information technology has also helped the various secondary stock markets to conduct business with more clarity and in a more smooth manner.
Secondary Stock Market Trading
In the secondary stock market, the shares of the enlisted companies are traded after they have successfully completed their Initial Public Offerings. The investors of the secondary stock markets range from the individual stock investors to the traders of the hedge funds.
Last Updated on : 22 July 2016