Ajay Bohra
Last updated: May 2026 · Core market structure for Indian equity investors.
This page explains Secondary market in plain language for Indian investors reading market terminology.
The secondary market is where investors trade securities after they are first issued. On NSE and BSE, almost all daily stock trading you see is secondary-market activity.
Primary vs secondary market
| Primary market | Secondary market | |
|---|---|---|
| What happens | New shares/bonds created (IPO, FPO, bond issue) | Existing securities trade between investors |
| Who gets the money | Issuer (company/government) | Seller of the security (not the company) |
| Indian examples | IPO book-build, rights issue | NSE/BSE cash and F&O |
Why this matters for your demat account
- Your demat holds securities traded on the secondary market.
- IPO allotment is primary market; listing day trading is secondary.
- Prices on your broker app are secondary-market last traded prices.
- Mark to market (MTM) applies to many F&O positions in the secondary market.
Participants
- Retail investors (you)
- Institutions (mutual funds, insurers, FIIs)
- Market makers and HFT firms (liquidity)
- Stock exchanges (NSE, BSE) and clearing corporations
Choose a broker for secondary-market costs: broker reviews · Dhan vs Zerodha.
FAQ
Is the secondary market the same as the stock market?
In everyday language, yes — when people say “stock market,” they usually mean secondary trading on exchanges.
Can companies raise money in the secondary market?
Not directly from share-to-share trades. New capital comes from primary issues (IPOs, QIPs, etc.).
Risk warning: Trading involves market risk. See disclaimer.
FAQs
What is the secondary market?
Where existing securities trade between investors after the primary issue.
How is it different from the primary market?
Primary is new issuance (IPO/FPO); secondary is resale on exchanges.
Which Indian exchanges are secondary markets?
NSE and BSE for listed equity and many ETFs.
Most retail equity orders on NSE and BSE are secondary-market trades. Primary market participation is mainly through IPOs and FPOs.
