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SECONDARY

MARKET

What is Secondary Market??


Secondary

Market refers to a market


where securities are traded after being
initially offered to the public in the
primary market.
Majority of the trading is done in the
secondary market.
Secondary market comprises of equity
markets and the debt markets.

Features of Secondary
Market
It

Creates Liquidity
It Comes After Primary Market
It Has A Particular Place
It Encourage New Investments
Aids in financing the industry
Ensures safe & fair Dealing

Functions of Secondary
Markets
Provides

regular information about the


value of security.
Helps to observe prices of bonds and
their interest rates.
Offers to investors liquidity for their
assets.
Secondary markets bring together
many interested parties.
It keeps the cost of transactions low.

FINANCIAL INSTRUMENTS TRADED IN A


STOCK MARKET?

Bonds:
A

bond is adebt investmentin which an


investor loans money to an entity (typically
corporate or governmental) which borrows
the funds for a defined period of time at a
variable orfixed interest rate.

Bonds

are used by companies, municipalities,


states and central governments to raise
money and finance a variety of projects and
activities. Owners of bonds are debt
holdersorcreditors of the issuer.

Mutual Fund:
An

investment vehicle that is made up


of a pool of funds collected from many
investors for the purpose of investing in
securities such as stocks, bonds, money
market instruments and similar assets.

Mutual

funds are operated by money


managers, who invest the fund's capital
and attempt to produce capital gains
and income for the fund's investors.

Derivative:
Asecuritywhose

price is dependent
upon or derived from one or more
underlying assets.

The

derivative itself is merely a contract


between two or more parties. Its value is
determined by fluctuations in the
underlying asset.

The

most common underlying assets


include stocks, bonds, commodities,
currencies, interest rates and market
indexes.

Share:
A

unit of ownership that represents an


equal portion of a companys capital.
It entitles its holder(the shareholder)
to an equal claim on the companys
profits and an equal obligation for the
companys debts and losses.

Stock Market Participants

Investor:
An investor is the market participant that
the general public most often associates
with thestock market. Investors are those
who purchase shares of a company for
the long term with the belief that the
company has strong future prospects.

Trader:
Traders are market participants who
purchase shares in a company with a
focus on the market itself rather than the
company'sfundamentals.

Market Regulator:
A medium for the exchange of goods or
services over which a government body
exerts a level of control.

Broker:
Abrokeris an individual or parties
(brokerage firm) that arranges
transactions between abuyerand
asellerfor acommissionwhen the deal is
executed.
Stock Exchange:
The basic platform that provides the
facilities used

How Does Share Market


Work???

Dematerialization
Dematerialization is the process by which
physical share certificates held by an
investor are converted into an equivalent
number of securities in electronic form
and credited into the investors demat
account.

Demat Account
A

demat is to your shares what a bank


account is to your money.
Simply put, it is the account that holds all
your shares in electronic or dematerialized
form.
Like the bank account, a demat account
holds the certificates of financial
instruments like shares, bonds, government
securities, mutual funds and exchange
traded funds (ETFs).
One cannot trade in the stock market
without a demat account.

How to open a Demat


Account?

Trading Account
A special account through which you can
conduct transactions is called trading
account.
How do you open a Trading Account?

Thank
You