Raising Capital in the Securities Market

The sale and purchase of financial assets, such as stocks and bonds, take place in the securities market. The securities market is comprised of both the primary and secondary markets. Most investors are familiar with the operations of the secondary markets where existing securities are traded. The trade is carried out between a buyer and a seller, with the stock exchange facilitating the transaction. Transactions can also occur “over the counter” which is direct trading among broker-dealers. In the secondary market, the company that issues the security is not involved in its sale, as the amount invested by the buyer goes to the seller. However, firms use the primary market to issue new securities, to raise capital for growth and investment. In this article, we will discuss the various methods of raising capital in the primary securities market.

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