what is a primary market 
a primary market is a source of new securities often on an exchange it s where companies governments and other groups go to obtain financing through debt based or equity based securities primary markets are facilitated by underwriting groups consisting of investment banks that set a beginning price range for a given security and oversee its sale to investors once the initial sale is complete further trading is conducted on the secondary market where the bulk of exchange trading occurs each day understanding primary marketsthe primary market is where securities are created it s in this market that firms sell or float in finance lingo new stocks and bonds to the public for the first time during the primary distribution these stocks and bonds also called primary instruments trade on mainstream exchanges with prices based on their market value companies and government entities sell new issues of common and preferred stock corporate bonds and government bonds notes and bills on the primary market to fund business improvements or expand operations although an investment bank may set the securities initial price and receive a fee for facilitating sales most of the money raised from the sales goes to the issuer the primary market isn t a physical place it reflects more the nature of the goods the key defining characteristic of a primary market is that securities on it are purchased directly from an issuer as opposed to being bought from a previous purchaser or investor second hand so to speak 