The notion of market stands for a complex interrelation between various systems, procedures, infrastructures, and social phenomena that contribute to the systematization of goods and services exchanged in certain conditions. The exchange within a market may rely either on the exchange of goods and services by barter, i.e., in return for other goods and services, or the exchange based on the seller-buyer relationship. The characteristics of a good market include but are not limited to:
- The large market size allows the sellers to reach major target audiences;
- The market’s growth potential is characterized by the ability to increase prices, reach, and goods assortment;
- The market’s uniqueness in terms of goods presented to the customers;
- The market’s relevance and demand within the target population or segment;
- The market’s ability to deliver goods and reach new customers with minimum financial losses;
- Good market accessibility for both suppliers and customers.
The notion of primary market stands for the market where the securities, i.e., financial assets that could be traded at a certain price, are created and first introduced to the potential buyers. A prime example of such an offer is an initial public offering, which means the private company’s first introduction of stock to the public. For its part, the notion of the secondary market stands for the space where some of the world’s major exchanges take place with no direct involvement of the companies that issue stock. In the secondary market, different investors are able to exchange equities and securities of different companies. The activity of the primary market is directly dependent on the activities of the secondary market, as the company’s decision to raise capital by issuing an initial public offering is based on secondary market tendencies and potential for capital liquidity.