4. Financial markets consist of two major
types :
1.Money market : Money market is a
market for debt securities that pay off in the
short term usually less than a year.
2.Capital market : Capital market is a
market for long term debt and equity shares.
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5. CAPITAL MARKET CONSIST OF TWO MARKETS
Primary and secondary
Primary Market: The primary market is that part of the
capital markets that deals with the issuance of new
securities. Companies, governments or public
sector institutions can obtain bonds through the
sale of a new stock or bond issue. This is typically
done through a syndicate of securities dealers
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6.
Secondary Market refers to a market where
securities are traded after being initially offered to
the public in the primary market and/or listed on the
Stock Exchange.
Majority of the trading is done in the secondary
market. Secondary market comprises of equity
markets and the debt markets.
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7. primary market
In primary markets,
securities are bought by
way of public issue directly
from the company.
New issue are available in
primary market.
The primary is a
middlemen.
New issue of common
stock;bonds and preferred
stock are sold by
companies.
secondary market
In Secondary market share
are traded between two
investors.
Securities usually bought
and sold through the
secondary market.
The secondary market are
broker and dealer.
The secondary market stock
and bonds issues are sold
to the public.
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8.
Secondary Market has an important role to play
behind the developments of an efficient capital
market.
Secondary market connects investors' favoritism for
liquidity with the capital users' wish of using their
capital for a longer period.
Secondary market is that financial market in
which investor can buy and
sell shares and bonds after its issue by company.
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10.
Advantages
Secondary markets offer advantages to both sellers and
buyers. Sellers gain the advantage of effectively reducing the
purchase price of products and investments by recouping a
portion of what they originally paid.
Disadvantages
If secondary markets grow too large, they can eat into original
sellers' sales and profit margins. Especially in the case of
long-lasting goods such as automobiles and musical
instruments, secondary markets can encourage a large
percentage of shoppers to purchase used items rather than
purchasing new.
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11. PRODUCTS AVAILABLE IN THE
SECONDARY MARKET
Equity Shares
Government securities
Debentures
Bond
Commercial Paper
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13. AUCTION
• The Exchange purchases the requisite quantity in
the Auction Market and gives them to the buying
trading member.
• If the shares could not be bought in the auction i.e.
if shares are not offered for sale in the auction, the
transactions are closed out as per SEBI guidelines.
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14.
Step 1.
Investor / trader decides to trade
Step 2. Places order with a broker to buy / sell
the required quantity of respective securities
Step 3. Best priced order matches based on
price-time priority
Step 4. Order execution is electronically
communicated to the broker’s terminal
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15.
Step 5. Trade confirmation slip issued to the
investor / trader by the broker
Step 6. Within 24 hours of trade
execution, contract note is issued to the investor /
trader by the broker
Step 7.
T+2 day
Pay-in of funds and securities before
Step 8.
day
Pay-out of funds and securities on T+2
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