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The Primary Market
In the beginning was the Primary Market. Securities trading starts when an issuer decides to sell its security to the public market. This is called the initial public offering, or IPO. This initial offering, the sale of a security from issuer to public buyer, is done in the Primary Market. The Primary Market is the first great market force; without it, there would be no securities trading.
The Primary Market is so different from all other securities trading that it is easy to see why it is considered a separate market. Bringing a security issue to the public market involves a world of complicated legal work, meticulous regulatory filings, sensitive syndicate negotiations, considerable selling effort, and the exhausting and frightening task of underwriting and pricing the issue. All of these activities continue right up to the moment of the first sale. These tasks only occur in the Primary Market.
For the Primary Market specialists, it's on to the next IPO.
The Secondary Market
After that first sale, the security is now owned by the ''public," and subsequent trades of that particular security will occur in the Secondary Market, which is where securities are traded from public seller to public buyer.
The Secondary Market is what most people think of as "the stock market." This is also a specialized and unique market, with its own set of specialized experts. The Secondary Market is the world of stock exchanges, brokers, specialists, market makers, price quotes, new highs, new lows, earnings announcements, analyst pronouncements, CNBC and CNNFN telecasts, institutional investors, and individual investors. This is where the action is!
Today we regularly see billion share days in the Secondary Market. The NYSE set a record with 1,349,711 shares traded on December 17, 1999; a record that is sure to be broken soon. We take this incredible ability of our markets to facilitate trading for granted, but it was a painful and slow climb to these heights.
Our younger readers cannot imagine a world without the ubiquitous power of the computer, but until very recently much of the transaction processing in the securities markets was done by hand! Take a look at this chart, which shows some NYSE share volume milestones. Between

 
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