Primary market

A market is primary if the proceeds of sales go to the issuer of the securities sold.

In a primary market, companies, governments, or public sector institutions can raise funds through bond issues, and corporations can raise capital through the sale of new stock through an initial public offering (IPO).

Dealers earn a commission that is commonly built into the price of the security offering, though it can be found in the prospectus.

The primary market plays the crucial function of facilitating capital formation within the economy.

[3] Corporate entities raise funds from the primary market in three ways:[6]