What is the term for a market where securities are offered for the first time?

A market where securities are offered for the first time is known as the primary market. In the primary market, new securities are created and sold to investors directly by the issuing company, which could be in the form of stocks or bonds. This process is crucial as it is where companies raise capital to fund operations, expansion, or other investments.

When a company decides to go public, it will often conduct an initial public offering (IPO) in the primary market, allowing investors to buy shares directly from the company. The funds raised in this market are essential for the issuer, as they will directly benefit the company’s financial standing.

In contrast, a secondary market involves the trading of securities that have already been issued. Here, investors buy and sell existing securities without the issuing company directly involved. Capital markets encompass both primary and secondary markets but refer broadly to venues for buying and selling long-term securities. Money markets, on the other hand, deal with short-term debt instruments and are distinct from both the capital and primary markets.