The primary market is the market where newly issued securities are sold to investors for the first time.
When a company sells shares in an initial public offering, that sale takes place in the primary market. Governments and corporations can also use this market to issue bonds and raise capital. The money paid by investors goes to the issuer, subject to the offering’s structure and expenses.
The secondary market is different: investors trade securities with one another after issuance. In a secondary-market stock trade, the purchasing investor’s money generally goes to the selling investor rather than directly to the company.
Primary-market offerings can be arranged through underwriters, public offerings, or private placements. The distinction is about the relationship between issuance and trading, not whether the security is a stock or a bond.