Distinguish between Primary Market and Secondary Market.

Basis	Primary Market	Secondary Market
Types of securities	There is sale of new securities issued by new companies or existing companies to investors.	There is only trading or marketing of existing second-hand securities.
Involvement of the issuing company	Securities are issued and sold by the company to the investors directly or through an intermediary.	Securities are transferred between the investors only. The company is not involved.
Capital formation	Primary market contributes directly for capital formation by mobilising the funds from the savers to the investors.	Enhances incashability (liquidity) of shares i.e., the secondary market indirectly promotes capital formation.
Nature of transactions	Only buying of securities take place in the primary market. Securities can't be sold.	Both buying and selling of securities can take place on the stock exchanges i.e., in the secondary market.
Price	Prices of securities are fixed and decided by the management of company.	Prices of securities are fixed by the demand and supply factors of stock exchange market.