These markets are divided into two different categories: primary markets—where new equity stock and bond issues are sold to investors—and secondary markets, which trade existing securities.
Primary markets are open to specific investors who buy securities directly from the issuing company. These securities are considered primary offerings or initial public offerings (IPOs). When a company goes public, it sells its stocks and bonds to large-scale and institutional investors such as hedge funds and mutual funds.
The secondary market, on the other hand, includes venues overseen by a regulatory body where existing or already-issued securities are traded between investors. Issuing companies do not have a part in the secondary market.
Market capitalization (also known as market value) is the share price times the number of shares outstanding (including their several classes) for listed domestic companies.