What is then the primary market?

Well, it is the market in which shares and debentures are put for the first time at the disposition of the public. When a society is in need of money, one way to get it is by issuing shares or debentures to be subscribed by the public investor.

In the insurance operation, the stock exchange agency buys the new shares or debentures and resells them to the investors at a higher price, obtaining by it a profit.

In this process (that serves for the nation’s companies to gather capital), it is said that the stock exchange agencies act as an investment bank. The insurance is not done by only one stock exchange agency, but by several of them as a group acting all in this case as investment banks. In this way, the insurers distribute between them the risk and it also makes it easier to sell or to distribute the issuance. Once the securities are sold or distributed they begin to be quoted at the secondary market.

One can see, then, how stock exchange agencies can assume the roles of agents, stock exchange operators on their own account and that of an investment bank.

As an individual investor, the money that one invests along with millions of other investors, assemble at the nation’s investment market, also called market of capitals.

One’s money contributes to finance private businesses if one invests in company shares and to finance public entities if one buys treasury bonds. In all this process one wins if the value of ones investments rise. The stock exchange agencies obtain benefits from the commission that they collect acting as intermediaries and also from the profits that they obtain by acting on their own account.

Beginner Money Investing How do the Stock Exchange Agencies Function? Price To Earning Ratio (PER) What is then the primary market? Full service agencies and discount agencies What does the account executive need to know? What can you expect of an account executive?