Buying & Selling Buying & Selling SecuritiesSecurities

Primary MarketsPrimary Markets

Primary marketsPrimary markets: buyers invest : buyers invest

in newly offered stockin newly offered stock

Initial Public Offerings (lPO)Initial Public Offerings (lPO) New issues of stockNew issues of stock

Investment banking firmsInvestment banking firms

Secondary MarketsSecondary Markets Secondary markets Secondary markets (aftermarket) (aftermarket)

• Stocks bought & sold on exchanges Stocks bought & sold on exchanges

• Stocks traded must be Stocks traded must be listed listed securitiessecurities

• Brokerage firms - members of an Brokerage firms - members of an exchangeexchange

ExchangesExchanges

•NYSENYSE - largest in world, strict - largest in world, strict requirements, 75% of market requirements, 75% of market value of ALL listed stocksvalue of ALL listed stocks

•AMEXAMEX - second largest - second largest exchange in U.S., requirements exchange in U.S., requirements are not as tough are not as tough

ExchangesExchanges

•Over The Counter (OTC) Over The Counter (OTC) marketmarket: stocks not sold on an : stocks not sold on an exchange exchange traded via traded via computercomputer Prices negotiated through the Prices negotiated through the NASDAQNASDAQ

Few listing requirementsFew listing requirements

NASDAQNASDAQ

New York Stock ExchangeNew York Stock Exchange

Knowledgeable investors Knowledgeable investors consider many factors consider many factors

Exchange indices - average values Exchange indices - average values • Dow Jones Ind AvgDow Jones Ind Avg. most widely reported. most widely reported• S&P 500S&P 500 also well known also well known

Updated economic & financial newsUpdated economic & financial news Business trends in specific industriesBusiness trends in specific industries Information on specific companiesInformation on specific companies