Capital Market

The capital market is a financial market where individuals and institutions buy and sell long-term debt and equity securities, such as stocks and bonds. It enables businesses, governments, and other entities to raise capital for growth and expansion by issuing securities to investors. The capital market is divided into two segments: the primary market, where new securities are issued and sold to investors, and the secondary market, where existing securities are traded among investors.

Example

When a company goes public through an initial public offering (IPO), it raises money by selling shares in the primary capital market. After the IPO, those shares are traded among investors in the secondary capital market, such as the New York Stock Exchange (NYSE).