Share market is the market for securities where organized issuance and trading of shares takes place either through exchanges or over-the-counter in electronic or physical form.
Basically, Share Market can be divided into two parts :-
1. Primary Market
It is the market where new issues of securities are offered to the investors.
2. Secondary Market
An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary Market).
Shares in the Share Market are either traded through :-
(a) Stock Exchange
These are organized market places where stocks, bonds are other equivalents are traded between the buyers and sellers where exchange acts as a counter-party to both the participants in case of any default. The contracts are standardized and not customized ones. For example, NYSE, NASDAQ, NSE, NIKKEI, etc.
(b) Over-the -Counter (OTC)
These are not centralized exchanges. Here, the trade takes place through a network of dealers. Generally, the OTC contracts are bilateral customized contracts and not standardized ones.