Secondary Market Definition

Learn the definition of secondary market and other ETF terminology from the etf.com glossary.

ETF
|
Reviewed by: etf.com Staff
,
Edited by: etf.com Staff

Learn more about Secondary Market

The Secondary Market for ETFs is the dynamic arena where investors actively buy and sell ETF shares after the initial issuance in the primary market. In this realm, individual investors, institutional traders and market makers engage in transactions based on prevailing market conditions and participant demand. The secondary market is vital for price discovery and liquidity, providing investors with the flexibility to trade ETF shares throughout the trading day at market-determined prices. As a robust and accessible marketplace, the secondary market enhances the overall tradability and efficiency of ETFs, ensuring their relevance and effectiveness in meeting investor objectives.

Related Terms

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.