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Aftermarket

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The aftermarket, also called the secondary market, is the market in which securities which have already been issued are traded. Initial public offerings (IPOs) or private offerings of securities are referred to as primary market offerings, but once those securities are traded a second time they become part of the aftermarket. In the aftermarket an investor purchases a security from another investor rather than from the original issuer. The stock markets themselves are examples of the aftermarket for securities and the vast majority of stock brokers make their living dealing almost exclusively in aftermarket transactions. In the securities aftermarket, equities are sold to speculators and investors and it is important that the aftermarket be both transparent as well as liquid. Stocks, bonds and other aftermarket securities are regulated by stock exchanges and other regulatory agencies. In a broader sense, the aftermarket refers to the sale of any used item or new parts not manufactured by the original maker.



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