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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Secondary Market


Synonyms:aftermarket, equity market, stock exchange, stock market
Filed Under: financial-banking, investments, mortgages
Tags: banking, investment, mortgage
 

Definition of secondary market

secondary market
1. A financial market, such as the NYSE, NASDAQ, TSE, or TSX, where previously issued financial instruments are purchased and sold to investors in the form of stocks, bonds, options and futures. Also known as an "aftermarket." The term "secondary market" is also used in conjunction with mortgage banks and the loans they sell to investors or can also be used to describe any market that sells second-hand goods or assets.

Related Terms and Acronyms:

  • asset-backed securities (ABS)   Securities backed by a pool of assets.
      ➥  Financial security made up of a bundle of assets.
  • mortgage-backed securities   Securities backed by mortgage debt.
  • non-liquid asset   A possession that can't be transformed readily into cash. Stocks and bonds are liquid assets because they can be sold easily; a house is a non-liquid asset because it takes time to sell.
  • portfolio lender   A company that underwrites mortgage loans and keeps them on the books instead of selling them on the secondary market.
  • preferred stock   A type of security that signifies part ownership in a corporation and is given preferential treatment over common stocks.
  • publicly traded company   A company that is sold on a stock exchange.
  • secondary mortgage market   The trade in home loans that are bundled together and sold as securities to investors. It frees money so more people can get mortgages.
  • security   A tradable financial implement that represents ownership, the rights to ownership or debt.
  • underwriter   An entity that issues and distributes financial products including equity capital, credit, mortgages, and insurance.
  • underwriting (UW)   Assessing individuals for eligibility and issuing and distributing a financial product such as insurance, equity capital or credit.

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