DEFINITION of 'Secondary Stock'

A stock that is considered riskier than blue chips because it has a smaller market capitalization. A secondary stock can relate to any type of company, in any industry. The primary definer of a secondary stock is the company's market cap, with any company's equity shares trading under a certain "large cap" level being considered a secondary stock.

BREAKING DOWN 'Secondary Stock'

Secondary stocks are more commonly referred to as mid-, small- or micro-cap stocks, depending upon their market capitalization. While market capitalization is a definite driver of a stock's risk level, most view large-cap stock as less risky than secondary stocks, due primarily to their market cap. Secondary stocks however often times can be less volatile than large cap stocks, thus all else held equal, being a less "risky" investment than a large cap.

  1. Primary Offering

    A primary offering is the first issuance of stock from a private ...
  2. Secondary Buyout

    In a secondary buyout, a financial sponsor or private equity ...
  3. Spot Secondary

    The sale of a previously issued security that does not require ...
  4. Large Cap - Big Cap

    Large cap refers to a company with a market capitalization value ...
  5. Aftermarket Report

    A summary of how shares of an initial public offering (IPO) performed ...
  6. Secondary Mortgage Market

    The market where mortgage loans and servicing rights are bought ...
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  1. What constitutes a secondary market?

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  2. Why do we need a secondary market?

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  3. What's the difference between primary and secondary capital markets?

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  4. Are secondary capital markets beneficial for society, or are there purely speculative?

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  5. Are small cap companies a safer investment than large cap companies?

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  6. What financial regulation exist to control the secondary market?

    Examine a brief characterization of financial regulation in the secondary market, including self-regulatory organizations ... Read Answer >>
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