The initial offering of a new stock takes place in the primary market. Investment banks typically handle these transactions. Investors in the primary market are usually very large institutional buyers who buy millions of shares at a time. Proceeds from transactions in the primary market flow to the issuing company that is raising capital.The secondary market refers to all transactions of a security that happen after the initial offering. It can also refer to the exchanges themselves, where these transactions take place. The New York Stock Exchange and the NASDAQ are examples of secondary market exchanges. In the secondary market, the issuing company is no longer involved. These transactions take place between investors, and the money transacted flows between investors, not back to the issuing company. For example, BamCo decides to sell $500 million in new stock. It retains an investment bank that manages the offering. The bank finds large institutional buyers to purchase the stock in massive blocks. This is the primary market. Minutes after the primary sale takes place, some of the buyers start selling their shares on the secondary market, aiming to make a profit. This happens on the public exchanges where any size investor can get involved. In the primary markets, the initial price is set by the bank. In the secondary markets, the price is determined by the supply and demand of buyers and sellers.