What are primary markets?

Primary markets are places where companies sell new things to people for the first time, like a toy store opening and selling toys that no one has bought yet.

Imagine you're starting a lemonade stand. You need money to buy lemons, sugar, and cups. So you decide to sell shares of your lemonade business, kind of like giving people little pieces of ownership in your stand. When you sell those shares for the first time, that's happening in a primary market.

Once people have bought those shares, they can later sell them to other people. That’s when the secondary market comes in, like if one kid sells their share of the lemonade stand to another kid at school. But the first sale? That was all about the primary market, where everything starts fresh and new.