The secondary market, also called aftermarket, is the  in which previously issued  such as , , , and  are bought and sold. Another frequent usage of "secondary market" is to refer to loans which are sold by a  to  such as  and .

The term "secondary market" is also used to refer to the market for any  or assets, or an alternative use for an existing product or asset where the customer base is the second market (for example, corn has been traditionally used primarily for food production and feedstock, but a "second" or "third" market has developed for use in ethanol production).

With primary issuances of securities or financial instruments, or the , investors purchase these securities directly from  such as  issuing  in an  or , or directly from the federal government in the case of . After the initial issuance, investors can purchase from other investors in the secondary market.

The secondary market for a variety of assets can vary from  to stocks, from fragmented to centralized, and from  to very liquid. The major stock exchanges are the most visible example of liquid secondary markets - in this case, for stocks of publicly traded companies. Exchanges such as the ,  and  provide a centralized, liquid secondary market for the investors who own stocks that trade on those exchanges. Most bonds and structured products trade “over the counter,” or by phoning the bond desk of one’s broker-dealer. Loans sometimes trade online using a .

In the secondary market, securities are sold by and transferred from one  or  to another. It is therefore important that the secondary market be highly  (originally, the only way to create this liquidity was for investors and speculators to meet at a fixed place regularly; this is how  originated, see ). As a general rule, the greater the number of investors that participate in a given marketplace, and the greater the centralization of that marketplace, the more liquid the market.

Fundamentally, secondary markets mesh the investor's preference for liquidity (i.e., the investor's desire not to tie up his or her money for a long period of time, in case the investor needs it to deal with unforeseen circumstances) with the capital user's preference to be able to use the capital for an extended period of time.

Accurate share price allocates scarce capital more efficiently when new projects are financed through a new primary market offering, but accuracy may also matter in the secondary market because: 1) price accuracy can reduce the agency costs of management, and make hostile takeover a less risky proposition and thus move capital into the hands of better managers, and 2) accurate share price aids the efficient allocation of debt finance whether debt offerings or institutional borrowing.