What is the term for trading investment securities after their initial public offering?

The term for trading investment securities after their initial public offering is known as the secondary market. In this market, previously issued securities are bought and sold among investors, rather than being acquired directly from the issuing company. This allows holders of securities to exchange their investments, providing liquidity and the opportunity for investors to respond to changing market conditions or personal financial situations.

In the secondary market, prices are determined by supply and demand dynamics, reflecting investor sentiment and overall market activity. This contrasts with the primary market, where new securities are created and sold directly by the issuing entity to raise capital. The secondary market plays a crucial role in the financial system, as it allows investors to realize gains or losses on their investments and provides an essential mechanism for price discovery.

Other markets mentioned, such as the over-the-counter market and the derivatives market, serve different functions. The over-the-counter market refers to trading that occurs directly between parties, usually facilitated by dealers, rather than on formal exchanges. The derivatives market is focused on financial instruments whose value is derived from underlying assets, rather than the buying and selling of securities in their original form.