Equity instruments are of great importance for saving and investment process in financial market. Firms raise the funds by issuing equity that provides ownership to the investors. Equity, preference shares as well as mutual funds or derivatives of equity are traded in equity market or security market. Security market can be broadly classified into two categories i.e., Primary market and Secondary market.

Equity shares can be issued first time either privately to the investors which is called as private placement or publicly through Initial Public Offering (IPO) with the help of investment bank in the primary market. If the company is already listed in stock exchange and issues additional shares for raising additional funds then it is called as Secondary Public Offering (SPO).

There is a secondary market for trading the equity instruments through which no new capital is raised. Secondary
market can be classified into two categories i.e., organized stock exchange and Over-the-counter (OTC) markets. Over-the-counter market is a market place for financial instruments which are unlisted. Dealers market is one kind of OTC market where trading generally takes place through electronic means. Dealer is the agent who buys and sells securities on his own account rather than as a broker for his client.