Final answer:
Transactions that don't involve the original issuers of securities occur in the secondary market, which provides liquidity as securities can be sold and bought between investors. The primary market is where securities are first issued and often are not transferrable.
Step-by-step explanation:
Transactions that do not involve the original issue of securities take place in secondary markets. In the secondary market, assets or securities are traded between investors without the involvement of the original issuer. This market is crucial for providing liquidity to investors, allowing them to sell their assets to others with relative ease and potentially without a significant loss in value.
The primary market, on the other hand, involves the original issuer of the securities. When securities are initially created and sold, this is conducted in the primary market, and often these securities, like government bonds and certain retirement accounts, cannot be transferred to another individual. The primary market provides the original sale of securities to investors.
It is important in financial markets to understand the difference between these two. Whether securities can be traded freely in the market or if they are bound to the original issuer differentiates a primary from a secondary market.