Which market involves trading previously issued securities?

The correct answer is the Secondary Market, where trading occurs for previously issued securities. In the context of financial markets, the secondary market plays a crucial role in providing liquidity and enabling investors to buy and sell securities after their initial issuance in the primary market.

When a company first issues stocks or bonds, they do so in the primary market, where they receive funds directly from investors. Once these securities are sold, they can be resold in the secondary market. This is where existing shareholders sell their shares to other investors, allowing for the trading of securities without the company receiving any additional funding.

The functioning of the secondary market is essential as it helps to determine the market value of securities, and impacts investors' decision-making by providing a visible and accessible platform for trading. It also enhances the overall efficiency of the financial markets by allowing for price discovery and enabling investors to adjust their portfolios based on market conditions.