In which market do companies issue shares for the first time during an IPO?

When a company issues shares for the first time during an Initial Public Offering (IPO), that transaction takes place in the primary market. This market is designated for the issuance of new securities, where companies raise capital by selling shares directly to investors. The primary market allows the company to collect the funds it needs to support its operations or growth initiatives, and investors who buy shares at this point become the company's shareholders.

In contrast, the secondary market is where investors buy and sell shares among themselves after the initial issuance has occurred. The private market involves transactions that occur away from public exchanges and typically includes private placements, where securities are sold to a limited number of investors, rather than to the general public. The derivatives market involves financial instruments that derive their value from the performance of underlying assets and is unrelated to the initial issuance of equity securities. Thus, the primary market is specifically where IPOs occur, making it the correct choice for this question.