What does the term "primary offering" mean?

The term "primary offering" refers specifically to the first sale of securities to investors directly from the issuer. This is a foundational concept in securities regulation, as it distinguishes between the initial distribution of securities and subsequent transactions in the secondary market.

In a primary offering, the proceeds from the sale go directly to the issuing company, providing them with capital for operations or expansion. This contrasts with secondary offerings, where investors are buying and selling securities among themselves, and the issuer does not receive any funds from these transactions. Understanding this distinction is crucial for anyone involved in the securities industry, as it impacts both regulatory considerations and the valuation of securities.

The other options, while related to the broader context of securities trading, do not accurately define a primary offering. Resales of previously owned securities fall under the secondary market, and offerings limited to institutional investors do not define the nature of the primary offering. Consequently, the correct choice highlights the direct connection between issuers and new investors during the initial sale of securities.