Share Market: Share means share. Market is the place where you can buy and sell.
In a literal sense, the stock market is a place to buy and sell a stake in a listed company. There are two major stock exchanges in India named Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
In BSE or NSE itself, shares of a listed company are bought and sold through a broker. However, bonds, mutual funds and derivatives are also traded in the stock market.
Domestic as well as foreign investors (FIIs or FPIs) invest a lot in the stock market or stock market with the expectation of big returns.
What does it mean to buy shares?
Suppose a company listed on NSE has issued a total of 10 lakh shares. According to the proposal of that company, you buy as many shares as you have ownership of that share in that company. You can sell your share of shares to any other buyer whenever you want.
When the company issues shares, the number of shares to be given to any individual or group is at its discretion. To buy/sell shares from the stock market, you have to take the help of a broker.
Brokers charge commission from their clients for buying and selling shares.
The value of shares of a listed company is recorded in BSE/NSE. The value of the shares of all listed companies fluctuates according to their profit making ability. The control of all stock markets is in the hands of the Securities and Exchange Board of India (SEBI or SEBI).
Only after the permission of SEBI, a company can issue its initial issue (IPO or IPO) by listing in the stock market.
On every quarter/half yearly or yearly basis the companies pay dividend to the shareholders on making profits. Information about the activities of the company is also available on the website of SEBI and BSE/NSE.
Perhaps you do not know, Warren Buffet, one of the world’s richest people, has also become a billionaire by investing in the stock market.
How can you start investing in the stock market?
First of all, you have to open a demat account with the help of a broker. After this you have to link the demat account with your bank account.
You transfer funds from the bank account to your demat account and buy shares of any company by logging in yourself from the broker’s website or placing an order on it.
After that those shares will be transferred to your demat account. You can sell it whenever you want through a broker on any working day.
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