Stock Market Basics : Learn share market basics in India :: Part 1
What is Share Market?
Stock market is just like a grocery shop where you buy and sell stocks. We know that all companies needs money to run their business. But sometimes they don’t make sufficient money to run their working requirements. And so, Companies invites normal people to invest money in their company so they can run efficiently and in returns investors get a share whatever they profit make. Then the first question arise in everyones mind that what are shares?
What are shares?
A company’s capital is divided into small equal units of a finite number. Each unit is known as a share. Or we can say a share is a percentage of ownership in a company or a financial asset. Investors who hold shares of any company are known as shareholder. If You buy 2% of shares in any company you can say that you have 2% ownership in this company.
What is IPO?
IPO is abbreviation of Initial Public Offering. The first time company offers shares to public then, It is called IPO. Security and Exchange Board of India(SEBI) is a regulatory body which make some rules and regulations for a company to list its IPO in the exchanges. If you are thinking that what is SEBI? Then It is a regulatory body to regulate oversee any fraudulent transactions and activities made by any companies, investors, traders, brokers.
What are stock exchanges?
Stock exchanges are the platform where traders and buyers buy and sell stocks. There are two primary stock exchange in India BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). Company has to registered first to any Exchange before issue there shares to public.
What is Nifty 50 and SENSEX?
We all heard atleast once in NEWS about NIFTY and SENSEX. But many of us don’t know what is it.
Nifty 50 is a collection of top 50 companies listed on NSE. and SENSEX is a collection of top 30 companies listed on BSE. If the average price of all companies shares are increasing listed in NSE or BSE, Then Nifty 50 and SENSEX are also increases respectively. Nifty 50 and SENSEX are indicies. India’s top companies listed in Nifty 50 and SENSEX, so according to their data we can also predict the economy of india is increasing or decreasing.
How do we make money?
When we buy stocks at lower price and sell it at higher price we make money. There are two way to gain capital, If we buy at lower price and sell at higher price it is called long position or long. And if we sell at higher price and then buy at lower price it is known as short selling of short. When the chance of stock price is increasing then we buy for long position and sell at higher price. And if there is possibility of stock price is decreasing then we short our position and buy at lower price and book profit.
if you like my content then you can buy me a coffee as clicking it.
