Learn – What is Share Market and How it Works
May 30, · What is Share Market in India? Earlier, stockbrokers would converge around Banyan trees to conduct trades of stocks. As the number of brokers increased and the streets overflowed, in , they relocated to Dalal Street, the place where the oldest stock exchange in Asia – the Bombay stock Exchange is now ctcwd.comted Reading Time: 5 mins. Mar 25, · Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since.
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Expert Views. Technicals Technical Chart. Commodities Views News. Forex Forex News. Currency Converter. More Sitemap Definitions. Saloni Goel. Font Size Abc Small. Abc Medium. Abc Large. In a share market, shares are bought and sold. The stock market is a share market, however besides shares of companies, other instruments like bonds, mutual funds and derivative contracts too are traded in the stock market.
There are two kinds of share markets : Primary share market A company enters the primary market to raise funds.
It is in im primary market that a company gets registered to issue shares to the public and raise indiw. Companies generally get listed thd the stock exchange through the primary market route. In case a company is selling shares for the first time, it is called an Initial Public Offering or IPOafter which the company becomes public.
While going for an IPO, the company has to provide details about itself, its financials, it promoters, its businesses, stocks being issued, price band and so on. Read this article in : Hindi. Also, ETMarkets. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds. Thank you for sharing this valuable information. Your articles are always very informative.
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Before starting to invest in stocks, it is important to learn about what the share market is and how it works. It is where shares of different companies are traded. In India, there are two primary exchanges; the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Investment is a key to your safe and secured future. Jul 10, · For example: Shares of Tata Steel are trading in the market at Rs a share. An investor can buy these shares at current market price and will get part-ownership of the company and become a shareholder. The share market is a source for companies to raise funds and for investors to buy part-ownership in growing businesses and grow their wealth. On becoming a shareholder, an investor Author: Saloni Goel. Share Market Today | Share Market Live updates: Get all the Latest Share Market News and Updates on The Economic Times. Share Market Live Charts, News, Analysis, IPO News and more. India Ratings lowers country's FY22 GDP growth forecast to %. 23 Apr , China equity benchmarks rise, helped by green stocks, healthcare plays.
We all know how important it is to invest money in the right avenues to grow wealth. Stock market investment is one such lucrative option that has rewarded steadfast investors with high returns over the years. However, to gain the maximum out of a financial instrument, it is essential to know about its workings. The stock market is an avenue where investors trade in shares, bonds, and derivatives. This trading is facilitated by stock exchanges, which can be thought of as markets that connect buyers and sellers.
Four participants are involved in the trading of shares in the Indian stock market. Stock exchanges : The stock market is an avenue where investors trade in shares, bonds, and derivatives. This trading is facilitated by stock exchanges. In India, there are two primary stock exchanges on which companies are listed. Investors are individuals who purchase stocks to become part owners in the company. Trading involves buying or selling this equity. To understand how to share market works, the next thing is to learn about primary and secondary markets.
The primary stock market provides an opportunity to issuers of stocks, especially corporates, to raise resources to meet their investment requirements and discharge some obligations and liabilities. Through an IPO, a company sells its shares for the first time to the public. An IPO opens for a particular period. Within this window, investors can bid for the shares and buy them at the issue price announced by the company.
Once the subscription period is over, the shares are allotted to the bidders. The companies are then called public because they have given out their shares to the common public. For this, companies need to pay a fee to the stock exchanges. The last step involves listing the company on the stock market, which means that the stock issued during the IPO can now freely be bought and sold.
The secondary stock market is where shares of a company are traded after being initially offered to the public in the primary market. It is a market where buyers and sellers meet directly. Once listed on the stock exchanges, the stocks issued by companies can be traded in the secondary market to make profits or cut losses. Your broker passes on your buy order for shares to the stock exchange. The stock exchange searches for a sell order for the same share.
Once a seller and a buyer are found and fixed, a price is agreed to finalize the transaction. Post that the stock exchange communicates to your broker that your order has been confirmed.
It then facilitates the actual transfer of ownership of shares from sellers to buyers. This process is called the settlement cycle. Earlier, it used to take weeks to settle stock trades. Stockbrokers identify their clients by a unique code assigned to an investor. Apart from the purchase price of a stock, an investor is also supposed to pay brokerage fees, stamp duty, and securities transaction tax. In case of a sale transaction, these costs are reduced from the sale proceeds, and then the remaining amount is paid to the investor.
But the stock trading process has become electronic today. So, the process of matching buyers and sellers is done online and as a result, trading happens within minutes. You now know that your possession is valuable and decide to reject the current offers, hoping for a higher bid tomorrow. However, the next day, a fellow student brings a better quality notebook to school with shinier pages.
Your friends are now attracted to this notebook more than yours and this leads to a dip in the value of your notebook. Now only a handful of people are willing to pay for your notebook and that too at the last quoted price i. When the students were optimistic and ready to pay higher cash than its current price, the price appreciated.
When a lesser number of students wanted your notebook, the price fell down. The Indian stock exchanges, BSE and NSE, have algorithms that determine the price of stocks on the basis of volume traded and these prices change pretty fast.
So this is how the stock market works in India. There is definitely more to it however this is a good starting point to develop further understanding. Disclaimer: The views expressed here are of the author and do not reflect those of Groww. Mutual Fund Calculator. Investment in securities market are subject to market risks, read all the related documents carefully before investing. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved.
NBT do not guarantee any assured returns on any investments. Covering all things personal finance, I strive to make complicated financial concepts snackable and novice-friendly. I believe good content empowers people to unleash their wealth-creation potential, and I am happy if I can contribute to it. Investment Basics. In this article Participants of the Stock Market 1. Primary Markets 2. Investing in stocks is now super simple Free Demat account Zero maintenance charges.
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