Fundamental of stock market

 

There are four main investment types, or asset classes, that you can choose from, each with distinct characteristics, risks and benefits.

• Growth investments. ...
• Shares. ...
• Property. ...
• Defensive investments. ...
• Cash. ...
• Fixed interest
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• Why stock market is the best business ?

   There are many motivating reasons to choose trading stocks. Here are the some of the top reasons why trading stocks is really the perfect business.

  Ø No inventory

  Ø No angry customers or complaints, no returns

  Ø Can work from home anywhere in the world

  Ø No paperwork - year end statement is sent to you

  No selling, no recruiting, no networking

• Ø Compounding effect

  Ø Recession free business

  Ø Gives you financial freedom

  Ø Anyone can easily scale up

  Gives you more free time for friends and family Master of your

  own destiny

   What do you mean by share?

  In simple terms, a share is a percentage of ownership in a company or a financial asset. Investors who hold shares of any company are known as shareholders. For example ; if the market capitalization of a company is Rs. ... 10 then the number of shares to be issued will be 1 lakh. A share or a stock is a part of the company that it makes available for sale. So when you buy a stock, you’re basically buying a part of the company. Companies sell their shares when they need to raise money.

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  What is share and types of share?
  A share is referred to as a unit of ownership which represents an equal proportion of a company's capital. A share entitles the shareholders to an equal claim on profit and losses of the company. There are majorly two kinds of shares i.e. equity shares and preference shares 

  
  

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• What is share and how it works?

  Stocks, shares and equities work by giving direct exposure to a company's performance. Shares will rise in value when the company is doing well, and they'll fall in value when the company is doing poorly. Stock exchanges facilitate the exchange of shares in publicly listed companies

   

  What is the stock market?

  In its most basic form, the share or stock market is the place where

  buying and selling of shares take place.

   

  How does the stock market exactly work?

  To understand the process, let’s take a look at the four main parties

  involved in any share market transaction:

  SEBI: SEBI stands for Securities and Exchange Board of India and its main purpose is to make sure that all the activities that happen in the share market are fair and do not jeopardize the interests of any specific participant(s) involved.

  Stock Exchanges: A stock exchange is essentially the place where stock buyers meet the stock sellers. To participate in the trading process, participants must first be registered with the stock exchange and SEBI.

  India has these two main stock exchanges:

  BSE (Bombay Stock Exchange)

  NSE (National Stock Exchange)

• Brokers: The role of brokers (or brokerage firms) is to act as a mediator between you (the investor) and the stock exchange to help facilitate the buying and selling of shares.

  Traders: These are the people who are looking to buy or sell shares

  The Process: The process starts with a company that wants to raise money, they release the details of their stocks that they want to sell through an IPO. An IPO (Initial Public Offering ) is basically the first time a company sells its shares to the public. This is the primary market stage. After this, the company’s stocks can be traded between the sellers and the buyers. This is the secondary market stage. But due to a large number of potential traders, it’s not possible for them to conduct the trade at the same time and place. Hence, stockbrokers and brokerage firms step in to act as the intermediary party between the buyers and the stock exchange.

  Now if the trader wants to buy a share, the request is forwarded to

  the broker who sends the order to the stock exchange. The stock

  exchange then matches the traders buy request with that share’s sell request. Once both the parties (seller and buyer) agree to the price of the share, the transaction is finalized which is intimated by the exchange to the broker, who in turn passes on the confirmation status to the investor. This entire process takes place in about two days. It is important to keep in the mind the fact that the prices of shares keep fluctuating as the demand for that stock increases or decreases.

   

  What is demat and trading account?

  Demat account is a repository where the digital copies of your stocks are held. If you buy 100 shares of Tata Steel, it will be held in your Demat account. Trading account is a platform in which you credit funds, and buy and sell shares. Trading account enables you to do stock transactions. E.g after logging into your trading account, and buying shares, it will be credited to your demat account. Like, when you sell these shares, they will be digitally removed to the buyers account. You usually require both - one to buy / sell and other to hold the scripts that you have bought.

  Yes, you need to fund your account before you buy stock for delivery. Brokerage is deducted from your trading account. Demat account has no role in it.

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