A stock market is a place where the buyers and seller meet in the presence of brokers to exchange the stocks. When a company releases IPO, a person can buy the share from the company for a particular face value mentioned. The share price of a stock fluctuates based on the buyers/sellers active participation. The stock market is a secondary market. Online trading can be started with a DEMAT account where all the certificates of a person are electronically saved in NSDL. SEBI protects, promotes and regulates the stock market and the exchanges. For a company to publish IPO, it has to pass through various criteria mentioned by SEBI. Investing and trading are two different activities which differ based on the period, capital growth and risk factor. An activity in stock market can either be a business or a gamble based on prior study of return-risk ratio. When the price is expected to increase, it is advised to take long position (buy first and sell when the price increases). When the price is expected to decrease, it is advised to take short position (sell first and buy later when the price decreases). SENSEX and NIFTY are the indexes of BSE and NSE respectively, determining the averages of the top 30/50 companies listed in their particular exchanges. NSE is more preferred than BSE.

  • Stock market is a platform where buyers and sellers meet to exchange stocks with the help of brokers.

  • Stock market is required to make the buyers and sellers meet. Here the exchange acts as market and the buyers/sellers are the participants. Companies need stock market in order to find large number shareholders to pool their capital.

  • A vegetable market in koyembedu is similar to stock market as in both places, the buyers/sellers meet in a common platform to exchange their commodities with the brokers as mediators, listing various companies with various share prices fluctuating based on the traffic of buyers and sellers.
    The difference between stock market and the rest is that, stock market is also known as secondary market, where the stocks are immaterial and are exchanged between the participants without involving the companies. The participants act as retailers.

  • SEBI stands for Security Exchange Board of India. SEBI's role is to protect the interest of investors, to promote the development of stock exchange and to regulate the movement of stock market itself.

  • A share holder of a company is the one who has purchased a certificate with a particular face value during the IPO or a particular share price during the exchange. He/She has a particular % of share in that company's earning ability.
    A promoter is a person who was initially responsible for the company's growth.
    A director is a person who runs the company. He/she needn't necessarily be the sole proprietor.

  • Primary market is a place where the company sells its commodity to the customers by making public announcements through many means of communication. Secondary market like stock market is a place where the stocks are exchanged between the participants without the involvement of the company.

  • IPO stands for Initial Public Offer. To apply for IPO in a company, one needs to create a DEMAT account.For a company to issue a IPO, it needs to pass certain level of examination and criteria assigned by SEBI.

  • A shareholder can extend the rights for refund/dividends depending upon the conditions mentioned by the company. Some offer stock dividends, cash dividends or bonus.

  • In terms of periods, an investor plays a buy and hold position, retaining the stocks for a very long time. Whereas a trader holds a stock for a much lesser time. In terms of capital growth, the investor aims at accumulated wealth by means of compounded interest and bonus shares, by not taking the short term market fluctuations into account. Whereas a trader buys a stock and waits for the right time by studying the price pattern to sell the stocks at a higher performance. In terms of risk, both faces it. But an investor faces lesser risk when compared to a trader.

  • Face value is the standard price of each certificate as fixed by the company during IPO. A Dividend is the share of every shareholder received when the company experiences a profit, which is the profit divided by the number of share he/she holds. Bonus share is given when a company decides to accumulate its profit and instead gives shares to a shareholder for that particular profit he/she has to get. Split happens when the company decides to liquidate their shares in the market. For example, a split of 1:2 means, the shareholder gets twice the number of share as he holds, but the face values becomes half of its price.

  • Sensex and Nifty are the indexes of BSE and NSE respectively. Sensex is the average earning ability of top 30 companies in BSE. Nifty is the average earning ability of top 50 companies in NSE.

  • NSE is a newer exchange than BSE. NSE is considered to be the most preferable exchange than BSE because of better transparency, direct participation of traders/investors, lesser transaction charge than BSE.

  • Whats the difference between stock dividend and bonus share?
1 Comment
  1. vignesh 4 years ago

    Answering to your question 1 :: Whats the difference between stock dividend and bonus share?
    Profit share given in form cash is called dividend while profit share given in form shares is called bonus.

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