This gives a brief overview of what stock market is and how it operates and the elements in stock market. This also gives more insight about the common terms that one needs to know when entering into stock market without which it will be highly difficult to understand how the market operates and what lies ahead…

  • : It is a place where buyers and sellers meet virtually to trade.
  • : It allows companies to raise money and to allow investors to participate in the financial achievements of the companies.
  • : Are you talking about BSE & NSE? I'm not pretty sure about the question.
  • : Securities and Exchange Board of India. It's role is to protect the interests of the investors and to promote the development and regulate the securities market.
  • : Share holder - Is an entity that legally owns one or more stock in a company Promoter - Is an entity that promotes a stock making the buyers to buy stocks Director - Manages the day-day operations of a company.
  • : Primary Market - Investors can buy shares directly from the company when they are floated for the first time in the market. Ex: IPO Secondary Market - Investors buy and sell stocks among themselves. Ex: BSE, NSE. Securities issued in primary market can be sold immediately in secondary market.
  • : IPO - Initial Public Offering is an offer given to the investors to buy shares for the first time by which the company can raise money for expansion and to become a publicly traded enterprises. It can be applied through the trading account or bank account. Once the account is set then all the filings are done. Next the pricing for the offer is set. Post that stabilization has to be done for a period, then the transition to market competition starts after 25 days of the IPO. HindPrakash IPO Issue Open - Jan 15, 2020 Issue Close - Jan 17, 2020 Issue Size - 2,880,000 Face Value - Rs.10/Equity Share Issue Price - Rs. 40/Equity Share Market Lot - 3000 Shares Min Order Quantity - 3000 Shares
  • : Shareholder's cannot ask for refund rather he/she can sell their share to another person. Dividend is decided by the company if it wants to share their profit among the investors. Shareholders doesn't have the rights to ask for refund or dividends.
  • : Investing - Building wealth gradually over a period of time thro buying and holding stocks. Trading - Involves frequent buying and selling targeting faster returns.
  • : Face Value - Original cost of the stock when a company releases an IPO. Dividend - Is the profit that the company makes in an year that is shared among the shareholders. Bonus - They are additional shares given to the shareholders at no extra cost. Split - It increases the number of shares of the company reducing the market price of individual share and not changing the total market capital.
  • : NIFTY - National Index Fifty is the weighted average of 50 Indian company stocks in 13 sectors. SENSEX - Sensitive Index is free float market weighted index of 31 companies. Nifty Index Value = Current Market Value/Base Market Capital*Base Index Value (1000) SENSEX = (Total free-float market capitalization/Base Market Capitalization)* Base Index Value
  • : NSE, despite having very few stocks listed as compared to gigantic BSE list, provides more liquidity for its stocks. This high liquidity is a plus point of NSE. NSE stocks provide more liquidity than BSE, thus a better choice for investors.
2 Comments
  1. Suresh Surulimuthu 3 years ago

    @amalalexander Good Start. All the Best!

  2. Suresh Surulimuthu 3 years ago

    I would like to try answering the 3rd question.

    What are the similarities and differences from other markets?
    Vegetable / Electronics / Garments markets are some of the markets where the vegetables, electronic goods and garments are traded between buyers and sellers. In all the markets the trading practices are same except the products. In stock market, the product is mainly shares where buyers and sellers are meeting through the stock brokers and do the transactions.

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