1)A stock market is through which traders buy and sell shares.
2)Face value , dividend , bonus , split – all these are decided by the director of the company and the share holder has no say in it.
3)When the trading deal is executed it is known as a trade settlement.
4)The ability to calculate the risk-reward ratio is known as knowledge.
5)If the risk is greater than the reward , it is known as gambling and if the reward is greater than risk it is business.
6)Income minus expense gives us profit/loss. If the answer is positive, then it is a profit else, loss.
7)SEBI keeps a check on malpractices and makes sure that the trade is clean.

  • A market is a medium through which buyers and sellers of a particular product interact and facilitate an exchange. In stock market, shares are traded.

  • In order to buy shares, we need to know all the possible options. Likewise, to sell shares we need to know all the options to sell it at the right price. Stock market is a medium through which a large number of buyers and sellers meet to trade shares effectively.

  • Vegetable, Electronics, Shares, Clothes ,etc. In all types of market, the presence of buyers and sellers are a must. The only difference between different markets is that the product which is being traded is different.

  • SEBI, Securities Exchange Board of India keeps an eye on the exchanges and checks on malpractices to make sure that the traders are protected.

  • If a person buys the shares of a company, he becomes a part owner of the company and is known as a share holder.
    A person who promotes the company from base is a promoter.
    Director is the one who takes all the decisions and runs the company.

  • In primary market the company looks to known people for investment. This usually happens when the capital is low. When the capital is high the issue is taken public and through a secordary market(stock market) anyone can invest and become a part owner of the company.

  • When the company seeks the public for capital for the first time, it comes under IPO(initial public offer). To apply for an IPO, the company has to be registered in the stock exchange.

  • The share holder has no right to ask for a refund or a dividend because the money is already invested and it is upon the director to decide whether to give dividends to the share holders or not.

  • Investors buy and accumulate wealth, in this case shares, over a long period of time and profits only in the long run. On the other hand, traders buy and sell shares more frequently and aims at a short-term profit.

  • Face value is the denomination (capital required/ no. of people).
    Dividend is the share of the profit which is given to the share holders(profit/no. of shares).
    Bonus shares is given to the share holders instead of dividend by the choice of the director.
    Suppose a person owns 1 share.When the face value of the share is reduced,say from rs.10 to re.1 , the share holder will now own 10 shares at the cost of re.1. This is split.

  • An index is an overview of how the market is performing on that particular day. SENSEX is the average performance of the top 30 companies in the Bombay Stock Exchange and NIFTY is the average performance of the top 50 companies in the National Stock Exchange.

  • NSE provide futures and options which BSE do not and hence a lot of people moved to NSE from BSE and it became popular. A market is more effective when the buyers and sellers are given a lot of options , which happens with the presence of lots of buyers and sellers. When trading became online, the traders who traded through the regional exchange moved to an exchange which had many buyers and sellers.

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