Shares (Equity)
Equity shares are instruments issued by companies to raise capital and it represents the title to the ownership of a company. You become an owner of a company by subscribing to its equity capital (whereby you will be allotted shares) or by buying its shares from its existing owner(s).
NSE (National Stock Exchange) and BSE (Bombay Stock Exchange)
The key factor in a stock market is the stock exchange – the basic platform that provides the facilities used to trade company stocks and other securities. A stock may be bought or sold only if it is listed on an exchange. Thus, it is the meeting place of the stock buyers and sellers
What is an Index?
An index is a statistical measure. It refers to a bunch of stocks grouped together, where each stock has a value. If the value of one or more stocks increases, then the index value will increase. If the value of one or more stocks decreases, then the index value will decrease Nifty is the Index for NSE and Sensex is the Index for BSE.
What is the role of a Depository?
It holds the securities in an account. It transfers securities between accounts on the instruction of account holder NSDL – National Securities Depository Limited and CDSL – Central Depository service Limited
What is the role of a clearing corporation?
It provides funds to those who have sold their shares. It receives the shares from the sellers and delivers it to the buyers. It provides a financial guarantee for all transactions. Example of a clearing corporation:
NSCCL: National Securities Clearing Corporation, which is a subsidy of NSE.
What is the role of a broker?
Mediator between you and exchanges, depositories, Clearance Corporation, banks etc.
Bank account Pumps money Demat account holds the securities Trading account to buy and sell securities