Preliminaries of Stock Market

1. Stock market is where buyers and sellers meet to trade their shares.
2. We need stock market for exchange of shares
3. Stock markets are where only stocks and stock related derivatives are trades.
4. SEBI is regulator for stock markets.
5. Companies consists of shareholders, promoters, directors.
6. Primary market is for buying of new shares in IPOs and Secondary market is for buying and selling of shares already held by the investors.
7. IPO is Initial Public Offer for issuance of new shares to public.
8. Shareholder has no right to ask for refund or dividend.
9. Investment is for long term accumulation of wealth where is trading is to benefit out of share price movements in short term.
10. Every share has a face value. Dividend is sharing of profit. Split is division of shares. Bonus is issuance of additional shares.
11. Sensex is Index of 30 companies of BSE, while Nifty is index of 50 companies listed in NSE.
12. Nifty is more popular as it is more vibrant than Sensex given its diversified derivate market.