market, also known as the share market, is a platform where publicly traded
companies' stocks and other securities are bought and sold by buyers and
sellers during specific hours of the day while adhering to SEBI’s well-defined guidelines.
Types of Share Market
market is divided into two main sections: primary market and secondary market.
Market: The primary
market is where companies raise capital by issuing new stocks to the public. When
a company registers itself for the first time at the Stock Exchange to raise
funds through shares, it enters the primary market. This is called an Initial Public Offering (IPO). After this, the company
becomes publicly registered and its shares can be traded by the market
secondary market is where investors buy and sell existing stocks that have
already been issued by companies. The secondary market is also where the stock
prices are determined based on supply and demand.
Major Stock Exchanges in India
two major types of Stock Exchanges in India, namely the-
Stock Exchange (BSE): The Bombay Stock Exchange was
established in 1875 in Mumbai at Dalal Street. It is one of the oldest and 6th
largest stock exchange in the world.
estimated market capitalization of Bombay Stock Exchange as of January stands
at $ 4.25 Trillion and has around 6000 companies listed under it.
Stock Exchange (NSE): The National Stock Exchange was
established in 1992 in Mumbai. It has evolved itself into an advanced and
automated system offering trading facilities to investors and traders across
estimated market capitalization of National Stock Exchange as of August stands
at $ 3.4 Trillion and is acclaimed as the 12th largest stock
exchange in the world.
How to Invest in the Stock Market?
To invest in
the stock market, you need to open a brokerage account with a registered stockbroker. A stockbroker is a licensed
professional who can buy and sell securities on your behalf. Before investing,
it is essential to research the companies you are interested in and their
financial health. It is also important to diversify your investments to
minimize the risk of losses. Investing in the stock market can also be very
profitable, as stock prices can rise over time and provide significant returns
What are the Financial Instruments traded in the Share Market?
four categories of financial instruments that are traded on the Share Market.
These include: -
A share or a stock of a company represents a unit of equity
ownership in a company. Shareholders are entitled to any profits in the form of
Dividends that the company may earn. They also enjoy the right to vote in any Annual
General Meeting (AGM) of the company.
Mutual Funds are investments that allow you to indirectly
invest in share markets or bonds. In simpler terms, the money pooled by a large
number of people (or investors) is what makes a Mutual Fund.
To undertake long term and profitable projects, a company
requires substantial amount of capital. Bonds refer to high-security debt
instruments that enable an organization to raise funds and capital to fulfil
The term Derivative refers to a type of financial contract
whose value is dependent on an underlying asset or a group of assets. This can
have a wide variety such as shares, bonds, currency, commodities and more.
Contract value depends on changes in the price of the underlying asset.
time, investing in the Stock Market can be considered as one of the best ways
to generate long term wealth. With a right strategic investment plan, any
investor can achieve their long term desired financial goals with the help of
the stock market.