Stock Market is a public market for the trading of listed company stocks and derivatives at an agreed price.When coming to invest in stocks, new investors need some quick reference to understand the function of Stock Market and strategies in trading.Stock market can divided into two parts.One is Primary market and the other is Secondary market.Primary market involves in the new issues of shares and bonds directly from the listed companies.This is called public issue.When an investor buys a stock of a Company, he is called a share holder or stock holder of that company.
"Stock Exchange" is the secondary market which provides trading facilities for Stock Brokers and traders.There we have to buy or sell second hand shares of any listed company.For example, you can buy second hand shares of any listed company like TATA MOTORS, VIP Industries, Uco Bank, Vijaya Bank etc.Imagine that if you buy 100 shares of TATA MOTORS at a price of Rs.300 and you sell it when the price is 310, so the difference is your profit.i.e Rs 1000.Otherwise the price is dropping and you sell it at Rs.290, then you loss Rs.1000.In India most stock trading activities are done through an intermediary called a broker.Stock Broker is a regulated professional who buys and sells shares and other financial securities through market makers or agency firms on behalf of investors and traders.They executing buy and sell orders submitted by an investor charges a fee.
To be able to buy or sell shares in the stock markets a client would need to be registered with a stock broker who holds membership in stock exchanges and is registered with SEBI.To start trading in shares, Indian citizens have to open a trading account with a stock broker and a DP account with a Depository Participant.The client can approach any DP of their choice and fill up an account opening form.At the time of opening an account, the client has to sign an agreement with the DP in a NSDL prescribed standard agreement, which details the clients and their DP's right and duties.
Investment in good equity shares brings different types of returns such as capital appreciation,dividend,bonus and right shares etc.Capital gain is the difference between buying price and selling price of a share.People buy shares with the view of selling at a better price and this difference is one of the most important gain from equity investment.In a right issue, a company issues new shares by giving existing share holders the right to purchase new shares in proportion to their existing holding.Dividend is the part of profit distributed by the company among its investors.Bonus share is a share issued by the companies to their share holders free of cost by Capitalization of accumulated reserves from the profits earned in the earlier years.
Share trading requires study,dedication and experience.Product knowledge is must.If you want to make quick money investing in stocks, you need to be a good at money management technique.Getting more profit depends upon your knowledge and experience.Successfully opening a demat account you are ready to do buying and selling of shares in Stock Exchanges like BSE(Bombay Stock Exchange) and NSE(National Stock Exchange).Stock exchanges make arrangements to change the ownership of shares from Seller to Buyer, collect some fee to process the trades.In India Stock Exchanges are regulated by an authority named SEBI(Securities and Exchange Board of India).
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