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Share Market Basics !


Share Market 

In this blog we will learn about Share Market. Sounds tough right? Actually it's not.
In Layman's term , Share Market is a market where trading of shares take place. Now you might be wondering What is share ? Share is a part of capital which a firm distributes it's capital to the person who buys the share of the company. 
SEBI :- Securities Exchange Board of India is 

 an Indian Regulatory Body which regulates the securities market of India. One thing to keep in mind is that a stock of a company maybe bought or sold only if it is listed on exchange.

 Now we will talk about types of market. Usually there are 2 types of markets:-
1. Primary Market
2. Secondary Market

 Primary Market :- Primary Market is a market where new issue or fresh issue of shares take place. To issue new shares a company should be registered as a public company and should invite public for issue of share through IPO(Initial Public Offer).

 Secondary Market :-  Secondary Market is a market where once the new securities are sold in primary market are traded between different traders in secondary market.

 Now a days everything has gone digital. Now we will learn about how you can buy shares online?.

 "Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years” – Warren Buffet

 Prerequisite for Online Trading in Shares:

  • Trading & Demat Account: A Demat Account is a dematerialized account which gives it's users the facility of holding shares and securities in electronic format like a bank account which gives facility to hold cash in electronic format.
Now we will see what are the financial instrument traded in stock market?
  • Shares
  • Bonds
  • Derivatives
  • Mutual Funds
If you are continuing till here it means you find it easy to read here right? :)

Now we will talk about some terminologies used in Share Markets-

Rolling Settlement: Rolling Settlement implies that all traders have to be settled at the end of the day. In India, there is T+2 Settlement Cycle. T+2 Settlement Cycle is payment is made after 2 days where Saturday and Sunday both are excluded.

Short-Selling: Let's explain short-selling with an example. There's an investor named Akash.Akash comes to know about a price of a particular stock of a company may go down in coming time so Akash borrows the share at current price which is Rs 50 and sells it at that price and when the price dips down to suppose Rs 45 Akash purchases that share at the current price and return it to the borrower which helps him in pocketing a profit in the bargain.  


Margin Trading: Margin Trading is a trading where traders trade on stock using borrowed funds or securities. It's almost like buying on credit.

Now we will talk about very two important term used in stock markets.


  • Bear Market: Bear Market is a market condition where the market of share is not good i.e prices of shares are going down. Now you might be wondering why the name bear market? As the name suggests the reason behind naming this market is the how bear attacks it's prey. Bear pulls down it's prey for hunt.


  • Bull Market: Bull Market is a market condition where the market of share is going good i.e the prices of stock is going up. The reason behind bull market name is as the bull attack it's prey it makes the use of it's horn to push it's prey in the air.



That's All Folks for the basics. 

If you are interested and need consultancy in investing in Stock Market with less risks and proper guidance do visit : http://wealthmaxsolution.com/ 








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