General

What Is Stock Market – Introduction To Share Market For Beginners

NewsGram Desk

By Deepali Patil

Almost all companies need money to run their business, and at times, profit acquired from selling goods or services is not enough to align the working capital requirements. And several companies invite the general public to put some money in their company so that they can run it efficiently. By placing the money, the investors can get some profit. Firstly one needs to know about stock market basics. To learn in detail, one can also join stock market courses for beginners.

Things to know about shares:

Shares are said to be a part of the value of the company and in proportion to the capital one can invest in getting ownership rights to a certain percentage in the company. For example, one owns 2% of the shares being traded in the market, then they can say that they have 2% ownership in the company.

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Ideally, shares are units of ownership in the company and its financial assets, and they are also known as stocks, equity, scrips, etc. After buying them, one can be known as a stockholder or a shareholder of the company.

Why do organizations need shares?

A company will need more capital when it is scaling up, expanding its business, etc. A company can quickly enter the share market and offer a certain number of shares depending on its market value, which investors can buy under such times. One will be paying the company some money and, in return, get to be part-owners, and when the value of shares increases, the value of shares investors own also shoots up.

One must wonder investors are creditors, but in reality, they aren't. Hence one can join stock market courses for beginners as it is essential to understand why companies need shares.

Shares are units of ownership in the company and its financial assets. Pixabay

The company's process to list shares:

Initial Public Offering is an essential aspect of share market basics. It is the first time a company offers its shares to the public, known as an IPO. The market is regulated by the Securities and Exchange Board of India (Sebi). It has given out some rules and regulations for a company to list its IPO on exchanges.

The company needs to comply with being eligible for listing. Securities and Exchange Board of India is the market regulator for securities that keeps an eye on fraudulent transactions and activities made by any of the companies, investors, traders, brokers, and the likes.

Stock exchanges are said to be a place or a platform where traders and buyers come together to buy and sell stocks, and the leading exchanges include the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

What must you know about Nifty and Sensex?

The stock market works from 9.15 a.m. to 3.30 p.m. Unsplash

The companies that need to be listed on stock exchanges need to be approach NSE, BSE, or both. To understand the trend in the stock market in the best way possible, all the stock exchanges need equity benchmarks. Both BSE and NSE have a plethora of companies listed on them. It will be challenging for one siphon through this vast number of companies listed if they have to pick at least 30 stocks or look at what the bottom 100 are doing.

A collection of the topmost 50 companies listed on NSE is Nifty50, and a collection of the top 30 stocks listed on BSE by way of market capitalization is Sensex. Some of the leading companies are the ones that influence the stock market besides affecting the nation's economy.

If one wants to gauge the entire stock market, then one can consider looking at Sensex. Besides that, there are some sectoral indices as well; Nifty Pharma, BSEBankex, Nifty PSU, and others. One must know when they are permitted to buy and sell shares to learn about the stock market basics in India.

The stock market works from 9.15 a.m. to 3.30 p.m, and during some holidays, the market is shut.

The investors can make money through investments. Pixabay

The investors can make money how:

Ideally, when one buys shares at a lower price and sells it at a higher price, one can earn the capital gain as there are two ways to do this.

Stock investors- They are the ones who can keep their money in the stock for a more extended period, even for years, as returns are compounded over some time. They can use fundamental analysis and look at the growth trajectory of the company because their investment ideally grows with the company in the long term.

Stock traders- They ideally buy and sell within the same trading session and use technical analysis to understand which stocks to invest in. One needs to learn technical indicators like momentum oscillators, Bollinger bands, charts, and others.

One needs to open a Demat besides a trading account as most investment platforms and brokers currently offer one with a Demat cum trading account.

(Disclaimer: The article is sponsored and hence promotes some commercial links.)

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