What is Stock Market and how does the stock market work?

 What is Stock Market and how to make money from it?

Do you know what is the stock market? You must have seen people talking about it often. And often you have seen many posts related to it on the internet, but do you know that most of the posts do not give you the right information about this thing, and that puts you in further confusion.

Many people want to invest in the Share Market but due to their lack of proper knowledge about the Stock Market, they either avoid investing in the Share Market and do not invest money in the stock or lose their money in the Share Market. The stock market has many names and it is known by different people by different names. "Share" is an English language word. The simplest and easiest meaning is "Hissa". And the stock market is what it is, it works on the principle of "share".

What is Stock Market and how does the stock market work?

BSE (Bombay Stock Exchange) is considered to be the largest stock exchange in India. It was established in 1875 as India's first stock exchange. The second stock exchange of India is the NSE (National Stock Exchange of India). It was established in 1992 as India's first demutualized electronic stock exchange.

So let's know what is this stock market? And how does it work? So our post today will try to give all the information related to the share market so that you can avoid taking more losses and also get good information about the stock market. Then, without delay, let's start and get complete information about the Stock Market.

What is Stock Market

As we know that lots of people know the stock market by different names and I have already told that the meaning of the share is directly "share" can be called share in a company in the stock market.

For example, suppose a company has issued one lakh shares. Now if a person buys all the shares in that company, he becomes the owner of that share in that company. For example, if a person buys 40,000 shares out of 1 lakh in the company, then his share will be 40% in that company. And he will own that 40% share.

Stocks show the individual's stake in any company. And whenever that person wants, he can sell his shares to others or he can buy another person's shares.

The value of shares or stocks of companies is recorded in the BSE. The value of the stocks of all the companies keeps decreasing or increasing according to the profitability of the company. Maintaining control of the entire market is done by the Securities and Exchange Board of India (SEBI). Only when SEBI gives permission to a company can a company issue its initial public offering, no company can issue an IPO without SEBI's permission.

When does the company appear in the stock market?

In order to be listed or visible in the stock market, the company has to make several agreements in writing from the Exchange, under that agreement, the company has to give information of its activities to the market from time to time, such information in this information also. This affects the interests of investors.

The valuation of the company is done on the basis of the information given by the company and on the basis of this assessment, the prices of the shares of that company fluctuate as demand increases. If any company does not follow the rules of the listing agreement and is found guilty of violating the rules, then the action will be taken by SEBI to remove them from the exchange.

Apart from this, the company has to go through a lot of things to appear in the stock market. Such as the complete record of the company for the last 3 years, the company's share in the market above 25 crores, the capital of the applicant company for IPO is at least ₹ 10Cr. And ₹ 3 CR for FPO. Should be Apart from all these things, many things are taken care of when the listing of the company is done. For the listing of a company, it has to follow strict rules.

What are the types of shares?

There can be many types of shares and different people define them differently. But we can divide the share mainly into 3 forms. Let us know the types of share: -

1.) Common Shares - Anyone can buy them. And can sell if needed. These are the most common methods of stock.

2.) Bonus Shares - When a company makes a good profit and that company wants to give some share of it to its shareholders. Instead, she does not want to give money and if she gives shares, it is called bonus share.

3.) Preferred Shares - This share is brought by the company only to certain people. When a company needs money and wants to raise some money from the market, the shares it will issue will give the first right to buy them only to certain people. Like employees working in a company. Such shares are considered very safe.

 How to Buy Stock?

To buy stocks, first, you have to decide whether you would like to buy stocks yourself or take the help of a broker. Only then can it be carried forward.

If you take the help of a broker, then first you have to open your account, which is called a Demat account. Which you can get opened through your broker. There is a lot of benefit in buying a stall through a broker, one is you will get good guidance, and second, you will be fully aware of the stock market.

Brokers take the money or share of profits in the stock to help you and stock information etc.

There are only 2 stock exchanges in India. NSE and another BSE. Only companies which are listed in them can be bought or sold in those stocks.

Whenever you buy and sell a share, its money comes into your Demat account. Your Demat account is linked to your bank account. You can easily send money from your Demat account to your bank account.

If you want to invest your money in the Share Market, then you can create your account on the Discount Broker "Zerodha". In this, you can open a Demat Account very quickly and easily and can also buy Share in it.

 What is Trading in the Stock Market?

The term "Trading" is very popular and very widely used in the stock market. This word in Hindi means "business". Whenever we buy an item or a service with the aim that after keeping that item and service for some time, we will make a profit by selling it. Can be called "Trading".

Similarly, when a person buys a stock in the stock market, the main objective of that person is that after the price of that stock goes up, they can earn profit by selling that stock. To make this profit, the whole process of buying and selling stocks is called "Trading".

What are the types of trading?

As such, there can be many types of trading. But mainly 3 types of trading are very much liked and used by people.

1) Intra-day Trading: Trades that are completed within a day are called intraday trading. In intra-day trading, the act of buying and selling stocks on the same day is done.

2) Scalper Trading: Trades that are sold within minutes of buying are called scalper trading. In this, shares are often bought and sold within 5 to 10 minutes. 

The profit in such a stock is high. But the profit can be increased only if the amount invested in it is more. There are more chances of loss as well because the amount charged is also high.

3) Swing Trading: In this the process of trading is completed in a few days, weeks or months. After purchasing the stock, investors keep it for some time like a week or month. After that, we wait after the stock price rises and when the right price is found. So let's sell it.

Stock Market is considered by people to be a dangerous sport. In which the man only drowns but it is not like that at all. This assumption is completely wrong. If invested in the stock market with the right methods and restraint, then the person can also make a lot of profit in this thing. But before jumping into it, it is very important for the person to get as much information about it. Incomplete information has always been dangerous.

But this does not mean that one should not invest in the stock market or there should be a different talent or ability to invest. Anyone can try and learn about the stock market and invest in it and with their experience, one can become an expert in the field of investing in the stock market.


I request all of you readers that you too share this information about the stock market in your neighborhood, relatives, your friends so that we will have awareness among us and everyone will benefit a lot from it. I need your support so that I can convey more new information to you.

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