Tuesday 31 July 2018

A Comprehensive Guide to Stock Market

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When people think of investing, the stock market immediately comes to their mind. However, many people get scared merely by the thought of investing in the stock market. There is nothing to be scared of the stock market. For a newbie, the financial news can be difficult to understand and confusing, but understanding the stock market and its various terms are not rocket science.

To help you get acquainted with this one of the most popular investment options, here we will be discussing it in detail.

What is the stock market?

In simple terms, we can define a stock market as a market where shares are traded. Like, a supermarket is a place to buy and sell groceries, a stock market is a place to buy and sell stock.
The share market is the term used for the collection of markets and exchanges where equities, bonds and other types of securities are issued and traded either over-the-counter markets or through formal exchanges.
The equity market is another term used for the stock market and is one of most important elements of a free-market economy, as it gives companies access to funds in exchange for giving investors a part of ownership.

What is a Stock Exchange?

Stock Exchange is another term for the stock market. Stock Exchange is organized and regulated the financial market for buying and selling of the industrial and financial security. Here, securities are bought and sold according to some well-defined set of rules. It gives a secure and convenient platform or mechanism for transactions in different securities. Such securities include debentures and shares issued by public companies which are properly listed at the stock exchange and debentures and bonds issued by port trust bodies, public and municipal corporations and government bodies.

Bombay stock exchange (BSE) is the oldest in India established on 09 July 1985. While the London stock exchange (LSE) is the oldest stock exchange in the world.  India also has a National Stock Exchange which was established in 1992.

How does share market work?


There are sellers and buyers in the market. When you want to invest in the stock market, you buy on the secondary market. In most cases, you are buying stocks from someone who already owns the shares and is interesting in selling them.

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