A stock is a venture that addresses a share, or halfway proprietorship, of an organization. When a person buys the stock, he obtains the ownership of that organization based on the number of shares that he has purchased.
The Stock Market is a platform where public and institutional investors can buy, sell, and issue shares of publicly-held companies or corporations.
A stock market is a platform where stocks and derivatives are being bought and sold. The buyers and sellers of the stocks have to be registered with the stock exchange and SEBI to conduct the trading activities. The buying and selling activity is conducted in the form of auctions. The buyers place bids and sellers offer asking prices for shares of stock.
The process of a new company’s listing in the stock market starts with an Initial Public Offering (IPO). It is a process where the company lists details about itself and the stocks it is issuing.
The stock exchange works as a facilitator for the stock market activities, i.e., buying, selling, and issuing shares of publicly-held companies or corporations with the public.
Primarily, lndia has two major stock exchanges - the
1) National Stock Exchange of India (NSE) and the
2) Bombay Stock Exchange of India (BSE).
In addition to these two, there are-
3) MULTI COMMODITY EXCHANGE (MCX)
4) CALCUTTA STOCK EXCHANGE (CSE)
5) PUNE STOCK EXCHANGE (PSE)
Demat Account is used to hold shares and securities in electronic format. The term DEMAT refers to Dematerialization in which financial securities like Shares, Bonds, Government securities, Mutual Funds, Insurance and ETFs are converted ) from physical form into Electronic form. Opening a Demat account makes share holding easy so that trader can opt for online share trading.
A brokerage account is an investment account that allows the traders to buy and sell investments in the form of stocks, bonds, mutual funds, and ETFs. A brokerage account lets a trader use his funds whenever and however he wants.
A trader can be either a professional, trading on behalf of a financial company or an individual who engages in the buying and selling of shares in the stock market. The basic functions and goal of earning profit from the purchase and sale of securities are same for both the professional and individual traders. The only difference is that a professional/institutional trader is often employed by investment firms and an Individual trader does the buying and selling through a brokerage.
There are 5 trading days in a week from Monday to Friday. The Stock Market opens at 9:15 AM and closes at 3:30 PM every day.
For a beginner, stock market trading starts with educating oneself on reading the financial markets via charts and price action. This is to be followed by using technical analysis, in conjunction with fundamental analysis, which will help the trader in understanding the price action.
The step-by-step process for a beginner is as follows:
1) Open a Demat account.
2) Understand stock prices on the basis of technical and fundamental analysis.
3) Deciding on the correct bids and asks.
4) Studying the fundamental and technical analysis of stock.
5) Learn to set a stop loss price for preventing heavy loss.
6) Ask an expert to make the right trading decision.
7) Start slow with safer stocks.
Earning from Stock Market can be done in two ways:
Firstly, buying a stock at a low price and sell it off at a higher price will let one earn a nice profit.
Secondly, short-selling the stock at a higher price and then buying it back at a lower price.
The entire process of investing in stocks and making money may let one derive best results if the following factors or practices are kept in mind-
1. Learn to take advantage of time. One can earn good on long-term holdings.
2. Continue investing regularly.
3. Maintain a diverse portfolio and invest in different types of securities.
4. Hire an investment advisor to obtain expert advice at times.