Friends, you must have heard about words like share market, Sensex, Nifty, NSE, BSE somewhere. You must have heard in newspapers, news channels etc. that today the stock market declined, today the Sensex closed so many points, today Nifty closed so many points down. So do you have a curiosity to know about all these. So let’s know in today’s post what is share market (What Is Share Market in Hindi), what is Sensex? What is Nifty? What is NSE, BSE. Lots of information about share market like How does stock market work?
What is Share Market ?
Friends, there is a market to buy and sell every particular item, such as a separate market for vegetables, a market for clothes, a market for household items, in the same way, to buy and sell shares of companies. There is a share market for. It is a normal market like other markets from where you can buy and sell shares and earn profit in between.
But there are no such shops in the share market, rather it all runs online. In the stock market, you buy shares according to your own money, and when the price of those shares increases, you can earn money by selling them, apart from trading, you can also earn money from selling. For this, you have to have a bank savings account, trading account and to open a demat account with any one brokerage company to buy and sell shares. There are many companies such as Groww, Angel Broking, Upstock, 5Paisa, Zerodha etc. where you can open an account to buy/sell shares. We will also talk about how all this works later. First let’s understand some more important things about it.
How does the stock market work
Friends, you must have understood very well that money is also needed for any company, business to run and grow. When a company enters the market, it has a purpose. Which product to make, how much capacity and in what quantity. According to them, they also need money. Now the company has to either take a loan for money. Either it can make money by selling some percentage stake in its company and it can list that stake in the stock market.
Suppose someone has a good business idea. But that business idea doesn’t have the money to deliver results. In such a situation, she can go to SEBI (Securities and Exchange Board of India), get her company listed in the stock market after completing the paperwork and raise money for her business from there.
Now share here means share. This means that the companies which are listed in the stock market or stock market sell their shares. When an investor buys shares, he becomes a shareholder in that company. This stake depends on the number of shares purchased. Brokers do the work of buying and selling shares, these shareholders and the company act as an important link in the market.
Suppose a company needs 10000 rupees to run its business. Now the company puts its shares in the market with their price. The company sells as much shares in the market as it needs money and it is less than 50% of the total share value. Only then does the ownership of the company remain. Now when a person buys shares of that company, he has to pay money based on the price of that share. Now if the company does good work, or more number of people express their curiosity to buy that share, then its share price also increases. And if the company does not do well, then its share price is low. In such a situation, a person can make money by buying and selling shares in the stock market. In such a situation, the company gets money to carry forward its business and the share holders get the profit between the shares bought and sold.
There is a different market for any company to be listed in the stock market, according to the rules of those markets, the company can list itself in the stock market. Talking about our country India, there are two markets available for this stock market. Let us know about them.
- NSE
- BSE
What is NSE ?
NSE means or full form is “National Stock Exchange”. Established in the year 1992, the National Stock Exchange (NSE) is the largest stock exchange in India in terms of market capitalization. NSE was the first stock exchange in India to bring in the system of electronic and fully automated trading. In just a few years, this electronic system of trading has completely replaced the paper based stock trading system by incorporating natural share certificates.
The stock exchange also has a benchmark index known as Nifty. The 50 most traded companies are listed under Nifty. And depending on their market, Nifty’s points go up and down. In addition, NSE has been selected as the world’s largest exchange in terms of wholesale trading. And the Global Rank of National Stock is 11.
What is BSE ?
BSE means or full form “Bombay stock exchange”. The Bombay Stock Exchange (BSE) is an older stock market than the National Stock Exchange. BSE started its operations in the year 1875 under the name “The Native Share and Stock Brokers Association”. This makes BSE the oldest stock exchange in the whole of Asia. Unlike NSE, Bombay Stock Exchange shifted from open-cry only system to fully electronic trading (BOLT) in 1995.
Like Nifty, Bombay Stock Exchange also has its own benchmark index known as Sensex. This index was first introduced in the year 1986. Under this, the average results of basically 30 companies of business are presented in numbers. It is the 12th largest stock exchange in the world.
How shares are bought and sold
Friends, it is very important for you to have a Demat Account and Trading Account to buy and sell shares in the Share Market. You can open this demat account from any brokerage company, you can also call it share market app like –
- Angel Broking
- Groww
- UpStox
- Zerodha
- 5 Paisa
- ICICI Direct etc.
To invest in the stock market, it is necessary to have a bank account, demat account, trading account. You will need the following documents to open an account with any brokerage company.
- PAN Card
- Address Proof
- Passport Size Photos
- Account Check Book
- 6 months account transaction history (in any company)
With the help of these documents, you can open your demat account in any brokerage company. And after which you have to put money from your bank account in the wallet of your brokerage company, from which you can buy and sell shares. And you can also withdraw these money in your bank account. I have given you the names of some brokerage companies above, which shares you have to buy and sell from time to time. Keep giving complete information about what is going on in which company. Which helps you in investment.