Basic Introduction to the Layout & Working of Stock Market in SEVEN POINTS
Before starting with the topics of stock market lets know some of the basic introduction to the layout and working of the stock market in simple words using pictures and simplified points that can be easily understood by everyone let it be a seven year school going kid or a teenager going to college or an adult working at MNC or a retired man.
Stock Market is essential to learn for every-one as it can be the GREATEST TOOL for The Way Towards FINANCIAL FREEDOM. Everyone needs financial freedom, everyone wants to work the way they want, everyone want to do what they loves doing for that stocks trading can be the best possible way towards the financial freedom. lets get started:
Seven Points to be covered :
1. Why to start with stock Market ?
2. What is Stock Market ?
3. Primary market : IPO
4. Secondary Market
5. NSE & BSE
6. S.E.B.I.
7. NSDL & CDSL
1. Why to start with stock Market ?
One should start trading in Stock Market because of
the following points :
· ➤Stock market beats FD’s in terms of ROI (return on investment).
· ➤Stock Market beats Gold & Silver in terms of Profit & volatility.
· ➤Stock Market beats Mutual funds in terms of returns.
· ➤Stock Market is the only TOOL that beats INFLATION.
· ➤Stock Market is so easy that a 5 year kid can do it fluently (with a system)
2. What Is Stock Market ?
The stock market is nothing but a place where investors connect to buy and sell investments — most likely in stocks, which are shares of ownership in a public sector company.
The Indian stock market opens at 9:15 am and closes at 3:30 pm. it was established in the year 1875. Basically stock market is divided into two markets : Primary market i.e. IPO and Secondary Market
3. Primary market – IPO
➢ An IPO i.e. initial public offering or stock market launch is a type of public offering where shares of stock in a company are sold to the general public for the first time to get funding for the company.
➢ This is done by offering those shares to the public, which were held by the
• promoters or the private investors.
➢ This is why doing an IPO (initial public offering) is also referred to as "going public."
➢ IPO’s are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.
To get the IPO (initial public offering) one should first bid on the offer price decided by the company in the given time window provided by the authorities. anyone can bid in the process of allotment from common man to large institutes then the amount is collected by the company. there is no partiality or discrimination in the process of allotment. After bidding is done next step is done with a random allotment system where share are given to the randomly selected people. this how the IPO (initial public offering) allotment takes place. those who's bid does not get allotment their collected amount is returned to the public within three working days. Normally the share lot priced is fixed and it is fixed at a price band of ₹15000/- in India.
4. Secondary market – day to day trading
The
secondary market can also be called as the aftermarket. Or follow on the IPO ( Initial
public offering ) which people received during allotment Basically it is the
market where the buy and sell of shares takes place. here one trade their share
received during the IPO (initial public offering) allotment, It is the market
in which previously issued financial instruments such as Equity stocks, futures,
options, and Bonds are traded.
5. WHAT IS NSE & BSE ?
NSE i.e. National Stock Exchange here most of the buy/sell takes place, it is the place where a company lists its share, It is the leading stock exchange of India, located in the Mumbai city of Maharashtra state.
It is under the ownership of some leading Banks, Insurance companies, and financial institutions. NSE was established in the year 1992 as one of the first dematerialized electronic exchange in the country.
BSE i.e. Bombay Stock Exchange it is a place where most of buy/sell takes place, it is a place where where a company lists it's IPO ( initial public offering).
BSE (Bombay Stock Exchange) is the oldest stock exchange of entire Asian continent established in the year 1875. its historical building's photo graph is given below:
6. What Is S.E.B.I. ?
The Securities and Exchange Board of India (SEBI) is the
leading regulator securities markets in India. it has wideranging regulatory, investigative, and enforcement powers, including the ability to impose fines on violators.
In-short SEBI is the protector of the Indian stock market.
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