What is the stock market and how to make money from it?

by Admin Date 25/03/2020

What is the stock market and how to make money from it?

Stock Market is also Known as Share Market it simply means that you can also take share in Share Market of any company. Suppose,  if a company issues their one lakh shares then if anybody wants to buy the company’s shares and he/she buys 20,000 shares of one lakh  shares the he/she will be owner of the 20% share of the company. Stock or Share shows your participation in any company.

Each and every company registered their cost of shares or stocks in BSE. In India, BSE (Bombay Stock Exchange) is the largest stock exchange. It was founded in the year of 1875 in form of the  first stock exchange in India. NSE (National Stock Exchange) is the second stock exchange. It was founded in the year of 1992 and it is also known as the first demutualized electronic stock exchange India. These two Stock exchange agencies play a vital role in stock market.

There can be variations  in cost of stock or shares  according to their profits. It can be low and high according to situation. SEBI ( Securities and Exchange Board of India) controls all over the share markets. Every company must have to take the permission of SEBI for issuing Initial Public Offering.

Initial Public Offering  (IPO) is also known as stock market launch that means offer company’s shares to the public that can be sold to retail investors and as well as institution investors. Initial Public Offering also arrange for stocks for listing on one or more than one share exchanges. With  the help o f Initial Public Offering  private corporations can also offers their shares to the public.

How a company can be listed in Stock market and what is the process?

For listed in Stock market, Company must have to compromise, for this procedure company must have to inform time to time about the all ups and downs about the company. On the basis of the Information about company SEBI decides the value of the company. On the basis of this value, on demand of shares the cost of share can be high or low, it totally depends on  the value of the company.

If any listed company does not follow the  rule and regulations regulated by SEBI ( Securities and Exchange Board of India) according to the agreement and if the company is guilty then SEBI ( Securities and Exchange Board of India)  can be remove from the stock exchange list.

Procedure for listed in stock exchange:

  • For listed in Stock Exchange, Company must have to show all the records of company of last three years.
  • Share of company more than rs. 25 crores in the market.
  • For applying In IPO, company must have atleast  rs. ten crores and for FPO company must have atleast rs. three crore.
  • Company must have follow strict rules and regulations.

How can you purchase stocks/shares:

First you have to decide  that you want to buy stock yourself or with the help of any broker.

If you take broker’s help the you have to open a account in bank first, which is known as Demat Account. You can earn profit by buying stall. You have proper guidance about the stocks and you also have all the information about the  stock market. And for this they ask for shares in profits.

Those companies which are listed in (Bombay Stock Exchange) and NSE (National Stock Exchange), shares of these companies can be bought and sold.

When ever you buy shares or stocks then the money that is earned directly transferred to your Demat account which is linked to you bank account. You can also transfer the money from your demat account to your personal bank account or you savings account.

If you want to invest in share market then you can also open your account at “Zerodha” and you can easily open you demat account.

Website link: www.zerodha.com

You can also buy shares with the help of this link.

Types of Shares:

Basically there are three types of shares which are as follows:

Common Shares: 

These Shares are available for common person.  Anybody can buy these shares and if needed  he/she can sell these shares also.

Preferred Shares:

These Shares are available for only special person. These shares issue only when then a company wants to collect some money from the market the provides the right to buy the shares only some persons like employees of any company because these types of shares can be assumed very safe.

Bonus Shares:

When ever a company earns good profit they company want to give shares to their share holders. But company does not give money inspite of company gives some shares to their share holders.

What is tranding in stock market ?

Trading refers to  business. It is very use full when ever we buy  things or services with an objective, then after using those things and services by selling this things or services if we earn profit then this is known as tranding.

Similarly, if a person buys stock or shares in the market then his/her objective is that the on rising the price of stocks he/she can sell it and earn profit. This all process is known as tranding in stock market.

Types of Tranding:

There are basically three types of Tranding in Share market which are as follows:

Intra Day Tranding:

Those Trades which can be completed with in a day that is known as  Intra  Day  Tranding.

Scalper Tranding:

Those trades which is sold with in few minutes after purchasing it are known Scalper tranding. The time period is often referred to 5-10 minutes usually.

Swing Tranding:

This tranding process can be completed in few days, weeks or in few months. In this tranding investers or share holders can keep stock for some time like few days, weeks or in few months. And they have to wait for rising the stock prices and when they meet their requirements the they sell the shares.