What is Stock Market | How Share Market Works

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What is Stock Market

If you are interested to know, what is the stock market, what is the stock exchange, what is NSE and BSE, how share market works, how you can participate in the companies growth and let’s stock makes you reach then this article will answer your question

What is Stock Market – How Share Market Works

We always hear about the stock market from newspapers, channels, and televisions. The stock market is an integral part of today’s world economy. The country’s economic growth is directly related to the stock market. The stock market directly corresponds to run the country’s economy. When people talk about the stock market then they talk about the different company’s base valuation. The stock market provides a platform for business owners to raise funds. Once the stock of specific companies listed then business owners are capable of sells companies ownership in percentage by selling its shares.

The stock market is directly proportional to the dynamic health of the economy. The world economy runs with the stock market. Any countries economical background, strength, and stability can be easily judged by those countries’ stock markets.

What is Stock Exchange?

Stock markets are run by stock exchanges. The stock exchange is an exchange of shares across stockbrokers and traders in terms of buying and selling shares of the company. To buy and sell shares of a company, the company should be listed on a stock exchange. East India Company is the first traded company. Early days buying selling of a share is done at restaurants or shops. These stocks were written on paper or sheet which then traded by investors.

What are NSE and BSE

The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are two leading primary stock exchanges in India. BSE and NSE are primary exchanges that come with the BSE index known as Sensex and NSE index which is known as the Nifty 50 index.

NSE and BSE volumes are equal. Nifty 50 comes with fifty stocks whereas Sensex comes with thirty stocks. The Bombay stock exchange (BSE) is located at Dalal Street Mumbai. BSE is the oldest and world’s largest stock exchange. More than 5000 companies are listed under BSE. Its capitalization is more than 2 trillion US dollars.

What is Bombay Stock Exchange (BSE) – Sensex

Let’s see what is bse sensex – Bombay Stock Exchange (BSE) was the first exchange that is being recognized by the government of India. BSE was founded in the 19th century by Premchand Roychand. BSE has introduced a centralized internet trading system, which enables investors and traders to invest and trade on BSE from any corner of the world.

What is National Stock Exchange (NSE) – Nifty

Let’s see what is nse nifty – The National Stock Exchange (NSE) is located in Mumbai. The NSE was established in 1992, which offers Internet-based centralized trading. Vikram Limaye is Managing Director (MD) and Chief Executive Officer (CEO) of NSE. National Stock Exchange (NSE) is a 12thlargest stock exchange having more than 1.4 trillion US Dollar market capitals.

National Stock Exchange (NSE) enables traders to trade in the future and option segment. NSE launches index futures in June 2000. Future and Options segment facilitate traders to trade in NIFTY 50, NIFTY IT, and Bank Nifty segment. The average daily turnover of NSE in the Future and Options segment is around 24 billion US dollars.

U.S.A ’s popular Stock Exchanges

Three major U.S. financial security markets are,

    1. NYSE New York Stock Exchange:

NYSE is a New York-based stock exchange, this sock exchange merged with a European stock exchange in April 2007 to form NYSE New York Stock Exchange.

  2. Nasdaq National Association of Securities Dealers Automated Quotation System:

Nasdaq is the largest electronic screen-based market in the United States. It offers the least listing fees than NYSE.

  3. AMEX American Stock Exchange:

This exchange mostly focuses on exchange-traded funds. This is a type of investment fund that is traded on a stock market.

    • What is the Primary Market

The market operates in two different modes of functionality i.e. Primary Market and Secondary Market. Primary Market is the market whereby issuing shares company and industry raise long-term funds via initial public offer (IPO).

    • What is the Secondary Market

Secondary Market is a market where post-transaction can be executed after listing IPO, in the secondary market investor or traders can buy the share or sell the share to another investor or trader.

How Share Market Works & Can Make you Rich:

If you want to become rich via the share market then you need to be a “Smart Investor”. If We would like to sum up all the questions which are currently in your mind, by simply one line then we will quote that line:

“Buy the Right Equity Stock At Appropriate Time & Then Hold Your Holdings for a Longer period”

Yes, this is as the sample like that, you need to act as an investor than the trader. Being a smart investor, you need to figure out what is a good fit for you then accordingly you should do the steady investment for a long period and then you will see the magic of stock which can make you rich.

To become a successful smart investor, you should keep below “FOUR R” in your mind:

    1. Buy Right
    2. Enter into Right at Right Time
    3. Define Right Stop loss
    4. Do Exit from your Right Holding at Right Time.

You may also love to read how you can prevent the losses in stock market Fundamentals of the Stock Markets to Avoid Incurring Losses

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