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What is the stock market?


What is the stock market? – The initial guide

Just like we go to the local grocery store or supermarket, For our daily shopping, Similarly we go shopping in the stock market / market, To buy equity or company shares.

We go to the stock market to trade stocks, In simple language, transaction means buying and selling money. For any purpose, you do not trade through the stock market, Cannot buy / sell shares of public companies like Apple / Tesla.

What is a share?

Before you know the stock market, let’s know what stocks are, A share is a single unit owned by a company. It’s basically an exchangeable part of a company’s value, Which depends on different market factors, Can fluctuate up or down. Shares are also known as stocks.

The main purpose of the stock market is, Assist you in facilitating your transaction. So if you are a stock buyer, The stock market helps you deal with sellers And vice versa.

But a stock market is not a physical store like a grocery store or a supermarket. It is only available electronically. You can get electronic access to the stock market, With your computer or mobile app, You can do transactions (buy and sell shares).

Stock Broker – A stock entity, a corporate entity, Whose stock is licensed to buy shares
And to sell. Stock brokers are the gateway to your stock exchange. Also, it is important that you access the stock market through a stock broker.

How to buy shares?

When it comes to investing in the stock market, You need to have a trading account with a stock broker. A trading account allows you to make financial transactions in the market. A trading account is an account with a broker, Which allows investors to buy / sell securities.

Stock market participants:

The stock market attracts individuals and corporations from a variety of backgrounds. If someone trades in the stock market, We can call him a market participant. Market participants can be categorized into different categories. Below are some categories of market participants:

1. Domestic Retail Participants – These are people like you and me who trade in the market.

2. NRIs and OCIs – of Indian or Indian origin but located outside India.

3. Domestic Institutions – These are large corporate entities based in the country. The best example is LIC Company of India.

4. Domestic Asset Management Company (AMC)- The general participants in this category are Holo SBI Mutual Fund, There will be mutual fund companies like DSP Black Rock, Fidelity

5. Foreign Institutional Investors – Corporate organizations outside the country. These could be foreign asset management companies, Hedge funds and other investors.

From this chapter we learn:

1. If you want to trade in equity / shares, you have to go to the stock market.
2. You can access the stock market electronically or trade with a broker.
3. There are different types of participants in the stock market.

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