BASIC OF STOCK MARKET

 

1. Stock Exchanges:

   - National Stock Exchange (NSE): The NSE is the largest stock exchange in India, where most equity trades take place. It operates electronically and has a wide range of listed companies.

   - Bombay Stock Exchange (BSE): The BSE is another major stock exchange in India and the oldest one. It facilitates trading in equities, debt instruments, and derivatives.

 

2. Indices:

   - BSE Sensex: The Sensex is a benchmark index of the BSE and represents the performance of the top 30 companies listed on the exchange.

   - NSE Nifty: The Nifty is a benchmark index of the NSE and consists of the top 50 actively traded stocks across various sectors.

 

3. Types of Stocks:

   - Common Stocks: Common stocks represent ownership in a company and provide voting rights in shareholders' meetings.

   - Preferred Stocks: Preferred stocks have a fixed dividend payment and hold priority over common stockholders in terms of receiving dividends or assets in case of liquidation.

 

4. Market Participants:

   - Retail Investors: Individual investors who trade in the stock market.

   - Institutional Investors: Large organizations such as mutual funds, insurance companies, and foreign institutional investors (FIIs) that invest on behalf of their clients.

   - Stockbrokers: Registered intermediaries who facilitate buying and selling of stocks on behalf of investors.

   - Depository Participants: Entities that hold shares in electronic form and provide services for dematerialization and rematerialization of shares.

 

5. Trading Instruments:

   - Equity Shares: Common or preferred stocks that represent ownership in a company.

   - Derivatives: Financial contracts whose value derives from an underlying asset (e.g., futures and options).

   - Mutual Funds: Investment vehicles that pool funds from multiple investors to invest in diversified portfolios.

   - Initial Public Offerings (IPOs): When a company offers its shares to the public for the first time.

 

6. Trading Timings:

   - Pre-opening Session: This session starts before the regular market session and allows orders to be placed.

   - Regular Market Session: The primary trading session where most trading activity occurs. It operates from 9:15 am to 3:30 pm Indian Standard Time (IST).

   - After-Market Hours: A session after the regular market hours where limited trading can take place.

 

7. Regulatory Bodies:

   - Securities and Exchange Board of India (SEBI): SEBI is the primary regulatory authority overseeing the Indian securities market, protecting investors' interests, and promoting the development of the market.

   - Reserve Bank of India (RBI): The RBI is responsible for monetary policy, regulates the banking sector, and manages foreign exchange.

 

8. Risk Factors:

   - Market Risk: Fluctuations in stock prices due to economic conditions, geopolitical events, or investor sentiment.

   - Company-Specific Risk: Risks associated with a particular company, such as financial performance, management quality, or industry-specific factors.

 

It's important to note that investing in the stock market involves risks, and it's advisable to conduct thorough research, stay updated with market developments, and consider professional advice before making investment decisions.