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What is Stock Market (Share Market), Types of Share Market, How Does Share Market Works

Share Market Or Stock Market

Many people have this question in their mind: Want to learn about the stock market where can I learn better if I am a beginnerI have interested in share marketing how do invest money in the share market? So you have come to the right place, so welcome to this series of learning the stock market.

What is Share Market

What is a Share market Or What is Stock Market?

 A stock market is a place where shares, debentures, mutual funds, derivatives, and other securities are bought and sold. Shares are mainly bought and sold through stock exchanges and BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are the two main stock exchanges in India.

You can become a shareholder of that company by investing in a company only through the stock market.


Sensex is an index of the Bombay Stock Exchange and Sensex is determined on the basis of the market capitalization (total value of companies) of the top 30 companies listed in BS. Sensex reflects the performance of the top 30 companies of BSE.


If Sensex rises it means that most of the companies registered in BSE have performed well and similarly if Sensex falls then it means that most of the companies have performed poorly.


Nifty is an index of the National Stock Exchange and is determined on the basis of the market capitalization (total value of companies) of the top 50 companies listed on the NSE.


If nifty rises then it means that companies registered with NSE have performed well and if Nifty falls then it means that companies of NSE have performed poorly.


How does the stock market work?

How to Start investing

How do companies issue shares?

Firstly the companies get their shares listed on the stock exchange and bring IPO (Initial Public Offering) and issue their shares to the public at their fixed price. Once the IPO is completed, the shares come into the market and are bought and sold by the investors themselves through stock exchanges and brokers.


How do share prices change?

Firstly, the company decides the price of the shares while bringing the IPO, but once the IPO is completed, the company has no role in setting the price of the shares, and the price of the shares is independently determined by the stock exchange. Based on the demand and supply of shares. are determined.


If the number of shares sold is less than the number of shares to be purchased, the share price will increase and if the number of shares purchased is less than the number of shares sold, the share price will decrease.


After getting registered with the stock exchange the companies have to share all the important information with the investors from time to time and on the basis of this information the investors evaluate the companies. Based on this valuation the price of the shares changes due to the increase in the demand and supply of the shares.


Types of Share Market - 

Types of Stock market

There are two types of share market.

  1. Primary Share Market.
  2. Secondary Share Market.  

Primary Share Market 

• The company's share in the Primary Share Market is first issued.  Whenever the company is first listed in the Share Market and there are Stock Issues, it all happens in the Primary Share Market.

• When the company sells Shares for the first time, it is called Initial Public Offering or IPO.  After which the company goes public.  When going for an IPO, the company has to give information about itself, its Financials, its Promoters, and its Businesses, Stock. 

 Secondary Share Market

•Trading is done by buying and selling shares of already-listed companies in the Secondary Share Market.  

• When we talk of investing money in the Normally Share Market.  We are talking about the Secondary Share Market only.  

•The price of a stock or share is put in the Secondary share market itself and it is bought or sold with advantages or disadvantages.

Some important topics you have to read:-


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