What is Share Market? So today’s article is special for you. In this article, I will tell you what is Share Market.
Knowing whom you will be able to take your first step in the world of the stock market. And together I will give you countless such teachings. With which you will be able to make money by pressing in the stock market.
What is Share Market?
Many people still think so today. That the stock market is a fraud or a trap in which people get trapped and lose their money. But it is not so at all. The stock market is not a gamble or speculation. There is a huge difference between betting and the stock market.
While playing betting or gambling, a person shoots arrows in the dark. But the stock market is one such platform. Where a man with the right understanding can start from zero and become a millionaire.
For example, You can only look at Rakesh Jhunjhunwala of India or learn something from Warren Buffett. He is considered to be the world’s largest lion Mercator, and Rakesh Jhunjhunwala is also considered the Warren Buffett of India. He became a millionaire at a very young age.
Friends, if I try to explain the share market to you easily, then believe it. That you have bought shares of a company. So that means you are buying some share in that company.
Whenever companies need money. So she takes out IPO in the stock market. IPO means Initial Public Offering. We will explain this in detail next. When the company takes out an IPO. So after that its listing gets done in the stock market.
Every company’s share has a different price, suppose the price of 1 share of Reliance company was ₹ 100 10 years ago and you buy 1000 shares of 1 lakh rupees.
So you become the owner of 1000 shares of Reliance company if tomorrow the price of 1 share of Reliance company is ₹ 200 after 1 year. So if you want to sell 10 shares you have bought. So their value will be ₹ 200000 i.e. double your money.
What is a stock exchange?
Friends, the stock exchange is that place. Where shares are bought and sold. All the workload of the stock market of any country lies with the stock exchange.
A stock exchange is a link between a company and a common citizen or any other company. Basically, there are two types of markets. A Primary Market & Secondary Market Let’s talk about both of these in detail.
1. Primary Market
Friends, if we talk about the primary market, then where people buy shares directly from the company. When the company gets its listing done in the stock market. So it is called IPO.
IPO i.e. Initial Public Offering, under this the company takes its first step in the market. When a company is about to come out with its IPO. So the registration starts 15 days before that, and shares are allotted among the people in the same way as the lottery.
However, it also charges money which is deducted 15 days in advance. You can also call it a feature of the stock market. But mainly if we talk about the primary market. So the primary market means from where people buy shares from the company. It depends on the company. How will she keep the price of her share?
Suppose the real price of a company is ₹ 100,0000. So if she wants, one can allot 1000000 shares of ₹ 1-1, or 10,000 shares of 100 ₹ 100 can also be allotted. But no company completely dedicates itself to the stock market.
Because there is a simple rule. That is the company in which more than 50% of the shares will be held. He will run the rules and regulations of that company. Simply put. So who has more than 50% shares of the company? He will be the real owner. That’s why companies take out shares in the stock market only up to 30 to 40 percent.
2. Secondary Market
Friends, real trading takes place only in the secondary market of the stock market. When companies allot shares after taking out IPO, and people buy shares, and after that, if shares are sold by people.
So he buys another guy. That is, in the secondary market, the shares keep moving around each other with the people, and due to this the price of the share keeps going up and down.
Right now you must be thinking that how can the price of the stock go up or down due to this. See, explain in easy language, that the price of anything is based on its demand and supply.
But demand is given more importance in the stock market. If the demand for a stock increases, the price will increase and if the demand decreases, the price will decrease.
3. Sensex or Nifty done?
Friends, when you open the newspaper in the morning, you will get the figure of Sensex and Nifty on the front page itself. What are these Sensex and Nifty
If I explain in simple language, then Sensex and Nifty are measurements. As we told you that there are two stock exchanges in India. Bombay Stock Exchange and National Stock Exchange.
Friends, about 5000 companies are registered on the Bombay Stock Exchange, and there are about a thousand companies registered on the National Stock Exchange. Since Sensex and Nifty are a measurement, it gives an account of the overall exchange. For example, the Mumbai Stock Exchange uses the Sensex.
It means when the Sensex is going up. That the companies of Mumbai Stock Exchange are going up. It is an index made by taking the average of all the companies.
In the same way, the Nifty is also a measurement of the National Stock Exchange. Which tells us whether the companies registered in Nifty are going up or down. The prices of Sensex and Nifty keep going up and down day by day.
Friends, now that you have fully understood the share market, what it is and how the share market works, let us now tell you how you can earn money from the share market,
Because when a person learns about the share market, then his motive is to earn money and it is also true that the stock market runs with money, when new people come to the share market and invest their money, then the stock market will grow more. And there will continue to be more opportunities to earn money in it.
Friends, although there are many ways to earn money in the stock market, here I will talk to you about some basic methods like earning money by trading, earning money through dividends, etc.
How to do trading?
Friends, trading simply means to trade and if I define business even more, then it means to take something and then send it i.e. buy and sell.
This is what you do in the stock market, buy a lion and send it as soon as you see the profit, so friends, trading in the stock market is the biggest way due in which the stock market rests, and people earn money.
Friends, suppose you think that a company is going to grow a lot going forward and at present, the price of its share is very low, then you buy that share at this time and when its price is big then sell that share.
Most people do this, but if you think that the share price of a company is going to decrease, then you can still earn good money from there, that means, you have to do short selling here, let’s see what is short selling.
What is Short Selling?
Friends, the concept of short selling was brought to make the stock market more liquid, if I explain in simple language what is short selling, it means that when someone feels that the share price will go down.
If the share price is going down in the future, and he buys the shares now and sells in the future, then he will have a loss, but what if he sells the shares now and buys the shares in the future, then he can make a profit.
Exactly the same thing happens in short selling. In short selling, you first sell the shares and when the price goes down, then buy the shares at the lower price.
So much so that you also understand that money is saved only when the thing bought cheaply is sold in the expensive, and in this way, we can get a good profit from short selling too.
just for the sake of dividend and when a dividend is received then share back. is sold.