Learning about the basics of stock market is highly essential prior to actively venturing into the same. Stock markets are basically representative of a gathering of sellers and buyers of stocks on one platform. This is the same thing as the share market. Prior to investing, you should focus on gaining more share market knowledge beforehand. This is where trading takes place for shares of various companies. There are two primary stock exchanges in the country, namely the NSE or National Stock Exchange and the BSE or Bombay Stock Exchange.
Stock market basics India- What you should know
One of the safest ways to introduce yourself to stock market investing is to explore public sector companies, for example you can start off by checking out BEML share prices or prices of shares for other entities in the market. These are what you should keep an eye on with regard to choosing the stocks to invest in. Whenever any organization launches its IPO or initial public offering, the purpose is usually listing of a stock in the primary market. Once stocks are listed, they commence trading in the secondary market. Buying of shares and selling them is akin to trading in any other commodity in the country. Remember that share prices are determined by the market and its workings. That’s why delving deeper into the share market basics for beginners is a must if you wish to reap handsome returns in the future since knowledge is the key to building successful portfolios for the future. In most scenarios, prices of shares increase with fast growth or success of the company in question. They may also go up when the company books higher profits or gets bigger and newer orders. Demand often rises for stocks and hence prices also increase accordingly. The supply and demand equation is what basically determines share prices. Hence, when there is a high demand for shares of a particular company, the prices per unit will automatically rise. In the same vein, when demand dips for shares of any other company, the share prices may go lower. Some investors even see these scenarios as opportunities to buy shares at lower prices for reputed companies that are predicted to do well in the future in spite of the temporary dip. If you are too scared then you can also go for Public sector units’ shares such as Coal India share prices that might be at attractive levels for a specific period of time.
Some other key aspects worth knowing
There are innumerable companies that have their shares listed in the market. Out of these entities, similar shares/stocks are clubbed together for making the index. Classification could be on the basis of the market capitalization, industry or business sector, size of the company, or other fundamental categories. You can trade in stocks or shares online via the internet by logging into your account for trading. You can also visit the office of your broker or contact him/her via telephone to buy or sell shares. Brokers help in the execution of selling and buying shares and they usually help you find buyers/sellers, depending upon your exact requirements. Most brokerages will also offer advice on the stocks that you should purchase, the ones to be sold, and how you should invest money in the market. They take a brokerage fee/charge for their services. Your brokerage may help you identify the same as a high-performing and potentially high-value asset in the future. Thus, you may wish to buy these shares at comparatively reasonable prices for the future. These are decisions that will be aided by your brokerage or financial advisors.The trading account is where you execute the sell/buy trades and Demat accounts are where your particular shares are kept. When you purchase shares via the trading account, the bank account will get debited and the Demat account will be credited accordingly. The reverse scenario takes place whenever shares are sold by you. Therefore, in such scenarios, whenever you sell a share of any company, your Demat account will be debited and your bank account will be credited with the proceeds of the sale. Trading is short-term sale and purchase of shares while long-term share purchases are known as investments. The former requires active involvement and monitoring on a daily basis. You may even wish to get these activities executed or implemented by your investment advisor.
Basic aspects to look out for
SEBI or the Securities and Exchange Board of India is the regulator for the stock market in India. Both derivative and equity markets are a part of the Indian share/stock market. The equity market usually has stocks and shares being traded while options and futures are traded in the derivatives market. Fundamental analysis refers to thoroughly understanding the business of any particular organization, the potential for growth in the future, overall profitability, and debt levels among other parameters. This is a must for understanding which are the right companies to invest in for the long haul.Technical analysis refers to patterns in the past and graphs for application in the future. There are no minimum investment thresholds. It all depends on the share price. You can start your journey by purchasing even a single share of any organization. Hence, share market investing is readily accessible for most people, making it one of the best avenues to consider, provided there is ample knowledge and a clear understanding of financial goals. Stamp duty, GST, and other statutory charges are levied by State and Central Governments. These payments are collected by your brokerage and deposited with the Government on your behalf. Remember to make a note of these charges and also the brokerage fees in order to work out your final profit margin.
Conclusion
One of the fundamental share market basics that you should know before stepping in to the share market is what actually is share and stock markets.