Have you ever wondered what the share market is? Is investing in the share market worthwhile? you may have heard about Sensex and Nifty term and others share market terms such as IPO, PE Ratio, BSE, NSE. If you are one of those people who wants to know about the share market, this article is for you.

    

     > What is the share and share market.

     > Basics of the share market.

     > How does the share market works in india.

     > Some pro tips to invest in share market.

 in simple terms, a stock is a part ownership in a company.The company selles some of its shares to its own needs, i.e collect investment and gain funds.

     The company sells these parts to the public through the stock exchange. And the public can buy them from the stock exchange through a broker

  A stock exchange is a market where the exchange of shares and other financial instruments aee facilitated.

It provides services to stock brokers and traders to buy or sell stocks.

  When the public ( also known as an investor ) buys  or sellls shares of a company is called trading.

  Here is 25 basic stock trading terms in below image.

Shares or Equities or stocks give you ownership of a company. You can buy or sell shares through a broker.

Here, the money is pooled from many investors and then invested in various financial instruments. Invesors are referred to as unit holders. Profit generated is distributed to unit holders in proportion to the units held by them.

 

These are fixed income instruments also known as debt instruments by which government or a company borrows money from investors at an agreed interest rate for a specific tenure. These are less risky when compared to shares.

A derivative is a financial contract whose value is a derived from an underlying asset. It can be used to mitigate a number of risks. Derivatives include forward, futures, options and swaps.

There are two types of share market

This where a company gets registered to issue a certain amount of shares and raise money. This is also called getting listed in a stock exchange.

Once new securities have been sold in the primary market, these shares are traded in the secondary market. This is to offer a chance for investors to exit an investment and sell the shares.

What are BSE and NSE?
 

most of the trading in the stock markets of india takes place through its two main stock exchanges BSE and NSE.

1. NSE - National Stock Exchange 

2 BSE - Bombay Stock Exchange 

There are a lot of companies involved in the stock exchange. Generally, it is not possible to consider the stock of each company to evaluate market strategy. That's why stock exchange select certain companies to determine there market index. There is two main index in india known as sensex and nifty.

1. Sensex- Stands for Stock Exchange Sensitive Index. It is an index of 30 key companies listed on the BSE.

2. Nifty- Stands for National Stock Exchange fifty. It is an index of 50 key companies listed on the NSE. 

SEBI refers to Securities and Exchange Board of India. Because the bourses have inherent risks, a market regulator is required. The SEBI is provided with this power and has the responsibility of developing as well as regulating the markets.

Its basic objectives are:

• Protecting the interests of investors in stocks.

• Promoting the development of the stock market.

• Regulating the stock market.

A demat account is for holding stocks, bonds, mutual funds, and Exchange Traded Funds(ETFs) and other securities.

A trading account is for buying or selling of shares on the stock exchange. It has to be linked to a bank and a demat account to trade.

Firslty, open a demat and trading account online with a broker and link your bank account with that. Opening demat account is a very easy process. One you have your demat and trading account, you can start investing in the indian share market.It's essential for you to be familiar with the stock exchange and there functions which is regulated by SEBI.

Companies can register on stock exchange for selling their share and investor buy shares of those companies, which is the share market fundamental rule.

There is a Stockbroker between the stock exchange and the investor. These stockbrokers helped the public to buy shares of the company and received some commissions.

Different companies are participate in the share market to sell their shares. when you buy a percentage share of those companies,  you own that percentage.

 >>  An investor can buy the share with the Face Value and sell them later with the Market Value of those shares. 

 

     > If the company makes a profit, i.e the company will perform very well then their market value goes up.  (market value>face value)

The number of shares you had buy will increase the value. You make a profit!

     > On the other hand, if the company makes losses, then the market value of the company will go down.  (market value<face value)

The number of shares you had buy will decrease value. You make a loss!

    

• Its always better to do your own research before investing.

• Its not wise to take decision based on rumors.

• Monitor your investments regularly so that you can eliminate the loss making stocks.

• Patience is very essential for any investor.

• Take the help of research experts also before making an investment move.

• Study about successful investors and also a find a mentor. 

• Alwaysbe updated with share market news.

• Cautiously explore seminars, online courses, or live classes.

• And last but not least, invest in trusted companies to reduce your risk factor.