What is ‘Stock’

What is 'Stock'

Definition: Stock is a general term used to describe the ownership certificate of any company. A share, on the other hand, refers to the stock certificate of a particular company. By holding shares of a particular company, you become a shareholder.

Description: There are two types of stocks- normal and preferred. The difference is that the holder of the former has voting rights that can be used in corporate decisions, the latter does not. However, preferred shareholders are legally entitled to receive a certain level of dividend payments before dividends are issued to other shareholders.

There is also something called ‘convertible preferred stock’. It is basically a preferred stock that has the option to convert to a certain number of common shares, usually at any time after a predetermined date.

Do you know what is stock market (What is Stock Market )? You must have often seen people talking about it. And often you must have seen many posts related to it on the internet, but do you know that most of the posts do not give you the correct information about it, but due to incomplete information available there, it turns you upside down. Confusion.

Many people want to invest in share market but due to lack of proper knowledge about stock market they either avoid investing in share market and do not invest money in stock or lose their money by investing in share market. Huh. Huh. To give. There are many names of stock market or stock market and it is known by different names by different people. “Share” which is a word of English language. Its simplest and simplest meaning is “part”. And what is the stock market, it works on the principle of “Share” i.e. “Share”.

BSE (Bombay Stock Exchange) is considered to be the largest stock exchange in India. It was established in 1875 as India’s first stock exchange. The second stock exchange of India is NSE (National Stock Exchange of India). It was established in 1992 as India’s first demutualized electronic stock exchange.

So let’s know what is this stock market? And how does it work. So in today’s post, an attempt will be made to give all the information related to the stock market so that you can avoid more losses and also get good information about the stock market. Then without delay let’s start and get complete information.

What is share market

As we know that people know share market or share market by different names and I have already mentioned that the direct meaning of share is “Part”.

What is stock market called?

For example, suppose a company has issued one lakh shares. Now if a person buys as many shares in that company, he becomes the owner of that share in that company. For example, if a person buys 40,000 shares out of 1 lakh in a company, then his share in that company will become 40%. And he will own that 40% share.

Stock refers to an individual’s stake in any company. And that person can sell his shares to others or buy any other person’s shares whenever he wants.

The value of shares or shares of companies is recorded in BSE. The value of the shares of all the companies keeps on increasing or decreasing according to the profit potential of the company. The entire market is regulated by the Securities and Exchange Board of India (SEBI).

Only when SEBI gives permission to a company, a company can issue its initial public offering, without the permission of SEBI no company can issue an IPO.

When does a company appear in the stock market?

In order to be listed or appear on the stock exchange, the company has to enter into several agreements in writing with the exchange, under that agreement, the company is required to notify the market from time to time of all its activities. The information also includes such information. which affects the interests of investors.

The valuation of the company is done on the basis of the information provided by the company and on the basis of this valuation the prices of the shares of that company keep on fluctuating due to fluctuations in demand. If a company does not comply with the terms of the listing agreement and is found to be in breach of the rules, SEBI will take action to delist it from the exchange.

Apart from this, the company has to go through many things to enter the stock market. For example, complete record of the company for the last 3 years, the market share of the company is above 25 crores, the applicant company’s capital for IPO is at least ₹ 10 crores. and ₹3 crore for FPO. Should be. Apart from all these things, many things are also taken care of when the company is listed. For a company to be listed, it has to follow strict rules.

What are the types of shares?

Shares can be of many types and different people define them differently. But we can mainly divide the share into 3 forms. Let us know how many types of shares are there:-

1.) Common Shares – These can be bought by any person. And can sell when needed. These are the most common types of shares.

2.) Bonus Shares – When a company makes good profit and that company wants to give some part of it to its shareholders. Instead, she does not want to pay the money and if she gives shares, it is called bonus share.

3.) Preferred Shares – This share is brought by the company only for certain people. When a company needs money and wants to raise some money from the market, it will get the first right to buy the issued shares. Like employees working in a company. Such shares are considered quite safe.

how to buy stock

To buy a stock, first you have to decide whether you want to buy the stock yourself or take the help of a broker. Then you can proceed.

If you take the help of a broker, then first you have to open your account. Which is called demat account. Which you can open through your broker. There are many advantages of buying stalls through a broker, one you will get good guidance and second you will get complete information about the stock market. Brokers take money or share of profits in shares to help you and stock information etc.

There are only 2 stock exchanges in India. NSE and other BSE. Stocks can only be bought or sold in companies that are listed in them.

Whenever you buy a share, its money comes into your demat account only, your demat account is linked to your bank account. You can easily send money from your demat account to your bank account.

What is trading in stock market called?

The term “trading” is very popular and used a lot in the stock market. The meaning of this word is “business” which can be called “business”.

Similarly, when a person buys a share in the stock market, the main objective of that person is that after the price of that share increases, he can earn profit by selling that share. The whole process of buying and selling stocks to earn this profit is called “trading”.

What are the types of trading?

By the way, trading can be of many types. But mainly 3 types of trading are very much liked and used by the people.

1) Intra-day trading: Such trades which are completed within a day are called intra-day trading. Intra-day trading involves buying and selling of shares on the same day.

2) Scalper Trading: Trades that are sold within minutes of purchase are called scalper trading. In this, shares are often bought and sold within 5 to 10 minutes. This type of stock has high leverage. But the profit in this can be high only if the amount invested in it is high. The potential for loss is also high as the amount invested is also high.

3) Swing Trading: In this the trading process is completed in a few days, weeks or months. After buying a share, investors keep it with them for some time like a week or a month. After that, after raising the price of the shares, wait and see when the right price is found. That’s why he sells.

People consider the stock market a dangerous game. In which only humans drown, but it is not so at all. This notion is completely wrong. If invested in the stock market properly and in moderation, then a lot of profit can be earned in this thing too. But before jumping into it, it is very important for the person to know as much as possible about it. Incomplete information has always been dangerous.

But this does not mean that one should not invest in the stock market or have a different kind of talent or investment ability. By investing in the stock market, any person can try to become a master in the field of investing in the stock market with his experience.