Search

STOCK MARKET BASICS – MUST KNOW


What is a stock market?


A stock market is a place for buying and selling of securities (shares, bonds, commodity, derivates) of the companies listed on the stock exchange.


Types of Securities :


SHARES - These are the financial instruments offered by a public company to raise capital from the investors. A share is a single unit of net worth of the company, offering ownership rights to the shareholder (investor)


BONDS - Bonds are high security debt instruments issued by the government, companies, municipalities, to raise funds to fulfill the capital requirements of the issuer party.


COMMODITIES - Commodity market is a market that tardes in agricultural products such as cocoa, fruits; and natural resources such as gold, silver, timber, oil and metals.


DERIVATIVES – Derivatives are financial instruments traded in the market that derive their value from the underlying asset. Common types of derivates are: Futures, Forwards, Options and Swaps.


The Stock Exchange includes :


The stock exchange trade in securities through their respective indices-

BSE – SENSEX (Sensitive Index) (Top 30 companies as per market capitalization)

NSE – NIFTY (National Fifty) (Top 50 Companies as per market capitalization)


SEBI :

Securities and Exchange Board of India is a regulatory body established in 1992, with the primary role of monitoring the malpractices in the capital market, and protect the interest of the investors.


THE INDIAN STOCK EXCHANGES :

Bombay Stock Exchange (BSE) - Established in 1875. About 5000 listed companies.

National Stock Exchange (NSE) – Established in 1992. About 1600 listed companies.


MARKET TRENDS:

Bull Market - When the market shows a consistent upward trend that is the market is rising and the investors are making gains, usually upward of 20 percent.

Bear Market – When the market shows a consistent downward trend that is the market is falling and the investors are making losses, usually a drop of more than 20 percent.


INITIAL PUBLIC OFFER (IPO):

Initial Public Offer is the process where a private company, decides to go public, by listing it shares on the Stock Exchange for the first time.


Written By Priyal Doshi, Law Student at Jindal Global Law School

9 views0 comments

Recent Posts

See All

STATUS OF POTHOLE DEATHS IN INDIA

You have to be careful of social climbers There are a lot of potholes out there “LAN LEIRING” INTRODUCTION When we start talking about the road accidents one of the cause we see is the potholes.

DYING DECLARATION: AN EVIDENTIARY VALUE IN INTSELF

Introduction Indian law recognizes Dying Declaration in Sec 32 (1) of the Indian Evidence Act, 1872. A statement which is considered as an evidence when is made by the person as the cause of his death

OPEN GOVERNMENT AND THE RIGHT TO PRIVACY

INTRODUCTION An Open Government is guided by the principles of transparency, accountability, participation, and collaboration. Openness in governments helps to keep a check on abuse of power by the go