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Basics of Stock Market

The stock market is where investors and traders buy and sell shares of companies. It's a set of exchanges where companies issue shares and other securities for trading.

The primary stock exchanges in India are the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The stock market is divided into two parts: primary market and secondary market.

Primary market is when a company decides to go public and lists itself on the exchange by offering shares in an initial public offering (IPO). The purpose of an IPO is to collect capital and grow business, among other reasons.

Once the shares issued in IPO are completely subscribed and allocated to investors, the shares enter the secondary market and start trading on a daily basis.

Secondary market is where thousands of listed companies trade on a daily basis. Secondary market transactions are referred to trades where one investor buys shares from another investor at the prevailing market price or at whatever price the two parties agree upon.

In the secondary market, the price of shares is governed by the demand-supply equation.

And this demand-supply process is influenced by many factors apart from demand and supply like company performance, news events, taxations imposed by the government, sector performance, etc.

When it comes to holding the shares, there can be two approaches, one where the investor buys a certain number of shares and keeps it for the long-term for months, years or even 5-10 years.

Another approach is when the trader takes advantage of the volatility of the market and completes a deal in the same trading session or within a short span.

The ocean of stock market is quite deep, and you may get lost at times. That is why to start with, we have brought these articles which will act as a guidepost for beginners.

Here they are:

Also check out this section which provides colossal wealth of information of the listed companies in India.


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