What is Stock/Share Market – How the Share Market work?

admin 3 years ago 2 min read

Stock Market Overview

For Stock Market we can say it as a public market that exist for issuing, buying, and selling stocks that trade on a stock exchange and here Stocks known as equities of a company. I this platform investors come to trade in financial instruments like shares, bonds, and derivatives.

If you want to invest in share you need Demat Account. Create your Demat Account

Types of Share Markets

In the share market there are two types of market exist. One is Primary Share Market and other is Secondary Market

1) Primary Share Market
In this type of share market the corporates issue new securities to raise funds for there company. The issued share of the company known as issuer and process of issuing share known as Initial Public Offer (IPO).

2) Secondary Share Market
When the securities issued in primary market are ready to buy and sell on stock exchange and anyone can buy and sell shares in this market. But you can only trade in equities through a stock broker because a broker is an intermediary that facilitates to you stock transactions.

How the Stock Market work?

First time the corporates raise funds through an Initial Public Offer or IPO where investors can bid for the stock.
When the IPO is listed the shares of a company can be buy or sell on the secondary market.
In the secondary market buyers and sellers to transact and make profits or in some times losses.
To buy and sell shares you need Stock broker because the stock broker is an intermediaries between the investors and the exchange.
When you place the order or Buy any share it will passed by the broker to the stock exchange.
Once you confirm and bought the share. The exchange then facilitates the transfer of ownership of the shares which is known as Settlement. Now in current days the settlement time will took only T+2 days.

List of Top 5 Stock Market Broker in India

Why Invest in Stock Market

To build our wealth in long term we should invest in share market. But still some people thinks the share market is a Risky Place to make money. But it’s 90% possibility to make good return if you hold stocks at least 5-10 years.