What is Share Market? Features & Types in 2024

What is Share Market The stock market is one such market? On which any investor can buy or sell the shares of his favorite company.

The stock market is one such place. Where many companies are listed, and those companies sell shares among people to take their funding (Fund for business). Then investors (paying money in the stock market) buy those shares and earn money from the share market.

If the performance of the company is good. So the investor gets good returns on that stock. But if the performance of that company is down. So the investor loses.

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In the stock market, sometimes there is loss and sometimes there is profit. It depends on the demand and performance of that company. If the demand for the company increases in the market. So the value of its share also increases.

Due to this the profit of the investor also increases. But if the value of a company is low. So as soon as the rate of that company goes down, the investor incurs a loss.

In the stock market, companies are listed on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). Which maintains the shares of the companies. There are more than 4000 companies listed in the stock market on BSE, and more than 1500 companies on NSE.

SEBI takes care of the security of BSE and NSE, the main job of SEBI (Security and Exchange Board of India) is to stop all the wrong things going on in the stock market and maintain balance in the stock market.

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What is a share?

Share means to share or stock. Whenever an investor buys shares of a company. So he becomes a shareholder of that company. The determination is made on the basis of the quantity of the shares. That shareholder should be given a partnership of what percentage of the company.

Any company needs money to grow its business. But more than 99% of companies do not have funds. So that they can invest in their business. To raise this fund, the company issues shares to the general public in the stock market. The number of shares an investor buys in a company. He gets that percentage share in the company.

When a company issues its shares for the first time. So it is called an IPO (Initial Public Offering). After bringing the IPO, the shares of the company are listed in the share market. Then investors buy and sell shares from the stock market.

How many types of shares are there?

  • Equity Share
  • Preference Share
  • DVR Share(DVR Share)

1 What is Equity Share?

Equity share is also called common share (ordinary share). Most of the companies listed in the stock market issue equity shares. Equity shares have more turnover than other stocks. Because almost all companies issue equity shares to the general public.

2. Preference Share

Preference shareholders are given more priority than equity shareholders. However, such shareholders do not have the right to express their views in the meetings of the company.

Even in the event of the company being wound up under the preference share, the shareholder is already paid the share. The preference share price is determined by the current price of the equity share.

3. DVR Share

The full form of DVR Share is “Differential Voting Rights”. DVR shareholders have less right to vote in the meeting as compared to equity shareholders. In order to reduce the voting rights of such shareholders, the company pays additional bonuses. The price of a DVR share is lower compared to an Equity share.

Why list a company in the stock market?

Friends, the stock market is called the ocean of money. Because there is a lot of money in this market and any company that needs funding. So she comes to the stock market, overcomes the lack of money, and earns profit in her business.

What is Share Market Funding?

To increase the business of any company, it is very important to have money. So that he can invest money in his business if the company does not have the money according to his need. So the need of that company is fulfilled by funding.

Funding is also taken by a big investor. If the company needs a lot of money. So that company is listed in the share market, with the help of the share market, people invest money in that company, and the company gives shares or shares to the investor in return for that money. Then that company uses the money received by the investor from the stock market for the growth of its business.

We will understand this in an easy way through an example, of how to list a company in the stock market.

Listing of the company in the share market: In simple words.

Friends, suppose that you have started a startup, and you are running it at your level. But if you want to increase your business or take it National then you will need more money. Then you will need funding to meet the demand for that money.

You can take funding from two places. Big Funding from a big investor or you can take Funding from small investors from the stock market. For that, you have to list your startup or company in the stock market.

First of all, to list the company in the stock market, you have to verify your company in SEBI (Share Exchange Board of India). After that, according to your choice, the company is listed on one of the stock exchanges either BSE or NSE.

Whenever a company is listed on the stock market for the first time. So she comes out with an IPO. By which that company gets shareholders and funding.

How to buy shares in the share market?

What is a share market? After knowing, now there will be another question in your mind how to buy shares in the stock market? And which account is required to buy shares? We will tell you the answers to all these questions in this section.

To buy shares of any company in the stock market, you will need a Demat Account and Trading Account. If you have both these accounts. So you can become a shareholder of any company very easily.

What is a Demat Account?

When we buy shares of a company from the stock market. So that share gets added to our Demat Account, and when we sell the share. So the shortfall of that share goes from the Demat Account. That is, simply put, the Demat Account is used for the transaction of shares or stocks.

What is Trading Account?

To buy and sell shares using Trading Account in the stock market, we need an amount. To bring that amount from Bank Account to Demat Account, we need Trading Account. That is, Trading Account is used for buying and selling shares.

With the help of a Demat Account and Trading Account, you can buy shares very easily in the stock market.

Ways to buy shares in the share market

First of all, you have to open that app or platform. In which your Demat Account has been created. Eg: Zerodha, Upstok, Angel One,

Now you have to search for that company. Whose share do you want to buy? After that, you have to choose that company.

Now on it, you will see two big buttons BUY and SELL.

If you want to buy shares. So click on BUY if you want to sell shares. Then click on Sell.

In the end, you have to buy as many shares of the company. Enter its quantity and submit it.

Now your share is BUY. You can also see the performance of that stock and the company.

How to earn money from the share market?

Learn about the ways to earn money from the share market. By which you will be able to make less loss and more profit in the stock market.

1. Don’t be greedy in the share market

If you want to be successful in the stock market. So for this, you always have to stay away from greed. Sometimes people make good money by investing. And then because of greed, they lose all their money too. Therefore, before investing, you have to see your target when you have to exit the market, and at what time you should go to the market.

2. Earn money from Long Time Investment

Friends, no one can become rich in a day in the stock market, for this, you have to give a lot of time. You should invest in good stocks for the long term. In a short time, any stock keeps on moving up and down due to small news.

If you invest in the stock market for a long time. So the impact of this small news will be negligible. And you will be able to make a good profit in that stock.

3. Keep Control of Emotion

You have equal chances of making both profit and loss in the stock market. If you make decisions without controlling your emotions. So it can cause you a lot of damage. No matter how good the opportunity is. You should never fall into the trap of buying and selling shares in a hurry.

4. Stay tuned with Strong Share

Whenever you buy shares to earn money from the stock market, you should choose Fundamentally Strong Share only. That is, you should keep in mind that the company is earning good profits every year. Whether or not, with the continuous growth in the company’s profit and business, one should invest in the company. With which you will be able to earn good profit in the coming days.

5. Stay updated with the news in the market

Whatever stock you have bought, you should always be updated about the news going on in the stock market of that stock.

Many people buy shares in the stock market. But do not pay much attention to what news is going on in the market about that stock, due to which many times the price of the stock suddenly comes down due to more bad news. Due to this, the investor suffers a lot. That’s why it is very important for you to stay updated on the stock market.

6. Buy shares according to future

In the stock market, you should invest in such stocks. Which works according to the future, which makes it seem. That this company can perform well in the coming time. By investing in such stocks, you will be able to earn good money from the stock market.

7. Buy shares in the fall

the most important thing is. That if you have bought a strong stock of the company well, then whenever you see an environment of decline in that stock, then you have to keep buying. That is, if the value of that share is low, then you should increase its quantity. This will keep your share price average, and you will be able to make good profits whenever the share price rises.

8. Study the market

You should do a market study before buying shares in the market. In it is very important for you to know what is the value of the company. How is the company’s product or service? What will be the demand of the company in the future? Investing in the market should be done only after studying all these questions. By which you will be able to earn good profit.

What is share market trading?

Trading has a general meaning. Buying any commodity or share at a low price and then selling it when the price of that stock or share increases, is the reason. Most trading is done in the stock market, and people are trading on shares every day. By doing this they earn thousands and lakhs of rupees.

Trading is done in the share market, hence it is also called share market trading.

The trading hours in the stock market are from 9:15 am to 3:30 am. That’s why investors buy shares at a lower price in the morning and sell them at a higher price before 3:30.

In the stock market, the investor earns a profit by selling the stock after seeing the profit on the stock bought by him. But there are different types of trading in the stock market and traders trade according to their convenience and risk.

Types of Trading

There are mainly three types of trading in the stock market:

  • Intraday Trading
  • Scalping Trading
  • Swing Trading

1. Intraday Trading

In intraday trading, shares are bought and sold before the opening and closing of the stock market. This trading investor buys and sells the stock in the market from 9:15 am to 3:30 pm.

2. Scalping Trading

Scalping trading is also done between the opening and closing of the stock market. But in scalping trading, trading is not done throughout the day. This trading is done for a few minutes or hours with more money. Like buying the stock at 9:15 in the morning and selling the stock at 10:05 in the morning to earn a profit.

3. Swing Trading

Swing trading is different from both those trading (intraday trading and scalping trading). This trading is done for a few days and weeks. In this too, like both of them, the stock is bought and sold between the opening and closing of the market.

In Swing Trading, investors first buy shares in the stock market at a low price and then hold them for a few days. After that when the price of their shares becomes high in a few days or weeks. Then they earn profit by selling these shares.

FAQs related to what is share market

1. What should be the qualification to invest in the share market?

To invest money in the stock market, the investor should have at least 18 years of age, a PAN card, and a bank account.

2. When does the stock of a company increase?

Whenever a company is listed in the stock market. So their share price is fixed. But after that the number of investors in that company increases, then the share price also increases.

3. How many stock markets are there in India?

There are 21 stock exchanges in India, out of which BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are both the largest stock exchanges.

4. Which is the largest stock market in the world?

The New York Stock Exchange (NYSE) 11, located in the United States, is the largest stock exchange in the world.

5. Which is the first stock market in India?

The first stock market in India is BSE (Bombay Stock Exchange) which was established on 31 August 1957.

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