Understand How Stock Market Works

We all know the importance of money and also understand that it is very much important to save money for future needs as the future is unpredictable and anything can happen at any point in time. Investment is a form of saving that also gives interests and profits in return. But we all don’t understand the correct avenue for investment for growth in wealth.

Investment in the stock market is one such lucrative option that rewards investors with high returns. But in order to gain the maximum from the stock market, one must know the working of it. Share Market Course For Beginners help in letting you know the working of the stock market.

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Participants of Stock Market

The stock market is an avenue where an investor invests in shares, derivatives, and bonds. These all are done at stock exchanges which is a market that connects investors who are sellers as well as buyers. There are four participants in stock exchanges in India:

  • Securities and Exchange Board of India (SEBI)
  • Bombay Stock Exchange (BSE) – Sensex is its index and National Stock Exchange (NSE) – Nifty is its Index
  • Stockbrokers or brokerages
  • Traders and investors
Types of stock market

Basically, there are two types of stock markets depending on the stocks issued by the issuers:

  • Primary stock market- A primary stock market is a place where the stocks are issued especially by corporations to raise funds for the company’s development or repay any kind of loan. A company usually issues shares in the primary market in the form of an IPO(Initial public offering). An IPO is issued for a certain time period, during this interval an investor can purchase the share at the price given by the issuer company.
  • Secondary market- In this market, the shares of the company purchased by the public from the primary market are allowed for trading further. This is the place where the buyers and sellers can meet each other personally. A share market advisory company gives the proper knowledge of trading in the stock market.

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Trading in the Stock Market

Trading in the stock market is easy for both markets. The traders just have to put their shares for trading and purchasers can purchase those shares at the given price. Once the price of the share goes above the purchase price, the trader can resell those shares to any other person and get the profit.

The shares then start circulating in the secondary market where the buying and selling of the shares are done to gain profit or cut losses. The shares in the secondary market are listed on the stock exchanges which charge a certain amount from the company. The companies also need to provide important details of the company such as quarterly/annual reports, income statements, balance sheets, along with details of future endeavors, projects, plans, and objectives. In the secondary market brokers, traders and investors purchase and sell shares; one such trading company is Sanbun Investments.

It is very much important for a person to understand the stock market in depth before making any kind of investment in it. Learning about the stock market can be done through various sources such as there are many Share Market Courses For Beginners which helps you understand the share market and everything related to it in depth. A share market advisory company also provides investors with proper knowledge on the investment in the share market and how to access the maximum profit from it, one such share market advisory company is Sanbun investments. It is the most lucrative investment for those who wish to get the most from a stock market investment.