How much you save does not matter where you invest that savings, It matters.

If you talk about money investment, then the largest investment in the world is in the Stock Market. Whatever money you save, then whether you deposit it in the bank or have it insured, all that money goes in the Stock market.

Hello friends, in this post, we will know What is Stock Market. If you are reading this post, it means that you also have an eagerness to know about it. What is Stock Market, so let’s understand…..

 

What is a Stock?

A Stock is a piece of ownership of any Company. Stock is otherwise known as if there is a financial instrument that Signifies ownership of a company in some proportion.

Reliance has 1000 shares and you bought one share you would on one 1/1000th of Reliance. in reality Reliance has millions of shares that some of the point you on a stock that means that own portion of a company and as the value of the company increases so does stock price…

 

What is Stock Market?

Definition of Stock Market:- A stock market is a Place where You can Buy or Sell shares of any listed Company. In the Stock Market apart from the Company Shares, you can also invest in Commodities, Currency Mutual Funds, Bonds, etc.

Like other Markets in the Stock Market, the buyers and sellers negotiate the deal. Earlier, the process of buying and selling shares used to be offline, But now it is the Era of Technology, So it has all gone online which is done through the Stock Exchange. Now if you buy shares, you do not even know the Seller, Who has sold you the Shares.

 

Deep Dive into Stock Market

You must have heard the name of the Auction at some time. The Stock Market is also auctioned above the Stock. Suppose you have some shares, then You will only sell your shares to the one who will bid the highest or assume that if you want to buy shares of any Company, then You will only buy from those who will sell you at the lowest price.

There are the two most famous Stock Exchanges in our Country. The stock exchange provides all the necessary facilities to the Stock Buyer and Seller.

In this Technology Era, You can buy and sell the shares of any company with the help of your computer or mobile. To buy and sell shares of any company in the stock market, you need a Stock Broker. Stock Broker gives you a platform in which you can buy and sell shares.

To invest in the stock market, you have to open your Demat and Trading account through any Stock Broker, after that, you can invest in any listed Company.

The Stock Market is a very important part of the economy of any Country, Just as we need food and water to live, in the same way, the stock market is needed for the development of the country’s industries, The Capital needed to run any company. And capital meets the Stock Market.

 

Types of Stock Market

There are two types of Stock Market.

Primary Market:- The primary market is a market where any company issues its shares publicly in the market for the first time.

Secondary Market:- When a company issues its shares in the primary market, then they are listed on the stock exchange. After listing the shares on the stock exchange, you can buy or sell shares in any quantity. Simply Put, The trading we do is in the secondary market.

Hello friends, you must have heard the name of the stock market at some time, today we know in this post how the stock market works and also known as Why do Companies sell Stocks, How Companies list Shares, Why and How Shares Price Fluctuate and How to Invest in the Stock Market.

Before understanding how the stock market works, you have to understand what is stock or Shares.

 

A Brief History of the Stock Market

  • The early 1300s:- Early Versions of Stock Trading begin in France where Traders would trade commodities and government Securities.

 

  • 1602:- The Origins of the modern Stock Market in Holland at the Amsterdam Stock Exchange where Dutch East India Company sold the first shares of stock ever.

 

  • 1698:- The London Stock Exchange was founded by John Castaing, The London Exchange is still in operation today.

 

  • 1792:- The New York Stock Exchange (NYSE), the first in the US, was founded on Wall Street by a group of Stock Brokers who wanted to organize what was a chaotic system at the time.

 

  • 1849:- The American Stock Exchange (AMEX) was established during the California gold rush and eventually included Companies that did not meet strict guidelines to be listed on the NYSE.

 

  • 1896:- The Dow Jones Industrial Average index was first listed in the Wall Street journal, representing 12 stocks and valued at 40 points.

 

  • 1971:- NASDAQ was established. It was the first exchange to trade stocks electronically.

 

What is the purpose of the stock market?

The stock market has two most important purposes. In which the first Purpose of the stock market is to provide capital to companies so that the company can use that capital to fund and expand its businesses. If a company issues 1 crore stock shares at the rate of 100 per share, the stock market provides 10 crore capital to that company which that company can use to grow its business. By offering stock shares instead of borrowing from a bank, the company avoids taking out a loan and paying interest charges on that loan.

The second purpose of the stock market is to provide a marketplace where traders and investors can buy and sell the stock of any listed company. Investors can profit from buying the stock of a listed company if the price of that stock increases from their purchase price. For example, if an investor buys the shares of a listed company at 100 per share and the stock price later rises to 150 per share, the investor can sell his shares and earn a 50% return on his investment.

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