Do you know what is the stock market?
You’ve probably heard people talk about it many times and seen lots of posts online about it.
But the truth is, most of those posts don’t give full or correct information. Instead of helping, they often leave you more confused because the information is incomplete.
The stock market, also called the share market, is known by different names by different people. The word “share” comes from English and simply means a part or portion of any company.
The stock market works on this idea — you own a part of a company when you buy its shares. So, without wasting time, let’s begin and learn everything about the stock market in English.
What is Stock Market or share market in English?
The stock market, also called the share market, is known by many names by people. Different people call it different things. The word “share” comes from English, and its basic meaning is “a part.” The stock market works on this idea — owning a small part of a company.
So, without wasting any time, let’s begin and understand everything about the stock market in a simple way.
For example, imagine a company has released 1 lakh (100,000) shares. If someone buys some of those shares, they become the owner of that part of the company.
So, if a person buys 40,000 shares out of 1 lakh, they now own 40% of the company. That means they are the owner of 40% share in that business.
Stocks show what portion of a company a person owns.
That person can sell their shares to someone else or buy shares from others whenever they want.
The prices of company shares are listed on the BSE (Bombay Stock Exchange). These prices go up or down depending on how well the company is doing or how much profit it can make in the future.
The Securities and Exchange Board of India (SEBI) is the organization that regulates and keeps everything in control in the stock market.
A company can launch its Initial Public Offering (IPO) only after getting permission from SEBI. Without SEBI’s approval, no company is allowed to issue an IPO.
What does Stock Market or Share Market mean in English?
The stock market is a place where people buy and sell shares, which are small parts of companies that are open to the public.
First, in the primary market in stock market, companies offer their shares to the public for the first time through something called an IPO (Initial Public Offering). This helps companies raise money to grow their business or company.
When does a company enter the stock market?
To get listed on the stock market, a company must sign several written agreements with the stock exchange.
As part of these agreements, the company must regularly share updates about its activities with the market. This includes any information that could affect investors or their decisions.
A company’s share price goes up or down based on the information it shares and how people judge its performance. If more people want to buy the shares, the price goes up; if fewer people want them, the price goes down.
If a company breaks the rules of the listing agreement or doesn’t follow the guidelines, then SEBI can take action and even remove the company from the stock exchange.
To be seen in the stock market, a company must meet several requirements.
For example:
- The company must show a complete record of its performance for the last 3 years.
- The company’s total market worth should be more than ₹25 crores.
- To apply for an IPO, the company must have at least ₹10 crores in capital, and for an FPO, at least ₹3 crores.
Along with these, there are many other rules that are also checked. A company must strictly follow all these rules to get listed in the stock market.
How many types of shares/stocks in stock market are there in English?
There are different types of shares, and different people explain them in different ways.
But mainly, shares can be divided into 3 main types.
Let’s I take a look at the types of shares:
1. Common Shares
These are the most basic and widely available shares.
Anyone can buy or sell them in the stock market whenever they want.
2. Bonus Shares
When a company earns good profit, instead of giving cash, it may reward shareholders with extra shares for free.
These free shares are called bonus shares.
3. Preferred Shares
These shares are given to selected people, such as company workers or those who invested early.
When a company needs money, it may offer these shares first to selected individuals before offering to the public.
These shares are often seen as more stable or safer.
How to buy stocks in English-
To buy stocks, you first need to decide whether you want to buy them on your own or take help from a broker.
Only after making this choice can you move forward with the process.
If you take help from a broker, the first step is to open a Demat account. This account can be opened through the broker.
Buying stocks through a broker has some benefits:
You get proper guidance
You also get useful information about the stock market
In return for helping you and giving advice, the broker charges a fee or takes a small part of the profit.
In India, there are only two main stock exchanges — NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).
You can buy or sell stocks only of those companies that are listed on these exchanges.
Whenever you buy or sell shares, the money goes to or comes from your Demat account.
Your Demat account is linked to your bank account, so you can easily move money between them whenever you want.
What is trading in stock market in English?
The word “Trading” is very common in the stock market.
In simple Hindi, it means “vyapar” or “business”.
When you buy something (like a product or service) with the idea that you will keep it for a short time and then sell it for a profit, this process is called trading.
In the same way, when someone buys a stock in the stock market, their main goal is to sell it later at a higher price to make a profit.
The whole process of buying and selling stocks to earn this profit is called “Trading”.
How many types of trading are there in English?
There are many types of trading, but people mostly use three main types:
1) Intra-day Trading
In this type, stocks are bought and sold on the same day. The goal is to make a quick profit in just a few hours.
2) Scalper Trading
This type of trading happens very quickly, usually within 5 to 10 minutes.
- People buy and sell stocks in a few minutes to earn profit in stock market.
- If you invest a large amount, you can earn a big profit in stock market.
- But it also has higher risk, because you can lose more money if the trade goes wrong in stock market.
3) Swing Trading
In this type, traders hold the stocks for a few days, weeks, or even months.
They wait for the stock price to rise and then sell at the right time to make a profit.
Many people think the stock market is risky and that it only causes losses.
But this idea is not completely true.
If someone invests with the right knowledge and patience, they can also earn good profits.
However, it’s very important to learn and understand the stock market before investing.
Half knowledge can be dangerous, so always learn first before starting.
But this doesn’t mean that you shouldn’t invest in the stock market or that you need some special skill or talent to do it.
Anyone can learn about the stock market and, with knowledge and experience, become good at investing.
With time and practice, anyone can learn how to invest wisely in the stock market.
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