Complete Guide to Stock Market

Stock market can be defined as the public market meant for the trading of various listed company’s stocks and derivatives at matched price. Its size was estimated at about $ 36.6 trilion US at the first week of the October. Anyone can participate in stock market whether it is small stock investors or large funded traders. According to the Securities Contract Regulation Act (SCRA), 1956, defines stock exchange as any body of individuals constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.

The stock market is one of the most vital sources for the companies to raise their money. It allows businesses to be publicly traded, or to raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides, allows investors to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments like real estate.

An investor should keep some points in mind while investing in stock market :-

1. Make sure your broker is registered with SEBI and the exchanges and do not deal with unregistered intermediaries.

2. Ensure that you receive contract notes for all your transactions from your broker within one working day of execution of the trades.

3. Do not get misled by the market rumours, like advertisement and ‘hot tips of the day’.

4. Investing in very low priced stocks or what are known as penny stocks does not guarantee high returns.

5. Be cautious about stocks which show a sudden spurt in price or trading activity.

BSE or Bombay Stock Exchange is the oldest stock exchange in Asia that has a rich past of stock trading in the country. It is the first stock exchange in India which obtained permanent recognition from the government of India under the Securities Contracts Regulation Act, 1956. It has facilitated the growth of the Indian corporate sector by providing it with an efficient access to wide pool of finance resources. At present, BSE is the world’s number one exchange in terms of the number of listed companies. The BSE Index, is India’s first stock market index that enjoys an iconic stature. It is an index of 30 stocks representing 12 major sectors.

Speaking about NSE or the National Stock Exchange, it is India’s leading stock exchange covering various cities and towns across the country. It was set up by leading institutions to provide a modern, fully automated screen-based trading system within national reach. The exchange has brought about speed & efficiency, safety and market integrity. It has played a catalytic role in reforming the Indian securities market in terms of micro structure, market practices and trading volumes. The market uses state of art information technology to provide an efficient and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in stock trading services.

These days, exchanges have tied-up with various leading names in the virtual world of Internet and mobile communication to deliver up-to-date knowledge to the subscribers of NSE stock market news alerts, BSE news alerts etc. These alerts spill out all second-by-second information about both, NSE, BSE stock gainers, thus, helping the dormant investors updated about the latest movements in the Indian stock scene.

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