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stock market basic knowledge

What is stock market

Hello friends Come, let us talk about the stock market. stock market basic knowledge? Why is it in place? How does it work? What are its advantages and disadvantages? And how you can invest money in it. Let us find out more about stock markets in this video Stock market,stock market or equity market- all three mean the same.

These are markets where you can buy or sell a company’s shares Buying shares of a company means buying some percentage of ownership of that company That is, you become the holder of a percentage of that company If that company makes a profit, some percentage of that profit would also be given to you If that company incurs a loss, a percentage of that loss would also be borne by you.

Stock Market Basic Knowledge

Telling you an example of this on the smallest scale, presume you have to establish a start up You have 10,000 rupees, but that’s not enough So, you go to your friend and tell him to invest another 10,000 rupees and offer him a 50-50 partnership So, whatever your company profits in the future, 50% of it would be yours.

50% of it would be your friend’s In this case, you’ve given 50% of the shares to your friend in this company The same thing happens on a larger scale in the stock market.The only difference being, instead of going to your friend, you go the entire world and invite them to buy shares in your company. The stock market basic knowledge is very important.

History and purpose of stock market

The origins of the stock market began about 400 years ago Around the 1600s, there was a Dutch East India company, similar to a British East India company, There was a similar company in the Netherlands today, known as a Dutch East India company At that time, people used to enter many surveys using ships.

The world map was not yet available So companies often sent their ships to find new lands and trade in distant places.

No one else had such a large amount of money in those days. So they publicly invited people to invest in their ships. When these ships sailed long distances to foreign lands and returned with their treasures from there.

They are promised a share of these treasures / money in the end.
But this was a very dangerous story because in those days, more than half of the ships failed to return They were lost, or broken or looted.

Anything that could happen to them So investors see the risky nature of this business So, instead of investing in one ship, they prefer to invest 5-6 bucks for them so that at least one of them has a chance to return.

One vessel that used to bring many investors closer to earning money So, this created what the stock market was. There were open shipping bins on their fingertips Watches are the places where ships go out Gradually, the program was successful because the money was spent by companies backed by ordinary people.

And ordinary people get a chance to earn more money You should have read in the history books about how the English East India company and the Dutch East India company became in those days.

Today, each country has its own stock market and each country is heavily dependent on the stock market.

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Types of Stock Market

The market can be divided into two types- The primary market and the secondary market Primary.

Primary market

Primary markets are where companies sell their shares. Companies decide exactly what

be the prices of their shares Although there are also some regulations in this The companies cannot maneuver too much because much depends on the demand How much price

Are people willing to pay for the shares of the company? If the value of the company is 1 lakh of rupees, it sells 1 lakh of its shares and offers shares.

at 1 re per share If your demand is high and many people want to buy your shares, the company could obviously sell its shares

for a higher price What companies do today is decide on a range.There’s a minimum price and a maximum price They decide to sell their shares within that range.

Secondary market

This is called the Secondary Market where people buy and sell shares among themselves and trade shares In the Primary Market, companies set their share prices Companies cannot control their

share prices in the secondary market Share prices fluctuate depending on the supply and demand of the shares Therefore, stock prices fluctuate depending on the supply and demand.

How many shares can a company have

One point to keep in mind here is that every share of the company has the same value.

It is up to the company to decide how many of its actions it wants to do.

If the total value of the company is 1 lakh, then it can generate 1 lakh of shares.

of 1 re each, OR you can make 2 lakh of shares of 50 paise each When companies sell their shares on the stock market, they never sell 100%

of them The owner always retains most of the shares to maintain possession of your power of decision If if you sell all the shares, then all the buyers of

Since everyone becomes an owner, everyone can make decisions regarding that company.

The person who has more than 50% of the shares could make decisions.

with respect to the company Therefore, the founders of the company prefer to retain more than 50% of the shares For example, 60% of Facebook shares are held by

Mark Zuckerberg People who have bought shares of the company can sell them to others.

India’s stock exchange

Almost every big country has its own stock exchange There are two popular stock exchanges in India One is the Bombay Stock Exchange which has around 5400 registered companies The

other is the National Stock Exchange which has 1700 registered companies With so many countries listed on the stock exchange If we want to observe, in general, whether the prices

of the shares of companies are going up or down, how do we see this?

To measure this, some measures have been implemented: Sensex and Nifty.

What is sensex

stock market basic knowledge
stock market basic knowledge

Sensex shows the average trend of the top thirty companies on the Bombay Stock Exchange by averaging, whether the shares of the companies go up or down The full form

of Sensex, the sensitivity index, shows the same The number of Sensex, which It has reached 40,000 marks The number itself does not mean much The value of this number

can only be understood by comparing it with previous numbers Because this number has been decided at random They decided, at the beginning, that the values of the shares of

the thirty companies it would be this.So we compile all the numbers and then we say it’s 500 So gradually the sensex has been rising and has reached the 40,000

mark in the last 50 years So this shows how high the stock prices of these 30 have gone up companies in the last 50 years.

What is Nifty

stock market basic knowledge
stock market basic knowledge

There is another similar index, NIFTY- National Fifty Nifty shows the fluctuations in the prices of the shares of the top 50 companies listed on the National Stock Exchange.

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