Share Market | What is Share Market / Stock Market?
Hello, friends welcome to Finance Mitr, I am Swapnil, here to guide you. I will take you through the world of the share market in this blog, let start it...
Share Market
First, we learn about, What is shear or stock?
Share is nothing but the unit “ownership” of the company. Let assume that you and your friend Start a grocery store and own it jointly and after some year decided to convert your business into a company, decided to take 50% share of the company by each. Rupees 1,00,000 is your business value, you decided the value of one shear 100 rupees then you get 500 shears of your company. And your friend gets 500 shares of the company. Share is nothing but represents ownership of the company. As you have 500 shears of your company which price at 100 rupees each.
What is the share market?
As we all know the market where we go and buy thinking we need and some sellers are selling it, Share Market is nothing but a market where people sell and buy the shares of the company. As when we need grocery we go to the grocery store, when you want to buy shares you need to go to the share market in India there are two places where you buy or sell shares, one is Bombay stock exchange (BSE) and another is National stock exchange (NSE). Both are located in Mumbai, Maharashtra. Some decades ago people go to physically in BSE and NSE to buy and sell shares. But now all things are online we did not need to go there to buy and sell shares.
What is a Demat account?
Decades ago we are going to buy shares physically when we buy shares they give us share certificates. Due to limitations with the physical shear certificate later converted into digital form.
Now Demat come into the picture as we store a physical share certificate at our home in a locker, this digital certificate store in your Demat account. For buying and selling shears you need a trading account and for storing them you need a Demat account.
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Trading account
A trading account is an account by which you get access to NSE and BSE for buying and selling shears. In India, only brokers can buy or sell shares directly from NSE and BSE. So we need to open a trading account from a broker, that gives us access to the Share Market.
How shear the price decided?
Share price depends on demand and supply of share, as in our market when we go to store to buy onion and only 1 kg onion are available in the market but you and your friend both want 1 kg each. Then sellers say I will give onion to persons who offer a high price, as there is limited supply price of onion rises, same way share price changes and it decided on the last price of the Last transaction. When the numbers of shares for Sell are moreover number of buyers the shares price decrease, the same way when the numbers of buyers are moreover sellers share price increase.
How people earn money from shears?
Let's continue with the example we take at starting, you and your friend each have 500 shares of your company. Later you decide to sell 100 shears to a friend at 130 rupees each. At starting you bought it at 100 rupees, now you getting 30 rupees more. That's means you have a 3,000 rupees profit on sell on 100 shares. Same way in the share market people buy shares at a lower price and later sell it at a higher price, from price differences they earn money. People also earn money without selling shears from the dividend.
What is the dividend?
As we know share is nothing but unit "ownership" of the company. let continue with our example as you and your friend owner of the company during business company earn a profit of 10000, as you and your friend are shareholders of company you divide this profit between you and friend as per the number of shares you have. This is nothing but a dividend, Company during their business earns a profit, that profit is distributed to the owner of the company i.e shear holder of the company. That's how you earn money from shares without selling them.
Book to be read - HOW TO MAKE PROFIT IN SHARE MARKET
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Swapnil Baravkar
Finance Expert
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- Swapnil Baravkar
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