What is Share Market 2022? How to Buy and Sale Shares in Stock Market

What is Share Market 2022? How to Buy and Sale Shares in Stock Market

What is Share Market 2022? How to Buy and Sale Shares in Stock Market. How to Buy and Sale Shares in Stock Market:- Share Market A market where shares are issued publicly and they are bought and sold. The answer to ‘what is a stock market’ is very similar to that of the stock market. The key difference between share market and stock market is that share market only allows trading of shares. The same stock market allows you to trade in financial instruments such as derivatives, bonds, mutual funds, as well as shares of listed companies. The link to download the best application for investing is given at the end of this post. You will also be given 300 rupees on downloading it.

The share market provides a platform of trading facilities that companies can use to trade shares in the stock market. Only those shares can be bought and sold on the stock exchange which are listed on it. Therefore, buyers and sellers meet in the stock market. The major stock exchanges of India are National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Types of Share Markets

Now that we understand the meaning of the stock market, a key aspect of the basics of the stock market is that one can trade on one of the two market segments. In other words, there are two types of stock markets in India. These are the primary market and the secondary market.

What-is-Share-Market

 

Primary Share Market

A primary stock market is a place where a company first registers and issues a certain amount of shares, with the goal of raising funds. The goal of being publicly listed on a primary stock exchange is to raise funds. This is where a company gets registered to issue a certain amount of shares and raise funds. If the company decides to sell its shares for the first time, it is known as Initial Public Offering.

Secondary Market

Once the company’s new securities are sold in the primary market, they are traded on the secondary stock market. In the secondary market, investors have the opportunity to exit their investments and sell their shares. Transactions on the secondary market mostly involve trades where one investor chooses to purchase shares from a different investor at the current market price.

At whatever price both parties agree to set or based on the prevailing market price, one investor will buy shares from the other in the secondary market. Typically investors do these transactions through a broker or other such intermediary who can facilitate the process. Brokers provide these trading opportunities in different plans.\

What we Can Buy or Sale in Share Market What is Share Market 2022

We cannot discuss the basics of the stock market without addressing the major financial instruments that are traded. There are four categories of financial instruments traded on the stock exchange. They are shares, bonds, derivatives and mutual funds. They are as follows:

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Shares – The market value of the shares listed on the stock exchange continues to fluctuate. – What is Share Market 2022

A share is an entity denoting equity ownership in a corporation that exists as a financial asset that provides equitable distribution for any profits earned. Therefore, when you buy shares, you buy a stake in the company whose shares you have purchased. This means that if the company becomes profitable over time, shareholders are rewarded with dividends. Traders often choose to sell shares at a higher price than they buy.

Bonds – The market value of the shares listed on the stock exchange continues to fluctuate. 

The market value of the shares listed on the stock exchange continues to fluctuate.  A company needs money so that they can start projects. They pay dividends to their investors from the revenue earned on their projects. One way to raise capital for operations and other company processes is through bonds. When a company chooses to borrow money from a bank, they take out a loan which they repay through periodic interest payments. Similarly, when a company chooses to borrow money from various investors, it is known as bonds, which are also paid back through timely interest payments. Take the following example as an explanation of how a bond works.

Imagine that your goal is to start a project that will start making money in two years’ time. To start this project, you will need some initial amount to get started. Suppose you get the required amount as a loan from a friend and write the loan receipt saying that you owe him ₹ 1 lakh, which you can pay for five years with an interest rate of 5% per annum. Will pay in years. Let’s say your friend now has this receipt. This means that they have just bought a bond by lending money to your company. Since you have promised to pay the principal amount at 5% interest, you do so and finally end up paying your principal amount by the end of the fifth year.

Mutual Funds

The market value of the shares listed on the stock exchange continues to fluctuate.  One of the major financial instruments of stock market basics is mutual fund investing. Mutual funds are investments that allow you to invest indirectly in the stock market. You can find mutual funds for different financial instruments like equity, debt, or hybrid funds to name a few. Mutual funds work by collecting money from all the investors who fund them. This total amount is then invested in financial instruments. Mutual funds are professionally handled by a fund manager.

Each mutual fund scheme issues units of a fixed value, similar to a share. When you invest in such a fund, you become a unit holder in that mutual fund scheme. When the instruments that are part of that mutual fund plan generate revenue over time, the unit-holder receives that revenue, which is reflected as the fund’s net asset value or as dividend payments.

Derivatives

The market value of the shares listed on the stock exchange continues to fluctuate. It is difficult to determine the value of a stock at a particular price. This is where derivatives enter the picture. Derivatives are instruments that allow you to trade at a price you set today. Simply put, you enter into an agreement where you choose to sell or buy shares or any other instrument at a specified fixed price.

Which app to invest in Share Market

Do you also want to invest in share market then download Groww App now. I myself am earning about 1 lakh rupees a month by using this app. Grow App With over 5 million users, Groww is one of India’s largest and fastest growing investment platforms. Recently they have introduced a new app which is fast, smart, smooth and easy to use for both pro traders and new investors. It lets you invest in stocks, futures, options, mutual funds, IPOs and many more. After downloading it and creating an account, you will get a balance of Rs.300 in your Grow App Wallet. You can also transfer this money to your bank account. Account opening in this is fast and paperless.

Disclaimer

This post is being shared for educational purposes only. The investor will be responsible for the profit or loss in the share market. We only share information. Share market is a risky business.

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