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What is Share Market : Destination, working and is it Good or Bad

full info about share market is here you can read this article full and in this article we tell you what is share market and how it works also its good or bad.

In today's world, everything is done online, even the sale of different types of goods and services is also made thorough online if we do not adopt this technology, then our company can't survive in the market. Here we discuss everything that is related to the share market, and this will help you in earning more returns on your investment. 

share market

What is the share market?

Share market is the place where the different types of companies issue their shares for the purpose of capital formation. These companies will pay their shares, and the investors purchase these shares. This is the place where the investors and the investing companies met. The investor may be an individual person or any company. Issuing shares is a common method for raising capital for your business because it takes less time and effort. 

Examples of Share Market:

Let me tell you everything with the help of examples so that you understand  easily:
Shares of SBI

It is very profitable to invest in shares of SBI because these are the institutions that are not winding up, and your investment is secure in this. 

Meaning of Share

A share means a share in the company from your investment.

Shareholder- When you hold the shares of the company, you will become its shareholders.

Dividend- The company gives you some amount of return on your investment; this amount is called dividend. It is the reward of the risk that you have taken when you invest the money.

Types of Shareholders:

1. Preference Shareholders

As the name suggests, these are the shareholders who have a preference while distributing the dividend among shareholders. The amount of dividend is fixed on these shareholders. 

If the company does not earn profit in a financial year, it does not mean the company does not give a dividend to preference shareholders. It does not matter whether there is a profit or not. The preference shareholders have also preference when the company is winding up.

2. Equity Shareholders

These shareholders are the real owners of the company. The amount of dividend is not fixed. If the company does not earn profit in a particular year, the equity shareholders do not get any profit, or in case the company earns more profit, the equity shareholders get more profit as compared to preference shareholders.

How the share market works?

The stock market enables buyers and sellers to interact with each other. The investors can invest their money in the form of shares. If any person purchase the shares of any company, then first of all he have to check the companies those are listed in SEB, this is because in these types of companies your shares are secured, if any type of miss happening occurs, the Government will take the responsibility to return your money, this money will not become your bad debts.

After finding the company, when you purchase your shares, the company will issue a share certificate, which includes all details about your investment like the name of the company, amount of investment, type of securities, name of the investor, etc.

Then the company will open your D'mat(dematerialization) account, which is necessary to open while investing. Through this account, you will pay the amount of your investment, and in case you want to sell these shares in the future, you may sell on this account.

What share market in India?

The share market and stock markets both are dealing with the securities. Share market only deals with the shares, but the stock market deals with every type of securities. Share market includes the shares and shareholders, who are investing money in shares.

Meaning of Stock Exchange

The stock market is the place where the shares of listed companies are sell and purchased. There are two types of stock markets.
Primary Market
Secondary Market

Primary Market- It is the place where the securities are first time issued in the market. It is also called the fresh issue or new issue market. Newly securities are firstly issued in the primary market and then go to the secondary market.

Features of Primary Market:

1. New Issue Market

This is the new issue market. The company which is issue shares for the first time is issued in the primary market.

2. Issued by companies directly to investors

In the primary market, the securities are directly issued to investors, there is the elimination of brokers or agents.

3. Security Certificate

The company issued a security certificate to its investors in the primary market.

4. Expansion or the new set up of a venture

When the new company issued its securities in the market, that it is starting a new business or trying to expand the existing business. 

5. Long term loans are not included in the primary market

The primary market is a security market, so it does not include long or short term loans.

Secondary Market- The secondary market is the place where the second hand or the securities that are already issued in the primary market are issued. The securities moved from primary to the secondary market.

Features of Secondary Market:

1. Liquidity

The very first feature of the secondary market is that there is liquidity means if the investors want to sell his security, then he can sell it and easily convert into cash.

2. Quickly adjust the new price

The secondary market quickly adjusts the prices or fluctuations in the stock market due to other factors.

3. Lower transaction cost

There is no cost or less cost as the investor sends the securities easily without any transporting or other types of costs.

4. Demand and Supply assists in price

The demand and supply of security affect the price of the security, there may be a rise in the price or fall in the price according to the market conditions.

5. Alternatives Savings

It means the investors have many options whether to sell the securities or not. He may purchase some new securities or sell the existing securities.

6. Heavy Regulations

There are so many regulations imposed in the secondary market that are issued by SEBI.

What is the stock market in India:

There are two types of stock exchanges in India that deal with the different types of securities. These are:
NSE( National Stock Exchange)
BSE( Bombay Stock Exchange)

What is NSE?

The National Stock Exchange was founded in 1992 as the first exchange company, that works electronically, this is located in Mumbai. Vikram Limaye is the managing director and CEO of NSE. This provides the investors' facilities to invest their money all over the country.

  NSE is the 11th world's largest stock exchange market. There are approximately 1952 companies that are listed under NSE. 

Website of NSE- www.nseindia.com

What is BSE?

The Bombay Stock Exchange was the first and largest market, that deals with securities. It was established in 1875 as the Stock Broker Association. It is located in Mumbai, and there are approximately 6000 companies listed in BSE.
It will work the other stock exchange works of the world like the New York Stock Exchange, London Stock Exchange, Japan Stock Exchange, etc. 

Share market basics for beginners

As we discuss the meaning of the share market, there are also important terms that the new investors should know before investing his money. These terms are described as follow:

1. Buying the Shares- It means to buy the shares of the company and becomes its investors.

2. Selling of the Shares- It means to sell the shares further when you need money or want to invest in another company.

3. Bull Market- It is the type of market where the prices of shares are very high.

4. Bear Market- In this type of market, the prices of shares are fall.

5. Authorized Shares- The total number of shares which the company issued for capital formation.

6. IPO- IPO means Initial Public Offering means when a private company issues its shares to the public in the security market.

7. Dividend- It that portion of the company which is distributed among its shareholders.

8. Broker- The person who works for commission and buy securities for further sale.

9. Portfolio- It the list of securities that are held by an investor.

10. Volatility- It means the speed of shares going down or up.

11. EPS- It means Earning Per Share means the amount that you earn from shares.

How can we invest in the share market?

Any person can invest in the share market, which is wanted to become an investor and wants to earn a profit on his investment.

Whenever we start to invest in the share market, then the first question comes in our mind, in which company we invest? Is it safe or not? Is our investment secure or not? Here we give you the answer to all your questions.

First, you have to list the names of the company, who have a goodwill in the market. Then the next step is to select one company which you want to invest in. Always select the company which has listed under SEBI. 

Our money is 100% secure in these types of companies. Then to decide the amount of investment. It depends on our financial position. When we invested, the company opens our De'mat account, which only related to the transactions of securities. These all are the things that we need to know while investing our money.

Difference between Stock Market and Share Market:

1. The stock market deals with every type of securities, but the share market deals only with the shares.

2. The stock market includes shares, bonds, debentures, mutual funds, etc., but the share market includes only equity and preference shares.

3. There are always fluctuations in both types of markets.

4. NSE and BSE are both markets that deal with the securities.

5. The stock markets follow the guidelines issued by SEBI regarding every type of securities, but the share market only follows the guidelines that are related to the shares.

Is the share market good or bad?

Share market is a good place where we can get higher returns, but it is also risky. If we are investing for a long period like 15-20 years, then our money is 100% secure, but if we are investing for short term or sells and buy securities within one or one weak. Then there will be a huge risk in this because it affects market situations, and the prices are not stable. They are changing day by day. So always keep your attention on the share market when you invest, and you know when the shares are going up and down.

So the share market becomes a profitable venture when we the important information about it also about the companies. And it proves useful for us and through this, we earn a huge profit. So try to invest your savings in the market whether to keep these in your home.


I hope this article solves your all doubts and problems About Share Market. if you have any problem understanding this article or want to know more about the Share market you can comment down in the comment box we will surely help you. Thanks for reading this article keep visiting our blog Happy Dussehra.



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Happy Dussehra Quotes, Wishes, Images, Greetings 2024: What is Share Market : Destination, working and is it Good or Bad
What is Share Market : Destination, working and is it Good or Bad
full info about share market is here you can read this article full and in this article we tell you what is share market and how it works also its good or bad.
Happy Dussehra Quotes, Wishes, Images, Greetings 2024
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