Basics of STOCK MARKET for BEGINNERS

What is The Stock Market?
In simple terms, a stock market is a marketplace where financial instruments are traded — these can be stocks, bonds, commodities, among others.

The two primary stock markets in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The NSE is by far the largest, with over 90% of cash trades. There are also other exchanges for commodities like the Multi Commodity Exchange (MCX) and the Indian Energy Exchange (IEX) for power trading and so on.

All activities as well as participants of the stock markets including day-to-day trades, instruments being traded, exchanges that enable the financial instruments to be traded, are regulated by the Securities and Exchange Board of India (SEBI).

Apart from listing companies, these exchanges also manage indices. An index is a basket of stocks that represents a theme, be it size or industry. It also allows investors a common gauge on the trend in the stock market.

The most common indices in India are the NIFTY and SENSEX. NIFTY is a basket of top 50 stocks by market capitalization listed on the NSE. The SENSEX is a similar index of 30 companies listed on the BSE.

To begin investing, you have to open a trading account with a broker or a stock brokerage platform. A trading account is where you actually “trade” or place buy or sell orders.