How Does the Stock Market Work in India?
If you’re new to the world of investing, you may have heard about the stock market and wondered how it works. In this article, we’ll explain some of the basics behind it so that you can understand how stocks work. We’ll also talk about some advantages and disadvantages to investing in the stock market.
1) The functions of a stock exchange
A stock exchange is a company or organization which provides facilities for stock brokers and traders to buy and sell securities, such as stocks and bonds. There are many different types of exchanges, but there are two main types: an equity exchange which lists shares of different companies for trade with their price determined by supply and demand; and a commodity exchange which trades commodities such as oil, corn, coffee or sugar. The first stock market was established in Amsterdam (Netherlands) on April 1, 1602 by the Dutch East India Company (VOC). How does the stock market work in India? The Securities and Exchange Board of India has been regulating trading since 1992. Since 2000 Indian markets have undergone significant changes and reforms with international standards on securities regulation being introduced into domestic markets for both public issuers of securities and private companies. How does the stock market work in India?
2) The key players at a stock exchange
Most stocks are traded at a central location known as a stock exchange. The key players of an exchange are: investors, brokers, traders, and market makers. Investors buy stock by borrowing money from brokerages to pay for their shares. Brokers then sell that borrowed stock on the open market in order to generate profit.
3) The trading process
When you want to buy shares, there are two ways you can do this. Firstly, some brokers are now offering automated share dealing which removes the need for a trader. Secondly, if you would prefer to speak to someone and don’t want to give away any details over the phone then internet shares dealing sites may be more suitable. The whole process of buying shares takes around 10 minutes and can be done from your desk.
4) The risks of trading stocks
Investing money is risky, but with the right knowledge, you can make it a lot less scary. Trading stocks is one way to increase your chances of making a profit while reducing your risk. In this post, we’ll take a look at how trades work and what makes them different from other types of investments. Join Infinite Trading Academy where you learn about real investment strategies and share market courses in Pune.