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Share Market Definition - Example, Tips, Demat Account

Share Market Definition

What is a share market? In a small definition, we will explain it in detail. To understand the share market better, we have to understand its terminology firstly we have to understand the meaning of share, what are shares. In the share market, companies sell their shares and raise money in public to make them the owners of the company.

Share Market

Share Market VS Stock Market

Share Market: A share market is a market where companies raise money by selling their shares where the shares of companies are bought and sold.

Stock Market: When we are talking about the stock market, we are not only talking about Equity but also the Bonds, Debenture, Mutual Fund, Forex, Commodity, Derivatives, Shares are all included in the stock market.

This is the only way we can buy and sell shares, we cannot buy and sell shares directly on the stock exchange. Because there are brokers on the stock exchange, through them we buy and sell shares.

Did you know who controls the stock market, then SEBI (Security & Exchange Board Of India) is the answer. Like, RBI (Reserve Bank Of India) manages the banking system.  If you want to earn money fast then you can trading.

It is very important for you to know that NSC (National Stock Exchange) is the largest stock exchange in India where big companies are listed. Nifty is a group of 50 companies. It is the main index of NSE.

BSC (Bombay Stock Exchange) is the 2nd largest stock market/Stock Exchange. Sensex is a group of 30 companies, it is the main index of BSE. 

If you buy some shares today and sell them tomorrow, then we call it BTST (Buy Today Sell Tommaro).

What Is Share With Example

Share - When the capital of a company is divided into small parts, then each part is known by the name of shares.

For Example - ABC Ltd is a company. And its capital is 10000. The capital of ABC Ltd Company is divided into 100 shares Then, The price of 1 share will be 100 rupees.

100 Shares * 100 = 10000 capital

When you buy the shares of a company, you become the owner of the same share of that company. Those who invest in the stock market are called shareholders.

Imp - I will advise you if you want to invest in the stock market, then first you should gain experience Or you can also invest through the Market Researcher/AnalysisTo invest in the stock market, you must first have knowledge of the market.

Important For Stock Market:-

  1. To invest in the stock market, you have to open a demat account.
  2. To invest in the stock market, you must first have knowledge of the market.
  3. Demat account opens in 2 ways, either you can open a broker through or you can open a demat account.
  4. To buy or sell shares, you have 2 ways to open a demat account/Trading Account. The demat account is linked to our savings account, so that the money from the shares gets in our savings account. You can also open a demat account/Trading Account by going to the bank. 

Difference Between Trading A/C & Demat A/c

  • Trading account: Trading account is required to buy and sell stocks, trading account is opened with broker.
  • Demat account: A demat account is required to hold the shares purchased, a demat account is opened with a broker.

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