Indian Stock Market

PLAIN AND SIMPLE, STOCK IS A SHARE IN THE

OWNERSHIP OF A COMPANY. STOCK REPRESENTS A CLAIM ON THE COMPANY'S ASSETS AND EARNINGS.

AS YOU ACQUIRE MORE STOCK, YOUR OWNERSHIP STAKE IN THE COMPANY BECOMES GREATER.

WHETHER YOU SAY SHARE, EQUITY, OR STOCK, IT ALL MEANS THE SAME THING.

What is Stock ?

Classification of stocks

Stocks are classified as 1. Common Stock:- Common shares represent

ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per share to elect the board members, who oversee the major decisions made by management

2. Preferential Stocks:- Preferred stock represents some degree of ownership in a company but usually doesn't come with the same voting rights.

What is Stock Market ? A stock market is a market for the

trading of publicly held company stock and associated financial instruments (including stock options, convertibles and stock index futures).

What is Indian Stock Exchange ? Formal organizations, approved and

regulated by the Securities and Exchange Board of India (SEBI), that are made up of members who use the facilities to exchange certain common stocks.

INDIAN STOCK EXCHANGES

Two National Level Exchanges are

1. National Stock Exchange (NSE)

2. Bombay Stock Exchange (BSE)

Total 22 Exchanges are there in India National and Regional level, all exchanges conducts 100% computerized trading.

NSE – National Stock Exchange

Established In November 1992.Around 3500 Companies Are ListedAround 850 Main Brokers And 10000

Sub Brokers.Non Corporate : 35 - Corporate : 725Daily Traded Companies Are Around

100%Average Daily Turnover Of Rs. 15000

cr.

BSE – Bombay Stock Exchange

Established In 1875 As "The Native Share And Stock Brokers Association".

Oldest Stock Exchange In Asia.Around 7000 Companies Are Listed.Around 935 Main Brokers And 5617

Sub Brokers.Non Corporate: 210 - Corporate : 710Daily Traded Companies Are Around

3500Average Daily Turnover Of Rs. 7500 Cr.

I N D I C E S

Major Indices Sensex (BSE),S&P CNX Nifty (NSE ), CNX IT

Index, CNX Nifty Junior, CNX Bank IndexOther Indices CNX 100, CNX FMCG Index, S&P CNX 500, CNX

PSE Index, CNX Midcap, CNX MNC Index, S&P CNX Defty, CNX Service Sector Index, CNX Midcap 200, S&P CNX Industry Indices,  Customized Indices, CNX Energy Index, CNX Pharma Index, CNX Infrastructure Index, CNX PSU BANK Index , CNX Realty Index

REGULATERY BODY

SEBI – Securities & Exchange Board of India

Established In 1992, As Per Securities & Exchange Board Of India , Act.

To Protect The Interests Of Investors To Regulate The Securities Market. To Promote The Development Of The Securities Market

Basic requirement for Investing in stocks

D-Mat Account:- Saving Bank Account:- Permanent Account Number (PAN):- Trading Account with Recognized Stock Broker:-

D-Mat Account and its Benefits

A Dmat account is like a Bank Account, with the difference being that instead of cash, a Dmat account holds shares.

Safe & convenient way to hold securities. Immediate Transfer of Securities. No Stamp Duty on Transfer of Securities. Auto. Credit Of Shares Into Dmat Account, Arising Out of Bonus, Right Issue ,Split, Merger, De-merger.

Trading Account

A Trading account is required if an

individual wishes to trade, i.e. buy and sell shares in the stock exchange. A Trading account can also be opened with most banks and financial institutions, after filling up the required forms and providing identity and address proofs.

Trading Process Once the Dmat account, Trading account

and Bank account are in place, an individual is ready to start trading. While it is not necessary to have the Dmat account, Trading account and Bank account with the same organization.

THREE WAYS TO INVEST IN SHARES

PRIMARY MARKET:-Where Company Directly Allots His EquityShares To Investors.

SECONDARY MARKET:- Where Allotted Sharein Public Issue Are Bought And Soldby Investors With The Help Of Stock Brokers at Various Stock Exchanges.

Future & Options:- It’s a derivative segmentof Underlying securities.

PRIMARY MARKET

The primary market is where securities are created (by means of an IPO).

Initial Public Offering (IPO) is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO. This market is known as primary Market

SECONDARY MARKET

A market on which an investor purchases an asset

from another investor rather than an issuingcorporation.

In this market Brokers becomes intermediate body

between buyer and seller.

FUTURES & OPTIONS

In finance, a security whose price is dependent upon or derived from one or more underlying assets. 

The derivative itself is merely a contract between two or more parties.

Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies.

DIFFERENCE IN EQUITY & DERIVATIVES

SEGMENTS IN EQUITY MARKETA) DELIVERY TRADING OR CASH MARKETB) INTRADY TRADING OR MARGINE MARKETF&O MARKET IS COMBINES FEATURES OF DELIVERY ANDINTRADAY TRADING PARAMETERS:-A) TIMEB) NUMBER OF SHAREC) INVESTMENTD) BROKERAGEE) BILATERAL RETURNS

TYPES OF ORDERS

ON MARKET ORDER LIMIT ORDER IMMEDIATE OR CANCEL (IOC)

ORDER STOP LOSS ORDER TRAILING STOP LOSS ORDER

FACTORS INFLUENCING CHANGE IN STOCK PRICE

DEMAND & SUPPLY, PROFITS, P.H , P/E RATIO, DIVIDENDS, BONUS SHARES, ECONOMIC NEWS, POLITICAL NEWS, COMPANY NEWS.

SOME COMMON TERMS IN STOCK MARKET

BULL MARKET, BEAR MARKET, BROKERAGE,

MARGINE, OPEN, CLOSE, DAY HIGH, DAY LOW, PREVIOUS CLOSE, % CHANGE, 52WEEK HIGH LOW, RESISTANCE &

SUPPORT, STT,TOT, OTLVT, STAMP DUTY.