How Stock Market works

February 03, 2019
Alok kumar
How Stock Market works

How Stock Market works

If you also get scared just by thinking to invest in the Stock market, then let me tell you my friend that you are not alone so many individuals with the least experience of the market get scared after hearing false stories from the investors who lose their money in the stock market because of their lack in knowledge about the Stock market.

The reality is that yes investing includes risk but if one will do it after getting proper knowledge of the market then it is the most efficient way to build an empire also.

Definition of Stock

A stock or share is referred as the ownership in a company or corporation. A stock is also known as the company’s equity.

Stock ownership shows that the shareholder also owns a slice of the company equals to the number of shares held as a portion of the company’s total shares.

Common and preferred stocks

There are two main types of stock one is common and the other is preferred stocks. Equities are also known as common stocks.

The Stock market is the place that connects buyers with sellers and sellers with buyers for investments.

Stock market is almost the same as the market that exists in reality however the stock market is a virtual market that also runs on the basis of Demand and supply.

Stock market Demand and supply

The stock market also provides an attractive example of the laws of Demand and supply that work in real life and real-time. For every Stock transaction there is a requirement of a buyer and seller. There are two kinds of individuals in the market.

Supply refers to the quantity of people who are willing to sell their Stocks at any price and on the other hand, Demand refers to the total Quantity of people who are willing to buy the stock at any price and called possible buyers.

If the quantity of people who are willing to buy the stocks is more than the quantity of people who are willing to sell the Stocks in that case the stock price increases, on the other hand if the number of people who are willing to sell the stocks is greater than the number of buyers then the stock prices decrease.

So, it is easy to say that price fluctuation happens in the stock market is due to SUPPLY and DEMAND.

How Stock Marketworks

How Stock Marketworks

What is stock exchange

There are two main stock exchange in India one is National stock exchange(NSE) second one is Bombay Stock exchange(BSE) both are located in Mumbai.

National stock exchange total market capitalization is more than $2.27 trillion US dollar NSE is the only exchange of India that provides fully screen based electronic trading system that make trading very easy.

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