A share market is where shares are either issued or traded in.
The
key factor is the stock exchange – the basic platform that provides the
facilities used to trade company stocks and other securities. A stock
may be bought or sold only if it is listed on an exchange. Thus, it is
the meeting place of the stock buyers and sellers. India's premier stock
exchanges are the Bombay Stock Exchange and the National Stock
Exchange.
THERE ARE TWO KINDS OF SHARE MARKETS – PRIMARY AND SECOND MARKETS.
Primary Market:
This
where a company gets registered to issue a certain amount of shares and
raise money. This is also called getting listed in a stock exchange.
A
company enters primary markets to raise capital. If the company is
selling shares for the first time, it is called an Initial Public
Offering (IPO). The company thus becomes public. You can read about the 6
factors to consider before investing in an IPO here.
Secondary Market:
Once
new securities have been sold in the primary market, these shares are
traded in the secondary market. This is to offer a chance for investors
to exit an investment and sell the shares. Secondary market transactions
are referred to trades where one investor buys shares from another
investor at the prevailing market price or at whatever price the two
parties agree upon.
HOW TO BUY SHARES ONLINE?
First,
you need to open a trading account and a demat account. This trading
and demat account will be linked to your savings account to facilitate
smooth transfer of money and shares.
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