What is Stock Market and How it Works ?

Last modified 28th November 2017


You may have heard that if you have invested an amount of an Enfield in the Eicher Motors share in 2001  you will be having an investment of 5 Crores by 2015-2016. But that’s a fact!

 

Stock Exchange: It is where the stock market process is happening.

Whats is stock market and share market: A stock market is dealt with derivatives, bonds, mutual funds as well as shares, a share market dealt with shares only.

Primary Market and Secondary Market: Primary market is where a company get registered into the stock exchange by issuing certain no of shares. and if the company selling the share for the first time, it is called IPO. The secondary market is where the public can buy and sell the shares with the help of a brokering firm and platform.

How does a Stock Market Works?

Stocks are units of ownership in a company. A company sell stocks for Improve production, Implement new products, Hire Employees or Modifying their company etc…

So government sells bonds and companies sell the stocks,

Once the shares are available for people it can be own by anyone by buying shares with share price, and this means you are a share holder. So here comes the clarification, the price value depends on the Supply and Demand of the company share.

Stock market