Share Market is made up of two words share and market. The word share means ownership and the market means the place where the shares are traded.
Let’s understand the SHARE in details:
As the meaning of this word is ownership, then the next question hit to our mind is ownership of what?
The answer is if you buy a share of any company then you will get the ownership of the part. For instance, if I buy one share of TATA MOTORS then I will become the owner of one share in that company.
Now what happens if you buy the share
- You will be given the profits on the basis of the shares you hold. For example, if you own 10 shares of any company and the profit declared is $100 million and the total shares issued by the company is one million. Then the profits of your share will be 01 million shares/$100 millions profits*10 shares which you own.
- You will be informed whenever the general meetings will be placed and you can vote as well.
- You can get gains or profits if you sell the shares at a higher price than you purchased.
Now understand the market:
Share market does not have a physical market as you go for shopping to the shopping mall. Earlier there it used to be the physical market but now everything has been shifted to the online platform.
It means if you want to invest in share market or want to buy shares then you do not have to go any physical market.
What is required to invest in the share market? is it only open the Demat account? This is just like your bank account but the works are different. And it requires all most the same documents, which requires to open a bank account.
How can we have a DEMAT account?
There are lots of companies who provide Demat account facilities like Zerodha, Upstocks, Sharkhan Limited and Angeles broking etc.
These are the companies who provide accounts where you can keep the shares.
Once you get Demat account then to buy shares it requires the same process what it requires to shop online.
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Here to pic shares, the only difference is you have to pick shares wisely after doing some research and analysis.
If I talk about the place where the shares are traded online are different sock exchanges, for example, NSE and BSE in India. The main active stock exchanges are these two only National Stock Exchange (NSE ) & Bombay Stock Exchange (BSE) in India.
Now the question comes that who regulate the share market as there is no physical presence?
As in banking sector Reserve Bank of India (RBI) regulates the market. Just like that Security Exchange Board of India (SEBI) regulates the share market.
SEBI keeps on watching each and everything very closely and ensures that the market is running properly.
If something wrong happens to you then you can file a complaint against the company to SEBI.
Again the question comes why this market is established or required?
Think being an individual if we need money, then we go to- parents, friends, neighbours, or the bank.
In the same way, if any limited company requires money to finance itself.