Learn Stock Market Basics for Beginners in India

Even though there are many companies that offer shares, a majority of people in India prefer to trade on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). NSE was established in the year 1992, while the latter dates back to 1875. Being recognized as two of the largest stock market centers in the country, both BSE and NSE are famous for following the same settlement procedure and the trading hours.

Stock trading is often seen as one of the simplest and fastest ways to double and even triple your capital. However, there is a common misconception concerning the stock market industry. We believe that our earnings and the ROI from the share market completely rely on our luck. Contrary to the popular belief, how much you earn from your investment depends on your experience and your enter and exit strategy. The stock market takes unpredictable turns. The value of the share that is increasing at a fast pace can collapse in weeks.

In such cases, only smart investors who stick to their exit strategies manage to survive the industry. There is no place for emotional and impulsive decisions. You need to plan your strategies before you even buy shares. Before you step into the share market institute in gurgaon , let's have a look at the basics of the share market in India.

Trading Mechanism

Both BSE and NSE involve stock investments via the online electronic limit order book. The good news is all the records and orders stay anonymous. It doesn’t unveil the identities of the buyers and sellers, making the system a whole lot reliable and transparent for investors. You could place the order for shares through a broker or use online share marketing platforms.

Trading Hours and Settlements

Note that the share market follows the T + 2 settlement cycle. Basically, if the buyer purchases shares on the 1st day of the month, they will get the shares two days after the application has been executed. Similarly, the shares are sold from the seller’s end are processed after two days following the date the buyer made a purchase. Stock exchanges stay open from 9:15 AM to 15:30 PM every day (except for Saturday and Sunday). The entries are accepted in the electronic forms only. You must have a valid Demat account to buy shares.

Market Indices

The famous market indices in India are Nifty and Sensex. Sensex holds the stocks of around 30 organizations while Nifty has the shares of approx 50 companies.

Market Regulator

SEBI is responsible for regulating the stock exchanges and ensuring that all entries and operations take place according to the regulations. The Stock Exchange Board of India was founded in the year 1992. The authority is responsible for forming the best regulations that all exchanges are supposed to follow. Should any stock exchange violate the terms and conditions, they will be subject to the penalties.

Types of Stock Markets

We have two major types of stock markets in India i.e. the primary market and the secondary market. The IPO offered on the primary stock market are unveiled to the public through the secondary stock market. People get to purchase and sell shares in the secondary market.

Type of Products Traded on the Share Market

• Shares

Individuals get an opportunity to purchase shares of the company and benefit from the profits the company makes. Shares are the traditional and most common forms of stock market products. They are extensively purchased and sold in the market.

• Mutual Funds

Mutual funds are an indirect source of investment in the share market. It is operated by professional investors, who collect the investment from the public and put them in different instruments.

• Derivatives

The stock value changes constantly. In fact, the price of the shares fluctuates so fast that it gets quite challenging for investors to see a fixed price. Derivatives help investors to place their offers on a future date using the current fixed prices.

• Bonds

Firms need investments to work on some big projects. They raise these funds by issuing bonds and distribute profits generated from the project to the bondholders. Many investors purchase bonds to provide financial aid to the companies and receive profits in return.