This is a free course designed for beginners as well as intermediates to learn stock market and earn a decent income from it. Here we start from very basics with real life examples. so that you can easily learn stock market. To purchase stock or share you need a demat account. Click here to open a demat account.
- 1 Learn Stock Market
- 2 How can you buy shares from a stock Market ?
Learn Stock Market
If you want to learn stock market. You have to understand the complete story of stock market.
Story of Stock Market
Stock market consist of a number of participants. But when we think about stock market we only bothered about us (Investors) only. We think about the questions like. how can we invest? How can we make profit from stock market?
But we have to think about the entire story of a stock market. Which have a number of companies and they list their stocks in this stock market. This companies have a story. This whole stock market works with brokers, so These brokers also have a story.
When we go through all this stories we will get a clear view of stock market and its working.
Stock market is basically a building in which shares of publicly listed companies can purchased and sold.
Consider an example of a super market owned by Mr. Thomas (Fictional character). It is a famous super market which is making a decent profit. It have a number of employees, inventories, geographical area, a Building and so on. Thus Thomas’s super market have a value and it is called valuation of a company. This valuation is equally divided into a number of units called share or stock of a company.
If the valuation of this super market is 10 Lakh. This 10 lakh is divided into 1000 shares (random number). Then value of each share is 1000 (10,00000/1000). Simply,
Business Valuation = Number of shares * Value of each share
Suppose Mr. Thomas want to start more branches of his super market in various cities. He need more capital (money) to start new branch. If someone are interested to invest some money to this business then thomas can take their money by selling shares of his company. If investor invested 5 lakh then Thomas can sell 50% of the total share.
To issue shares to the public a company should become a public listed company. After that they can do IPO (Initial Public Offering) in the stock market. So that anyone can purchase and sell this shares from the stock market through brokers.
What is an IPO ?
It is certain criteria defined by government of India and SEBI (Security Exchange Board of India). If a company fulfill this criteria then that company can issue share in stock markets.
What are the Benefits of Investors ?
Investors are a part owner of that invested company. So they will get a share of the profit made by the company. As the company develops the value of the share which they owned also increases.
How do you select a company for investing ?
To select a company, you have to do two types of analysis namely. Fundamental Analysis and Technical Analysis. If you want to invest a large amount or a periodical small amount (say, 1000 Rs per month) and holding that shares for a long time to get yearly dividends and to sell the shares when its value increases to a huge value.
Technical analysis is an analysis used by traders, they are actually not investing, they are buying and selling shares with in a small period of time (With in a day or few days). We will discuss about both of this analysis in our upcoming articles of learn stock market.
To buy a share from a stock market you need a broker, a trading account and a demat account, you can’t purchase or sell shares with out a broker. If you want to purchase a share you need a trading account with an amount to purchase that share (amount depends on the cost of the share). So you purchase share through a broker using the cash in your trading account. Then you will get share in digital form, Demat account (de-materialized account) will store this digital share.
You all have a savings bank account (If not, you should open a savings account from any bank). you can transfer cash into this trading account. It is like a bank account, but you wouldn’t get any interest from it.
Above, a link is provided to purchase a Demat account & Trading account through an online broker called upstox. You should open this accounts before going to further study.