What is stock market ? -A Complete Guide

Stock Market
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In simple words we can say the Stock Market is a platform where anyone can buy and sell shares/ stocks publicly on those companies who are listed in stock exchange. Stock markets provide solutions to companies to raise capital and investors to earn profit by investing in stock markets. We explore basic of stocks market, history of stock market, how its works, impact on global stock market, and what is stock trading, bank nifty, nifty 50. 

History of stock market

The stock market has a long history. One of the first stock markets was established in Amsterdam in 1602 by the Dutch East India Company. This company was the first company to offer to buy shares to the public.

In the United States the first stock market was established in 1790 in Philadelphia. The New York stock exchange was founded in 1817, and it quickly became the world’s largest stock exchange.

In India we have two stock exchanges NSE and BSE. NSE was founded in 1992 in Mumbai and it is the largest stock exchange in India. BSE is the oldest stock exchange in Asia and was founded in 1875, it is located in Mumbai, India.

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How The Stock market work?

The stock market is a system where stocks are buying and selling publicly. Companies who want to raise capital are listed in the stock exchange. And listed their shares in the stock exchange. The investors buy those shares through the stock market. if company value increases those share values also increase here investor got profit. 

Stock market operates on the principle of supply and demand. If there is high demand on a particular stock, that stock price goes up, similarly if there is low demand in a particular stock then that stock piece will go down. And there are also lots of factors that have to operate in the stock market.

Investing in stock market

Investing in the stock market can be a good way to grow your wealth. But it is also risky to invest in the stock market. So before investing in any stock you should research that company’s fundamental and technical analysis. And minimise your risk. 

There are lots of ways to invest in the stock market, like buying individual stocks, Mutual funds, exchange traded funds, options, and the future. Each option has its own risks and rewards. It’s important to choose the best way to invest and tolerate your risk. 

Mutual Funds

Mutual funds are managed by professional investors who make decisions about which stock needs to buy or sell. Mutual funds are good for long term investment. If you don’t have time then you just invest in a mutual fund as SIP, monthly you just invest your money the mutual investor will manage your portfolio. Mutual funds have some expenses also. So before investing in a mutual fund review their documents. 

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Exchange traded funds(ETF)

Exchange traded funds are investment fund that are traded in the stock market, it is similar to individual stocks. ETF are designed for specific indexes, specific sectors like technology, health care. ETF have lower expense ratios compared to other traditional mutual funds.

Future And options (F&O)?

Future and options are financial contracts that allow you to buy and sell underlying assets at a future date  to the investors. Futures and options are commonly used by investors to hedge against their losses. They trade on exchange and can involve underlying assets like stocks, commodities, currencies.  F&O can be high risk, as based on price movement that’s difficult to predict. 

Nifty 50

Nifty 50 also known as Nifty. It is the stock market index in India, representing the top 50 companies listed in National stock exchange (NSE). It is one of the two main stock indices in India, the one BSE Sensex. The Index value is based on the total market value of the top50 companies that are available trading in the stock market. The index is calculated real time of the Indian stock market. 

Bank nifty

Bank nifty is a stock market index in India that shows performance on the banking sectors. It is one of the major indices of the national stock exchange (NSE). It has the 12 most liquid and large capitalised banking stocks listed in the stock exchange. The index value is based on the total value of shares of the 12 banking companies available to trade in the stock market


The stock market is complex and risky. It has a significant impact on the global economy. We understand the history of the stock market, how the stock market works, different ways to invest, Know about the future and options (F&O). Now you can get information about the stock market.

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Stock exchange is a platform where companies issue shares publicly and investors can buy and sell those shares. 

There are lots of ways you can invest in the stock market. Like investing in individual strokes, mutual funds and exchange traded funds. 

Common stocks give investors ownership in a company with high return. While preferred stocks offer fixed dividend payment but not provide ownership. 

Investing in the stock market is risky like market volatility, company performance, economic conditions, events. You have to research about stocks before investment 

Stock market plays important roles providing capital to the company for the need to grow and expand. Which in turn creates jobs and simulates impact in the economy. 

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