Now, what is stock exchange?

To understand the stock market meaning, it’s important to understand what is stock
exchange. A stock exchange is an entity that facilitates trading of stocks and other
securities. A stock is open for sale & purchase only after it is listed on the exchange. India's
major stock exchanges are: Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE).

First, the company shares its offer for sale to raise capital in the form of an IPO in the
primary market, and then in the secondary market, buyers and sellers make subsequent
trade/transactions of these stocks.

By buying a share, a shareholder gets equity ownership of the company, equal to the value
of the shares s/he own in the demat form. Apart from shares, other securities such as
bonds, derivatives, and forex are also transacted in the stock market at different
exchanges. The Security and Exchange Board of India (SEBI) is the regulatory body and
looks after protecting the interests of the investors.

The markets work on fixed timings and the share price fluctuations as per several factors
like company’s financial outlook, inflation, economic outlook etc. Thus an investor’s
ability to understand market fluctuations is the key to trade in share market. Thousands of
companies are listed in the India. To make the best stock picks, one should understand
share markets basics and check share market live updates diligently.

Types of share market

After knowing about what is stock market investment, you must also understand that
there are several types of share markets that function in India.

1. Equity market:
Equity Market is the most popular type of share market. Here, companies
issue stocks to raise capital and investors buy and sell these stocks to earn
profits.

2. Debt market:
Debt market is bond market. Here bonds are issued by Corporates and
governments issue to raise funds from public. Investors buy these bonds and
earn interest on them until they mature.

3. Commodity market:
As the name suggests, commodity market deals with commodities such as
gold, silver, crude oil, agricultural products, and more. Investors trade in
commodity future contracts, where they agree to buy or sell a specific
commodity at a future date and price.

4. Currency market:
 Also known as the forex market, Currency Market deals with the exchange of
currencies between different countries. Investors trade currency in pairs, i.e.
in every trade, one currency is exchanged for other currency. The trades are
based on speculations on the exchange rate movement between two
currencies.

5. Derivatives market:
Derivatives are financial instruments that derive value from underlying assets
like stocks, bonds, currencies, or commodities. Traders use options, futures,
swaps, and forwards for betting on the future value of the underlying asset.

6. Initial Public Offering (IPO) market:

Here companies issuing new stocks to the public for the first time. It is in a
way part of equity market.

7. Penny stock market:

Next is, penny stocks markets i.e. markets for stocks that are low-priced,
primarily from small companies and with Market Price Value below Rs 10.
These are high-risk investments.

8. Over-the-counter (OTC) market:

OTC stocks are traded through a network of dealers and brokers, and they are
typically riskier investments. These are stocks that are not listed in major
exchanges. Over-The-Counter Exchange of India (OTCEI) is an Indian
electronic stock exchange comprising small- and mid-cap companies.

What is "trade" in the share market?

about share trading

In share market, "trading" is buying and selling of financial instruments such as stocks,
bonds, currencies, commodities and derivatives for making profits. It can be done by
individuals, institutions, or even algorithmic computer programs. However, we will focus
on trading by individuals. Unlike investors, traders are more interested in earning profits
by taking advantage of rising and falling markets to enter and exit positions over a shorter
time frame. They focus on taking smaller and frequent risks and tapping the profits. Let’s
further understand share market & know about share trading, below:
1. There are different types of trading such as day trading, swing trading, and
position trading, each with its own time frame and level of risk. You can also
understand these as different strategies of traders. There is no best stock
trading advice. The strategy depends on traders profile & goals.
2. Traders make use of various techniques, strategies & market research such as
technical analysis, fundamental analysis, and quantitative analysis for making
informed decisions about when to buy and sell assets.
3. Not all trading is short term; it can also be done on various timeframes i.e.
from short-term intraday trades to long-term position trading.
4. Just like investors, traders also trade on various platforms such as stock
exchanges, over-the-counter markets, and online trading platforms.
5. It is very important to note that trading carries calculated risks, and it is
crucial for traders to have a solid understanding of the markets and to use
proper risk management techniques. Only after due diligence you can
successfully zero on to what are the stocks to buy today.
How does the stock market work
Stock markets function through different stock exchanges where investors can buy & sell
assets and securities in the demat format such as stocks/shares, bonds, commodities &
contracts. Investors can directly buy or sell these securities or route through broking
houses or brokers as they are the intermediaries between the company and investors.
Each market has its fixed closing & opening time and price of securities change according
to external factors that result in highs or lows of markets.

For instance, when a company wants to raise capital, it issues stocks to the public through
an IPO. An IPO is first time purchase of a share of the company. The price of the stock is
determined through supply and demand, and the value of the stock can increase or
decrease based on its demand & various factors such as economic conditions, company
performance, and global events.

Investors can buy and sell stocks through a broker or an online trading platform. As they
have professionals who analyse live share market and share recommendations, sectoral
preferences & stocks to buy today, this week, month & so on.

Just like when an investor buys a stock, s/he becomes a shareholder in the company and
is entitled to a portion of the company's profits. Conversely, if the company does not
perform well, the value of the stock can decrease, potentially resulting in a loss for the
investor.

How to invest in stock market

To invest in stock market you must understand the stock market invest basics and
techniques of market research.
1. The first step is to learn about how share market works and the associated
risks of participating in capital markets.
2. Do research about companies and stocks you want to invest in.
3. Determine your investment goals and risk tolerance.
4. Open Demat accounts with the help of a SEBI registered broker. Make sure
the accounts are linked to your active bank account. This will help you make
instant transactions.
5. You would require PAN, Aadhar, cancelled cheque (with your name & bank
details visible), proof of income & address proof to open a Demat/Trading
account.
6. Once you have successfully opened your Demat & Trading accounts you can
navigate through mobile app of broker. Login to the trading platform & buy
shares of your choice. Here you can also access resources such as historical
as well as latest technical charts, stocks performances, stock market live
updates, and research recommendations. You can also monitor your
investments regularly and add or exit according to your portfolio performance
& market conditions.
In all, Investing in share market for beginners is much systematic and convenient these
days. All you require is to spend some time to understand the share market dynamics.
Recommended Read: know when midcaps outperform

Stock Market Trading Time in India

The stock market trading hours in India are determined by the Securities and Exchange
Board of India (SEBI). The market operating hours are uniform across all stock exchanges
in the country, which includes BSE and NSE.
The NSE/BSE trading hours are as follows:

Pre-opening session

Pre opening session starts at 9:00 am and ends at 9:15 am. In these 15 minutes, orders can
be placed, modified, or canceled, but no trades take place.

Regular trading session

This session starts at 9:15 am and ends at 3:30 am. These are regular market hours and
orders placed during the pre-opening session are executed and trades take place.

Closing session

This session starts at 3:30 pm and ends at 3:40 pm. During this time, the closing price of all
securities is determined, and the final settlement price is arrived at. Also, note that the
stock market remains closed on public holidays and weekend, i.e. Saturdays and Sundays.
Further, there are some exceptions such as special trading hours on certain days, such as
during the festive season eg. Muhurat Trading during Diwali, and during some unexpected
market volatility. SEBI reserves right to announce these special occasions as required.

Bull and bear markets

Bull and bear markets are two very popular terms used across the globe to describe the
overall sentiment of the stock markets. The bull market refer to the market that is
experiencing a period of growth and rising prices, while the bear market is a period of
decline and falling share prices.

A bull market has high investor confidence, increasing stock prices, and strong economic
growth. During a bull market, investors are generally optimistic and are more likely to buy
stocks, which lead to further price increases. In a bull market, there is usually a high
demand for stocks, and this demand drives prices higher.

On the other hand, a bear market has low investor confidence, falling stock prices, and
weak economic growth. During a bear market, investors are generally pessimistic and are
more likely to sell stocks, which lead to further price declines. In a bear market, there is
usually a low demand for stocks, and this lack of demand causes prices to fall.
The distinction between bull and bear markets is important for investors, as it can help
them make informed decisions about when to buy or sell stocks. Investors may choose to
invest in a bull market to take advantage of rising prices, or they may choose to wait for a
bear market to buy stocks at a lower price.

It is worth noting that the distinction between bull and bear markets is not always clear-
cut, and there may be periods of volatility or uncertainty that make it difficult to
determine the overall trend of the market.

What time do stock markets open?

Bombay Stock Exchange (BSE): 9:15 AM Indian Standard Time (IST) - Monday to Friday
The National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE), which
are the two major stock exchanges in India, are open from Monday to Friday. The regular
trading hours for both exchanges are from 9:15 am to 3:30 pm Indian Standard Time (IST).
However, both the exchanges have pre-opening sessions that start before regular trading
hours. The pre-opening session for is from 9:00 am to 9:15 am IST.
It is important to note that sensex trading time in India may be subject to change due to
unforeseen circumstances or market conditions, and that investors should always check
the current NSE & BSE trading hours to ensure they are up-to-date. Additionally, both
exchanges have extended trading hours for trading in specific segments, such as currency
futures and options, which are open till 5:00 pm IST.
Recommended Read: How to choose stocks for intraday trading

Why invest in the stock market?

Investing in share markets help you build a corpus from your savings, along with
protection from inflation and taxes. There is a substantial potential for high returns over
the long term from share market investments. You should invest in stock market:
 You get opportunity to participate in the growth of successful companies.
Being an equity holder of a company you get ownership in a company with
voting rights and the potential for dividends.
 You have enough avenues to diversify and reduce portfolio risk.
 Returns from share market act as inflation hedge to maintain purchasing
power.
 You can get access to professional management through mutual funds and
ETFs/
 There is ample liquidity to easily buy and sell securities.
 It is easy to participate in stock market these days. You can gain easy access
to investment opportunities through online brokerages and investment apps.

What are the risks of online share market

trading?
Online share market trading is certainly convenient and cost-effective. However, there are
several risks that investors should be aware of, such as:
Market risk:
The value of stocks fluctuate based on market conditions. It is thus important for
investors to be aware about market risks. They may experience losses if the market
declines.

Technology risk:
When you use technology, technical issues can always crop. You are exposed to
technological risk in cases of system outages or slow response times, which is
beyond the control, as it can impact your ability to buy or sell securities.

Cybersecurity risk:
Online vulnerability to cyber attacks is well known. You should thus keep your
customer ID & password secure and ensure that you do not share these details with
anyone. Compromising your user credentials can compromise security of personal
and financial information.

Fraud risk:
Always be aware of investment scams & stay away from Ponzi schemes. It can result
in the loss of your hard earned money.

Operational risk:
Online trading platforms may experience operational issues, such as errors in trade
execution or settlement, which can impact overall portfolio.

Lack of knowledge risk:

Online share market trading requires knowledge about investment, stocks, and
trading strategies. Lack of knowledge can lead to poor investment decisions,
resulting in financial losses.