In this article, we will know what is Share Market, and what exactly is Share?
Shares:- It’s also known by some other names – like STOCK and EQUITY Note that:- Stock , Shares , or Equity are the same things.
Meaning of Shares :- Total capital of the company is divided into units of small denominations. Each such units is called Shares (SHARE).
For example, if ABC company’s total capital of Rs.1,00,00,000 is divided into 100,000 units of Rs.100 each, then each unit of Rs.10 is called share which will be as follows:-
TOTAL NO of SHARE X SHARE PRICE = SHARE CAPITAL
1,00,000 (one lakh SHARE) X 100 (one share) = 1,00,00,000 (1 crore total share capital)
Now, you understand that SHARE means, a portion of the company’s capital, that is, whenever you buy SHARE, and pay the money, you are buying SHARE and giving capital equal to the value of SHARE purchased to that company, And the capital invested in BUSINESS is the owner of BUSINESS, in this way you have as many shares of a company, equal to the price of those shares, you become the owner of that company.
Benefits from SHARE – Let us also know how to make a profit by buying and selling shares-There are two main ways to make money from SHARE, they are to earn Dividend, and to earn profit by selling Shares when the price increases, ie Value Growth Income,
- Dividend- In any BUSINESS, there can be two situations: Profit and loss. If you have Company’s share and company will make the profit in future. In that profit, as per the management decision of the company, you will be received the Dividend as part of the profit and in this way you can generate INCOME in the form of dividend by INVEST in SHARES of the company.
- SHARE VALUE GROWTH- If the company is continuously doing good BUSINESS and making profit, then this increases the total value of the company and thus increasing its capital, also increases the price of SHARES. And in the event of loss, the total value of the company decreases. Due to this, the price of your SHARES also decreases. If the price of SHARE increases, you can earn profit by increasing SHARE VALUE by selling SHARES in STOCK MARKET.
What is the market?
We are all familiar with the word market, the market is also known as Bazaar, A market is a place where something is bought and sold, where many types of shopkeepers keep their belongings at their shop and the buyer comes to the market to buy the goods they need and buys from the shopkeeper, like – your city or village or street market. It is necessary to have two people in the market,
First – to buy, second – to sell
Let’s see now:-
What is SHARE MARKET or STOCK MARKET?
1. In absolute terms, STOCK MARKET is a MARKET PLACE where SHARES are bought and sold.
2. It’s a MARKET PLACE where buyers and sellers of shares come together to buy and sell SHARES, either VIRTUAL or PHYSICAL.
3. A participant in the stock market can be a small common investor and the largest Mutual Funds, FII, and DII company or anyone else.
4. Investors assign any share of BUY or SELL’s ORDERS to STOCK EXCHANGE by a system, and STOCK MARKET completes the ORDERS of purchase or sale.
5. Today all ORDERS are completed from COMPUTERIZED SYSTEM and all ORDERS are MATCHED from BEST POSSIBLES OFFERS and TRADE is completed.
6.This electronic system of STOCK TRADING provides more transparency as it shows all BUY and SELL ORDERS on COMPUTER SCREEN.