Working Steps & Participants of the Indian Stock Market

People feel different when they hear the words Stock Market, and that's because knowledge influences their feelings. It represents an inspiring opportunity to some, while it is a mystery to others. Knowing how the stock market works makes such a difference in perspective. With the appropriate knowledge, you will see the silver lining of the stock market.

Are you eager to know how to study stock market trading? You're at the right place. It is a great starting point with a comprehensive look at vital information. Let's first understand who accesses the stock market.

Who Participates in the Stock Market?

Learning about the stock market takes time, and there is always something new. Your mind must absorb information, and knowing who engages in the stock market is an example of valuable information.

• SEBI (Securities and Exchange Board of India)

Just as every process has a regulator, the SEBI acts as one for stock trading and investing. They protect investors and also monitor the Indian stock market actions.

Despite this, neither the stock market for investors gets any unfair edge over the other. The SEBI is a neutral body that acts according to legislation.

• Stock Exchanges

In India, two stock exchanges operate to allow stock-related activities. These are the two:

1. Bombay Stock Exchange (BSE)
2. National Stock Exchange (NSE)

You can think of them as the platform on which stock activities occur.

• Stock Experts & Stockbrokers

stockbrokers are firms of individuals that act with consent from clients on the stock market. Each transaction closed would attract a fee but provide many benefits to the individual.

• Investors & Traders

These are the individuals who stand to benefit financially from effective stock trading and investing. With higher skills and knowledge gained from stock market courses for beginners and intermediates come better opportunities to grow investments.

What Influences Stock Prices?

While learning about the stock market, you may wonder who controls stock pricing. Here's a brief of the many factors and situations affecting and deciding stock prices.

• Company performance

One of the actionable stock market tips you will learn is to assess company performance. Many company work details such as management, growth, earnings, and payout can influence stock prices.

Companies with exceptional numbers in all these aspects can attract high stock prices.

• Economic Factors

Country performance, such as growth and output, affects stocks too! Monetary policies, interest rates, and inflation can guide prices up or down.

• Investor Sentiment

High numbers of traders completing similar transactions can set off a chain reaction. If selling, the sentiment is bullish. But if they feel bearish, it triggers a buying spree!

When immense stock quantity appears on the exchange, prices drop due to high availability. However, if few stocks are available, stock prices increase due to shortages.

Types of Share Markets

Investors must be able to distinguish between the two types of share markets for trading. While reading a blog on share market news, you may hear about two share markets, and here's how they differ.

• Primary Market

Only partially publicly owned companies can trade shares on the stock market, and private companies must sell shares to gain shareholders. When shares go public for the inaugural time, it's called Initial Public Offering or IPO.

• Secondary Market

Post-IPO activities, the buyers are shareholders and own some part of the company. The owners of these shares can now trade them on the stock market.

Steps to Start Stock Market Trading

Trading in the stock market can become easier as you go. There are some crucial steps to know before you start. It includes the requirements for opening a demat account and the process of trading stocks.

• A demat account needs to be set up correctly, and authorised by the regulatory body is mandatory.
• Three main requirements for this account opening process are an Aadhaar card, a PAN card, and an existing bank account.
• Stock exchanges and traders connect through brokers.
• When they get shares from the exchange, they coordinate with clients and find buyers.
• Based on the order details, brokers determine if traders can complete the order by checking their accounts and other requirements.
• If the account checks out, buyers will complete their purchases immediately.
• The next step is for the exchange to confirm the order and transfer share ownership. Buyers find new shares in their demat account within a day or two.
• The new buyer can keep the shares for longer or trade them as per their needs.

Conclusion

After reading this blog, you may feel overwhelmed by the extensive working mechanism of the Indian stock market.

We assure you that even the most experienced trader once felt what you feel now. The pleasing news is endless resources exist to change what you know about the stock market.

If that doesn't sit well with you, rest assured, knowing you can approach a SEBI-registered investment advisor for further help.