Stock: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.
Synonyms Shares, Equity.
It depends if the company for which you want to buy that stock is private or public.
Private company: A company owned by a relatively small number of shareholders and which does not offer its company’s shares to the public on the stock market. The company’s stock is only traded or exchanged privately.
Public company: A company whose ownership is dispersed among the general public and its shares are freely traded on the stock market.
- Why would someone buy this stock?
Most people realize that owning a stock means buying a percentage of ownership in the company, but many new investors have misconceptions about the benefits and responsibilities of being a shareholder. Many of these misconceptions stem from a lack of understanding of each stock's amount of ownership.
- How and where can you buy a stock?
In the case of a privately held company, you would have to meet with the owner of that company for him to sell you their stock. In the case of a public company, you can just buy stocks through an online stockbroker. After opening and funding your account, you can buy stocks through the broker’s website in a matter of minutes. Other options include using a full-service stockbroker or buying stock directly from the company.
Opening an online brokerage account is as easy as setting up a bank account: You complete an account application, provide proof of identification, and choose whether you want to fund the account by mailing a check or transferring funds electronically.
Once you’ve set up and funded your brokerage account, it’s time to dive into the business of picking stocks. A good place to start is by researching companies you already know from your experiences as a consumer.
A place where people gather for the purchase and sale of products. It’s a place where commercial dealings are conducted.
Stock Market: A market in which shares of publicly traded companies are issued and traded, the stock market provides companies with access to capital and provides investors an easy way to have ownership of companies.
It’s just a place where buyers and sellers of stocks meet to transact.
Primary market: This is where the issuance of new securities happens. In this market, companies raise funds by issuing new stocks through an initial public offering (IPO). The underwriter (a company that helps other companies introduce new securities to the market) will take care of selling those stocks to funds and banks.
The secondary market: also called the aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. ... After the initial issuance, investors can purchase from other investors in the secondary market.
IPO (Initial public offering): This is the first time that a stock of a private company is offered to the public. It is very hard for regular investors to get shares at the IPO.
- What is a Stock Exchange?
Stock Exchange: Stock market is a general term that is related to a place where stocks are traded. A stock exchange is more specific to the place where the trading is executed, such as NSE, BSE, ARCA, NSE, NYSE, NASDAQ, and so on.
The history of the first stock exchange: Initially if you had a stock that you wanted to sell, you would have to find a counterparty that was willing to buy them from you at a price that you both agreed on. If you wanted to purchase a stock you would have to find a seller who was willing to sell it to you at a price that you both agreed on as well. This made things very complicated for buyers, sellers and traders. What people started to do was to set up meeting locations and times where groups who wanted to buy or sell stocks would meet and transact with one another.
As more participants started to join the group, the organization of this market became a bit hectic. 24 of these traders secretly signed an agreement together, on May 17, 1792, called the Buttonwood Agreement. This agreement stated: “We the Subscribers, Brokers for the Purchase and Sale of the Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at a less rate than one quarter percent Commission on the Specie value and that we will give preference to each other in our Negotiations.
In Testimony whereof we have set our hands this 17th day of May at New York, 1792.”. is made these the 24 original brokers of the New York Stock exchange. If anyone wanted to buy or sell a stock he would have to go through them. On each transaction that they made for their client, they would keep a commission. e same year they moved from under the tree to a coffee shop right next door. They eventually moved to the building right in front of that tree: the current building of the New York Stock Exchange.
A broker is someone who buys or sells things on behalf of others. They are the middlemen between two parties. In the stock market, a broker is an individual or a firm that executes ‘buy’ & ‘sell’ orders for an investor for a fee or commission. Besides executive client orders, some brokers also provide additional services such as research, intelligence, investment plans, margin funding, and other value-added services.
The stock market has evolved throughout the years and even though it still has the same structure, it is now fully automated. The human intermediaries that took your orders and found counterparts for your order to get you executed have been replaced by computers that automatically match orders.
How do you buy a stock?
Stocks are purchased and sold by sending out an order to the stock market.
Information needed on an order:
• Order types
•Ticker : ITC, TATAMOTORS etc
•Quantity
•Side: Buy/Sell
•Price
Different order types:
• Market order
• Limit order
• Stop order
• Stop limit order
Market Order: This is a buy/sell order that needs to be executed immediately at any price available. This type of order will always get filled when the stock market is open and the stock in question is trading. Market orders are used when your priority is getting the fill over getting a particular price. This is the simplest order type.
Limit Order: A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower. A sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to be
Different Players
Who are the different players?
•proprietary trading firms.
•Investors.
•Retail Traders.
•Portfolio managers (mutual funds)
•Hedge Funds.
3 Ways of Making Money in the Stock Market:
Going Long: buying a stock and selling it back at a higher price.
Going Short: Borrowing a stock that you do not own. Selling it. And if the price drops, buying it back at the lower price, giving back the stock to its original owner, and keeping the price difference (which is your profit).
Flat: Having no position in a particular stock.
How Start trading in the Indian Stock Market for Beginners?
The very 1st thing you will need is a Demat account with a good broking firm as follows:
Here are a few of the best brokers I would suggest you trade as a beginner:
Zerodha: https://zerodha.com/?c=UH9480&s=CONSOLE
Upstox: https://bv7np.app.goo.gl/UmVgD3JmQgmHPB426
Sharekhan: https://tinyurl.com/ygem43dk
You can also start investing in Cryptocurrency with: https://wwwww.vauld.com/register/gplthc
For any query regarding trading & account opening support please WhatsApp us our team: +917896348790
