The document discusses stocks, stock markets, and key concepts related to trading stocks. It provides information on the following:
- A stock represents a claim on a company's assets and earnings. As more stocks are acquired, ownership stake in the company increases.
- Stocks are listed and traded on stock exchanges, which are entities that bring together buyers and sellers of stocks.
- Key stock exchanges mentioned include the BSE in India, the NYSE in the US, and the NSE in India. Important stock market indices like the Sensex, Nifty 50, and Dow Jones are also discussed.
- The document outlines the functions of the securities regulator SEBI in India and describes a bull market
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Stock market
1. STOCK MARKET
A STOCK is a share in the ownership of a company. A stock represents a claim on
the companys assets and earnings. As you acquire more stocks, your ownership
stake in the company becomes greater.
A share market or Stock market, is a private or public market for the trading of
company stock and derivatives of company stock price;
The stocks are listed and traded on the stock exchanges which are entities a
corporation or mutual organization specialized in the business of bringing buyers and
sellers of the organizations to a listing of stocks and securities together.
Stock market is known as the cradle of capitalism. It is a place where companies
come to raise their share capital and investors go to invest their surplus funds.
2. SHARE IN THE SHARE MARKET ARE EITHER
TRADED THROUGH:-
1)Stock Exchange
2)Over-the-Counter
1)Stock Exchange:-
These are organized market places where stocks, bonds are
other equivalents are traded between the buyers and sellers
where exchange acts as a counter-party to both participants in
case of any default. The contracts are standardized and not
customized ones. For example, NYSE,NASDAQ, NSE, NIKKEI,
etc.
2)Over-The-Counter
These are not centralized exchanges. Here, the trade takes
place through a network of dealers. Generally, the OTC contracts are
bilateral customized contracts and not standardized.
4. SEBI(Securities And Exchange Board of India)
1. Introduction:-
SEBI is the Regulator for the Securities Market in India.
Originally set up by the Government of the India in 1988, it
acquired statutory from in 1992 with SEBI Act 1992 being
passed by the Indian Parliament. Chaired by C B Bhave.
1. Function of SEBI:-
I. The issuers of securities
II. The Investors
III. The market intermediaries
5. INDIAN STOCK EXCHANGES
1) BSE (Bombay Stock Exchange):-
Location: Mumbai
Index: Sensex (SENSitve indEX)
Consist of group of 30 Stock
Members: 852
Date of Launch: 03 January 1986
Base period:1978-79
Base Index Value:100
Timing: 09.30 AM 03.30 PM
Listed Co. : over 6000
7. 2)NSE(National Stock Exchanges)
Location: Mumbai
Index: Nifty (National Stock Exchange Fifty)
Consist of group of 50 Stocks
Date of Launch: April 1994
Base period: 1993-94
Base index value: 1000
Members 726
8. Type Of The Market
Stock Market
Normal
Market
Auction
Market
Odd Lot
Market
Spot Market
9. BIG STOCK MARKET
NYSE ( New York Stock Exchange)
NASDAQ-America
Dow Jones
S&P 500
Tokyo Stock Exchange
London Stock Exchange
Bombay Stock Exchange, India
National Stock Exchange, India
11. IMPORTANT TERMS IN STOCK
MARKET AND IN STOCK TRADING
Open- The stock price in beginning of Day(i.e. in morning).
High - The stock price reached at the highest level in a day.
Low - The stock price reached the lowest level in a day.
Close - The stock price at which it remains after the end of market timings
or the final price of the stock when the market closes for a day.
Volume - Volume is nothing but quantity.
Bid - The Buying price is called as Bid price.
Offer - The selling price is called offer price.
12. STOCK MARKET
CONDITIONS
There are two ways to describe the general conditions of
the stock market:
1)BULL MARKET
2)BEAR MARKET
Bull Market -
A Bull Market indicates the constant upward movement of
the stock market. A particular stock that seems to be
increasing in value is described to be bullish.
13. A BEAR MARKET INDICATES THE CONTINUOUS DOWNWARD
MOVEMENT OF THE STOCK MARKET. STOCK THAT SEEMS TO BE
DECREASING IN VALUE IS DESCRIBED TO BE BEARISH.
STOCK MARKET
CONDITIONS
BEAR MARKET:-
14. IMPORTANT INDICES IN THE WORLD
Name of Index Country Weight No. Pf
Stock
Base
Year
Base
Value
S & P CNX
Nifty
NSEIL,
India
Market Capitalization 50 1995 1000
SENSEX 30 BSE, India Market Capitalization 30 1978-79 100
NASDAQ 100 NASDAQ ,
USA
Market Capitalization 100 1985 125
FTSE 100 UK Market Capitalization 100 1984 1000
Hang Seng Hong Kong Market Capitalization 33 1964 100
Dow Jones USA Price 30 1928
Nikkei 225 Tokyo Price 225 1949
15. BENEFITS OF INVESTING IN
SHARES
Possibility of increase in value
of share
Income from dividends
Easy liquidity
Tax benefits on income
earned such as exemptions
U/s 10(34) for dividends, Sec
54 for calculating STCG &
LTCG
16. 1.DEMAND AND SUPPLY
2.BANK RATE
3.SPECULATIVE PRESSURE
4. ACTIONS OF UNDERWRITERS AND OTHER
FINANCIAL INSTITUTIONS
5.CHANGE IN COMPANYS BOARD OF DIRECTORS
CAUSES OF PRICE FLUCTUATION
17. 6. FINANCIAL POSITION OF THE COMPANY
7.TRADE CYCLE
8.POLITICAL FACTORS
9.SYMPATHETIC FLUCTUATIONS
10. OTHER FACTORS:
A. EXPECTED MONSOON
B. PERSONAL HEALTH OF HEAD OF
GOVERNMENT OR CHAIRMAN OF THE
COMPANY
C. OIL PRICES IN THE INTERNATIONAL
MARKET
CONT