What is Share Market? Basic of Stock Market and How it is Work?
What is Share Market?
The share market, also known as the stock market or equity market, is a platform where buying and selling of shares of publicly listed companies take place. It is a place where individuals and institutions can trade securities, such as stocks and bonds, which represent ownership in a company or a loan to a company, respectively.
Stock in a company
When a company wants to raise money, it can do so by issuing shares of stock to the public. When you buy a share of stock in a company, you become a part-owner of that company, entitled to a portion of its profits and voting rights on important company decisions. The price of a stock is determined by supply and demand in the market, as well as other factors such as the company's financial performance, industry trends, and economic conditions.
How Stock Market Works?
The stock market works on the principles of supply and demand. Buyers and sellers place orders to buy or sell shares at a particular price, which are matched by a computerized system that executes trades. The price of a stock is determined by the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. This is known as the bid-ask spread.
Factors In Stock Market?
The stock market is highly dynamic, with prices fluctuating based on a variety of factors, such as economic indicators, political events, and company news. Investors can profit from these fluctuations by buying low and selling high, or by holding onto stocks for the long-term as the value of the company grows.
Risk & Reward Ratio
It is important to note that investing in the stock market carries risks, and investors should carefully research and analyze companies before making investment decisions. It is also advisable to diversify investments across multiple companies and industries to minimize risk.
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