Terms & Concepts

There's a lot to cover when it comes to learning how to invest in the stock market. My goal is to provide you with a fast "crash course" on how the stock market operates. Rather than presenting you with a massive lexicon describing every term, measure, and word related with the market, I'm going to concentrate on only the most fundamental principles you'll need to get started. So lets just start from the bottom. What exactly is the stock exchange? A stock exchange is a marketplace where buyers and sellers can swap shares in publicly traded corporations. You become a part owner of the company when you purchase a share. What is the definition of a share? A share denotes a unit of ownership in a corporation. As a shareholder in a corporation, you own a portion of the company and are responsible for its earnings and losses. You'll also get dividends, bonus shares, and rights issues as well as other perks. What is the definition of a stock? A stock is a grouping of shares in a single firm or a grouping of shares in several companies. The Bombay Stock Market (BSE) is India's and Asia's oldest stock exchange. It was founded in 1875 by five stockbrokers under a banyan tree. On the BSE, there are now 5,400 shares listed. After the Harshad Mehta Scam in 1992, the National Stock Exchange (NSE) was founded. It is India's most important stock market and the world's fourth largest. The NSE has around 1,600 stocks listed. The Nifty 50 is a basket or grouping of the 50 most actively traded stocks on the NSE. It aids investors in determining market sentiment. Nifty 50 is an acronym for National Stock Exchange and Fifty (50). BSE's flagship index is the Sensex. It is a basket of 30 of the BSE's largest and most regularly traded equities. The name Sensex refers to a combination of the sensitivity index and the price index.