Indian Stock Market Basics

       January 1, 0000    1213


What is Stock Market / Exchange?

An platform /place where sellers and buyers meet (virtually or physically) to deal / exchange stocks or derivatives contracts. The market may be a physical location or a virutual marketplace . It can be a "open outcry" system or a virtual computer network system.

What is e-trade ( Electronic Trading)?

e-trading is a method of trading which allows a trader/ investor to trade without being physically present in the market place. The trading happes over a computer network through Internet / VSAT / Leased Lines. The traders dont need to meets each other in a physical location and also no one knows to whom/from whom he is buying or selling. Also it helps in bringing more transperency in the markets.

How one can invest in the Indian Stock Market?

One can invest / trade in indian stock market through exchange registered intermediaries -: Brokers. A client need to open an account with the broker .The broker executes the trade on insturctions of the client and all the dealing takes place through the broker.

How many trading exchanges are there in India?

There are many regional and national level stock exchanges in the country. Most of them see no or limited. Some to name are Delhi Stock Echange,Ludhiana Stock Exchange, Culcutta Stock Exchange, Jaipur Stock Exchange. But mostof the trading happens at The Stock Exchange, Mumbai (Bombay Stock Exchange ,BSE) and the National Stock Exchange (NSE) , they are fully computerised exchanges. Besides from Cash segment they have Derivatives too. In total there are 20 regional stock exchanges in the country.

What are Indices?

A Index is a represntative figure of market performance. It generally takes into consideration a large number of stock to form a figure using which general comment about the market conditions can be made and predictions can be based. An index can be for a particular industry, type of stock, on basis of capitalisation (Market Cap), a benchmark index is collection of large cap stock with high liquidity. These indices depict the health of complete economy. For the compostion of a index the constituent stock are given a wieghtage due to which a change in stock impacts the index.

Some general stock market rules

- Patience does way or the other. Always stick to your strategy.

- Never Panic while trading in Indian Stock Market prepare your strategy in advance and just stick to it..

- Always decide your stoploss before entering a trade, so that you know the maximum loss which you may have to bear, if the trend goes against your prediction.

- Do not get greedy.

- Sell when people are buying heavily. Buy when people are selling heavily.

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