How to Learn Share Market from Zero | Day - 2

To Learn from very beginning click here   Day - 1 >>
How to get the shares of a company?
IPO, Share Market, Stock Exchange, NSE, BSE.
As we have seen earlier any big company with huge Capital is funded from money of many other participants other than the owner. These participants can be an individual or some  organizations.

In the beginning phase of business owner takes money from friends & relatives or some financial individual or organization (In order to keep this article simple we won't dig about those) to run the company.


But when a company wants to raise huge funds to expands their businesses at large scale where they can't ask this huge funds from some individual or even from financial organizations then company invites the public to buy their shares. 


When company offers public to buy shares for the first time this process is knows as IPO (Initial Public Offer).

Let's say company sold 500 shares in IPO among 100 public on average 5 shares each public.


Now what if few particular public wants to sell their shares and pocket the money since their thoughts are this company is gonna perform bad in coming future so price of share may fall.


To facilitate this where you can find buyer there is a market place known as Share Market. Here buyers and sellers will be readily available to transact the shares at a reasonable price.

Market Place or Market- It's a virtual or physical place where buyers and sellers meet to make a deal. 


IPO is also a form of market where company sells shares for the first time to the public therefore IPO is known as Primary Market where public can buy shares directly from the company.

Share Market is Secondary Market where second hand shares are sold from from one public to another. So share market basically provides platform where one public can buy/sell the shares of the company from/to other public.

Now the question is who provides that marketplace (Share Market) for share exchange from one hand to another.


The answer is: Stock Exchange is the institution which provides that market place. From the name itself it is very clear that it provides a platform to exchange the stock from one party to another.

So when you buy shares in IPO money goes to company while it goes to other public when you buy shares in the Secondary Market.


In India there are chiefly two Stock Exchanges namely NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).

To Do: Try this website   NseIndia >>

Terms:
   IPO.
   Primary Market.
   Share Market.
   Secondary Market.
   Stock Exchange.
   NSE (National Stock Exchange).
   BSE (Bombay Stock Exchange).

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