Simply put, a stock exchange (market) is a business in which financial instruments are traded. These can be products, contracts, inventory, etc.
The main business entities in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The NSE is the most important, accounting for over 90% of cash flow. There are also other commodity exchanges such as the Commodity Exchange (MCX) and the Indian Energy Exchange (IEX) for the electrical industry.
All activities and market participants, including day trading, commodities and stock exchanges that trade financial instruments, are regulated by the Securities and Exchange Board of India (SEBI). In addition to listed companies, these exchanges also govern the metric. An index is a basket of products that represent a subject, regardless of its size or industry. It also allows traders to have a better measure of the different products in the market.
The most common indices in India are NIFTY and SENSEX. NIFTY is a basket of the retailer’s top 50 products listed on the NSE. SENSEX is a similar measure of 30 companies listed in the ESB.
Business products are typically used to measure the effectiveness of financial management and other business products. For example, if the joint venture that measures performance against NIFTY earns 15% this year and NIFTY reaches 20%, the joint venture might “fail” at the measure. This means that it would be better to buy 50 NIFTY shares instead of relying on the CFO’s experts.
How to invest in the stock market? You cannot buy and sell directly in a store. To do this, you need to go through a licensed broker for trading services or a security company that allows you to trade using the platform. The process is straightforward.
To start investing, you need to open a trading account with a broker or joint venture. A trading account is an account in which you can “trade” or place a buy or sell order.
A broker or brokerage platform will open a non-profit account for you. The demat account holds the financial assets in your name.
These two accounts will be linked to your bank account.
In order to open a trading and demat account, you need to provide your KYC credentials along with proof of a PAN card or government ID card such as Aadhar.
Most brokers and brokerage platforms now have KYC online procedures that allow you to open an account someday by digitally submitting your credentials.
Once opened, you can trade with a broker or brokerage firm online through the portal or offline by phone.
