A stock market is a place where stocks, shares, or derivatives of a company are bought or sold. In other words, the Stock market refers to a place where trading of certain stocks of a company takes place at an agreed price. Sometimes the stocks are also referred to as equities therefore this market is also known as equity market.

Stocks or Share?

Stocks and Shares are used interchangeably but both the terms are different in some context. Stocks refer to the ownership certificate of any company, in general, and shares mean the owner's certificate of a particular company. Having shares of a company means having partial ownership of that particular company. Some facts about stocks are-

Owning shares of a company make you the partial owner of the company and you get the voting rights in that company issues

· Stocks do not offer any guarantee of returns.

· Stocks can generate revenue through dividends even if the price of that stock gets down. That means if a company offers dividend on a share, you get the guaranteed return on that share

How Trading Takes place in the Stock market.

Trading takes place in the Stock Exchange and carried out by licensed members called brokers. To trade in the stock market first you need to have a Demat (Dematerialized) account then you should approach a broker. The brokers can give authority (on certain criteria) to transmit the orders of trading to their sub-brokers, so you can also contact a sub-broker rather than an exchange broker because a broker generally does not entertain small investors and deals with big investors or FII's.

A stock market gives you an opportunity to make money by buying or selling the shares of a company. Once you are authorized to trade in the stock market, you can trade upon the stocks. The trading process in the stock market takes place when there stands a person who wishes to sell his stocks and the other is ready to buy them. Thus the stock exchange acts as an intermediate between the buyer and the seller and they agree to deal on the stock price at a particular time.

In beginning, most exchanges used to have traditional methods for trading where traders were wildly throwing their arm up, waving, signaling to each other to carry out a trade but nowadays the exchange is composed of a network of computers and modern information technology where trading is done electronically.

A stock market is nothing but a link between the buyers and the sellers. Stock prices change every day due to changes in supply and demand. If more people demand to buy a stock than sell it, then the price moves up and vice-versa.