Stock Market Classes

What is stock market?

Stock market is a place where shares of public listed companies are traded. It helps companies to raise finance through an IPO. It also helps investors to make gain by investing or trading in the listed companies. You can think of stock markets as a shop where shares of different companies are traded.

Types of markets

The financial world is an amalgamation of different kinds of markets. The specific types of financial markets are – Equity market(stocks), bonds, Currency(foreign exchange), Derivatives(futures, option, forwards and swaps) and physical assets like Gold or Real Estate. Further, if we go deeper into the types of equity markets, then there is Primary market and Secondary market.

How does a company IPO?

Initial Public Offering (IPO) is a part of primary market. In an IPO, a company raises funds from the investors by selling a part of its ownership in order to fulfil financial needs such as debt repayment, growth and expansion, etc.   

Firstly, to raise funds through an IPO the company has a draft a Draft red herring prospectus (DRHP) and submit it to SEBI. Then, SEBI confirms the facts and if it passes the DRHP then a red herring prospectus (RHP) is made by the company and offered to the public. The public based on the information provided in the document and various other factors such as grey market premium decide whether or not to buy the IPO.

How to invest in stocks?

In order to invest in stocks, you must have the required skill and knowledge to put the odds against your favour. So, you must first acquire some knowledge by reading books, watching the right kind of videos for investing and developing a correct attitude for it. When you have acquired the knowledge, it’s time to test out your knowledge on the field. With time you can gain experience and have both the knowledge and skill to invest.

How to trade stocks?

For trading stocks, you need to understand price movements, volume, momentum of the stock. All this put together is called Technical Analysis. You have to practice trading initially by using small amounts according to your risk appetite and gradually increasing the amount of money as your risk taking ability and experience increases in the world of trading.

This was just an overview of hoe to invest in stocks or how to trade stocks. But if you want to know the A-Z of investing and trading, then I must suggest you to enrol in the ISMA 2.0 Programme in which you will be handheld through your journey in the markets by Harsh Goela and Aditya Goela – the founders of Goela School of Finance.

Link to Irresistible Stock Market Architecture (ISMA) Programme – https://goelasf.in/isma/