The share market works as a platform where sellers and buyers meet to sell and purchase the shares. Nowadays, these exchanges mostly take place online and offline transactions are almost in negligible quantity. Every stock market is regularised by the government of the country. In India, we have a securities exchange board of India, SEBI. It prohibits anyone from entering into fraudulent transactions.
The Routine Share Market Works Like This
A company lists its shares, after that, they become available to the public for purchase. The share market brings sellers and buyers together. It facilitates people to invest their funds. On the other hand, share market allows companies to raise their capital. As a result, they can utilize the funds in order to earn more profit.
The third parties or the market brokers allow their users to make decisions on whether to buy or sell them according to the market. So, they act as a facilitator who provides support to the investors to encash the opportunity for their investments.
The Process of Investment
If you are going to invest in the share market, you must have some knowledge about it. However, it’s not that difficult to understand. These are the usual steps to purchase the shares.
Choose a Good Broker & Share Market Works Well for You
A good broker helps you to make investments in the share market. It is important to select a good broker because profit also depends on the multiple aspects such as easy to use trading platform and quick support as well as low brokerage cost.
Open an Account for Investment (Demat Account)
After choosing the broker, you can signup and open an account. In India, you just need
- PAN CARD
- Aadhar Card
- Cancelled cheque/ Bank statement
- Your Signature on a paper
- Passport size photos
Now you can do this process online too, it is simple and fast.
Deposit Some Amount in Your Account
In order to purchase shares, you should have some amount in your trading account. Because you need some money (capital) to purchase shares for the first time.
Find a Stock That You Want to Buy
Do some research on your own, get the support of the broker in order to do the research and select where you want to invest. Keeping yourself up to date with the financial news and corporate sector updates will be a plus point for you.
Buy the Stock Through Broker’s Platform
Now you are done with the research, therefore you can buy shares as per your research data. However, make sure that you are not investing everything in a single share or a company.
Review your share positions regularly
You can check the status of your funds via online, through the broker you selected. Keep track of the position of the shares in the market regularly.
Some shareholders are offering their shares for sale and some investors want to invest in the shares available for sale. When a seller lists the share for sale, the buyer can purchase it at that price or wait for the price to reduce. When both agree on the same price, the transaction takes place. This process is done with the platform of the broker.
When share market works?
In India, the share market works between 9:15 am to 3:30 pm on weekdays. Above all, there are some holidays declared for the share market when it remains closed.
Without the share market, the sellers would have to go through the trouble of finding people to buy their shares. However, due to the existence of the share market, these transactions happen in less than a second. Therefore, the share market works as a regular online marketplace. The difference is that, instead of goods and services, people buy and sell shares (and securities) having different face values.
What’s your method of doing the research before purchasing a share? Comment below and share this article.