Friday, April 19, 2019

Do you Know about Stock Market???

What is  Share market ??

Share market is the market in which buying and selling of shares take place. The stock market is another name of share market however besides shares other instruments like bonds, mutual funds, and derivative contracts are also traded in the stock market.

There are two types of market 

1. Primary Market: Primary Market is the market in which new company listed shares are traded. For example, IPO(Initial Public Offerings) is the process of offerings shares in a private corporation to the public for the first time.
The essential market issuance is done either through open issues or private position. Under Companies Act, 1956, an issue is alluded as open in the event that it results in a portion of securities to 50 financial specialists or more. Nonetheless, when the backer makes an issue of securities to a select gathering of people not surpassing 49 and which is neither a rights issue nor an open issue it is known as a private situation.

2.Secondary Market: Secondary Market is the market in which already issue shares which are traded in the primary market or listed on the stock exchange. Secondary market includes equity, derivatives and the debt markets. The secondary market is operated is worked through two mediums, namely, the Over-the-Counter (OTC) market and the Exchange-Traded market. OTC markets are informal markets where trades are negotiated.

Key Indicators of Securities Market.
Index: An Index is utilized to give data about the value developments of items in the budgetary, wares or some other markets. Financial exchange records are intended to catch the general conduct of the value markets. The securities exchange file is made by choosing a gathering of stocks that are illustrative of the entire market or a predetermined area or section of the market. The bluechip record of NSE is CNX Nifty.

Market Capitalisation: Market capitalization is defined as the value of all listed shares on the country’s exchanges. It is computed on a daily basis. The market capitalization of a particular company on a particular day. can be computed as the product of the number of shares outstanding and the closing price of the share. Here the number of outstanding shares refers to the issue size of the stock.
Market Capitalisation = Closing price of share * Number of outstanding shares

Market Capitalisation Ratio: The market capitalization ratio is defined as the market capitalization of stocks divided by GDP. It is used as a measure of stock market size.

Turnover: Turnover for a share is computed by multiplying the traded quantity with the price at which the trade takes place. Similarly, to compute the turnover of the companies listed at the Exchange we aggregate the traded value of all the companies traded on the Exchange.

Turnover Ratio: The turnover ratio is defined as the total value of shares traded on a country’s stock Exchange for a particular period divided by market capitalization at the end of the period. It is used as a measure of trading activity or liquidity in the stock markets


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