what is share market in India
A single country or region may have multiple stock trading venues, that allow transactions in stocks and other types of securities. Although both stock market and stock exchange are used for this purpose only, a stock exchange is often a subset of the stock market.
If someone say that he trades in the stock market, it means that he buys or sells share equities on a stock exchange, which is a part of the stock market. New York stock exchange among major US stock exchange ( NYSE), Nasdaq and the include of Chicago board options exchange (CBOE).The two major stock exchanges in India are (BSE) Bombay Stock Exchange and (NSE) National Stock Exchange of India Ltd.
What is share market?
The meaning of share in common language is used to represent a fraction. When a company wants to raise capital, it sells a part of its ownership to the public. This part is called a share. People who buy these shares are called shareholders of the company.
Let us take a real example to understand the meaning of share.
For example, the total capital of a firm is Rs 10 lakh. The firm divides its total capital into 1000 parts at an equal price. Now each divided part of the company's capital is the smallest part of the company's capital.
In this way, the price of each part i.e. share will be Rs 100. And this small part is called a share. If you buy shares of that company, then you will become the owner of the share you pay to buy.
Note:- Share is also known as stock, equity in the stock market. Thus, the words share, stock or equity all have the same meaning.
What is a share market investment?
Dividend Yield
Dividend Yield or DY is a ratio of total dividends distributed in the last 12 months divided by the share price, which shows how much the company pays out in dividends each year as per its share price.
In other words,
the company distributes an annual dividend to its shareholders every year and when you divide this annual dividend by the company's share market price, we get the dividend yield of the company.
Bull Market
Bear Market
Demat & Trading Account
What is IPO?
What is a blue chip company?
What is capital expenditure (CapEx)?
What is EPS? EPS?
(Earning Per Share) is a number that tells how much profit a company is earning on each of its common shares in a fixed time interval. EPS is a very important number for investors, which increases the earning power of the company and the higher the earning power of a company, the higher can be the share price of that company. P/E and Dividend Payout are also calculated on the basis of EPS. It can also be known through EPS that how much money a company earns for each of its shares. In simple words, with the help of EPS we can also find out how much profit should come in the share of each share.
What is ROE?
ROE (Return On Equity) tells how much return was received on investment in any company. That is, we can know how much return the investor and owner got on investing 1 rupee in equity in any company. The ROE of a company tells us whether we should invest in that company or not. That means the higher the ROE of a company, the better it is for investment! Although there is no fixed value of ROE, but if you are investing in a stock in the stock market, then you should see that the ROE is 20% to 25%.
What is ROCE?
ROCE (Return on Capital Employed) is a financial ratio, which tells us how much profit the company is earning on the total capital invested in a business. Or it can also be said in this way that how well the company is utilizing its capital to make profit. This profit should be at least more than the interest on the loan, only then investors will get some return. Otherwise all the profit will be spent in paying interest only. And if the company is giving less returns than the interest on the loan, then the company will have to pay the interest on the loan from Reserves & Surplus. Which is a loss for investors. As an investor, we must look at ROCE for investing in any company. If the ROCE of a company is 20% or more than 20%, then it is a good option for investment!
What is EBITDA?
The full form of EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. Its full form itself makes it clear that through this, the profit from the income of the company can be easily measured. It includes borrowing, tax and cost of debt. How much is the company earning, how much tax is it paying and how much debt is it repaying. This tells about the company in which direction it is moving. What is its financial condition? For this reason, any investor keeps an eye on EBITDA. Understand it like this that if you lend money to any person, then you give it only after understanding his financial condition. In such a situation, when you invest, keep in mind the financial condition of the company. Let us tell you that from EBITDA you can get the cash flow (C) of the company…
Why do share prices fluctuate?
52 Week High-Low
What is SLB (Securities Lending And Borrowing)?
“Securities Lending and Borrowing is a mechanism in which the owner of shares or bonds – which are approved by SEBI – temporarily transfers them to a borrower, in return the person borrowing the shares pays some amount or interest as collateral.” In this, shares are usually borrowed to do short selling. Like a loan, SLB has an interest rate and loan period, which is decided by the lender and the borrower with mutual consent. The important thing in this is that the interest rate is decided according to the market and is control free. Note- Lending and Borrowing is done only for the shares in the Futures and Options (F&O) segment.
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