Business/15. Stock Market Part 1 (What is shares_ ).
Business/15. Stock Market Part 1 (What is shares_ ).
Contents [hide]
If you are new to the stock market, understanding shares is the first step to learning how businesses and investors make money. Let’s break it down in an easy way!
A share represents ownership in a company. When you buy a share, you become a shareholder (part-owner) of that company.
Example:
Suppose a company is worth ₹10,00,000 and issues 10,000 shares. If you buy 100 shares, you own 1% of the company.
Companies issue shares to raise money for:
Expanding their business
Launching new products
Paying off debts
In return, investors get ownership and may receive profits in two ways:
Dividends – A part of the company’s profit paid to shareholders.
Capital Gains – Selling the share at a higher price than you bought it.
Equity Shares – Common shares that give you voting rights and a share in profits.
Preference Shares – Fixed dividend shares, but usually no voting rights.
Share prices go up and down due to:
Company performance
Demand & supply in the market
Economic conditions
Global news & events
Example: If a company announces good profits, demand for its shares increases, and the share price rises!
Key Terms to Know
Stock Exchange – A marketplace where shares are bought and sold (e.g., NSE, BSE).
IPO (Initial Public Offering) – When a company sells shares to the public for the first time.
Market Capitalization – Total value of a company’s shares (Share Price × Total Shares).
Bull Market – When stock prices are rising.
Bear Market – When stock prices are falling.
Final Thoughts
Buying shares is a way to invest and grow wealth over time.
Always research before investing in any stock.
The stock market has risks, but with knowledge, you can make smart decisions!
Would you like to learn about how to invest in shares (Stock Market Part 2)?
Absolutely! Here’s a beginner-friendly guide on:
Stock Market – Part 1: What Are Shares?
(For Business Beginners / Students / Investors)
1. What Is the Stock Market?
The Stock Market is a platform where people buy and sell ownership (called “shares”) of companies.
Just like buying a piece of property gives you ownership in land, buying a share gives you ownership in a company.
2. What Are Shares?
Shares (also called stocks or equity) represent a unit of ownership in a company.
When you buy a share:
- You become a shareholder
- You own a small part of that company
- You may get a portion of the profit (called dividend)
- You can sell the share later to make a profit or loss
3. Why Do Companies Sell Shares?
Companies need money to grow (expand factories, develop products, etc.).
They sell shares to the public through a process called an IPO (Initial Public Offering).
This way, companies raise capital without taking loans.
4. How Do You Earn from Shares?
| Method | Explanation |
|---|---|
 Capital Gain |
Selling your share at a higher price than you bought it |
 Dividend |
Company pays a part of its profit to shareholders |
5. Where Are Shares Bought and Sold?
They are traded on stock exchanges like:
- NSE (National Stock Exchange – India)
- BSE (Bombay Stock Exchange – India)
- NYSE (New York Stock Exchange – USA)
Through online trading platforms / brokers like:
- Zerodha, Upstox, Groww, ICICI Direct, etc.
Example:
If you buy 10 shares of a company at ₹100 each → You invest ₹1000
If the price rises to ₹150 → Your shares are worth ₹1500 → ₹500 profit (capital gain)
Common Terms:
| Term | Meaning |
|---|---|
| IPO | First time company sells its shares |
| Shareholder | Person who owns shares in a company |
| Broker | Middleman who helps buy/sell shares |
| Portfolio | Collection of shares you own |
| Bull Market | Market is rising (positive trend) |
| Bear Market | Market is falling (negative trend) |
Summary:
- Shares = Ownership in a company
- You can earn through dividends or by selling shares at profit
- Stock market = Platform to trade shares
- Learn first → Then invest smartly
Coming Up in Part 2:
- Types of shares
- How to open a Demat account
- Risks vs. rewards in investing
Would you like:
PDF notes for this topic?
YouTube-style script for beginners?
Simple visual chart?
Let me know how you’d like to continue!