Then there is secondary market where one investor buys the shares from the other investor on prevailing market rate or a rate upon which both parties agree. The secondary market is responsible for the price of the stocks. It is where when we talk about investing in stock market and trading in shares. The SEBI or Security Exchange Board of India governs the primary and secondary markets or stock exchange.
The stock exchange enables stock brokers to sell or trade companies stocks and other securities. Stocks can only be sold or purchased if it is enlisted on exchange market. So stock exchange is a place where stock buyers and sellers meet on a single platform. If you are interested in trading in share market, you can trade on the basis of Share Market Tips from expert analysts like TradeNexa Research.
In India there are 20 stock exchanges including BSE, NSE, Calcutta stock exchange, madras exchange. But the two main stock exchanges due to their market capitalization are very strong and they hold position within 15 stock exchanges of the world:
1. Bombay Stock Exchange also knows as BSE which is the oldest financial market in South Asia founded in1857.It is the biggest stock exchange in which around 5000 companies are enlisted out of which 500 companies occupies its 90% market capitalization.
2. National Stock Exchange also known as NSE, which is founded in 1992 with 1700 companies listed.
Indian stock market is volatile and fluctuates at very rapid rate. In recent times stock market has shown immense highs and lows. Timing is very important for investing in stock market which one should always keep in mind.
BSE is the conventional exchange which works offline and operates through floor where as NSE is complete online working exchange. Seeing its popularity, BSE also now started to work on online mode but they also have an offline trading floor. The trading is carried out in National stock exchange through electronic limit order book or LOB.
Other then these, there are two different types of stock market depending upon the instrument used for trading.
1) Equity or Cash Segment: In this type of trading, buyers of the stock get the buying order through bid price and the order is made available through the broker within the price negotiated by the seller and buyer. In this type of trading buyer had to pay entire amount of stock price which they purchased along with the brokerage and taxes. The stock is deposited to the DP account of buyer.
2) Derivative Market: In this type of trading you can choose 2 methods of trading future contract and other is option contract. In future contract you need to close the deal within specific time and specific rate and in option contract you can ignore the contract. In both these type of contract stocks are purchased and sold in lot.