What is Share Market?
Have you heard the term "share market" but felt confused? Don't worry — this article will help you understand it in the simplest way, using real-life examples that even a beginner can relate to.
📈 What is a Share Market?
The share market is a place where people buy and sell shares of companies. These shares represent a small ownership in the company.
Example: If a company issues 1,00,000 shares and you buy 1,000 shares, you own 1% of that company.
🧠Why Do Companies Sell Shares?
Companies need money to expand — open new offices, launch products, or pay off loans. Instead of taking a loan, they raise money by selling shares.
Example: Zomato raised money through an IPO by selling shares to the public.
🔗 Read: What is Dividend in Stock Market?
🔄 How Does the Share Market Work?
- Primary Market: Where companies offer shares to the public for the first time via an IPO (Initial Public Offering).
🔗 What is IPO And Primary Market - Secondary Market: Where these shares are traded among investors — like you buying from someone else.
Example: Buying Tata Motors shares from another investor on NSE is a secondary market transaction.
💡 What is a Stock Exchange?
Stock exchanges like NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) provide the platform for these trades.
They ensure transactions are safe, fast, and transparent.
🔗 Read: Difference Between NSE and BSE
👥 Who Can Invest in the Share Market?
Anyone with a Demat account and a trading account can invest — even students, jobholders, housewives, or retirees.
🔗 Read: How to Open a Demat Account
💹 How Do You Earn Money from Shares?
- Capital Gains: Buy shares at a low price, sell at a higher price.
- Dividends: Some companies share their profits with shareholders.
Example: You bought Infosys at ₹1,200 and sold it at ₹1,500 — you made ₹300 profit per share.
⚠️ Is the Share Market Risky?
Yes, prices can fluctuate. But with good research, long-term view, and patience, risks can be reduced.
Tip: Never invest without understanding the company. Start small.
📚 Final Thoughts
The share market is not gambling — it’s a smart way to build wealth over time. The key is to learn, stay updated, and invest wisely.
🔗 Read: Top Stock Market Tips for Beginners
🙋♂️ Want to Learn More?
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