Common people in India used to say following things about Stock Market....
- Stock market is a place for people only to do gambling.
- People make money in stock market only due to good luck.
- Stock market is an earthly Hell where people get ruined.
- Stock market is not differnt from Lottery ticket.
- No wise person engage in stock market.
But frankly speaking, none of the above informations is correct. People who do not have any idea about stock market used to say things like that.
Knowledge of stock market is very much essential in todays perspective. Otherwise, we will be involved only in old-fashioned investment vehicle which will face break-down in the long run. The following term is essential to learn for beginers in stock market.........
- PAN (Permanent Account Number): PAN is a primary requirement for investing in Share Market. Hence, it is required to get first.
- Aadhaar is mandatory for stock market investment.
- Broker: We cannot buy or sell shares directly from stock exchange because we are not authorised to do so. There are people or agency, who are authorised to trade directly at stock exchange as they have registration and licence to do so. These people or agencies are called broker who get registration & licence from SEBI i.e. Securities and Exchanges Board of india. SEBI regulates share market in India.
- Savings Account in Bank: One Savings account is to be opened at Bank. This account is required to transfer money from savings account to trading account and vice versa.
- Demat Account : Demat account can be opened with the help of broker. Demat account is required to hold the stock in dematerialised form in the name of investor as we cannot hold stock in physical form.
- Trading Account: Trading account is to be opened with broker. Trading account is required to buy or sell shares. This will be done by our broker as per our instruction via online or offline.
- KYC: Full form of KYC is Know Your Customer. KYC is done by Banks & Non-Banking Financial Agencies. KYS Registration is must for investing in Share Market as it is a verification of identity of clients. This is done by broker while opening Trading and Demat account. Now, Aadhaar is mandatory for KYC.
- Depository Participant (DP) : Function of DP is to hold the stock that you buy & release the stock you sell. There are two DPs in India...
CDSL - Central Depository Services Ltd.
NSDL - National Securities Depository Ltd.
This things are taken care of by broker.
- Stock Exchange: After completion of above mentioned activities i.e. different account opening etc. , you can strat buying & selling in share market in any of the following two exchanges in India....
BSE - Bombay Stock Exchange
NSE - National Stock Exchange
Happy investing !!!
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