What is Stock Market and How it Works?

"A stock market (also called as share market) is the aggregation of buyers and sellers, where seller can sell their shares or stock and buyer can buy it. Or in other words, we can say that it is a market place where shares of pubic listed companies are traded.

The stock market consists of various entities including stock exchanges, brokers, clearing houses, depositories, advisors and investors. The stock market is one of the most sought after platforms which offers investors and traders to trade in stocks or shares or public companies.

For trading or investing in the stock market, a Demat account is required. Demat account can be opened on any of the two depositories of India, namely NSDL and CDSL. However, it is not possible to approach the depositories directly. Demat account is therefore opened through a depository participant.

The stock market is regulated and governed by the Securities and Exchange Board of India (SEBI). The SEBI has a grievance redressal system known as SCORES (SEBI’s compliant and redressal system) for investors and traders.

An investor can invest in cash market or derivatives market. Derivatives are financial instruments whose value is derived from an underlying asset. Futures and Options are the two standardized derivative contracts which are traded in India.

The stock market is one of the most widely preferred investment option due to its inflation beating nature. However, investing in the market also comes with its own set of risks. Investing in the market requires research and knowledge. CapitalVia provides research based recommendations for all your stock market investments.

Investing in the stock market comes with its own set of risks. Therefore it is recommended to have your risk profile analysis evaluated before investing. Risk profile analysis provides you an idea about the amount of risk you are capable of taking in the market.
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