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Share trading course: with complete info and guide

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Share trading course: with complete info and guide: Inthis post, we will learn a complete guide about share trading. Hence, be tuned with us.

What is share

A share is a unit of partial ownership in a company, representing a slice of its equity, and buying shares makes you a shareholder entitled to a portion of profits (dividends) and assets. Companies issue shares to raise capital for growth, while investors buy them for potential appreciation (selling higher) or income, with common types being Equity Shares (voting rights) and Preference Shares (priority dividends).

What is Market

A market is a system, institution, procedure, or physical place where buyers and sellers interact to exchange goods, services, or information, typically for money. It acts as the mechanism for establishing prices, enabling trade, and distributing resources through the forces of supply and demand. Markets can be physical (e.g., supermarkets) or virtual (e.g., online, stock market).

Must Read this post=>> Know about investment with high returns in India

A share represents a unit of ownership in a company. When you buy a share of a company, you become a partial owner of that company. As an owner, you may get:

  • A share in the company’s profits (dividends)

  • Voting rights (in some cases)

  • Capital appreciation if the share price increases

What Is the Share Market?

The share market is a marketplace where shares of publicly listed companies are traded. It allows investors to:

  • Buy shares from existing shareholders

  • Sell shares they already own

In India, trading happens electronically through stock exchanges under strict regulations.

History of the Share Market in India

The Indian share market has a long history:

  • 1830: Trading in shares began informally in Bombay.

  • 1875: The Bombay Stock Exchange (BSE) was established, making it the oldest stock exchange in Asia.

  • 1956: Securities Contracts (Regulation) Act was passed to regulate stock exchanges.

  • 1992: Securities and Exchange Board of India (SEBI) was given statutory powers.

  • 1994: National Stock Exchange (NSE) was established with electronic trading.

  • 1996: Dematerialization of shares started.

  • 2000s onwards: Online trading, algorithmic trading, and participation of retail investors increased rapidly.

Today, India has one of the fastest-growing equity markets in the world.

Structure of the Share Market in India

The Indian share market has a well-defined structure:

1. Stock Exchanges

Stock exchanges provide the platform for trading shares.

Major stock exchanges in India:

  • Bombay Stock Exchange (BSE)

  • National Stock Exchange (NSE)

2. Regulator – SEBI

The Securities and Exchange Board of India (SEBI) regulates the entire share market. Its objectives are:

  • Protect investors’ interests

  • Promote fair practices

  • Ensure transparency and efficiency

3. Depositories

Depositories hold shares in electronic form:

  • NSDL (National Securities Depository Limited)

  • CDSL (Central Depository Services Limited)

4. Depository Participants (DPs)

Banks and brokers act as intermediaries between investors and depositories.

Primary Market and Secondary Market

1. Primary Market

The primary market is where companies issue shares for the first time to raise capital.

Main instruments:

  • Initial Public Offering (IPO)

  • Follow-on Public Offer (FPO)

  • Rights Issue

  • Preferential Issue

Investors buy shares directly from the company.

2. Secondary Market

The secondary market is where existing shares are traded between investors.

Key features:

  • Companies do not receive money from these trades

  • Prices fluctuate based on demand and supply

  • NSE and BSE operate mainly as secondary markets

How the Share Market Works in India

The working of the Indian share market involves the following steps:

  1. Opening a Demat and Trading Account
    An investor opens:

    • Demat account (to hold shares)

    • Trading account (to buy/sell shares)

  2. Placing an Order
    The investor places a buy or sell order through a broker.

  3. Order Matching
    The stock exchange matches buy and sell orders electronically.

  4. Trade Execution
    Once matched, the trade is executed.

  5. Clearing and Settlement

    • Shares are credited/debited

    • Money is transferred

    • Settlement follows a T+1 cycle in India

    • Types of Shares in India

      1. Equity Shares

      • Represent ownership

      • Higher risk, higher return

      • Voting rights available

      2. Preference Shares

      • Fixed dividend

      • Priority over equity shares in dividend payment

      • Limited or no voting rights

      Market Indices in India

      A market index measures the performance of selected stocks.

      Major Indian indices:

      • Sensex (BSE) – 30 companies

      • Nifty 50 (NSE) – 50 companies

      • Bank Nifty

      • Nifty IT

      • Nifty FMCG

      Indices reflect overall market sentiment.

Participants in the Indian Share Market

  1. Retail Investors – Individual investors

  2. Institutional Investors – Mutual funds, insurance companies

  3. Foreign Institutional Investors (FIIs)

  4. Domestic Institutional Investors (DIIs)

  5. Brokers and Sub-brokers

  6. Market Makers

Each participant plays a role in market liquidity and stability.

Investment vs Trading
Investment

  • Long-term approach

  • Based on company fundamentals

  • Lower transaction frequency

Trading

  • Short-term approach

  • Based on price movements

  • Includes intraday, swing, and positional trading

Benefits of the Share Market
For Investors

  • Wealth creation

  • Protection against inflation

  • Dividend income

  • Liquidity

For Companies

  • Access to capital

  • Expansion and growth

  • Improved credibility

  • Market valuation

For Economy

  • Capital formation

  • Employment generation

  • Economic growth

  • Financial inclusion

Risks Involved in the Share Market

Despite benefits, risks exist:

  1. Market Risk – Price fluctuations

  2. Business Risk – Company performance

  3. Liquidity Risk – Difficulty in selling shares

  4. Economic Risk – Inflation, recession

  5. Psychological Risk – Fear and greed

Risk management is essential for long-term success.

Role of Technology in the Indian Share Market

Technology has transformed the market:

  • Online trading platforms

  • Mobile trading apps

  • Algorithmic trading

  • Real-time data access

  • Digital KYC and onboarding

This has increased retail participation significantly.

Share Market and Indian Economy

The share market is a barometer of the Indian economy. Rising markets indicate:

  • Economic growth

  • Investor confidence

  • Corporate profitability

Falling markets may reflect:

  • Economic slowdown

  • Global uncertainty

  • Policy concerns

Thus, the share market and economy are closely linked.

Common Myths About the Share Market Share Trading Course

  1. Share market is gambling – False

  2. Only rich people can invest – False

  3. High returns are guaranteed – False

  4. One can get rich overnight – False

The share market rewards knowledge, discipline, and patience.

Conclusion

The Indian share market is a powerful financial system that supports companies, investors, and the economy as a whole. With proper regulation by SEBI, advanced technology, and increasing awareness, it has become more accessible than ever.

However, success in the share market requires:

  • Understanding how it works

  • Managing risk

  • Having realistic expectations

  • Continuous learning

For those who approach it with discipline and knowledge, the Indian share market offers long-term opportunities for wealth creation and financial growth.

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