What are the basics of the Indian Stock Market that a beginner should be aware of?


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No matter what your age is, before plunging into the stock market, there might arise a question in your mind – “Why should I learn stock market trading?” Regardless of whether you’re a retired person or a young professional or a student, you must be having a few dreams that you need to fulfil. Unless you begin allocating a portion of your income to investment assets, you can’t achieve those dreams.

That doesn’t always mean you have to earn lakhs and lakhs of money to be able to invest in the stock market but you can also begin with a small amount as less as Rs. 500. There is a wide array of financial assets to invest in like mutual funds, equity, derivatives, SIP, commodity, currency, bonds and many more.

Trading in India

Now that you’re here to learn trading, you need to know that the majority of trading in India is done on the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). While NSE was founded in 1992, BSE was founded in 1875. Nevertheless, both these exchanges follow similar mechanisms, trading hours and settlement processes.

Things to know about the Indian Stock Market

The Indian stock market is unique in various ways and it is also the oldest in Asia. From the time the Indian stock market came into existence, it has expanded rapidly to become one of the most lucrative investment avenues for investors all over the globe. Here are few distinctive features of the Indian stock market.

  • There are a total of 17 stock exchanges in India, among which two of them are utilized for active trading – BSE and NSE
  • Bombay Stock Exchange has the highest number of listed and registered companies in the world
  • NSE has the third-largest volume in Stock Index Futures and the second-largest volume in the derivatives market
  • FIIs or Foreign Institutional Investors account for the largest slice of shares and LIC is the biggest domestic institutional investor in India
  • Just 2% of savings of Indian households are targeted towards equity markets
  • In terms of global market capitalization, BSE ranks 7th and ranks NSE 8th
  • Around 70% of trade volume is done by the top 100 brokers
  • Nifty is calculated based on the weighted average of 50 best stocks from 24 sectors
  • Algorithmic trading is responsible for 25% of derivatives volume and 30% of the volume of equity trade
Products traded on the stock market


Investors can invest in the shares of a company, obtain ownership and enjoy a part of their profits called dividends. Such shares are the largest products traded on Indian stock exchanges.


Stock exchange prices constantly fluctuate, making it tough to arrive at a fixed price. Here comes the benefit of derivatives that let investors trade on a future date at costs that are sealed today.


These financial assets let investors invest indirectly in shares and bonds. These are fund houses that pool from different investors and trade them in various instruments.


Companies also need money to fund bigger projects. These funds are raised through issuing of bonds and bondholders are paid back through gains made on any project. Bonds are financial instruments where investors lend money to firms and organizations.

Share market study is vital when you’re planning to step into the market. Keep in mind all the above-written details on the Indian Stock Market.
The majority of trading in India is done on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). So stick to these exchanges only.
In simple terms we can say the stock market is a place to invest in various types of financial instruments. A stock market investment entails investing in fundamentally strong assets to get desirable profits. Stock market is in fact, a network of stock exchanges, stock brokers, all the listed companies and investors. The stock exchanges facilitate buying and selling of assets, where companies list themselves. Then, the brokers provide demat and trading account along with several financial services to invest in these listed securities. You place your bids from a trading account, and the broker forwards it to the concerned exchange. Upon finding a match, it proceeds with the transaction. In two trading days, you receive the assets in your demat account.