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GUIDE TO
STOCK MARKET

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 THE HISTORY OF
INDIAN STOCK
MARKETS

The Bombay Stock Exchange is the oldest stock exchange in Asia. Its
history dates back to 1855, when 22 stockbrokers would gather under
banyan trees in front of Mumbai's Town Hall. The location of these
meetings changed many times to accommodate an increasing number
of brokers. The group eventually moved to Dalal Street in 1874 and
became an o cial organization known as "The Native Share & Stock
Brokers Association" in 1875.
On August 31, 1957, the BSE became the rst stock exchange to be
recognized by the Indian Government under the Securities Contracts
Regulation Act. In 1980, the exchange moved to the Phiroze
Jeejeebhoy Towers at Dalal Street, Fo area.

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WHAT IS THE
STOCK MARKET?
Stock markets are where individual and institutional investors come
together to buy and sell shares in a public venue. Nowadays these
exchanges exist as electronic marketplaces. Share prices are set by
supply and demand in the market as buyers and sellers place orders.

THE STOCK EXCHANGE

Established in Established in

1875 1992
No. of listings No. of listings

5,439 1,952
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WHAT IS
STOCK/SHARE
In simple Words, a share or stock is a document issued by a
company, which entitles its holder to be one of the owners of
the company.
A share is issued by a company or
can be purchased from the
stock market. By purchasing a
share you can earn a po ion of
the company and by selling the
shares you get capital gain.

PRIMARY
MARKETS
This where a company gets
registered to issue a ce ain amount
of shares and raise money. This is
also called ge ing listed in a stock
exchange.
A company enters primary markets
to raise capital. If the company is
selling shares for the rst time, it is
called an IPO.

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SECONDARY
MARKETS
A market on which an investor purchases an Shares from another
investor rather than an issuing corporation.

NSE/BSE
What is Demat Account?

A Demat Account or Dematerialised Account provides the facility of

holding shares and securities in an electronic format. During online
trading, shares are bought and held in a Demat Account, thus, facilitating
easy trade for the users. A Demat Account holds all the investments an
individual makes in shares, government securities, exchange-traded
funds, bonds and mutual funds in one place.

Who is a Bene cial Owner (BO) of the securities?

The investor whose securities are

held in electronic form in a demat
account opened with a depository
through a Depository Pa icipant is
called as 'Bene cial Owner' (BO).

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What Are Derivatives?

Derivatives are securities whose value is dependent on or derived from

an underlying asset. For example, an Reliance futures contract is a type
of derivative whose value is based on the market price of Reliance
equity. Derivatives have become increasingly popular in recent
decades, with the total value of derivatives outstanding was estimated
at $610 trillion at June 30, 2021.

Sectorwise Po folio Managements

Depositories

Depository is a place where nancial securities are held in dematerialised

form. It is responsible for maintenance
of ownership records and facilitation of
trading in dematerialised securities.
However, a Depository Pa icipant (DP)
is described as an Agent (law) of the
depository.

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Ni y

Ni y stands for National Stock Exchange Fi y

and is the equity benchmark index of the National Stock
Exchange (NSE). It was introduced by NSE in 1996,
Ni y 50 includes stocks from the top 50 of nearly 1600
companies actively traded in NSE across 24 sectors.

Ni y Sectorial Distribution

Sector Weight(%)

Financial Services 37.21

Oil & Gas 17.43

Consumer Goods 11.69

Automobile 11.10

Pharma 5.34

Metals 3.56

Construction 2.66

Cement & Cement Products 2.53

Telecom 1.82

Power 1.69

Services 0.76

Fe ilisers & Pesticides 0.64

Total 100%

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 Top Contributor NIFTY

Company’s Name Weight(%)

Reliance Industries Ltd. 10.01

HDFC Bank Ltd. 9.59

Infosys Ltd. 8.60

HDFC 6.55 6.55

ICICI Bank Ltd. 6.41

Tata Consultancy Services Ltd. 5.08

Kotak Mahindra Bank Ltd. 3.67

Hindustan Unilever Ltd. 3.24

Axis Bank Ltd. 2.83

Larsen & Toubro Ltd. 2.66

Total 58.64

Basics of Derivatives
Derivative is a contract or a product whose value is derived from value
of some other asset known as underlying. Derivatives are based on
wide range of underlying assets.

These include
Metals such as Gold, Silver, Aluminium, Copper, Zinc, Nickel, Tin, Lead
Energy resources such as Oil and Gas, Coal, Electricity
Agriculture commodities such as wheat, Sugar, Co ee, Co on, Pulses
Financial assets such as Shares, Bonds and Foreign Exchange.

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Derivative Products

Future
A futures contract’s deal is made through an
organized and regulated exchange rather than being
negotiated directly between two pa ies. Indeed, we may
say futures are exchange traded contracts.

Derivative Products Options

An Option is a contract that gives the right, but not an obligation, to buy or
sell the underlying on or before a stated date and at a stated price. While
buyer of option pays the premium and buys the right, writer/seller of option
receives the premium with obligation to sell/ buy the underlying asset, if
the buyer exercises his right.

Why 95% people make losses in markets

Reasons of losses

Lack Of Knowledge

Greed and Fear

Impatience

Sho Term Vision(Fast Money)

Over Aggression/Exposure Trading

Poor Connectivity with Markets

Following Blindly Directions/News

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 Fundamental Analysis

Balance Sheets

Government Policies

Interest Rates

Currencies Fluctuations

Global Markets

Political Views

Technical Analysis

Technical analysts believe past trading activity and price changes of

a security can be valuable indicators of the security's future price
movements.

History

Price

Trends

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Candle Stick Cha

Suppo & Resistance

Trading Behavior and Time Frames

Intraday Trading Sho Term Medium/Long Term

(Within a day) (Within a day) (4/5 days to Month/Year)
5 Minute/15 Minute 30 Minutes/Hour Day/Weekly/Monthly

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