how to study stock market

How To Study The Stock Market

Owning stock in the share market means having part ownership in a company. So, if you own one share of a company that has issued 100 shares, you own 1% stake in a company. Hence, you don’t need substantial capital to invest or buy stocks. You can purchase just one share at its cost value without having to fork out a significant sum and acquire a set number of shares.

However, you may need to keep in mind additional costs such as brokerage fees and other statutory charges that could apply depending on your demat and trading account.

If you are excited to get on the stock market bandwagon, it can help to examine stock markets and understand its basics. Here, we look into knowing how to study stock market and grasp its fundamentals.

Indian stock exchanges:

In India, there are two primary exchanges – The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Stocks listed on the stock exchanges are traded here.

Primary markets and secondary markets:

A company that issues an Initial Public Offering (IPO) is known as a primary market. As a rule, company shares are listed in the primary market on the stock exchange. Once the shares are listed, they begin trading in the secondary market. The buying and selling of shares are similar to that of buying and selling commodities in any other market.

Share prices:

Markets determine how shares are priced. Generally, company share prices rise when it is growing or earning exceptional profits or receiving new orders. Looking into these cues, investors egg on the demand for company stocks as they look to make purchases at a higher price.Thus, leading to an overall rise in share prices of a particular company. In the stock market, demand and supply primarily determine share prices.

Stock indices:

The Indian share market has thousands of companies listed in them. From among these, some stocks are grouped together to form an index. The categorisation of companies in an index could be based on size of the company, market capitalisation, industry and other divisions. For instance, the Bombay Stock Exchange or the Sensex includes 30 leading company stocks while the National Stock Exchange or Nifty has 50 leading company stocks. In addition, there are other sector indices known as BSE Mid-Cap, BSE Small-Cap, Bankex, and more

Off-line and online trading:

Trading online is done when you buy and sell shares on the Internet. You need to log into your trading account to make ‘buy and sell’ decisions. On the other hand, you can conduct off-line trading by instructing your broker to make the order on your behalf, either by visiting your broker’s office or through a phone call.

The role of a broker:

A broker is critical in helping you execute your buy and sell trades. Generally, brokers help buyers find sellers and vice versa. Well-known and reputed brokers offer trading advice and stock recommendations on stocks to follow, buy, and sell within specific categories.

Before you begin investing, here is what you would need to understand:

Your investment route

Typically, there are two ways to approach investing in stocks. You can select the option that best represents your investment method and how involved you would want to be in selecting shares.

  • Going the DIY way: If you are familiar with the stock buying game and only need a brokerage, look into the many well-known stockbrokers such as Kotak Securities that can help you begin your investment journey.
  • Seeking professional help: Look for investment management guidance offered by leading brokerage firms to help you understand where to invest based on your investment criteria. Full-service brokerage houses such as Kotak Securities can manage the stock investing process for you. Through their guidance, you can receive the benefits of investing in stocks without having to do the legwork in choosing individual investments.


Trading or investment in the stock market can be for everyone, including novices. However, financial experts recommend new investors to stay invested in the stock market for at least five years and study the market to make sound decisions. Eventually, the answer on how to trade or invest comes down to your financial objectives, time horizon to meet your goals and the amount of risk you are willing to take. Studying the stock market, especially if you are considering it as your primary investment avenue can be your guide in navigating its many nuances.

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