Share or securities represent the smallest unit/recognized fraction of ownership in a publicly held business & debenture represent the smallest unit of lending both may be of various kind a stock exchange has been the association of individual members ( broket) formed for the express purpose of regulating & facilitating the buying & selling of securities. Operates with due recognition from Govt. under the securities & contract ( regulation Act) 1956 in India most of the business is carried ort in national stock exchange (www.nse.india.com) & Bombay stock exchange (www.bseindia.com) initially the investment In share market is advisable through mutual fund.
Some common terms used in stock market
Some common terms used in stock market
- Book value:- shares are generally issued in the denomination of Rs. 10 initially but as company grows the book value of shares increases & declared at the end of FY.
- Price :- The price which is determined by the market I.e on which transactions (sell/purchase) takes place in the stock exchange called current market proce( CMP)
- Earnings per share EPS the amount in Rs. Which can be earned during last 12 months period by per each share of the company i.e EPS= net profit/no of shares
- Price to earning ratio (PE ratio) = Current market price/EPS
- Price to Book value (P/B value)= current market price / Book value
- Operating margin (OPM) indicates company’s % of margin over total turnover.
How to start investing in share market?
- Allocate the money to be invested & decide time period at least 2-3 years.
- Select a broker of good reputation, prefer institutional like. India info line (www.5paisa.com) , motilal oswal , anandrati , sushil finance , stock holding corporation of India, ICICI/ HDFC etc. but initially prefer local broker as per availability.
- Open a demat A/c & share transaction operating a/c with the broker identified.
- Now subscribe & read min 30min/daily at least one business magazine like dalal street/ money or news paper like Economic Times ect.
- Watch CNBC TV (Preferably at 8:30 to 10:00a.m at least)
