13 March, 2025
Synopsis
- The share market is where you can buy and sell company Stocks, Bonds and other financial instruments.
- To invest, you can choose a reputable broker, open a Demat and Trading Account and research Stocks before purchasing.
A share market is a place where shares are issued and traded in, has become a popular means of investing. With the advent of the digital age, almost everyone can participate in the share market and work towards fetching returns. While the share market can be a lucrative investment mode, it is only so if you understand investment practices. Here is a guide on investing in the stock market for beginners to help you with the same.
On the other hand, the stock market allows trading shares and mutual funds, bonds, derivatives, and other financial instruments. So, if you are looking to trade only in shares issued by companies, you are investing in the share market. However, if you want to trade using other securities, as well, then you can do so on the stock market.
An essential element of the share market is the stock exchange. The stock exchange is a platform that allows for trading company stocks and other instruments. Essentially, stock or security can only be traded if it features on the stock exchange list. The exchange acts as a place that catalogues all the securities that can be traded and it facilitates the meeting of stock buyers and sellers. The two primary exchanges where you can trade in India are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
You can read more about share markets here.
What are the Types of Share Markets?
The two types of share markets you can trade are the Primary Share Market and the Secondary Share Market.
Primary Share Market:
When a company wants to get registered to issue their shares and raise money, they rely on it. One can use this platform to park a place for stocks on the stock exchange list. A company mainly enters the Primary Share Market to raise capital by offering its shares to the public through an Initial Public Offering (IPO).
Secondary Share Market:
Once companies purchase new securities from the Primary Market, they can trade them in the secondary market. These trades offer investors a chance to sell the purchased shares. The transactions in the Secondary Share Market are between investors, wherein one sells and the other buys at the prevailing market price or one decided by the parties. Usually, trades on the Secondary Share Market come with intermediaries. How to Invest in the Share Market?
Here is how you can invest in the share market:
Select a Reputed Trading platform: To begin investing, you must choose a reputable trading platform. This facilitate buying and selling shares in the market also keep ensure the trading firm should be registered with SEBI (Securities and Exchange Board of India).
Open a Demat and Trading Account: A Demat Account is essential to hold Shares in electronic form, while a Trading Account allows buying and selling Shares in the stock market. Both accounts should be linked to a Bank Account for seamless transactions.
Add Funds and Log in to Your Trading Account: Once your Accounts are set up, you need to transfer funds to your Trading Account from your Bank Account. This capital is required to purchase Stocks. After funding, log in to your Trading Account through your broker’s platform.
Choose the Stock: Conduct thorough research on various companies and sectors before selecting a Stock. Analyse financial statements, market trends, and company performance to make informed investment decisions.
Decide Your Investment Amount: Determine the amount you wish to invest based on your financial goals and risk appetite. Diversifying investments across different Stocks can help lessen risks.
Purchase the Stock at Its Listed Price: In the secondary market, Stocks are bought at the market price. You can either place a market order (buying at the current price) or a limit order (buying at a specified price).
Execute the Purchase Order: Once you confirm the purchase, execute the order through your trading platform. The transaction will be processed, and the purchased Stocks will be reflected in your Demat Account.
Keep Track of Your Investment’s Performance: Monitoring your Stock performance regularly is crucial. Reviewing Stock price movements, company announcements, and market trends helps in making timely investment decisions, such as selling Stocks at a profit or holding them for long-term growth.
By following these steps and staying informed, you can make sound financial decisions and maximise your returns.
Open a DEMAT and Trading Account at HDFC Securities
At HDFC Securities, we provide top-of-the-line facilities to allow you to engage in the share market. Our DEMAT and Trading Account will enable you to avail of our excellent margin trading facility and practice currency and commodity trading, as well. You can rely on our robust research and guidance and use our quick and efficient transfer mechanisms.
We provide 24x7 assistance and relationship manager services to help you navigate the share market. HDFC Securities offers end-to-end investment solutions that can help you fulfil your financial aspirations.
Click here to open a Demat Account!
Disclaimer: *Terms and conditions apply. This is an information communication from HDFC bank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing.
