What is Stock Exchange : Everyone wants to earn money from share market but to earn money from share market, first of all you have to open a good Demat Account.
In today’s article, we are going to know the information related to stock exchange. What is stock exchange, how does it work, what are the advantages and disadvantages of stock exchange, how many stock exchanges are there in India?
Stock exchange is an organization where the stock market operates through which the general public buys and sells stocks, bonds, debentures and other securities.
It is necessary for any company or organization to get its name listed in any stock exchange of India, only then it can get the right to buy/sell its company’s stock, bond, debenture and other securities in the stock market. .
What is stock exchange
Stock Exchange is an organized market where buyers and sellers are present all the time to buy and sell any share. Investors buy and sell shares of only those companies which are listed in the stock exchange as per the rules of Stock Exchange SEBI. follow the Stock exchange is made up of two words, stock + exchange. Shares of any company are called stock and the exchange has to be sold or bought. Here investors buy or sell the shares.
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Main Stock Exchanges in India
Although there are very few Stock Exchanges in India, but among them there are two main Stock Exchanges which are very popular.
- BSE (Bombay Stock Exchange)
- NSE (National Stock Exchange)
1). BSE (Bombay Stock Exchange)
Bombay Stock Exchange (BSE) is the 10th largest stock exchange in the world. More than 5500 companies are registered in BSE. Bombay Stock Exchange is not only India’s but Asia’s largest stock exchange which has more than 140 years of experience in the stock market.
Like Nifty, Bombay Stock Exchange also has a benchmark index which is known as Sensex. This index was first introduced in 1986.
30 companies have been kept within Sensex only on the basis of the performance of these companies. The result of BSE is decided. At one time the trading of BSC used to be done under a tree.
2). NSE (National Stock Exchange)
National Stock Exchange (NSE) was established in 1992. It is the 11th stock exchange in the world. In 1992, when scams started increasing in the stock market, to reduce frauds in the market, the Government of India established SEBI (Security and Exchange Board of India) was formed whose objective was to develop the market by implementing new rules in the stock market and to protect the common investors.
Before the year 1992, only BSE (Bombay Stock Exchange) was in the stock market. Used to be used but when scams increased, SEBI banned BSE (Bombay Stock Exchange).
When asked to do electronic trading, BSE clearly refused to do so, due to which NSE (National Stock Exchange)
was formed and all paper transactions started being done in a smart manner.
NSE (National Stock Exchange) Nifty was started in 1996. Nifty NSE (National Stock Exchange) India’s top 50 companies are included in Nifty, the benchmark index.
History of Stock Exchange in India
The first stock exchange in the world was established in 1602 in the Netherlands by the Dutch East India Company, known today as the Euronext Amsterdam Stock Exchange. This Stock Exchange is the oldest stock exchange in the world.
If we talk about India, BSE (Bombay Stock Exchange) was established in Bombay in 1875. Bombay Stock Exchange is the oldest stock exchange of India and Asia. In the early days of Bombay Stock Exchange, trading started by sitting under a Peepal tree.
How Stock Exchange works
The stock exchange of any country works independently. The work of the stock exchange is to connect the company and the investor. No small investor can directly buy the shares of any company. First of all, that company has to be listed in the stock market is necessary.
As you know, whenever a company needs investment to expand its business, it collects funds from the general public, which is called IPO. When the company gets listed in the stock market, its shares become public. This means any investor can now buy and sell shares of that company from his Demat Account.
Let us tell you that apart from shares in the stock exchange, Mutual Funds, Boards, Index Funds, Etfs etc. Trading and investing is also done in India. To buy shares from major stock exchanges of India, you only need a demat account.
Future of Stock Exchanges
There are two largest stock exchanges in India and there is a lot of activity and investment in both of them, so there is only one company running the stock exchange of any country.
So if a stock exchange is running well, if you think that it is The exchange will do a lot of good work in the coming time, so if a company running the stock exchange is listed in the stock market, then you can buy its stock and move along with its future like BSC the stock of Mumbai Stock Exchange in India. is listed in the stock market
Stock Exchange Meaning FAQ
The stock exchange performs the function of liaising between a company and investors. Through the stock exchange, people invest in the companies of their choice and the companies in the country and abroad collect money by selling the shares of the company through the stock exchange.
Stock exchange is the most important component of the stock market of any country. It is through the stock exchange that small and big traders buy and sell the stock of any company.
Let us assume that a person places an order with his broker to buy an excise stock at Rs. So, the broker passes this order to the exchange. Now at the same time a person places an order with the broker to sell this excise stock at Rs. So and The broker gives this order to the exchange, then when there is a price match between these two investors, then one’s xyz stock is sold and the other one gets xyz company’s stock. Now it took you as much time to understand by reading this. But I can tell you from my experience that if this work is done in liquid stock then it does not take even a second to complete.
According to SEBI (Security and Exchange Board of India) there are 7 stock exchanges all over India.
National Stock Exchange is the largest stock exchange of India. NSE is the largest stock market of India. The total market capitalization of National Stock Exchange is more than 3 trillion dollars.
All the big traders together established a stock exchange to bring together the traders of the country and the world on one platform.
The largest stock exchange of India is BSE Bombay stock exchange. BSE is the oldest stock exchange of India and Asia. Bombay stock exchange was started in about 1875.
If you are new to stock market then Mumbai Stock Exchange is best for you and if you are experienced and intraday trader then National Stock Exchange is best for you.
Through the stock exchange, the country’s companies and traders get a place to trade on a single platform.
Stock Exchange Meaning Conclusion
Today, through this article, we have tried to give you detailed information about the Indian Stock Exchange NSE or BSE. If you liked this article written by us, then please tell us by commenting and if you have any questions regarding this What is Stock exchange article. Or if you have any kind of question regarding the stock market, then you can ask us in the comment, we will always wait for your loving comment.