Share market for beginners in simple words. How does it work?

What is Share Market?

The Share Market is like a market where shares are bought and sold. A share, refer to the piece or a part of the company. In simple words, the stock market is an online market where the listed companies sell there stocks or shares for collecting the money, which they can use to grow there company’s sales and profit. Once the company grows and performs better then the stock prices go up. Share market or stock market both the terms are same.

Through the stock market, we can only buy the stocks of listed companies in the market. The companies have to list their shares in the stock exchange to publicly trade there shares.

How the share market works?

In simple words we can say, every company or organization wants their company and business to grow. For improving the company’s performance and increasing the sales and profit, a company needs money to run their operations and doing the required R&D(research and development). That’s why a company lists their shares in the stock exchanges like: NSE (National stock exchange) or BSE (Bombay stock exchange), where the organization can sell their stocks to the normal retailers and can directly collect the money from the people.

Stock market investing for beginners.

For beginners in the share market 2025, investing is simply buying a stock. You can buy either 1 or multiple shares of a company. For example: if you buy a company’s stock of 100 rupees, then it means you are investing your money in that company and your investment is 100 rupees. You can sell that stock any time you want. If the price of the stock went up then you will get the profit and if the price went down then you lose.

For buying the stock you have to simply make a demat account with a stock market broker. There are lot of online low brokerage apps which are called discount brokers. You can easily buy and sell stocks once you open a Demat account.

What is trading in share market?

Trading in stock market is pretty much similar to the investing but here is a difference. In trading you have to sell a stock to complete the trade. In the investing when you buy a share then its called investing, no need to sell the stock quick or later, but trading is a two way process. If you trade in a stock then most probably you are doing it because you want some profit, and for that you have sell the share after buying or buy the share after selling respectively.

Yes, you read right. You can first sell the stock without buying it and after you reach a desired target or stoploss then you can rebuy it. It’s call short selling. Trading comes with this advantage but it has some limitation too. Here are few –

1. Time limit

You can trade in short selling in intraday but soon you have to rebuy it because the market will have to close at a specific time

2. Money Loss

In the trading you have the chances of losing your money as well, because market is volatile and will not always work according to your analysis.

So, better you should do long term investing to make money and if you want to trade then you can look at long term swing trade. But keep in mind, learning before the doing is always helpful. So please make sure you learn first and then you can do all these things.

What is an index in share market? What are Nifty 50 and Sensex?

An index is simply a group of stocks. For example: lets assume a bucket filled with a number of listed company’s in the stock market. That bucket is called an index. There are few famous indexes, listed in the stock exchanges respectively.

NIFTY 50

Nifty 50 is an index of top 50 companies listed in the NSE. It is very famous index of national stock exchange and the companies listed in this index are very reputable and large organizations of the country.

Sensex

Sensex is another very famous index of BSE. It is the bucket of top 30 companies listed in the Bombay stock exchange. Likewise the nifty 50, the companies of Sensex are also very reputable and among the large corporations of the India.

There are few another indexes like:

1. BankNifty
2. NiftyIT
3. NiftyAuto
4. Nifty100 etc

according to their respective sector. There are a lot more indexes which we can cover later.

That’s it guys for this article. We will meet you in another article. Keep supporting.

THANK YOU.

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