A Brief insight of Equity Market

Capital market is also known as stock market or equity market or share market then comes the commodity market and last but not the least Forex market. Let us have a look at first one i.e Equity market which deals with the buying and selling of shares which are also known as equity and stocks. For example owner of an XYZ company needs money to perform its day to day activities so how can he acquires the amount he can take loan from bank but will have to pay interest which is not profitable. Secondly he can agree a person to be his partner and invest some amount and share the profit with him in this way when the person who has invested the amount if earns profit so then he will continue to invest the money. So this will be profitable for both the company and the person who has invested the money.

There are two exchanges in which various companies are listed they are National Stock Exchange and Bombay Stock Exchange. The BSE is the oldest stock exchange. Then the body which regulates these overall activities is SEBI i.e. Securities and Exchange Board of India Limited. Basic function of SEBI is to protect the interests of investors in securities and to promote the development of and to regulate the securities market and for matters connected therewith or incidental thereto.

Then comes Derivative also known as Future Market in which a person can only hold the share for 1 month that is upto the last Thursday of that month.

Trading is done by opening a Demat account through a broker there are three types of trading namely intraday, Long-Term and Short term in intraday trading the share is purchased and sold in the same day, In long-term trading the share can be hold for 1 year or more than that and in short term trading a share can be hold back for 6 months only.

Then comes the commodity market in which exchange of hard and soft commodities is done. This market also has two exchanges Multi commodity exchange and National Commodity and Derivatives Exchange the first one deals with the exchange of gold, silver, crude oil, aluminum, copper etc. And the second one deals with exchange of maize turmeric soyabean cotton barley chana etc. The first category comes under hard commodities and the second one under soft commodities.

Then the last one is Foreign Exchange market known by its short abbreviation Forex which deals with the exchange of currencies such as US Doller INR and Euro.