Stock and Stock Market Introduction:
Stock is simply the ownership of any company.You are investing on stocks of any company means you have certain fractional rights to company's profits and assets.Stock of any company means the shares of that company.
Stock is the collective form of shares.
Similarly Stock market refers the market where trading and issuance of new shares happen.Trading of shares include both selling and buying.Buying the shares or stocks of any company means you are now a fractional part of the company and selling stocks means you are no longer part of that organization.
Types of Stock Market:
Depending on shares,there are basically two types of market exist in stock market:
(1)Primary Market
It is one part of stock market from where investors can buy the shares directly from company issuing the shares.Company generally issues shares either it is formed as new company or when it wants to expand its capital to larger extent.For eg;new company named XYZ is established as a new company and it wants public to invest in it.Then it issues shares in name of
IPO(Initial Public Offerings) to public or when a existing company named ABC wants to expand its capital larrger then it also issues shares in numbers to public as IPO.Most of the companies issue IPO as Rs.100 per share in Nepal.
(2)Secondary Market
It is another part of the company where investors buy and sell shares amongst each others.Company directly doesn't take part on trading of shares in secondary stock market.Transaction of shares in secondary market usually takes place through
broker.For eg;if you have 100 shares of any company having Rs.500 per share in market at that time when you want to sell it.Then you have to place a bid, in how much per share you want to sell your share like Rs.502,Rs.503,Rs.499 etc as per you want.On the other hand Buyers wants to buy that shares as low as possible and you as a seller,you want to sell your shares as high as possible.And when your selling price and buyers buying price match,then you sell those shares and you no longer part of that company.Both sellers and buyers have to give small amount of commission to broker as broker plays a mediator roles for both.
Who controls the exchange of stocks in Nepal:
NEPSE (The Nepal Stock Exchange Limited) controls all the activities of stock market in Nepal.It is the single stock exchange in Nepal.It fascilates the transaction of stocks and keeps it regulating through brokers.
Security Board of Nepal(SEBON) is also there which also works with NEPSE as a helping hand.SEBON provides the security to markets like making the decision on giving new issuance of shares or not,making market rules,issuing new license to broker etc.It is formed by the government to control over the market activities.
What will be best for Absolute Beginners;Primary or Secondary Market:
So for beginners primary market will be the best where they can learn more and more about the stock market.Beginners should start from applying to IPO shares where
risk would be minimum and after gaining knowledges they can slowly shift towards secondary market.Secondary market is the market where profits and risks are both high unlikely that of primary market.Investment is low in primary market and profit would also be low than in secondary market.You can apply for IPO's in a minimun price like Rs.100 per share in most of the IPO's.
How can Beginners collect Knowledges about Stock Market:
Before investing money and time on any thing you should have interests on that thing.So at first you should have interests on stock market and should have that curiosity to learn new things day by day.After that you can learn the things like how stock market works,about the secondary stock market,about the investing ideas etc.You can learn it from any platforms as per your comfort like from google,YouTube,books,articles etc.There are also the mobile applications which can provide you the informations about stock market,freely available in playstores.Also other sources of collecting informations include books and videos.After that you can completly learn about stock market within a several months and ready to make bigger investments.
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