Share market:- Public company uses money for growth from investors who invest in share market. a share market is also called stock market, equity market. stock market is ownership of the company.
stock exchange:- Stock exchanges is facility where traders can buy or sell shares of company. companies listed on stock exchange after it goes from private to public. and get listed on any stock exchanges by IPO (Initial Public Offering). the worlds largest stock exchange is NYSE(New York Stock Exchange)
in India two known stock exchanges are:-
1) BSE (Bombay stock Exchange)
2) NSE (National Stock Exchange)
1) BSE:- BSE establish in 1875 is the Asias first stock exchange. BSE is worlds 10th largest stock exchange. in BSE top 30 well established company listed. BSE used SENSEX( sensitive index)
2)NSE:- NSE is established in 1992 and it is first electronic exchange in country. it shows NIFTY index the well established 50 companies
Investor:- investor invest money in companies which gives good or bad returns. it's on investor where to invest money. investor uses Fundamental analysis for searching which companies stocks on growth.
Fundamental analysis:- Fundamental analysis is the analysis based on long term fair value of stock. where we track company comes in loss or growth in future.
Fundamental analysis depends on:- 1) earnings per share
2) price to earning ratio(P/E ratio)
3) Return on equity(ROE)
4) price to book ratio(P/B ratio)
5) Price to sell ratio
Company analysis:- Company analysis is study of various characteristics of company.
Company analysis is based on:- 1) balance sheet
2) Income statement
3) Cash flow statement
DRHP(Draft Red Herring Prospectus):- DRHP is document which shows how company uses money which comes from investors by IPO. every company who choose IPO show this document to public.
Trader:- Trader is a person who buy or sell financial securities such as stocks, bonds, mutual funds, debentures. traders uses technical analysis to predict the growth of company.
Technical analysis:- technical analysis is analysis through candlestick charts or patterns. this pattern shows where to buy or where to sell. Red candlestick pattern shows bearish or downward price movement and green candlestick pattern shows bullish or upward price movement
some well known candle sticks are:- 1) Doji
4) Hanging man
5) Morning star
Capitalization of companies:-
Market capitalization:- market cap refers to total market value of outstanding shares.
1)Small cap:- small cap company is company whose market capitalization is under $1 billion
2) Mid cap:- mid cap company is company whose market capitalization between $2 - $10 billion.
3) Large cap:- large cap company is company whose market capitalization value more than $10 billion.
Share market terms:-
1) IPO:- first sale of stock of company to public.
2) Bull market:- when stock price rises then it known as bull market.
3) Bear market:- when stock price fall then it known as bear market.
4) Penny stock:- penny stock are stock which comes under $5. it is very risky stock.
5) Blue chip stocks:- blue chip is the valuable stock. the share of large national company.
6) Sensex:- sensex is the index of well established 30 companies in India. index used by BSE.
7) Nifty:- Nifty is index of well established 50 companies in India. index used by NSE.
8) Appreciation:- increase value of an asset.
9) Depreciation:- decrease in value of an asset.
10) Dividend:- dividend is return give by company from it's profit.
11) Liquid assets:- asset which are easily convertible to cash.
12) Volatility:- measurement of how stock price move upward or downward.