What is share | How Can I Buy Shares – Stock Market Basics

Lets start with this simple question.

What is a share? How can I buy a share?

Shares (some times known as ‘stocks’) are a small portion of the capital of a company.

If you buy a share of a company, you are becoming a share holder of the company, and that means you have ownership of a small portion of the company.Sounds great ,right?

So you too can become the small owners(share holders) of Infosys, Tatas,Reliance…

OK.Then how can you buy a share?

You need two accounts to participate for ‘buy’ and ‘sell’ in a stock market.

They are

1.Demat Account

2.Trading Account.

You can easily get both accounts if you can contact the executives of any of the top stock broking firms in India.

The top players are the following:

  • Sharekhan
  • Indiabulls
  • India Infoline
  • Geojit Securities
  • HDFC Securities
  • Reliance Money
  • Religare
  • Geojit
  • ICICIdirect
  • Angel Broking

With the help of any of these stock brokers, you can buy shares from the two major stock exchanges in India- BSE and NSE.

If you are buying directly from the company before listing in an exchange, its known as IPO (Initial Public Offering) or Primary Market Purchase.

All the other buy or sell operations are done in Secondary Market, ie. exchanges.

The value of a share at a particular time or day is known as share value.

Usually share price is the last transaction price in a stock market.

For example,1 share of Tata Steel is worth Rs.595 on 6-7-11.

Now almost all Stock broking Firms offer online buying and selling options of shares.

And the paper format of shares is almost getting extinct.

Now shares are stored in demat form in Depositories.

The two depositories in India are the National Securities Depository and the Central Depository Services Ltd.

The depository has agents known as Depository Participants and whose names are listed in NSE and BSE.