Share Market full knowledge - Satyansh Chand

Share Market

Hello friends today we will talk about What is Share market and how it works, from where Share Market has been started and main thing you will know every thing in detail about share market in simple words. 

    What is Share market

    So, in simple words Stock market, Share market and Equity market are the same thing in which you can purchase and sell shares of different companies.

    In Share market purchasing shares means you are getting some share or ownership of the company and it means you becomes partner of the company and it totally do not mean that you become the owner of the company because the founder or owner of the company do not sells their all share and they have more than 50% of the share of the company because if they will sell all the shares then they will loose their ownership.


    Buying ownership means you are buying some ownership of the company and you becomes owner of the company of that share which you have purchased and if the company is getting profit then you will also get profit and if the company is going in looses then you will be also in loss.



    For example
    If you want to start a startup or a small business then you want 1000$ to start the business but you just have 500$ then you will ask your friend to become 50% partner of the company and invest 500$ and if your business will be in profit then you have to give half of the profit to your friend.

    In Share market you do not have to go to your friend or anyone and in this you tell or announce to whole world to purchase share in your company and this is Share market.

    Share Market

    History of Share Market

    The Share market was started around 400 years back from 2020 in the period of 1600s there was a company with name Dutch East India company which is now in Netherlands and in that time friends people was interested in exploring different places of the world and in that time the World ma was not explored totally and people visits different places with big ships for trading and exploring and this ships have to travel many thousands kilometers and for this it requires much investment and at that time a single person was not having this much money to invest.

    By seeing these problems this company announced in public that come and invest in our ships and when these ships will travel to different countries and the things, treasure or money they will bring with them then you will get some share of that thing.

    Public were getting chance to earn money but this method was very risky because investing in one ship was not safe because maximum ships were lost, destroy due to different reasons in the oceans like storms and many different things then people started to invest little money in many ships because some of the ships should come back and from here the Share Market started.



    What is Stock exchange

    Now you will think that What is Stock exchange then in very simple words it is place or a building where people and companies buy and sell the shares of the companies.

    It can be divided in two types:
    1- Primary Market
    2- Secondary Market


    Primary Market

    Primary market is where different companies sell their shares and they decide the amount of the share of their companies but it also have many regulations and it is also depend on the demand of that company that how much a particular person is ready to give money for the share of the company.

    According to this the company decide the price of their share like if the value of a company is 1000$ then they can sell 1000 shares of their company at cost of 1$ per share but if the demand of company is high then they can increase the rate of the share of their company from 1$ to 2$ or more according to demand.

    Secondary Market

    In Primary Market the price of the share is decided by the company but in Secondary Market the company cannot decide anything and in this market people buy and sell the shares of different companies and do trading.

    By seeing demand and supply of the company the share price of the company will up and down by seeing these demand and supply and the price is also different every time.


    How many shares can a company have?

    Now the main point is here that the value of each share in company is equal and it depends on the company that how much shares they makes of their company. 
    like if the value of a company is 1000$ then they can make 1000 shares at 1$ price of each share or they can make 2000 shares with 0.5$ each share of that company.



    The company do not sell all the shares of their companies and the founder of the companies prefers that the founder of the company should have majority or more then 50% of the shares they should have because if you will sell all the shares the you will not the owner of the company and the people who will have more shares of that particular company will be the main owner or decision maker of the company.

    like Mark Zuckerberg has more than 60% shares in the Facebook and that is why he is the main owner and decision maker in that company.

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