How Does the Stock Market Work?

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Basic Terms & Working of Stock Market:

Stock exchange is a platform where instruments like derivatives and stocks are traded. Securities and Exchange Board of India (SEBI) makes the rules of conduct. If a person wants to access the stock exchanges, then they need a stock broker. Stock brokers are the mediator between seller and buyer. You can open your account with any stock brokers to get started with trading in stock market.

The Law of Supply & Demand

It is a theory that explains the relation that can exist between supplies of the resources & demands of the resources. As per this theory, if the supply is low and demand is high, the price increases. While if the supply is high and demand is low, the price decreases.

Equity Market & Commodity Market

There are two segments in which a trader can trade in, Equity Market & Commodity Market. The terms Equity Market & Stock Market are used interchangeably with each other. Both the terms refer to the trading of Equity shares on Stock Exchanges.

On the other hand, Commodity Market is a market place where buying & selling of raw and primary material takes place. There are mainly two types of Commodity,

  1. Hard Commodity
  2. Soft Commodity

Hard Commodities are natural resources that must be mined like rubber, oil or gold. While Soft Commodities are the agricultural products or livestock like corn, soybeans, pork etc.

On our next blog, we will discuss the different segments of equity market, commodity market & how to trade in these segments. If you want to know more about stock market or stock market tips, get in touch with ProfitAim Research now. We are a SEBI registered stock advisory company who offers the best stock future tips, stock option tips, stock cash tips, commodity trading tips, equity trading tips etc.

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