What is Stock Market?

The stock market seems as difficult as anything can be and just as much lucrative. People flush their life savings or their pension funds to get rich fast. Sometimes it turns out pleasant and sometimes it doesn’t. All of it depends upon how the stock plays on a certain day, quarter, or even a year. The origin of stock markets can be traced back to the 1600s. But we aren’t in the mood for a history class, that’s pretty obvious! We all have had at least a bit of exposure to the stock market at some point in life. If not anything most of us have watched the movie “Wolf of the Wall Street”. The crazy life that the antagonist lives can easily be achieved by any man with a fair amount of money in the market given if his stars play right.

Stock Market can be regarded as a physical/digital place where people can buy stocks of a public company and the prices of these stocks fluctuate due to different factors such as supply, demand, goodwill, reputation, etc.

Typical math of profit/loss can be understood by the following demonstration:

John buys 20 shares of a company X at the rate of ₹40/share. Suddenly the price started increasing vociferously and John decided to sell the share. At the time of selling price was ₹70/share. So the profit made here by John is the price at which he sold minus at the price which he bought.

So ₹70-₹40= ₹30/share. So this is the profit that he registered per share. Given, that he owns 20 such shares, so the net profit that he made is ₹30×20= ₹600, in all. So John made ₹600 just by sitting at home. This ₹600 includes some minor deductions in the name of brokerage fees.

This brings us to another topic named brokerage fees. This is a fee charged in the name of the services that they provide. Stock broker are the person that takes orders for buying stocks in different publicly traded companies from the common people and buy the stocks with their contacts in the stock market. These stockbrokers usually work for very big investment firms. In the name of these buying/selling services, these brokers charge a fee for every transaction.

With the advent of the digital world, a revolution in the transaction of shares has also taken place. Now people can trade directly. They do not need to get in touch with a stockbroker explicitly for every transaction. Different e-stock brokering firms have also come into play. One such firm among them is 5paisa. It has made a name for itself and all this is due to its prominent customer services and goodwill constructed over time.

Afterthoughts:

The stock market is a fascinating place to earn money. People end up making fortunes or flushing their life earnings to no avail. Some invest with specific and some under peer pressure. Proper analysis should be done before investing any amount of money since each penny matters.