Module 1: Introduction to stock markets

Before charts, options or strategies, it helps to know what the market actually is: a place where companies raise money and where people buy and sell a share of those companies. This module walks through the pieces in the order you meet them as a new investor.

01Why people invest at all

Money left idle loses value to inflation. Investing puts it to work in assets that can grow faster than prices rise: shares, bonds, gold, property. Each carries a different mix of return and risk, and the stock market is where the share part happens.

02What a share is

A share is a small piece of ownership in a company. Owning it gives you a claim on the company's future profits, through dividends and through the price other people will pay for that claim later.

03The people in the market

Companies issue shares; exchanges such as NSE and BSE run the marketplace; brokers place your orders; depositories (NSDL and CDSL) hold your shares electronically; SEBI writes and enforces the rules for all of them.

04How a company comes to the market

A company sells shares to the public for the first time in an IPO. After listing, those shares trade between investors on the exchange; the company is no longer part of each trade.

05How an order becomes a trade

You place a buy or sell order through your broker. The exchange matches it with an opposite order at a price both accept, and the shares and money settle into your demat and bank accounts a day later.

06Order types

A market order takes the best price available now. A limit order waits for your price or better. A stop-loss order turns into an order only when price reaches a level you set in advance.

07Indices: the market in one number

NIFTY 50 tracks fifty large NSE companies, SENSEX thirty on BSE, BANK NIFTY the banks. An index summarises how a whole group moved, and it is what index options and futures are built on.

08Corporate actions

Dividends, bonus issues, splits, rights issues and buybacks change what you own or what you receive without you placing an order. Knowing them stops a sudden price change from looking like a crash.

09Reading a stock's page

Price, day range, 52-week range, volume and market capitalisation are the first numbers on any stock's page. Each later module adds a layer on top of these.

10Where this leads

Every other module builds on these words. On A1Stock, the stock page and Stock Radar show the same facts for any listed company.