What Is Stock Market And How Does It Works?

The stock market is a gathering place for buyers and sellers to trade equities. People used to meet at the trading ring to purchase and sell stocks before the internet. Today, however, all deals are conducted through computer terminals in broker’s offices. Furthermore, the terms’stock market’ and’share market’ are used interchangeably.

How It Works?

The Indian stock exchange operates through a network of exchanges, clearing firms, and brokers. They act as a go-between for stock market investors and publicly traded corporations.

Their indexes symbolise stock exchanges. Nifty and Sensex are different indices of India’s NSE and BSE, respectively. These indices include shares in the largest large-cap firms based on market volume and popularity. Other indexes exist for distinct sectors of corporations or a specific segment of companies in terms of market capitalization. Indices increase and fall in response to the performance of underlying equities, and investors use them to forecast market direction.

Another important concept to grasp when studying about the stock market is the bid-ask spread. The phrase “bid” refers to the price at which purchasers are willing to pay for a stock, which is usually less than the seller’s “ask” price.


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