What is an equity share?

An equity share represents the format of ownership. The holder of such a share is a member of the company and has the right to vote.

What are the risks?

Equity shares are "high risk, high return investments". The major difference between equity investment and all other investment options is that while the returns from other options such as bank deposits, small savings schemes, debentures, bonds, etc. are fixed and the earnings from equity investments are highly uncertain and varied. A good scrip taken at the right time can provide a very good return, otherwise, the returns can be extremely low or it can be negative, that is, the investment fund itself may end slowly. In short, investments in fixed income category instruments are largely safe and risk-free, then investments in equities and related sectors can be considered risky.

What is a dividend?

Dividends are a portion of the profits distributed by a company to its investors. It is often declared as a percentage of the share face value or paid-up value (paid-up value).

What is a bonus share?

A share issued by companies for their shareholders free of charge by the capitalization of accumulated profits earned in previous years is called a bonus share.

What is a bond?

A bond is a promissory note issued by a company or government to its lenders. A bond is the evidence of a loan at which the issuing company promises to pay the bondholder a specified amount of interest, often for specified periods, and to repay the original loan on the expiration date. A bond investor lends money to the issuer and in return, the issuer promises to repay the loan amount on the specified maturity date.

What is a debenture?

It is usually a bond issued by a company with a fixed interest rate that is usually paid half-yearly on specified dates and the principal is paid on redeeming (by redeeming) the debentures on a particular date. Debentures are generally secured/charged against the assets of the company in favor of the debenture holder.

What is a stock exchange?

A stock exchange is a place where buyers and sellers meet to trade in a systematic manner. At present, there are 25 recognized stock exchanges in the country which are governed by the Securities Contracts (Regulation) Act, 1956.

Which shares can I buy?

You can buy shares that are listed on any recognized stock exchange.

What is buy and sell?

There are several types of orders that you can direct to a broker. The most common type of order, which is a regular buy or sell order, is called a market order. Another type of order is a limit (limited) order in which you can ask the broker to trade only if the price reaches a specific level. In a stop order, you can ask a broker to sell your shares to prevent significant losses if the price falls to a certain level because if it falls to that level then it is likely to fall further and your loss is likely to increase.

How do I place my order?

Trading can be done via phone or by coming in person at a share trading office or any other facility provided by such as internet trading. The dealer (an employee, who is placed in the stock exchange order system to see investor orders), will enter the order in the stock exchange system after checking the authenticity of the person making the call and checking the margin available in the account.

What does the trend of bullish (rise) and bearish (bearish) mean?

When the market goes up, it is called the bullish trend and when the market goes down it is called the bearish trend.

What is a position to take?

When you work on stock and buy it, it means that you are taking a position. Positions are the amount of money invested in investment in anticipation of favorable price fluctuations. There are two types of positions:

Long positions (long positions) are those that most people use. When you buy a long position, it means that you are likely to increase in value, and thus you gain. People often buy shares at current prices, hoping to sell later at higher prices and thus gain.
Short positions (short positions) are complicated. When you buy a short position, you suspect a fall in price and a fall is the source of your profit. Shares will be sold first and subsequently repurchased and returned when the price drops and the difference is the investor benefit. Of course, for an investor who has borrowed shares, there is a risk of not increasing/decreasing the value as expected, in which case he may incur a loss in the repurchase of the shares.

What is an index?

An index is an indicator of a stock market that is created as a statistical measure of the performance of a segment of a market based on an entire market or a sample of securities taken from the market. Thus, an index is a segment of a market or the overall distribution of a market.