Stock Market

Lets begin
Basic of stock market

 What is stock market

 SEBI -Securities and Exchange Board of India
 Indian stock market exchangers
 #NSE - National Stock Exchange
 #BSE - Bombay Stock Exchange
 Brokers
 Depository
 Bank
Basic of stock market

 Why stock market required for company

 Types of trading
 How to chose any company share
 What are fundamentals to see the company
 Technical alanyls
 Chart reading
 Candlestick pattern
 Hedging strategies
 mutual founds basic
 What is stock market

Company's

Expand

Employment
Growth
 When u invest money in stock market

GDP growth

Per capita
income grow
 -Securities and Exchange Board of India

 The Securities and Exchange Board of India (SEBI) is the principal regulatory body for the securities and commodity
markets in India. Established in 1992, it operates under the jurisdiction of the Ministry of Finance, Government of
India.
 Protecting Investors: SEBI strives to safeguard the interests of investors in the securities market by ensuring fair and
transparent trading practices. This includes regulating activities of market participants like stock exchanges, brokers,
and mutual funds
 Regulating the Market: SEBI lays down rules and regulations for the smooth functioning of the securities market.
These rules cover areas like insider trading, market manipulation, and disclosure requirements.
 Promoting Investor Education: SEBI actively promotes financial literacy among Indian citizens. It provides
educational resources and conducts awareness campaigns to help investors make informed decisions
 Developing the Market: SEBI takes steps to promote the growth and development of the Indian securities market. This
Indian stock market exchangers

 #NSE - National Stock Exchange

 Established in 1992, NSE is a relatively young exchange but has quickly become the largest stock exchange in India by
trading volume.
 It is known for its modern technology, efficient trading systems, and transparent market practices.
 The key index of NSE is Nifty 50, which tracks the performance of the 50 largest and most liquid stocks listed on the
exchange.
Indian stock market exchangers

 #BSE - Bombay Stock Exchange

 Established in 1875, BSE is the oldest stock exchange in Asia and one of the oldest in the world.
 It has a rich history and heritage, but has faced competition from NSE in recent years.
 The key index of BSE is Sensex, which tracks the performance of the 30 largest and most liquid stocks listed
on the exchange.
Indian stock market exchangers

Feature NSE BSE

Year of establishment 1992 1875

Trading volume Higher Lower

Technology Modern Traditional

Market practices Transparent Less transparent

Key index Nifty 50 Sensex

 Brokers

 A corporate entry registered as a trading members with a stock exchanges

 Holds a stockbroking license BUY & SELL orders
 Follow the SEBI prescribed guidelines regulator trading account
 Order can a proceed Mobile or Web applications in internet
 Some basic services given by a stock broker :-
 1 Access to market
 2 Providing margins for trading
 3 Dealing support for call the trade
 4 Facility the fund send to your bank
 5 Brokerages charges
Stock brokers list

Rank Broker Active clients

1 Groww 7,092,413
2 Zerodha 6,598,363
3 Angel one 5,098,124
Depository

 Depository like a digital locker storing digitally your shares

 Two depository in India
 1 CDSL - Central Depository Services (India) Limited -BSE
 2 NSDL - National Securities Depository Limited - NSE
Bank

 Bank as role of send money to broker account

 Broker account to your account
 Bank is like a bridge you and broker
 IPO - Initial Public Offering

 An Initial Public Offering (IPO) is the process by which a private company sells its shares to the public for the first
time. By doing so, the company becomes a publicly traded company, meaning its shares can be bought and sold on
a stock exchange.

 What happens in an IPO?

 The company undergoes a financial and legal review to ensure compliance with regulations.
 Underwriters, typically investment banks, help the company set the IPO price and sell the shares.
 Shares are offered to institutional investors and sometimes retail investors through a book-building process or a
fixed-price offering.
 Once the offering is complete, the company's shares start trading on the stock exchange.
 Why stock market required for company

 The stock market helps companies raise money to fund and expand their business.
Companies can raise money by selling shares of stock, or equity, to investors.
 Why rise money in stock market bcoz if you take a bank lone to grow u r business
you must pay interest monthly so can’t grow bcoz of high interest
 When u take money in stock market u nothing to pay interest to any one and free to
grow your business
 You can rise unlimited money without pay any principal amount and interest
 Types of trading

 Cash and carry

 Intraday trading
 Future and options trading
 Swing trading
Cash and carry

 These shares, called delivery shares, become your property and are transferred electronically to your
demat account after the trade settlement.
 Delivery trading is often associated with a long-term investment strategy focused on fundamental analysis
and holding the shares for potential capital appreciation or dividend income.
 Intraday trading

 Intraday trading, also known as day trading, refers to the buying and selling of financial instruments like
stocks, ETFs, or derivatives within the same trading day. Essentially, you aim to profit from short-term price
movements of these instruments by closing all your positions before the market closes.

 Short Holding Periods: Intraday trades are typically opened and closed within the same trading session, with positions rarely held overnight.
 Leverage: Traders often use margin or leverage to amplify the potential returns on their trades. However, this also increases the risk, as losses can be magnified.
 Technical Analysis: Intraday traders often rely heavily on technical analysis, using charts, patterns, and technical indicators to make trading decisions.
 Volatility: Intraday trading is often associated with more volatile markets, as traders seek to profit from short-term price fluctuations.
 Quick Decision-Making: Given the short time frame, intraday traders need to make quick decisions, executing trades promptly based on their analysis.
 Futures and options

 Futures:-

 Contracts: Agreements to buy or sell an underlying asset (stock, commodity, currency, etc.) at a predetermined price and
date in the future.

 Obligation: Both parties are obligated to fulfill the contract on the expiry date.

 Leverage: Require a smaller upfront investment (margin) compared to buying the underlying asset outright, offering
leverage.

 Risk: High risk as losses can be unlimited if the price moves against you.

 Uses: Hedging existing positions, speculating on price movements, profiting from volatility.
 Futures and options


 Options:

 Contracts: Give the buyer the right, but not the obligation, to buy or sell an underlying asset at a
predetermined price and date (expiry).
 Flexibility: Offer more flexibility than futures as you can choose to exercise the option or let it expire
worthless.
 Cost: Requires an upfront premium payment, limiting potential losses but also capping potential profits.
 Risk: Lower risk than futures as losses are limited to the premium paid.
 Uses: Hedging existing positions, generating income (selling options), speculating on price movements with
limited risk.
 Swing trading

 Swing trading is a trading strategy that aims to profit from short-term to medium-term price movements in
a financial instrument, typically over a period of days to weeks. Unlike day trading, which involves holding
positions for minutes or hours, swing trading allows for a more relaxed approach as positions are held for
longer periods. However, it's also not as passive as buy-and-hold investing, as swing traders actively manage
their positions based on technical analysis and market trends.
How to chose any company share

 Book value
 EPS
 TTM EPS
 P/E Ratio
 Dividends
 Book value

 The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was
liquidated and paid off all of its liabilities.
 If company is closed, you get some amount in per share, its book value
 P/B Ratio :- P – Share
 B – Book value
 EX :- Wipro P/B Ratio = Market price per share
 Book value per share
 440 – share price
 119 – book value
 3.6 P/B Ratio
 P/B Ratio its good below 5
 Book value

 P/B Ratio 3.6 it means share trading more the 3.6 times higher then company value
 P/B Ratio is low so company is good in market
 P/B Ratio below 5 its good to chose a company
 P/B Ratio is high to compere with the same field company
 EPS - Earnings Per Share

 EPS stands for earnings per share, a key metric used to gauge a company's profitability. It essentially tells you
how much money the company makes for each outstanding share of its common stock.

 EPS = Net Income / Outstanding Shares

 Net Income: This is the company's profit after all expenses have been paid.
 Outstanding Shares: This is the total number of shares of common stock that are currently held by investors.
 A higher EPS generally indicates a more profitable company, making its shares potentially more attractive to
investors. However, it's important to consider EPS in context with other factors, such as the company's industry,
growth rate, and overall financial health.
TTM EPS - Trailing Twelve Months Earnings Per Share

 TTM EPS stands for Trailing Twelve Months Earnings Per Share. It's a measure of a company's profitability
based on its earnings over the past 12 months, rather than just the most recent quarter or fiscal year
 Trailing Twelve Months (TTM): This refers to the latest 12 consecutive months of data. So, on December
21st, 2023, the "TTM" period would run from December 22nd, 2022, to December 21st, 2023.
 Earnings Per Share (EPS): This is a measure of a company's profit per share of its outstanding common
stock. It's calculated by dividing the company's net income by the number of outstanding shares.
P/E Ratio

 The P/E ratio, or Price-to-Earnings Ratio, is one of the most widely used metrics in stock market analysis. It
tells you how much investors are willing to pay for each dollar of a company's earnings.
 Formula: P/E Ratio = Share Price / Earnings Per Share (EPS)
 Below 20 P/E Ratio its good company to invest
 Some its high you do one thing to compare another company in the same sector
 Example :- HDFC-20, ICICI-21, SBI-23,
Dividends

 Dividends in the share market refer to a portion of a company's profits that are distributed to its shareholders. It's
essentially a reward for owning shares in the company.
 Types of dividends:-
 1 Cash dividends: This is the most common type, where shareholders receive a cash payment per share owned
 2 Stock dividends: Instead of cash, shareholders receive additional shares in the company.
 3 Stock splits: Similar to stock dividends, but the total value of your holdings remains the same, just divided into more
shares.
 Dividends give company never grow
 Growing company never give you dividends