(What is a share market?)
Before I tell you about stock market,
I request you guys to have a look at my previous answeron why to invest (Why should one buy shares or invest in stock market?) and which domain to invest (What are the best ways to invest money?) before getting into my current answer as it will provide a deeper understanding of the stock market.
Now let’s understand the stock market in brief!
In general like how you go to a super market to pick up stationeries, similar way you have to visit Stock market as it is one stop shop to buy and sell financial products. Stock market exists only in an “Electronic format” which means financial products are bought and sold online.
Stock market’s important role is to facilitate transactions.
Never get tempted with the stock price volatility in short term.
Don gets into the zeal of being a part ownership of the desired companies.
Stock market investment needs required skill and patience helps to get a chance to grow your desired company and helps to grow your money by bringing the profit to all investors.
Stocks are the most volatile investments, which means the price of a deserved company based single stock can vary quite widely from day to day or within a day the prices fluctuates , which is beyond the control of the investor, patience with required skills are much needed before trading or investing to get profit out of stock market investments..
(Who are the stock market participants?)
Before answering the question lets understand the difference between Stock Market Participants and Stock Market intermediaries.
Now let’s first understand who are stock market participants?
Stock Market Participant:
The investors who are interested in investing on stock market domain are referred as market participants. People like me and you, whoever transact on stock market can become the stock market participant; people from any profile can be a part of stock market participant, no one is restricted on being a stock market participant.
To understand the market participants the investors are categorized based on the citizenship or home ground they belong to.
The market participants are:
· Domestic Retail Investors: Domestic retail participants are the investors like me and you, who purchase the securities for his or her own personal account, typically retail investors like us trade in much smaller amounts, when compared to any organizations or institutions.
· NRI’s, PIO and OCI Investors: Non Residential Indians (NRI), Person of Indian origin (PIO) and overseas citizenship of Indians (OCI) can owe the required stock in digital stock market.
· Domestic Institutions or Domestic Institutional Investors (DII): They are the country based, like Indian institutional investors who invests in securities and other financial assets, let me explain example like LIC (Life Insurance Corporation) of India, who generally gives away the bonds to Indian institutional investors.
· Asset Management Companies or AMC: Mutual Funds are managed by Asset Management Companies; Asset Management Company is a company which collects money from public who are interested in investing and maintains that money in a single account to bring in profit to the investors. For Example: SBI Mutual Funds.
· Foreign Institutional Investors (FII), Foreign Direct Investments (FDI), Foreign Portfolio investment (FPI):
Foreign Institutional Investors (FII): Foreign Institutional Investors are the foreign entities who invest in large amount of money with an interest to invest in India, to create wealth.
Foreign Direct Investments (FDI): ForeignDirect Investments are the companies which gives, a chance to a foreign company or to a foreign individualto establish business operations or to get hold of business assets in other country.
Foreign Portfolio investment (FPI):Foreign Portfolio Investment or Investors are basically non residents living in India who invests on securities including shares, government bonds, convertible securities, infrastructure securities etc. the investors who make investments in these securities are called Foreign Portfolio Investors.