Stock market for teens
What is Stock Market?
When you hear the word market what's the first thing that comes to your mind?
Well maybe the vegetable market or the farmer's market. Yes, that's exactly what a market is. But why is it called the market? It's because it is a place where transactions take place for various products. You go there in order to be able to buy a certain product which is being sold by someone else.
The Stock Market is also like a farmer’s market where investors buy and sell shares, and other financial instruments instead of vegetables. There are buyers and sellers of various financial instruments and the stock market is the marketplace where this exchange of securities takes place at different prices. The price of each share of the company is determined by a constant bid and ask of what investors/traders value a company at. This trading is facilitated by stock exchanges.
There are two big stock exchanges in India:
- Bombay stock exchange (BSE) – Sensex is its Index
- National stock exchange (NSE) – Nifty 50 is its Index
We will elaborate on the concept of the stock market index in the next unit.