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Basics of Stock Market


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Founded in 2003 AZEE Securities with a vision to provide its customers portfolio investment and financial services under one umbrella backed up with premium quality personalized services. AZEE has relentlessly challenged the industry to give investors more power and control over their finances and established itself as one the most recognized names in financial services. Azee offering Online Trading and Mobile Apps having wide reach terms as one of the largest outfit of Pakistan. We provide daily research ideas and analysis to our clients to help them make smart investing decisions.

Published in: Economy & Finance
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Basics of Stock Market

  1. 1. VALUE >< 1 Basic’s of Stock Market
  2. 2.  In plain and simple words a share is a Participation in the Ownership of a company.  It represents a claim on the company's assets in the event of winding up of a company. It also represents a claim on the company's earning to the extent of once share holding.  You buy a share in the hope of realizing returns in the form of dividends and increased price of the share. What is Share
  3. 3.  A share market is where shares are either issued or traded in.  A stock market is similar to a share market. The key difference is that a stock market helps you trade financial instruments like Bonds, ETF’s as well as Shares of companies.  A share market only allows trading of shares. The key factor is the stock exchange – the basic platform that provides the facilities used to trade company stocks and other securities. A stock may be bought or sold only if it is listed on an exchange. What is Share Market
  4. 4. There are two types of markets  Primary Market: This where a company gets registered to issue a certain amount of shares and raise money. This is also called getting listed in a stock exchange.  Secondary Market: Once new securities have been sold in the primary market, these shares are traded in the secondary market. This is to offer a chance for investors to exit an investment and sell the shares. What is Stock Market
  5. 5. Now that we have understood what is stock market , let us understand the four key financial instruments that are traded in our Pakistan Stock Exchange. Instruments in Stock Market
  6. 6. Stock markets are risky. Hence, they need to be regulated to protect investors. The Security and Exchange Commission of Pakistan (SECP) is mandated to oversee the secondary and primary markets. SEC has the responsibility of both development and regulation of the market. It regularly comes out with comprehensive regulatory measures aimed at ensuring that end investors benefit from safe and transparent dealings in securities. What is SECP and Its Role
  7. 7. We introduced market participants and other share market basics. Let’s try to stitch these narratives together and understand how the stock market works.  A stock exchange in the platform where financial instruments like stocks and derivatives are traded. Market participants have to be registered with the stock exchange and SECP to conduct trades.  First, a company gets listed in the primary market through an Initial Public Offering (IPO). In its offer document, it lists details about the company, the stocks being issued, and so on. How Stock Market Works
  8. 8.  Once listed, the stocks issued can be traded by the investors in the secondary market. This is where most of the trading happens. In this market, buyers and sellers gather to conduct transactions to make profits or cut losses.  Stock brokers and brokerage firms are entities registered with the stock exchange. They act as an intermediary between you, as an investor, and the stock exchange.  Your broker passes on your buy order to the exchange, which searches for a sell order for the same share. Once a seller and a buyer are fixed, a price is agreed finalized, upon which the exchange communicates to your broker that your order has been confirmed. How Stock Market Works
  9. 9. Now that you have understood exactly how the stock market works, Lets check out how to invest in the market. Step 1: First, understand your investment requirements and limitations. Your requirements should take into account the present as well as the future. Step 2: Once you understand your investment profile, analyze the stock market and decide your investment strategy. Find out which stocks suit your profile. How to Invest in Stock Market
  10. 10. Step 3: Wait for the right time. Time is of utmost importance in the stock market. Merely getting the stock right is not enough. Your profits will be maximized only if you buy at the lowest level possible. The same applies if you are selling your shares. This needs time. Do not be impulsive. Step 4: Conduct your trade either online or on the phone through your broker. Ensure that your broker confirms the trade and gets all the details right. Recheck the trade confirmation to avoid errors. Step 5: Monitor your portfolio regularly. The stock market is dynamic. Companies may seem profitable one moment, and not-so profitable the next due to some unforeseen factor. Ensure you regularly read about the companies you have invested in. In the case of some unfortunate situation, this will help you minimize your losses before it is too late. How to Invest in Stock Market
  11. 11. Twitter Facebook Thank You It’s Simple