SHARES & STOCK
(1 Share of the company) (A bundle of shares)
BONDS & STOCK
Part lenders of the company Part owners of the company
A part of debt of the
companySecurity name for
A part of equity of the
Security name for shares
Bonds & Debentures
Bonds are backed by collateral
Debentures are backed by
All Debentures are Bonds but
not all Bonds are Debentures.
An Unsecured Bond is a
How Does A Company Issue Its Shares?
Initial Public Offering
When a new company is formed , the initial
investors apart from the idea generator or the
initiator of the company, are called
• A company goes public when it further plans
to expand its business and requires huge fund
for the same.
• The company first has to convert into a Public
Company and appoint a Merchant Banker.
• The job of the merchant banker is to conduct
diligence on the company filing for an IPO and
ensure the legal proceedings.
• The merchant banker also Underwrites shares
by agreeing to buy a part of the IPO.
• The shares are issued in the market called
• The IPO is also knows as the Primary Market.
There are two main exchanges followed by traders:
NSE-National Stock Exchange(Nifty)
BSE-Bombay Stock Exchange(Sensex)
Sensex Is calculated by market capitalisation of 30
Nifty is calculated by market capitalisation of 50
• Entities that offer services by performing
functions of the stock market.
• Their functions are complied with the
regulations laid down by the SEBI.
• A registered trader with the stock exchange.
• They act like the gateways to stock
• They provide Trading Account, used for all
market related transactions.
(buying and selling of shares)
• Facilitate fund transfer between trading and
personal bank accounts.
• They act like a messenger between two
• Not all brokers facilitate exchanges abroad.
A depository offers the service of Demat account.
They are like banks to the owned shares.
Once the trade is done, the share certificate gets
transferred from trading account and stored in Demat
Currently, there are only two depositories in India;
NSDL-National Securities Depository Limited
CDSL-Central Depository Services Limited
A market watch is a forum that provides business
news, analysis and stock market data.
Symbol of the
% Change of
price from the
price on the
Opening Price for
1.The opening price differs from the
previous day’s closed price due to the
2.The market trades between 9:15am to
3:30pm and remains closed on Saturdays
and Sundays but the companies continue
Therefore, prices keep fluctuating even
when the market is shut.
3.Trade is made on lot size of shares. Every
company has its own bundle of shares
which are traded together as a stock.
Price Determination of Shares
Assets-Liabilities=Book Value Of Shares
What Is Market Capitalisation?
Market capitalisation means to
calculate the market value of the
The total number of shares of a
company trading in the market are
The current market value of the share
is then multiplied by the total shares.
It is a method to develop a point of
view on markets.
It helps in identifying the entry and exit time while
trading on a particular stock.
Assumptions in TA
1. Market discounts everything-All known and unknown
activities/information is reflected in the latest price stock.
2. Always prefer knowing ‘HOW’ over ‘WHY’
3. Prices move in a trend. A major rise/fall happens over time
and not immediately.
4. History repeats itself simply because market traders react to
fluctuations in a similar way .
Few Technical Tools/Methods
Daily Trade Pattern
Every price movement is recorded to know the
highest and lowest for the day.
It is important to mark the opening and closing to
know the overall price trend for the day
The line charts can be plotted
for various time frames
namely monthly, weekly,
The advantage of the line
chart is its simplicity.
With one glance, the trader
can identify the generic trend of the security.
The line chart does not provide any additional
detail apart from trend of the security.
Line chart takes into consideration only the
closing prices ignoring the open, high and low.
The Bar Chart is a bit more versatile.
It displays all the four price variables namely
open, high, low, and close. A bar has three
central line – highest price
bottom end- lowest price
The left mark–open Price
The right mark–close Price
The length of the central line-the range
for the day
Candle Stick Pattern
The candlesticks is originated from Japan.
The open and close prices are displayed by a rectangular
Candles can be classified as a bullish or bearish candle
usually represented by blue/green/white and red/black
The consideration given for this presentation is blue and red
combination to represent bullish and bearish candles
The Central real body –
connects the opening
and closing price
Upper shadow – Connects the high point to
Lower Shadow – Connects the low point to
The Central real body –
opening and closing price
However the opening is
at the top end and the closing is at the bottom
end of the rectangle
Upper shadow – Connects the high point to the
Lower Shadow – Connects the Low point to the