The document provides an overview of the stock market, detailing its definition, functions, types, and how it operates. It explains important terminologies, the benefits and risks of investing, and offers tips for beginners. Additionally, it highlights major stock exchanges in India and emphasizes the stock market's role in the economy.

1. STOCK MARKET
PRESENTED BY: AAKRITI JINDAL
CLASS: 12 –D

2. INDEX
1) INTRODUCTION
2) MEANING OF STOCK MARKET?
3) PURPOSE
4) KEY TERMINOLOGIES
5) WHAT IS STOCK MARKET?
6) TYPES OF STOCK MARKET
7) HOW DOES THE STOCK MARKET
WORK?
8) FUNCTIONS OF STOCK EXCHANGE
9) MAJOR STOCK EXCHANGES IN INDIA
10) BENEFITS OF INVESTING IN THE
STOCK MARKET
11) RISK OF INVESTING IN THE STOCK
MARKET
12) TYPES OF BEGINNERS
13) CONCLUSION

3. INTRODUCTION
What is a Stock Market?
The stock market is a platform
where shares of publicly traded
companies are bought and sold.

4. MEANING OF STOCK MARKET
A stock exchange is an important factor in the
capital market. It is a secure place where trading
is done in a systematic way. Here, the securities
are bought and sold as per well-structured rules
and regulations. Securities mentioned here
includes debenture and share issued by a public
company that is correctly listed at the stock
exchange, debenture and bonds issued by the
government bodies, municipal and public bodies.

5. PURPOSE
To provide companies a way to raise
capital.
To offer investors an opportunity to earn
returns.

6. KEY TERMINOLOGIES
1. Stock/Share: A unit of ownership in a company.
2. Stock Exchange: A marketplace for trading stocks
(e.g., NSE, BSE).
3. IPO (Initial Public Offering): The first time a company
offers its shares to the public.
4. Bull Market: A market trend where prices are rising.
5. Bear Market: A market trend where prices are falling.

7. WHAT IS STOCK MARKET?
Typically, bonds are traded Over-the-Counter
(OTC), but a few corporate bonds are sold in a
stock exchange. It can enforce rules and regulation
on the brokers and firms that are enrolled with
them. In other words, a stock exchange is a forum
where securities like bonds and stocks are
purchased and traded. This can be both an online
trading platform and offline (physical location).

8. TYPES OF STOCK MARKET
1. PRIMARY MARKET:
 New securities are
issued and sold for
the first time.
 Example: IPOs.
2. SECONDARY MARKET:
 Existing shares are
traded among
investors.
 Example:
Buying/selling shares
on stock exchanges.

9. HOW DOES THE STOCK MARKET WORK?
1. Investors place orders through brokers.
2. Orders are executed on stock exchanges.
3. Prices fluctuate based on supply and
demand.
4. Profits or losses are realized based on
market movements.

10. FUNCTIONS OF STOCK EXCHANGE
Following are some of the most important functions that are performed by stock exchange:
 Role of an Economic Barometer: Stock exchange serves as an economic barometer that is indicative of the state of the economy. It
records all the major and minor changes in the share prices. It is rightly said to be the pulse of the economy, which reflects the state of
the economy.
 Valuation of Securities: Stock market helps in the valuation of securities based on the factors of supply and demand. The securities
offered by companies that are profitable and growth-oriented tend to be valued higher. Valuation of securities helps creditors,
investors and government in performing their respective functions.
 Transactional Safety: Transactional safety is ensured as the securities that are traded in the stock exchange are listed, and the listing
of securities is done after verifying the company’s position. All companies listed have to adhere to the rules and regulations as laid out
by the governing body.
 Contributor to Economic Growth: Stock exchange offers a platform for trading of securities of the various companies. This process of
trading involves continuous disinvestment and reinvestment, which offers opportunities for capital formation and subsequently,
growth of the economy.
 Making the public aware of equity investment: Stock exchange helps in providing information about investing in equity markets
and by rolling out new issues to encourage people to invest in securities. Offers scope for speculation: By permitting healthy
speculation of the traded securities, the stock exchange ensures demand and supply of securities and liquidity.
 Facilitates liquidity: The most important role of the stock exchange is in ensuring a ready platform for the sale and purchase of
securities. This gives investors the confidence that the existing investments can be converted into cash, or in other words, stock
exchange offers liquidity in terms of investment.
 Better Capital Allocation: Profit-making companies will have their shares traded actively, and so such companies are able to raise
fresh capital from the equity market. Stock market helps in better allocation of capital for the investors so that maximum profit can be

11. MAJOR STOCK EXCHANGES IN INDIA
1. Bombay Stock Exchange (BSE): Established
in 1875, Asia's first stock exchange.
2. National Stock Exchange (NSE): Established
in 1992, known for electronic trading.
3. Index Examples:
Sensex (BSE)
Nifty 50 (NSE)

12. BENEFITS OF INVESTING IN THE STOCK
MARKET
1. Potential for High Returns: Higher returns
compared to other investments like FDs or
bonds.
2. Liquidity: Stocks can be easily bought and
sold.
3. Ownership in Companies: Investors become
part-owners of the company.
4. Diversification: A variety of industries to
invest in.

13. RISK OF INVESTING IN THE STOCK MARKET
1. Market Volatility: Prices can fluctuate
significantly.
2. Economic Downturns: External factors like
inflation, recession, etc., can impact the market.
3. Lack of Knowledge: Poor decisions can lead
to losses.
4. Risk of Loss: Not all investments yield positive
returns.

14. TIPS OF BEGINNERS
1. Research Before Investing: Understand the
company and industry.
2. Start Small: Invest in small amounts initially.
3. Diversify: Spread investments across sectors.
4. Avoid Emotional Decisions: Do not panic during
market volatility.
5. Seek Professional Guidance: Consult financial
advisors if necessary.

15. CONCLUSION
The stock market is a vital component
of the economy, enabling companies to
grow and investors to earn returns.
While it offers opportunities for wealth
creation, it also involves risks that
require careful planning and
knowledge.

16. Q&A
{ANY QUESTIONS ?}

17. THANK YOU!