The document provides an overview of the stock market, explaining its function as a platform for trading shares of publicly held companies and its significance in raising capital for businesses. It outlines the stages of company incorporation, major stock exchanges, and key participants including individual and institutional investors. Additionally, it defines important terms related to the stock market, such as market capitalization, capital structure, and types of speculators.

1. Topic-Stock Market (Shares)

2. Introduction:
• The stock market is the market in which part of
publicly held companies are issued and swap either
through interchange or over-the-counter markets

3. • The total capital of company is estimated, registered
and divided into units of equal value. This units are
known as Shares and collectively they are known as
Share Capital.
Share Capital Shares

4. The amount is invested or contributed by the investors and then
they are collectively sold and purchased by new or existing
investors through various means such as brokers of stock
market / companies etc. , thus directly or indirectly giving birth
or using the STOCK MARKET (Share Market).

5. Incorporation of a Company:
• The procedure for incorporating a co. may be
divided into 4 principal stages :
 Promotion
 Incorporation or Registration of a Co.
 Capital Subscription
 Commencement of Business

6. What is Stock Market?
• A stock market or equity market is a public entity for the trading
of company stock (shares) and derivatives at an agreed price; these
are securities listed on a stock exchange as well as those only
traded privately.

7. Importance of Stock Market:
• Function and purpose:
The stock market is one of the most
important sources for companies to raise
money. This allows businesses to be publicly
traded, or raise additional capital for
expansion by selling shares of ownership of
the company in a public market.

8.  History has shown that the price of shares and other
assets is an important part of the dynamics of economic
activity, and can influence or be an indicator of social
mood.
 An economy where the stock market is on the rise is
considered to be an up-and-coming economy.

9.  Share prices also affect the wealth of households and their
consumption
 Exchanges also act as the clearinghouse for each transaction,
meaning that they collect and deliver the shares, and guarantee
payment to the seller of a security.

10. Major StockExchanges:
• New York Stock Exchange(NYSE- USA)
• Toronto Stock Exchange(Canada)
• Amsterdam Stock Exchange
• London Stock Exchange
• Singapore Exchange
• Tokyo Stock Exchange
• Hong Kong Stock Exchange
• Bombay Stock Exchange(BSE- India)

11. Major Participants:
• Individual Retail Investors
• Institutional investors such as mutual funds, banks, insurance
companies and hedge funds, and also publicly traded
corporations trading in their own shares.

12.  The smooth functioning of all these activities facilitates
economic growth in that lower costs and enterprise risks
promote the production of goods and services as well as
employment.
In this way the financial system contributes to increased
prosperity.

13. Some Important Terms Relating To
‘Stock Market’

14. Market Capitalisation:
Market capitalization is the measure of corporate
size of a country. It shows the current stock price
multiplied by the number of outstanding shares. It is
commonly referred to as Market cap.

15. Capital Structure:
• Capital structure means the proportion of debt and equity
used for financing the operations of a business or an
enterprises.
The capital structure should be such which increases the
value of equity shares or maximises the wealth of share
holder.

16. • In finance, to corner the market is to get sufficient control of
a particular stock, commodity, or other asset to allow the
price to be manipulated.
Corner the market to have the greatest market share in a
particular industry without having a monopoly. They may
charge higher prices for their products without fear of losing
too much business.
Cornering:

17. Speculation:
• Speculation is the practice of engaging in risky financial
transactions in an attempt to profit from short or medium
term fluctuations in the market value of a tradable good.
• Speculation can in principle involve any tradable good or
financial instrument.

18. Speculators:
• Many speculators pay little attention to the fundamental
value of a security and instead focus purely on price
movements.
Four kinds of speculators operate in the Indian Stock
Exchange. They are known as :
 Bull
 Bear
 Stag and
 Lame duck.

19.  Bull:
A Bull also called as Tejiwala is an operator who is hopeful
of price rise in the near future. In anticipation of price rise
he makes purchases of shares and other securities with the
intention of selling them at higher prices in future.
He being a speculator has no intention of taking delivery of
securities but deals only in difference of prices.

20. Bear:
A bear does not have securities at present but sells
them at higher prices in anticipation that he will
supply them business purchasing at lower prices in
the future.

21. Stag:
A stag is that type of speculator who treads his path
very carefully. He applies for shares in new
companies and expects to sell them at a premium if
he gets an allotment. He selects those companies
whose shares are most in demand and are likely to
carry a premium. He sells the shares before being
called to pay the allotment money.

22. Lame Duck:
A Lame Duck is nothing but a stressed bear. When a
bear finds it difficult to complete his promise he is
labeled as a lame duck.