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Module 1: Market basics

1. Stocks and exchanges

What it is. A share is a small slice of ownership in a company. In India, shares trade on two main exchanges: the NSE and the BSE. Most stocks are listed on both.

Where to find it. The exchange websites (nseindia.com, bseindia.com) list every company, its filings, and announcements.

How to read it. Each stock has a symbol (for example, RELIANCE). The price you see is simply the latest price at which a buyer and a seller agreed.

Common trap. A low price per share does not mean a cheap company. Price per share alone tells you nothing about value.

2. Indices

What it is. An index is a basket of stocks used to track the market. Nifty 50 follows 50 large NSE companies. Sensex follows 30 large BSE companies.

How to read it. If Nifty is up 1%, the weighted average of its 50 stocks rose about 1%. Bigger companies carry more weight.

Common trap. The index can rise while many stocks fall, because a few heavyweights can lift it.

3. How a trade works

You place an order through a broker. You need a demat account (holds shares electronically) and a trading account. Indian markets use T+1 settlement: shares and money are exchanged one working day after the trade. Regular trading runs from 9:15 AM to 3:30 PM IST on weekdays.

4. Order types

Market order: buy or sell now at the best available price. Limit order: buy or sell only at your chosen price or better. Limit orders give control over price, but may not fill.

Common trap. A market order on a thinly traded stock can fill at a worse price than expected.

5. Who keeps it fair

SEBI is the market regulator. It sets the rules for exchanges, brokers, and companies, and it registers investment advisors. Exchanges also use circuit limits that pause trading in a stock if it moves too far in a day.