Stock market is a place where various companies list their stock and shares in the market for open purchase and sell of stock and shares. Stock Market is quite a diversified term and plays a vital role in the overall GDP of a country. All the big shot companies of India are listed here in the stock market.
What is Stock Market:-
It is a market of stock and shares. In simple language we can say that it is a market for buying and selling of stocks such as equity shares, derivatives and bonds of various companies and it also regulates its selling. Therefore, we can say it is a place for buying and selling of stock that is referred to as the Stock Market.
Regulation of Stock Market In India:-
In India the stock market is being regulated by SEBI Board who regulates all the rules and regulations of the Stock Market and Stock Exchange in India.
SEBI is a statutory body that was established in the year 1992.
There are five major functions of Securities Exchange Board of India:-
- All the stocks and brokers working in the marketplace of stocks and securities need to be registered with SEBI. Here all the brokers, sub-brokers, merchant banks, transfer banks and so on.
- It regulates all the notifications and provisions laid down for the securities and stock market and it has been laid down under the provisions of rules and regulations made by SEBI.
- It prohibits all unfair trade practices.
- It regulates all the levying of fees.
- It regulates all the schemes related to Investment.
- It regulates all the functioning and process of mutual funds.
- It imposed all the restrictions on private placement.
- It helps in conducting and inquiring about regular inquiries and audits.
Therefore, SEBI is the board which regulates all the functions and power of the securities market and Indian capital market.
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Types of Stocks in Stock Market:-
There are namely four types of stocks available in stock market which are as follows;-
- Common Stock: It is a stock that provides representation and ownership in a corporation. When a company goes through the liquidation process the shareholders of such stocks are those who receive the money at first.
- Preferred stock: It is a certain stock that is a class of stock wherein certain rights have been granted and they also differ from common stock.
- Large cap stocks: It is a stock which is also known as big-cap stocks. These are the shares or stocks who have huge market capitalization of stocks which is around $10 million and more.
- Mid-cap stocks: It is a stock which comes with middle range of market capitalization and herein the worth of market capitalization stays somewhere in range around 5000 cross but lesser than 20,000 crore.