Basic Knowledges and Terms To Enter ShareMarket

Introduction:

On a very simpler note where everybody would understand that the share market is the market in which trading of share happens. Trading of share includes both selling and buying. Buying the share of any company means you are actually investing money on that company and you have a right to vote to form the executive committee of that company whereas selling the shares means you are no longer the part of the company. You can sell and buy the shares of the company you want if others are also interested in buying and selling them. Basically in sharemarket shares are buying when NEPSE index is low and are selling when it reaches its peak value. That's the way how you can earn money in the share market.



Types Of Market:
Majorly, there include two types of the market as:

Primary Market: The primary market means when the new company opens up the share or existing company when wants to expand it then you actually investing in Primary Market.mainly it can also be referred to as IPO. Most of the IPO calls out shares as Rs.100/kitta in Nepal.

Secondary Market: Secondary market means you have to buy the shares of existing companies on a market price at which the company is trading. You have to buy the secondary shares through the broker house.


11 Important Terms To Enter ShareMarket:

1.Broker
A place where trading of share happens by taking certain commissions in return.
2.Dividend
A portion of a company’s earnings that is paid to shareholders, or people that own that company’s stock, on a quarterly or annual basis.
3.IPO
An IPO is the first sale or offering of a stock by a company to the public. It happens when a company decides to go public rather than remain solely owned by private or inside investors.
4.PortFolio
A collection of investments invested by an investor is owned by himself or herself as their own portfolio.
5.Sector
Various fields such as hydropower, banking, hotel, insurance, etc. are referred to as sectors for an investor to invest in them.
6.Stock Symbol
Shortforms of companies to make trade more smooth, they use their short forms.
7.Bonus
With a profit company making, it distributes the bonus to its shareholders. The bonus may either be Cash or Share as a certain percent of your share in that company.
8.Bull Market
When the market is at its peak, then it is referred to as Bull Market.
9.Bear Market
The bear market is exactly opposite to the Bull market. It is the condition in a market where the market price goes on decreasing to its bottom.
10.Earning Per Ratio(PE Ratio)
It refers to how much you should invest to make a profit of 1 ruppe in that company. For eg.if any company has a PE ratio of 10 times then you have to invest Rs.10 to make a profit of Rs.1.Lower the PE ratio better the Share.
11.Earning Per Share(EPS)
It signifies the price you would make from your one share. If any company has an EPS ratio of Rs.30 it means you would earn Rs.30 from one share of that company.

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