What is a stock exchange? Stock exchange is an entity which provide a service of trading shares, securities, bonds.

It is used by the public limited companies to raise capital by selling the their shares.

What are shares? A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in the company becomes one of the owners of the company.

What is a secondary market? A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchanges - such as the National Stock Exchange (NSE) or the Bombay Stock Exchange(BSE) Secondary markets exist for other securities as well, such as when funds, investment banks, or entities such as Fannie Mae purchase mortgages from issuing lenders. In any secondary market trade, the cash proceeds go to an investor rather than to the underlying company/entity directly.

How to buy shares through stock exchange? We can buy shares through a broker or our self. If you hire a broker to buy shares he will give you tips as to which share should be bought and he will earn through commissions. If you buy share yourself then there are many legal formalities before which you are eligible to buy shares. These legal formalities may include to be of a minimum age and to open a Demat account with a minimum balance .

How are share prices determined? Share prices are determined by the law of demand and supply.

Largest stock exchange by market capitalization Rank Economy Stock exchange Value $(billions)

1
2 3 4

USA
Japan UK China

NYSE
Tokyo Stock exchange London stock exchange Shanghai stock exchange

15,970
3,827 3,613 2,717

5 6

Hong Kong Canada

Hong Kong stock exchange Toronto stock exchange

2,711 2,170

India

Bombay stock exchange

1,631

Stock exchanges in India. Earlier in India there were stock exchanges for every state. Now we have only 2 stock exchanges functional which are the Bombay stock exchange (BSE) and the national stock exchange(NSE).

Bombay stock exchange is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE wasUS$1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest in the world. The BSE has the largest number of listed companies in the world. As of June 2011, there are over 5,085 listed Indian companies, the Bombay Stock Exchange has a significant trading volume. The BSE SENSEX, also called "BSE 30", is a widely used market index in India and Asia. Though many other exchanges exist, BSE and the National Stock Exchange of India account for the majority of the equity trading in India.

National stock exchange is a stock exchange located at Mumbai, Maharashtra, India. It is the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around US$1.59 trillion and over 1,552 listings as of December 2010. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions.

The two stock exchanges have different index to measure the growth or the slump in the two stock exchanges. For BSE the index is called a sensex30 and for NSE the index is nifty50. The number after nifty and sensex indicate the number of large cap companies on which the growth or downfall of these two stock exchanges is measured.

In BSE the are 5000+ companies and in NSE the are only 1500+ companies so the is the reason why sensex fall more than nifty is because of more companies listed in BSE.

March 17, 2008: The Bombay Stock Exchange benchmark Sensex crashed by 951 points to close at 14,809 on weak cues from the overseas markets. Unabated selling saw the index slip below the 15,000-mark. March 3, 2008: The Bombay Stock Exchange benchmark Sensex witnessed its second-largest fall ever losing 900.84 points to close at 16,677.88 on frantic selling by funds, triggered by deepening concern over United States recession and some Budget-related concerns. January 21, 2008: The Sensex saw its highest ever loss of 1,408 points at the end of the session on Monday. The Sensex recovered to close at 17,605.40 after it tumbled to the day's low of 16,963.96, on high volatility as investors panicked following weak global cues amid fears of the US recession. January 22, 2008: The Sensex saw its biggest intra-day fall on Tuesday when it hit a low of 15,332, down 2,273 points. However, it recovered losses and closed at a loss of 875 points at 16,730. The Nifty closed at 4,899 at a loss of 310 points. Trading was suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex crashed to a low of 15,576.30 within minutes of opening, crossing the circuit limit of 10 per cent. February 11, 2008: The Sensex finally ended with a loss of 834 points (4.8% ) at 16,631. The NSE Nifty slipped over 5% (263 points) to 4,857. These are some events of the Indian stock market crash where BSE has crashed always more than the NSE.

What is speculation? In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum. Speculation typically involves the lending of money for the purchase of assets, equity or debt but in a manner that has not been given thorough analysis or is deemed to have low margin of safety or a significant risk of the loss of the principal investment.

What is bull market and bears market? A financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market and market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining.