The share market is a platform that allows investors and traders to buy and sell publicly listed shares during the day’s trading hours. There is a slight difference between the stock market and the share market. The share market allows you to trade only in shares, while the stock market allows you to trade a wide variety of securities [Bonds, Derivatives, Forex etc.]. Let’s understand more about share market basics.
Many securities are listed on two major stock exchanges in India: the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). In addition, you can trade these listed securities through any depository participant (DP) in India that can be associated with National Securities Depository Limited (NSDL) or Central Depository Services Ltd (CDSL).
Types of the Stock Market
The stock market in India is divided into two segments: the primary market and the secondary market.
The Primary Market
The primary market is where a company offers investors its shares to purchase for the first time on any stock exchange, meaning its shares get listed on the stock exchange, which is known as an initial public offering (IPO). When the company becomes public through the IPO process, investors can invest in the company’s first issuance in the primary market.
The Secondary Market
After a company sells its new securities in the primary market, they become available for trading on the secondary market. The secondary market is the market where investors can buy and sell shares and other securities from each other at the prevailing market prices.
Share Market Timings in India
To effectively execute trades and investments in the financial markets, you must know about India’s stock market timings. You will get the exact share market timings in every part of the country.
Therefore, once you know the stock market timings, you can buy, sell, or invest in shares from any part of the country during that time. Whether you enter the BSE or the NSE, you will see these timings are also the same. The regular market trading starts at 09:15 AM and closes at 03:30 PM. The market’s pre-opening session happens before 09:15 AM, while a post-closing session happens after 03:30 PM.
The beginning of the pre-opening session happens at 09:00 AM and continues till 09:15 AM. This session has three sections –
From 09:00 AM to 09:08 AM
From 09:08 AM to 09:12 AM
From 09:12 AM to 09:15 AM
During every time slot, you can place buying or selling orders for a limited period.
A normal session is a continuous trading session that begins at 09:15 AM and ends at 03:30 PM. Here are the following activities that you can do in this normal session.
- Buy and sell freely
- Place your buying or selling orders for stocks.
- Modify or cancel your buy or sell orders where you will face no limitations.
There is a need to follow a bilateral order matching system during this window. Each selling order must be matched with a purchasing order whose placing happens at the same stock price. Similarly, each purchase must be matched with a selling order whose placing happens at the same stock price.
The beginning of the post-closing session happens when the regular trading session ends at 03:30 PM. The post-closing session continues till 04:00 PM. This session has two sections.
- From 03:30 PM to 03:40 PM
- From 03:40 PM to 04:00 PM
The stock market in India will not remain open on public and national holidays. But, you will see that the stock market remains open for at least one hour as a Muhurat trading session every Diwali. Therefore, Diwali is known as an auspicious day. The time and date keep changing for this kind of session.
Types of Investment Options
Here are the following different types of options to invest in the stock market in India.
A share is a unit of ownership of the company that issues it. At the same time, a stock is a group of shares.
A bond is a debt security that allows a government, municipality, or corporation to raise money from investors for a certain amount of time.
A mutual fund means an investment vehicle that collects money from investors and further invests in various financial securities like stocks, bonds, etc.
Derivatives are financial contracts that happen between two or more parties. Their value depends on an underlying asset, group of assets or benchmark.
Stock market investments come under lucrative options to generate long-term wealth. You should know the stock market timings to execute your trades with complete confidence. It becomes essential in terms of intraday trading. You must open a Demat and trading account to participate in the stock market in India.