Module 1 ยท Stock Market Basics
A stock is a small slice of ownership in a company. When you buy one, you become a part-owner.
A company raises money by dividing itself into many equal units called shares. Each share represents a tiny claim on the company's future profits and assets. Buying a share makes you a shareholder, which means you own a small part of that business.
Shareholders can benefit in two ways: the company may pay a dividend (a share of profits), and the share price may rise if the business grows and more people want to own it. But prices can also fall, so you can lose money too.
In India, most shares are bought and sold on the two big stock exchanges, the NSE and the BSE. The price you see is whatever a buyer and a seller agree on at that moment.
Example: Reliance Industries
Reliance has issued hundreds of crores of shares. Each share is a tiny ownership claim on everything Reliance does - refining, retail and telecom. When Reliance earns more profit, its share price tends to rise over time.
When you buy a share of a company, you are:
Think of one company whose products you use daily. Would owning a tiny slice of it feel different from just being a customer?