Stock market has become a savior for lots of people. Many households run on the income generated through stock markets. It has also provided new investment and saving options which are much better than conventional ones. Of course there are many unresolved questions around the planet regarding stock markets. Some of these are preliminary superficial questions which if not resolved may never let you enter stock market. These are called stock market frequently asked questions (faq).
FundsBase has dedicated this article to answer these stock market faq. Get your answers solved.
If you still have any basic question regarding stock market feel free to provide it in the feedback section at the end of this article.
What is stock market?
Stock market is a place where business owners create funds for their business expansion, government gathers funds from the public. In the stock market, traders/investors earn money by taking advantage of fluctuations of the stock price.
Is stock market Gambling?
Definitely not!
There are lots of fears and myths that have grown in tandem with the stock market. These myths and fears are the main reason most people never even try to start trading/investing in stock market.
Earning from the stock market, just like any other business faces ups and downs. That is just a part of the business and should not be seen as gambling.
FundsBase is glad that it has successfully busted most prevalent myths of the stock market.
Who regulates the stock market?
SEBI, one of the 4 financial regulators in India, is the regulatory authority of Indian financial market. SEBI keeps a check on the stock market and enforces bye-laws to every entity of the stock market.
How to start trading in the stock market?
Before even starting in the stock market, make sure that your psychological fundamentals are in the positive direction.
Then you need to have a basic infrastructure which includes –
- Computer
- Internet
- Pan card
- Aadhar card
- Bank account
- Broker
- Some amount to start your experiments
- A source to learn
Read more details at basic requirements to start investing in stock market.
How to start earning in stock market?
A stock broker is a gateway to the stock market. You need to open a trading and demat account from a broker. You can choose a full-service broker or a discount broker.
Make sure that you have some risk-free money. Risk-free money means that you don’t have any problem in case that money is out of your reach for some time. Start by making small trades and small earnings per month. Take leap when pro.
You should also understand the basics of technical analysis. Subscribe to FundsBase articles or feeds for that purpose.
When does stock market open?
Stock markets in India open at 09:15 for trading in all scrips and close at 15:30.
There is a pre-market session from 09:00 to 09:15. This pre-market session gives the time to settle-down any overwhelming market sentiment due to the overnight news. This pre-market session allows establishing the new open price for scrips.
Read more on the pre-market session.
Is stock market open today?
The stock market is closed on weekends and officially announced holidays by Indian exchanges.
See Stock Market Holiday for year 2020
What if someone cheats me in the stock market?
Scams exist everywhere. The stock market is not an exception. However, SEBI keeps a check on financial intermediaries thus any big scam is not supposed to happen. Still, if you feel that you have been cheated, SEBI has introduced a platform called SCORES. You can lodge a complaint over there and SEBI will make sure that justice is done.
Do I have to pay any fee in the stock market while trading/investing?
Yes, you need to pay some fee in stock market viz.
- To exchanges
- To Central government
- GST
- State Govt
- Brokerage
- DP charges
- SEBI charge
- Demat AMC fee
Read details of different charges you pay in the stock market.
Do I have to pay income tax on earnings from stock market earning?
Yes, earnings from the stock market are also seen as an income. Thus you need to pay income tax on that.
Previously income on gains from stocks, kept for less than a year was prone to income tax. In 2018 budget Union Govt. of India brought Long-Term Capital Gains (LTCG, gains from stocks kept for more than a year) also under income tax.
So today, whatever you earn from stock market is seen as income and you need to pay income tax on that.
What is the difference between stock market and stock exchange?
The stock market is a complete eco-system for stocks and its derivatives (futures, options). On the other hand, the stock exchange provides a platform where a company can issue their shares to the public to gather funds for their business expansion. Stock exchanges provide a platform for traders/investors to earn money by taking advantage of fluctuations in stock price.
Stock market consists financial intermediaries to provide ease for various financial processes in the eco-system. All entities in the stock market are strictly regulated by SEBI.
What is the difference between stock market and commodity market?
A stock market is a place where only stocks and its derivatives are traded whereas commodity market is a place where only commodities are traded (e.g. metals, agricultural products)