There has been a growing trend of Indians starting to trade in the stock market recently. Usually seen as a risky and volatile avenue to growing wealth, the stock market is slowly becoming a preferred way for Indians to grow their wealth. However, it is essential that retail investors in India learn about the gritty of the Indian stock market to invest wisely and save themselves from poor financial decisions.
There are certain players of a share market that are involved in this game of trading, and as an investor you should know about the roles they play in the Indian stock market.
Securities and Exchange Board of India
The SEBI, or Securities and Exchange Board of India, was established in 1992 as a statutory body by the Government of India. SEBI works as a regulating body and sets down frameworks that all other participants must follow. These rules and regulations ensure that the interests of investors, companies, stock market experts, and brokers are protected and everyone gets a level playing field in the Indian stock market.
Stock Exchanges
Stock exchanges enable the buying and selling of stocks, bonds and derivatives in the Indian stock market. The two principal stock exchanges in India are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)
- Bombay Stock Exchange
Bombay Stock Exchange (BSE) is one of the oldest stock exchanges in the world, established in 1875. It stands as a torchbearer of the Indian financial system and is revered for its stock market analysis, which enables both investors and companies to trade wisely. If you are a participant in the Indian stock exchange, keeping a check on BSE indices is a must.
- National Stock Exchange
The National Stock Exchange is the other leading stock exchange in India. Due to its large trading volume, it was ranked 4th in the world stock exchanges. NSE was established in 1992, shortly after India opened up through the LPG reforms. Due to its electronic trading initiatives and becoming the preferred exchange for both domestic and international investors, NSE has earned its place in the Indian financial market and should be looked out for.
Stock Brokers
Stock brokers are intermediaries who facilitate the buying and selling of stocks for a charge. There are two types of stock brokers: full-service brokers and discount brokers. The former provides more services and charges a higher fee than the latter, which provides limited services for a discounted price.
Traders & Investors
Traders invest in the stock market for short-term gains and monitor stock market forecasts to buy and sell stocks continuously to earn profits. On the other hand, investors invest in a long-term and low-risk opportunity to grow their wealth
Now that you have learned about the players of the Indian stock market, you can make more informed decisions before starting your trading. The Securities and Exchange Board of India, the stock exchanges like NSE and BSE, and other participants like brokers, investors, and traders play a part in the Indian stock market.