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Tag: Price Movements

  • The Fundamental Concepts Of Equity Trading

    When looking for money, a business needs to think about two main sources. It can raise money through equity, which means selling shares, or through debt, which means borrowing money from lenders through debentures and other debt instruments. In this case, the company gives investors a piece of the company in exchange for their money. There are different kinds of shares, such as preferred shares and equity shares. This article is meant to help you learn more about equity shares, including how they work, what their pros and cons are, and how they can be used.

    How do shares work?

    Equity shares are a type of long-term financing that businesses that need money can use. Each equity share is a small piece of ownership in the business. People can invest in equity shares, which are also called common stock or common shares.

    Investing is riskier than saving, but it can give you higher returns and help you reach your financial goals faster if you do it right. Equity shares are seen as a long-term way for businesses to get money to run their businesses. People who own preference shares can make use of a number of benefits and advantages.

    Voting rights: One of the best things about having equity shares is that you can vote for general managers and other company officials and have a say in how the business is run. This is because the way a company runs has a direct effect on the returns it gives to equity shareholders. If you own a large number of equity shares, you also have a large number of voting rights.

    Attending meetings: People who own equity shares are allowed to sit in on all annual and/or general body meetings of the company and have a say in how the family business is run through their voting rights.

    Dividends: They can also be paid to people who own equity shares. In this area, though, the benefits for people who own common stock are different from those for people who own preferred shares. Dividend payments to equity owners are not set in stone. They can change depending on how well the company does and whether or not certain goals are met. So, people who own equity stocks have a right to dividend payments, even though these payments are not promised. Dividends are set, though, for people who own preference stock.

    Equity shares cannot be redeemed, which means that investors will not get their money back as long as the company is in business. When the company goes out of business, equity shareholders will either get this money based on the value of their equity shares at that time, or they can sell their equity shares to get it back.

    There are a lot of companies that only give out common stocks, and more common stocks are traded on stock exchanges than preferred stocks. Common investors, on the other hand, have the least chance of getting any of their money back if a company goes bankrupt. Paying back the people who loaned money to the business comes first. If there is still money left over after creditors are paid, it goes to the people who own preferred stocks. There is a limit to how much of this you can get. Common investors only get their money back if there is still money left over.

  • What Are The Indices In The Stock Market?

    An investor can use a stock market index to measure the performance of a market, like the Bombay Stock Exchange or the National Stock Exchange, or a sector, like the energy, infrastructure, or real estate markets. In India, SENSEX and NIFTY are the two most important stock market indices that are used to measure the market. Indian investors can keep an eye on how the index value changes over time and use it as a benchmark to measure how well their own portfolios are doing.

    Investors now talk about the stock market as having indices for different parts of the market that don’t always move together. Because if they did, there would be no need for different stock market indices. By learning how stock market indexes are made and how they change, you can make sense of the daily changes on the Indian market.

    SENSEX S&P BSE (also called BSE 30 or SENSEX)

    SENSEX was the first stock market index for equities. It was created in 1986. It is made up of shares from 30 companies that are listed on the BSE and are well-known and financially stable. These companies are a good example of the major industrial sectors of the Indian economy.

    How to measure the SENSEX

    SENSEX has switched to the market capitalization weighted method, which gives weights to companies based on how big they are. The weight goes up as the size goes up.

    Now, it is thought that the total market share was 100 points when the index was made. This shows the change in terms of % in a way that makes sense. So, if the market capitalization goes up by 10%, the index goes up by 10% as well, from 9 to 10.

    Let’s imagine that there is only one stock on the market. Let’s say that the stock is now trading at 200 and that its basic value is 100. If the price of the stock is 260 tomorrow, it has gone up by 30%. So, the index will go from 100 to 130, a 30 point jump. If the stock price goes down from 260 to 208, that’s a 20% drop. To reflect the drop, the SENSEX will be changed from 130 to 104.

    CNX NIFTY S&P (also called NIFTY 50 or NIFTY)

    The National Stock Exchange has 50 shares of NIFTY, which was started in 1996. It gives investors access to the Indian market through a single portfolio and includes 24 different parts of the Indian economy.

    NIFTY calculation

    The same formula that the Bombay Stock Exchange uses to figure out the SENSEX is also used to figure out the NIFTY. But there are three major differences:

    NIFTY is made up of 50 stocks that are actively traded on the NSE (SENSEX is calculated on 30)


    On both the SENSEX and the NIFTY, there is a separate index for each sector. This makes it easier for investors to keep track of changes in the market every day.

    Please think about this helpful advice: if you want to play on the stock market, you need to learn how to keep an eye on the scorecard, which is made up of two stock market indices. Zebu’s platforms give you real-time price moves about all of Nifty and Sensex’s prices. Open a trading account with us to find out more.