What is the stock market?
The stock market is a regulated marketplace where shares of listed companies are bought and sold. When you buy a share, you own a small part of that company and benefit if its value — and profits — grow over time. Companies raise money by listing through an IPO (Initial Public Offering); after that, shares trade between investors on the exchange every working day.
Key players: SEBI, NSE, BSE, depositories & brokers
| Institution | Role |
|---|---|
| SEBI (Securities and Exchange Board of India) | The market regulator. Protects investors, registers brokers, advisers, research analysts and mutual funds, and frames market rules. |
| NSE (National Stock Exchange) | India's largest exchange by volume. Home of the Nifty 50, Bank Nifty and most F&O trading. |
| BSE (Bombay Stock Exchange) | Asia's oldest stock exchange (est. 1875). Home of the Sensex (30 stocks). |
| NSDL & CDSL | Depositories that hold your shares electronically in your Demat account. |
| Stock brokers | SEBI-registered members (e.g. discount and full-service brokers) through whom you place orders. |
| Clearing corporations | NSE Clearing / ICCL guarantee settlement so that buyers get shares and sellers get money. |
Indices: Nifty 50, Sensex, Bank Nifty & more
An index tracks a basket of stocks to show how the market or a sector is performing.
- Nifty 50 — 50 large, liquid companies on NSE across sectors; the main benchmark for Indian equities.
- Sensex — 30 large companies on BSE.
- Nifty Bank — the most liquid banking stocks; very popular for options trading.
- Nifty Midcap / Smallcap indices — track medium and smaller companies (higher growth potential, higher risk).
- Sectoral indices — Nifty IT, Pharma, Auto, FMCG, Metal, Realty, etc.
- India VIX — the "fear index"; measures expected volatility over the next 30 days.
How to start: Demat, trading account & KYC
- Choose a SEBI-registered broker — compare brokerage, platform quality and support.
- Complete KYC — PAN card, Aadhaar, bank details, photo and signature (fully online via e-KYC).
- Open Demat + Trading account — Demat holds shares; trading account places orders.
- Add funds via UPI / net banking.
- Start small — learn with quality large-cap stocks or index ETFs before moving to advanced segments.
Market timings (IST)
| Session | Time | What happens |
|---|---|---|
| Pre-open | 9:00 – 9:15 AM | Order entry & price discovery (9:00–9:08), then matching. |
| Normal market | 9:15 AM – 3:30 PM | Continuous live trading. |
| Closing session | 3:40 – 4:00 PM | Trades at the closing price. |
| Commodities (MCX) | 9:00 AM – 11:30/11:55 PM | Evening session for global commodities. |
Markets are closed on weekends and exchange holidays (check the NSE holiday calendar each year).
Market segments
- Equity cash (delivery) — buy and hold shares; you become a shareholder.
- Intraday — buy and sell on the same day; positions are squared off before the close.
- Futures & Options (F&O) — derivative contracts on indices and stocks; leveraged and high-risk.
- Currency derivatives — USD/INR, EUR/INR, GBP/INR, JPY/INR and some cross pairs.
- Commodities — gold, silver, crude oil, natural gas, base metals on MCX/NCDEX.
- ETFs, REITs, InvITs, bonds — also traded on exchanges like shares.
Order types every trader must know
| Order | Meaning | When to use |
|---|---|---|
| Market | Buy/sell immediately at the best available price | Highly liquid stocks, urgent exits |
| Limit | Buy/sell only at your price or better | Control the price you pay |
| Stop-loss (SL) | Triggers a limit order when price hits your trigger | Protect capital |
| SL-Market (SL-M) | Triggers a market order at your trigger | Guaranteed exit (price may slip) |
| GTT / GTC | Good-till-triggered — stays active for months | Long-term targets & stop-losses |
| Bracket / Cover | Entry + target + SL together (broker-specific) | Disciplined intraday trades |
Settlement, circuits & corporate actions
T+1 settlement: India moved to T+1 for all stocks in 2023 — shares bought today reach your Demat account the next working day. An optional same-day (T+0) cycle has also been introduced for selected stocks.
Circuit limits: Exchanges set price bands (2%, 5%, 10%, 20%) for many stocks, and market-wide circuit breakers pause trading if indices fall or rise 10%, 15% or 20%.
Corporate actions: dividends, bonus issues, stock splits, rights issues and buybacks change your holdings or cash flows — always check record dates.
Fundamental vs technical analysis
| Fundamental analysis | Technical analysis | |
|---|---|---|
| Question | What should I buy? | When should I buy / sell? |
| Looks at | Revenue, profit, debt, ROE, P/E, management, industry | Price, volume, trends, patterns, indicators |
| Time frame | Months to years | Minutes to weeks |
| Best for | Investors | Traders |
Many successful market participants combine both: fundamentals to pick strong companies, technicals to time entries and exits. TradeSense IQ uses AI and Machine Learning to automate the technical side for 175 high-volume Indian stocks — showing clear entry, exit, stop-loss, target, risk-reward and strategy win rate.
Taxes on stock market gains (India)
| Type | Holding period | Tax (FY 2025-26 rules) |
|---|---|---|
| Short-term capital gain (STCG) — listed equity | 12 months or less | 20% |
| Long-term capital gain (LTCG) — listed equity | More than 12 months | 12.5% on gains above ₹1.25 lakh per year |
| Intraday | Same day | Speculative business income — slab rate |
| F&O | — | Non-speculative business income — slab rate |
| Dividends | — | Added to income, taxed at slab rate |
Securities Transaction Tax (STT), exchange charges, GST and stamp duty also apply. Tax rules change — confirm with a chartered accountant.
10 golden rules for Indian traders
- Always trade with a stop-loss.
- Risk only 1–2% of capital per trade.
- Aim for a risk-reward of at least 1:2.
- Trade with the trend — "the trend is your friend".
- Avoid tips from Telegram/WhatsApp groups and unregistered "advisers".
- Don't average a losing trade.
- Keep a trading journal.
- Learn F&O only after mastering the cash market.
- Keep emergency funds separate from trading capital.
- Use rules and tools — not emotions — to decide.
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Educational content only — not investment advice. Rules and tax rates mentioned are as understood at the time of writing and may change; verify with official sources (SEBI, RBI, Income Tax Dept.) or a qualified adviser.