How to earn huge profit from Stock Market?
A complete guide to the basics of making money in the stock market. If you are considering investing in the stock market, you must read this article. We have explained all the concepts and talked about all the myths that people have about the stock market and shares.

What are stocks?
Stock can be explained as a share in the ownership of a company. A stock represents a claim on the company's assets and earnings. As you acquire more stocks, your ownership stake in the company becomes greater. Some times different words like shares, equity, stocks etc. are used. All these words mean the same thing.

Holding a company's stock means that you are one of the shareholders of a company and, as such, you have a claim to everything the company owns. This means that technically you own a tiny little piece of all the furniture, every trademark, and every contract of the company. As an owner, you are entitled to your share of the company's earnings as well. These earnings will be given to you. These earnings are called dividends and are given to the shareholders from time to time.

For starting trading online, you need to have a demat account. Once you open the demat account selling and buying stocks can be done just by a few clicks.

Why companies issue stocks?
Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods come under debt financing. On the other hand, issuing stock is called equity financing. Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way. It is important that you understand the distinction between a company financing through debt and financing through equity. When you buy a debt investment such as a bond, you are guaranteed the return of your money along with promised interest payments.

There are no guarantees when it comes to individual stocks. Some companies pay out dividends, but many others do not. And there is no obligation to pay out dividends. Without dividends, an investor can make money on a stock only through its appreciation of the stock price in the open market.

What are the Sensex & the Nifty?
The Sensex is just an index (An index is basically an indicator). It gives you a general idea about whether most of the stocks have gone up or most of the stocks have gone down. The Sensex is an indicator of all the major companies of the BSE (Bombay Stock Exchange) and The Nifty is an indicator of all the major companies of the NSE (National Stock Exchange). If the Sensex goes up, it means that the prices of the stocks of most of the major companies on the BSE have gone up. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE have gone down.

he BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. There are other stock exchanges like the Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE.Most of the stock trading in the country is done though the BSE & the NSE. Besides Sensex and the Nifty there are many other indexes. There is an index that gives you an idea about whether the mid-cap stocks go up and down. This is called the "BSE Mid-cap Index". There are many other types of indexes.