What is Nasdaq

What is Nasdaq

What is Nasdaq: If you purchase or sell an investment, you’re probably conscious that stocks are moving on markets that enable trading to occur. The most well-known exchange is the New York Stock Exchange, but the NASDAQ has also emerged as one of the biggest in the last quarter millennium. The Nasdaq Stock Market is one of the two largest inventory markets in the United States throughout the business group. The Nasdaq, founded in 1971 was the world’s first electronic stock market to supply inventory quotes. The Nasdaq subsequently added to the ability to manage business electronically, purchase and distribute instructions to shares traded on the shelves instead of on the New York stock exchange.

What is  Nasdaq
What is Nasdaq

Now, the Nasdaq has developed into an international leader, taking complete benefit of technological developments to offer high-tech businesses the natural place to register their stocks. Some of the world’s largest companies are mainly mentioned on the Nasdaq and confirm their position in the financial world.

It is the second-largest inventory exchanges in the world on the basis of market capitalization and full form Is  National Securities Dealers ‘ Automatic Quotation System. It trades both designated inventories and OTC inventories. The most technological stocks are traded as a general rule. The ticker sign can be checked quickly to see if a firm is listed on the NASDAQ. (E.g., Dell Computers= DELL, Dell=MSFT= DELL).

Apple, Amazon, Microsoft, Facebook, Gilead Sciences, Intel and Oracle are major inventories that trade on NASDAQ.

The  Creation of NASDAQ || How Nasdaq was Created

1971 saw the establishment of the world’s first electronic stock market by the National Association of Securities Details (NASD). The NASDAQ could not carry out the trade when it opened its gates on 7 February 1971. Rather, automated quotes were given. The NASDAQ frequently supported OTC Trading in the years preceding its inception, which meant that NASDAQ was synonymously synonymous with OTC, often known in newspapers and trade publishers as an otc industry. It then introduced automated trading facilities to produce trading and quantity accounts and became the first internet trading exchange. Rapid up until the present day–the NASDAQ lists over 3,700 businesses with the biggest amount of business in the United States. Companies trading on the NASDAQ valued over $10 trillion.

City Street Photo
What is Nasdaq

A NASDAQ history demonstrates a background of breakthrough achievements. It was the first exchange to open an online site, was the first one to store cloud documents and to distribute its technology to other dealers. The first exchange to give electronic trade was also the first.

Trading hours of Nasdaq

Just like Indian Share Market timings of Sensex and Nifty is 9:15 AM to 3:30 PM in similar way

The NASDAQ is open for trade from 9 am, as is the case with the New York Stock Exchange (NYSE). And 16:30 p.m. ET. AND. Nevertheless, NASDAQ provides “pre-market” and “post-market” traders times. The hours preceding the delivery shall be 4:00 AM to 9:30 AM ET and the hours post-market shall be 16:30 PM to 8 PM ET.

The First Mover is Nasdaq  is it true

The Nasdaq is proud of its innovative position. The Exchange was also the first portal to be launched in 1996, as well as electronic origins. In 2004, the Nasdaq was a pioneer in double lists, wooing multiple businesses that are mentioned on the New York Börse to attempt to trade their stocks on both main US bourses. The Nasdaq also performs a vital role in promoting technology implementation in financial operations. The bursary was the first company to implement its own bond management machinery and promoted the use of its company instruments globally from Hong Kong to Latvia. In 2012, Nasdaq started with cloud-based solutions, including management of data and equipment and statutory record storage.

Listing Requirments For Nasdaq

A business must fulfill certain criteria depending on its finances, liquidity and corporate governance in order to be listed on the NASDAQ electronic exchange, be recorded with the Securities Exchange Commission (SEC) and have at least three market makers. Once their request is presented, approval of their registration may take between 4 and 6 weeks.

US Market Tiers of Nasdaq

Based on the listing requirements, the stock of a company will be recorded in one of the following three market segments. The most stringent criteria must be met by companies registered in the Global Select Market, while those mentioned in the Capital Market must meet the least stringent criteria.

Global Select Market

This composite consists of 1,200 U.S. and international companies ‘ stocks and is weighted on the basis of market capitalization. As I stated earlier, the businesses listed here have to meet the greatest norms of NASDAQ. Global market listings are surveyed annually by the Listing Qualifications Department of NASDAQ and, if eligible, will move them to the Global Select Market.  Global Market NASDAQ’s Global Market is made up of 1,450 stocks of U.S. and globally listed companies. It is regarded as a mid-cap industry.

Capital Market

Once the SmallCap Market has been called before NASDAQ has modified its name, you will discover a big list of businesses with lower market capitalizations.

Performance  of Nasdaq

Because the NASDAQ is mainly made up of tech stocks, in the last quarter millennium, its general output was very powerful. As of June 2018, a 5-year yield of 155 percent and 240 percent over ten years was recorded by the NASDAQ-100 cpi, which contains the top 100 stocks in the portfolio. In the meantime, its Biotechnology Index recorded a yield of 138% over 5 years and a return of 312% over 10 years.

Nasdaq Makeup

NASDAQ now has about 3,200 publicly traded companies and is the second NASDAQ now has about 3,200 publicly traded companies and is the second-biggest stock exchange (in terms of the merits of its securities) and the biggest electronic stock market. NASDAQ trades stocks in a multitude of kinds of companies— including capital products, sustainable and non-sustainable customer products, power, finance, health care, government services, infrastructure, and transportation — but it is most well-known for its high-tech stocks.d biggest inventory exchange (in terms of currency valuation) and the biggest digital inventory market.

Companies must fulfill particular economic requirements to be mentioned on the NASDAQ National Market. They must retain a stock price of at least $1, and the outstanding stock value must be at least $1.1 million in total. There is the NASDAQ Small Caps Market for larger businesses that are unable to satisfy economic demands. As eligibility shifts, NASDAQ will move businesses from market to market.

Nasdaq History

The NASDAQ launched on Feb. 8, 1971, founded by the National Association of Securities Dealers. Trading more than 2,500 over-the-counter securities started the world’s first electronic stock market. The NASDAQ was a computer board-type board scheme at the moment. At first, there was no real trade between buyers and vendors. Instead, by reducing the gap between the bid price and asking stock price, the NASDAQ evened the chances of the traders. The NASDAQ Composite took a big hit after the dot-com bubble burst of the early 1990s, falling from over 5,000 to below 1,200, thanks to its tech-heavy nature.

1975 – NASDAQ invents the contemporary IPO (Initial Public Offering) by listing venture capital-supported businesses and enables underwriting trade unions to act as business manufacturers.

1985 –NASDAQ produces an index of NASDAQ-100.

1996 – The website of the first swap, www.nasdaq.com, is going live.

1998 – NASDAQ merges to create the NASDAQ-AMEX Market Group with the American Stock Exchange. (AMEX was purchased and incorporated into the NYSE by NYSE Euronext in 2008.)

2000 – NASDAQ affiliation acts to restructure and split NASDAQ into the NASDAQ Stock Market, Inc., a publicly-traded shareholder-owner for profit.

2007 – NASDAQ acquires OMX, a Finnish-Swedish economic firm, and shifts its name to the NASDAQ OMX Group. The Boston Stock Exchange is purchased by NASDAQ OMX.

2008 – NASDAQ OMX purchases the Philadelphia Stock Exchange, the United States ‘ largest inventory exchange

2009 – NASDAQ OMX is creating an industry-first portable web variant of nasdaq.com.

Indexes Of Nasdaq

The NASDAQ, like any stock exchange, utilizes an index, or a set of stocks used to produce a snapshot of business results. The NYSE provides its main index with the Dow Jones Industrial Average (DJIA), and NASDAQ provides the NASDAQ composite and NASDAQ 100.

The NASDAQ Composite Index estimates the shift in more than 3,000 shares traded on NASDAQ, while the DJIA lists 30 large firms ‘ highs and troughs. The NASDAQ composite is often referred to as “the NASDAQ” and is the most frequently cited index by economic journalists and reporters.

NASDAQ 100 is an altered capitalization-weighted index consisting of the 100 biggest enterprises in market value trading on NASDAQ. Though the biggest are usually technology-related, these businesses cover a variety of business areas. Depending on their market value, companies can be incorporated and withdrawn from the NASDAQ 100 every year.

Both NASDAQ Composite and NASDAQ 100 include non-U.S. corporations as well as American corporations. This is different from other significant indexes since the DJIA does not include overseas firms.

I hope you like my post  if you like to know about cryptocurrency then you can see my other section of cryptocurreny

What is Swing Trading

What is Swing Trading

Explanation of Swing Trading

What is Swing Trading: Swing Trading is a trading style that tries to capture inventory profits (or any economic tool) over a period of a couple of days to several weeks. Swing traders mainly search for trading possibilities using technical analysis. In addition to evaluating price trends and patterns, these traders can use fundamental analysis. The goal of swing trading is to capture a chunk of a potential price move. While some traders seek out volatile stocks with lots of movement, others may prefer more non-volatile stocks. In either case, swing trading is the process of identifying where an asset’s price is likely to move next, entering a position, and then capturing a chunk of the profit from that move. Successful swing traders only seek to catch a portion of the price change anticipated, and then move on to the next chance.

Swing Trading

Swing Stocks Trade is one of the most common types of active trading, where traders use multiple types of technical analysis to search for intermediate-term possibilities. You should be closely acquainted with technical analysis if you are interested in swing trading. On a risk/reward basis, many swing traders evaluate trades. By analyzing an asset chart, they determine where they’re going to enter, where they’re going to put a stop loss, and then anticipate where they can make a profit. If on a setup that could reasonably yield a gain of $3, they risk $1 per share, that’s a favorable risk/reward. On the other hand, it’s not as favorable to risk $1 to make $1 or just make $0.75.

On a risk/reward basis, many swing traders evaluate trades. By analyzing an asset chart, they determine where they’re going to enter, where they’re going to put a stop loss, and then anticipate where they can make a profit. If on a setup that could reasonably yield a gain of $3, they risk $1 per share, that’s a favorable risk/reward. On the other hand, it’s not as favorable to risk $1 to make $1 or just make $0.75.

Due to the short-term nature of the trades, swing traders mainly use technical analysis. That said, to improve the analysis, fundamental analysis can be used. For instance, if a swing trader sees a bullish configuration in stock, they might want to check that the asset’s fundamentals look beneficial or are also improving.

Day Trading  vs  Swing Trading

Holding time for positions is the difference between Swing Trading and Day Trading. Swing trading includes an overnight hold at least, while day traders shut down positions before the market shuts down. Trading positions for the day are restricted to one day. Trading in swing includes holding for days to weeks.

The swing trader incurs the unpredictability of overnight danger such as gaps against the position up or down by keeping overnight. Swing trades are generally performed by taking on the overnight risk compared to day trading with a lower position size (assuming the two traders have likewise sized accounts).

Swing traders also have a 50% margin or leverage. For example, if the trader is approved for margin trading, they need only put up $35,000 in the capital for trading with a current value of $70,000.

Tactics of Swing Trading

A Swing Trader tends to look for patterns of multi-day charts. Some of the more prevalent motifs include moving average crossover patterns, cup-and-handle patterns, patterns of head and shoulders, flags, and triangles. In relation to other indices, key inversion candlesticks can be used to develop a strong trading scheme.

Every Swing Stocks Trader ultimately designs a plan and approach that provides them an advantage over many businesses. This includes searching for trade configurations that tend to lead to predictable movements in the cost of the asset. It’s not simple, and every moment no strategy or configuration operates. Winning every moment is not needed with a favorable risk/reward. The more favorable a trading strategy’s risk/reward is, the fewer times it requires to win to generate an general profit over many trades.

Swing Trading
Swing Trading Opportunities in Reliance Share

In the above diagram, you can see that you have opportunity to buy reliance at Rs around 1226 and after that, there are a continuous 8-9 bullish candlesticks and you have opportunity to sell the stocks after Doji formation candle. In this case, you can buy reliance at Rs 1226 with a stop loss of Rs  1210  and sell at around 1380 so profit you can earn (1380-1210) =170 per share.

How Does Swing Trading Work?

Swing Trading utilizes technical analysis to determine if, in the very near term, specific stocks may or may not go up or down. By examining technical indicators, day traders are looking for stocks that have momentum in price movements— indicating the best times for buying or selling. Swing traders are not worried about a specified stock’s long-term value. Swing Trading is dangerous, though based on sound methodology. The successful swing trader focuses solely on locking up significant profits in short time spans, making the approach particularly susceptible to unexpected financial shocks (e.g. oil shortages, elevated interest rates, etc.).Some Swing Trading Strategies are below

Swing Trading Guide For Bullish and Bearish Traders

Swing Trading is a technique of short-term trading that can be used to trade stocks and alternatives. While Day Trading positions last less than one day, Swing Trading positions typically last between two and six days but can last for as long as two weeks. Swing trade is aimed at identifying the general trend and then capturing profits within that trend with swing trading. Technical analyses are often used to assist traders to take advantage of the present safety trend and hopefully enhance their businesses. Day trading and swing trading require particular hazards and commission expenses that vary and exceed the typical investment strategies. Most swing traders are working with the chart’s primary trend. If the security is in an uptrend, by purchasing stocks, calling alternatives, or futures contracts, the internet trader will “go long” that security. If the general trend is down, the trader could either purchase brief stocks or futures contracts or put options. There is often no bullish or bearish trend, but safety moves in a somewhat predictable pattern between parallel resistance and support regions. The lowest point achieved before it pulls back is the resistance when the industry moves up and then pushes back. The assistance is the highest point achieved before it climbs back as the market continues to rise again. In this situation too, there are swinging trading possibilities, with the trader taking a long stand near the support region and taking a brief stand near the resistance region.

Bullish Traders  are playing the uptrend

In a straight line, trending stocks rarely move, but in a step-like pattern instead. An inventory could go up for several days, for instance, followed by a few steps back over the next few days before heading south again. If several of these zig-zag patterns are linked together and the graph appears to be moving higher with some degree of predictability, it is said that the inventory is in an uptrend.

As a bullish swing trader, you should look for an original upward motion as the main portion of a trend, followed by a reversal or inversion, also known as the “counter-trend.” Then, following the counter-trend, you’ll want to see the original upward motion resumed. Approximate trade reward is the distinction between the profit goal and the entry point. The distinction between the entry point and the stop-out point is the estimated risk. Consider using two-to-one as a minimum reward-to-risk ratio when determining whether it is worth entering a swing trade. At least twice as much as your potential loss should be your prospective profit. The trade is deemed better if the proportion is greater than that; if it is smaller, it is worse.

Bearish traders are capturing downside profits

It is also possible to apply tactics used to take advantage of the uptrend to trade the downtrend. Again, since predicting precisely how long a bear rally or “counter-trend” can last is very hard, you should join a bearish swing trade only after the inventory seems to have continued downward. To do this, take a close look at the bear rally. If the inventory heads below the low of the past day’s counter-trend, a bearish stance could be entered by the swing trader. Again, only after evaluating the potential risk and reward should you enter a swing trade. As with bullish swing trades, the entry point would be compared to the stop-out and profit target points to analyze the potential rewards and trade risks. The stop-out point is the largest cost of the latest counter-trend on a bearish swing trade. So if the inventory grew above this cost, you’d be exiting the trade to minimize losses. The profit goal is the last downtrend’s smallest cost. So if the inventory has reached this or reduced cost, you should consider at least leaving someplace to lock in some profits. The distinction between the entry point and the profit objective is the trade’s targeted reward. The assumed risk is the distinction between the stop-out point and the entry point. A two-to-one or higher reward-to-risk ratio is preferred.

If the reward-to-risk ratio is acceptable, as with bullish swing trades, you can join your trade using a sell-stop limit order. This would lead to the short sale of the inventory once it reaches your entry point. Selling short is the process of borrowing and selling shares from your online broker in the open market with the intention of buying back the shares for lower costs in the future. Buying an in-the-money put option would be an alternative to short selling. You would use a conditional order to purchase the set after the inventory reached the entry price if you choose to use alternatives.

How to invest in the share market

How to Invest In Share Market

How to Invest in the Share Market: In this article, we are talking about how you can invest in the share market before discussing how to invest in the share market we are talking about What is Share Market Share Market is a market in which buying and selling of shares takes place for investing in Stock Market you should have some accounts requirements.

In this article we are talking about how you can invest in the share market before discussing how to invest in the share market we are talking about What is Share Market Share Market is a market in which buying and selling of shares take place for investing in Stock Market you should have some accounts requirements.

The method of investing and trading in the Indian Share Market may seem a little complex as a beginner investor. It requires you to open some accounts and perform some formalities. If you’re looking to invest in the Share Market, you don’t have to look any further but read the following method that allows you to begin trading as soon as possible. Nifty and Sensex are he two indices in Share Market

There are two types of market in the Share Market :

1.Primary Market: Primary Market Is the Market in which fresh buying and selling of shares take place.

For instance, for the first time IPO(Initial Public Offerings) is the process of offering shares to the public in a private corporation.
The vital issuance of the market takes place either through open problems or through a personal situation. Under the Companies Act, 1956, if it results in a fraction of securities for 50 or more economic experts, a problem is referred to as open. Nonetheless, it is recognized as a personal scenario when the backer makes a securities problem to a select collection of individuals that do not exceed 49 and is neither a rights issue nor an open problem.

2.Secondary Market: Secondary market is the market where shares are already issued that are traded or listed on the Stock Exchange on the primary market. Secondary market comprises equity, derivatives and debt markets. The secondary market is controlled by two media, namely the market of Over-the-Counter (OTC) and the market of Exchange-Traded. OTC markets are unofficial markets that negotiate trades.

How to Invest In Share Market Some Tips

With the introduction of technology, it has become simple to put cash on the stock market.

This is also one reason why too often poor investments occur.

On the other hand, excellent stock data is also accessible free of charge.

For an investor, access to reliable stock data from the internet has become simpler.

Besides this, one can follow the processes below to effectively invest in stocks

Have a Clear Objective

In order to guarantee efficient inventory investment, the ‘ objectives ‘ must first be obviously stated. The individual must understand why he/she is first purchasing that stock before purchasing the first inventory. It is key to define clear and quantifiable objectives. Never purchase an inventory without allocating a goal to it

Expect Real Returns 

Share Investment can yield elevated yields. But expecting rationally is also crucial. A fairly healthy share can generate a yield of 12 percent p.a. on average (in India). Some stocks will be able to get more, and some will get less. So, on average –it will be realistic to expect yields in the range of 10% to 15%.

Used free Money

Invest in stocks only free money. What’s Cash Free? The extra money that will not disturb your peace of mind, even if lost. It can be as small as Rs.500 this cash. Assess your own “free money level” and set it as a monthly budget. To invest in the share market, use only this budgeted free money.

Build the list of stocks

Never randomly purchase inventory. Always purchase your watch list shares. How to construct this list? Add the stocks you believe are useful to the list. When to purchase? If the cost of these shares drops by more than 8-10%, it may be a purchase time. But they do a final check on these stocks before purchasing them. How to finalize the check

How to Invest In Share Market

Get a Pan Card

Mostly everyone has a PAN card regardless of being an investor. But your PAN card may have some error about your name or otherwise. The permanent account number written on the PAN card is a mandatory necessity in our nation for the execution of any financial transaction. So the main thing you need to purchase internet stocks is to have a PAN card that is error-free.

Hire a Stock Broker

The stock market is not a place to go straight to purchase money stocks. The stock exchange authorizes certain particular individuals to perform the purchase and sale of stocks. These are referred to as stockbrokers or brokers. You need to employ a broker to help you buy internet stocks and fulfill all other formalities needed to join the Indian share market. Keep in mind that you should only employ a brokerage company that charges a flat brokerage fee instead of a commission on your transaction as it would in many respects be less costly.

Opening Demat and Trading Account

Once you’ve recruited a stockbroker, you’ll have to open a Demat and a Trading account next thing. Since the shares are no longer in the physical form, your shares will be held in digital and dematerialized form by the Demat account. Whenever you buy or sell shares in the share market, the number of shares in and out of your Demat account will be credited and debited.

A Trading account covers the purchase and sale of stocks. It connects your Demat account to your bank. It’s just like you open a savings account in a bank. It requires from the Demat account the shares you have and sells them in the stock exchange. Usually, after opening your Demat and Trading account, your stockbroker performs this process.

Opening Bank Account and Linking with Demat Account

You need to have your Demat and Trading account connected to your bank account. The amount of money will be debited from your bank account when you purchase shares, and the shares will be credited to your Demat account. When you sell shares, the amount of money will be credited to your bank account, and the number of shares will be debited to your Demat account.

You must have a bank account to obtain shares in your Demat account (when you purchase stocks) and cash in your bank account (when you sell stocks), and for a smooth transaction, it should be connected to your Demat and Trading account.

Check Need of UIN (Unique Identification Number)

You need to verify whether you need a UIN number for share market trading. UIN number is only required if you intend to participate in a single Rs.1,00,000 or higher transaction. If you don’t have a UIN, you’re not going to be able to make transactions equal to or higher than Rs 1 lakh.

Purchase and Sell the Shares

You can begin trading on the Indian share market after all the formalities are finished and you can purchase or sell stocks. You need to say your stockbroker the business name, the admission cost, and the complete amount of shares you want to purchase for this. For instance, if you want to purchase 100000 XYZ business stocks at Rs 900, which is presently trading at Rs 1050, you can ask your stockbroker to purchase 100000 stocks as quickly as the price falls to 900 and vice versa is also there.

If the purchase or sale order reaches its expiry date, your stockbroker will notify you of the same and cancel the order. Once it is removed, you can place the same order again.

Let’s make What is Sensex and Nifty

What is the Sensex

Sensex And Nifty Definition

Sensex Full Form: Are you looking to know about What is Sensex and Nifty so in this article you can easily understand about Sensex Meaning and Full Form of Nifty. I have covered

What is the Sensex and how it is calculated

Different points between Nifty and Sensex

What is Free Float Market Capitalization

Past Performance of Nifty And Sensex

What is the Sensex and Nifty
What is Sensex and Nifty

What does the Index Mean? Index definition is “An index is a statistical aggregate that changes measurements.” Recall this throughout this post–’ statistical aggregate.’ Not all indexes are the same–they can be differentiated on the basis of countries, the stock market cap they cover, or even how any stock becomes part of the index. Sometimes I feel that even building an index is an art and not science Sensex & Nifty are both big cap indexes but BSE NSE from various inventory exchanges.

What is Sensex?

Sensitivity Index is the Full Form Of Sensex

When the Sensex comes up, people are pleased and angry when it comes down. 

Sensex is the Bombay Stock Exchange or BSE stock market index – it is also known as BSE Sensex.

What does Sensex Mean

It is the market-weighted stock index of 30 firms chosen based on economic soundness and results. Usually big and well-established firms are selected to represent the different industries. Here is the list of Top 30 Companies in Sensex India

1. Housing Development Finance Corporation Ltd.

2. Cipla

3. State Bank Of India

4. Adani Ports and Special Economic Zone Ltd.

5. Asian Paints Ltd.

6. Bajaj Auto Ltd

7. Bharti Airtel Ltd.

8. Coal India Ltd.

9. Dr. Reddys Laboratories Ltd.

10.Hero MotoCorp Ltd

11. Hindustan Unilever Ltd.

12. Hindustan Unilever Ltd.

There are many more remaining companies in Sensex which was first published in 1986. Sensex’s base value is 100 and its foundation year is 1978-79.

Full market Capitalisation of Sensex in Aug 2019 is 6,729,251.20 crores and free float is 3,740,148.93 crores

Over the years, how did the Sensex perform?

Here’s a chart showing Sensex’s value from the beginning –

Sensex Past Performance



How is the calculation of Sensex?

Using the Free-float market capitalization technique, the Sensex is calculated. The index represents the free-float market value of the 30 constituent stocks in relation to a base period in this technique.

What is Free Float Market Capitalization?

Free float stands for trading open shares. Not all shares may float freely. Some may be promised, some may be in the hands of individuals or bodies that control interest/promoters, some may be public holdings, etc. Such locked-in stocks are not regarded as floating freely.

To discover a company’s Free-Float Capitalization, first discover its market cap, the number of exceptional stocks multiplied by share price, and then multiply its free-float factor. The proportion of floated stocks to excellent determines the free-float factor. For instance, if a company has a float of 10 million shares and 12 million outstanding shares, the float to outstanding percentage is 83 percent. A business with a free float of 83 percent falls in the free-float factor of 80 to 85 percent, or 0.85, which is multiplied by its market cap. Twelve million shares multiplied by 10 dollars per share, then multiplied by 0.85 equals 102 million dollars in free-float capitalization.

What do you mean by Market Capitalization?

Market capitalization is the combined value of all the stocks in the stock exchange of separate businesses.

A company’s market capitalization is achieved by the product of its stock price and the amount of the company’s issued shares.

To determine the free-float market capitalization, this figure is multiplied by the free-float factor. The free float factor is obtained from the data the free-floating shares are submitted by each business. Every business must provide the data in a format provided by BSE on a quarterly basis.

All companies ‘ free-float market capitalization is summed up.

In order to get the Sensex value, the free-float market capitalization is then divided by an index divisor. This divisor is adjusting for stock modifications and other corporate shares. The divisor is the base year value of the Sensex Index.

How Does Sensex work -In the following example describes the working methodology of Sensex

Suppose there are two companies in the Index -A and B

Company A has 1000 stocks out of 600 are float freely or are accessible to purchase and sell to the general public.TEach Stock cost is Rs 100

Company A has 1500 stocks out of 800 are float freely or are accessible to purchase and sell to the general public.TEach Stock cost is Rs 120

Market Capital of Company A is 100000

Market Capital of Company B is 1200000

Free Float Factor of Company A is 0.60

Free Float Factor of Company B is 0.53

Total free-float market Capitalization of index =(100000*0.60+1200000*0.53)=696000

let us assume the base year of the index was 10000

value of the index is (696000/10000)*100=6960

Since India opened its economy in 1991, the BSE Sensex has witnessed enormous development. Growth occurred primarily in the 21st century, rising from a close of 3,377.28 in 2002 to a high of 20,286.99 in 2007 in August 2018. Growth happened primarily on the back of development in India’s gross national product (GDP) since the turn of the century, which ranks among the world’s fastest.

What is Nifty

India’s leading stock exchange is the National Stock Exchange (NSE). NIFTY’s Full Form is “National Stock Exchange Fifty,” the wide NSE index. NIFTY usually consists of 50 stocks, but 51 stocks are currently in existence. It’s called NIFTY 50 or Nifty CNX. India Index Services and Products Ltd. (IISL) owns and manages it.

The Nifty index base period is November 3, 1995. 

The index’s base value was laid at 1000 and a 

Rs 2.06 trillion base capital.

Which Firms belong to the NIFTY 50?

For businesses that have to be met, there are certain eligibility criteria–
Liquidity –The inventory should have traded at an average impact price of 0.50 percent or less over the past six months, for 90 percent of Rs. 2 crores portfolio observations.

Float adjustment–Companies must have at least twice the float-adjusted market capitalization of anything that constitutes the present lowest index constituent.

Domicile: The firm should be headquartered in India and trading on the NSE.

How has the NIFTY gone through the years?

The Graph of Nifty Past Performance –

Full Form Of Nifty
Nifty

NIFTY 50 is calculated using a free-float market capitalization-weighted method in

 which the index level reflects the total market value of

 all the stocks in the index relative to a given base period. 

Here is the mathematical formula for NIFTY – market capitalization = equity capital x price free-float market capitalization = equity capital x price.

Index Value = Current Market Value / Base Market Capital x Base Index Value (1000)

What is a Fixed Income Security

Fixed Income Security

Fixed Income Security which is an investment that provides periodic interest payments and returns of principal at maturity. Unlike any other variable –income securities such as short term interest rates the payments of a fixed-income security are known in advance.

The most common type of Fixed-Income Security is a bond that promises to make a series of interest payments in fixed amounts and to repay the principal amount at maturity. There is an inverse relationship between the market interest rate and the value of the bond. If the interest rate increases the price of the bond decreases. Bonds Rating are based on their relative probability of default because investors prefer bonds with lower probability of default, bonds with lower credit quality must offer investors higher yields to compensate for the greater probability of default will decrease the price of the bond thus increasing its yield.

Features of a Fixed Income Security

The features of a fixed income security include specification of :

  • The issuer of the bond
  • The maturity date of the bond
  • The par value (principal value to be repaid)
  • Coupon Rate and Frequency
  • Currency in which payments will be  made

Bonds are mostly comprised of Corporate Bonds and Government Bonds and can have various maturities and face value amounts. A prime example of Sovereign National Government bonds is US Treasury Bonds but many countries issue sovereign bonds

Types of Fixed Income Security 

Treasury Notes(T notes) are issued by the U.S Treasury and are intermediate-term bonds that mature in two, three, five or 10 years. T-notes have a face value of $1000 and pay semiannual interest payments and principal repayments of all treasury are backed by the US Government. Another type of fixed income security is Treasury bonds (T-bonds ) which matures in 30 years.

Bond Maturity

Bond Maturity date is the date on which the principal is to be repaid. Once a bond has been issued, the time remaining until maturity is referred to as the term to maturity or tenor of a bond.

When bonds are issued, their terms to maturity range from one day to 30 years or more. Both Disney and CocaCola have issued bonds with original maturities of 100 years. Perpetual bonds are the bonds which have no maturity date. There is another short term fixed income securities include Treasury Bills. T-bills mature within one-year issuance and doesn’t pay interest. Investors are paid the face value amount when the bills mature. The interest earned or return on the investment is the difference between the purchase price and the face value amount of the bill.

What is Fixed Income

Par Value 

The principal amount that will be repaid at maturity is called the par value of a bond.

Coupon Payments 

The coupon rate on a bond is the annual percentage of its par value that will be paid to bondholders.

Currencies 

Bonds are issued in different currencies. A dual Currency bond makes coupon interest payments in one currency and principal repayment at maturity in another currency.

Money Market Instruments 

Money Market Instruments include securities such as commercial paper ,banker’s acceptance ,certificate of deposit(CD),and Repurchase agreements(“repo”).Treasury bills are technically included in this category, but due to the fact that they are traded in such high volume, they have their own category here.

Share Market: What is the Stock Market?

What is Stock Market

The market that purchases sell and issues regular stocks is known as the Stock Market. This sort of activity takes place through Exchange Traded Fund or Over The Counter Market (OTC). Exchange-Traded Market is the market for buying and selling stocks listed on the stock exchange such as NYSE, NSE, BSE, etc. Stock Exchange is another term for the Stock Market, the Share Market Subset. The major inventory exchange is the NYSE(New York Stock Exchange), Nasdaq, BSE(Bombay Stock Exchange) and NSE(National Stock Exchange).

In Stock Market Trading not only of shares or equity but also of other economic assets such as exchange-traded funds (ETF), corporate bonds and stock-based derivatives, commodities, currencies, Fixed Income Securities, etc.

Purpose of the Stock Market  

Two very significant purposes are served by the share or stock market. The first is to provide businesses with capital that helps them use the fund and grow the company. For instance, if a company issues 5 million shares that initially issue an IPO (Initial Public Offerings) with a face value of $20 per share, then the company receives some Investment Bank charges of $100 million of the capital to arrange such offers.

The secondary purpose of the Stock Market Service is to offer investors profit in the form of a regular dividend in order to gain profit there is another way in which investors can gain earnings by selling stocks greater than the Stock Exchange Purchase Price.

How  Stocks  are Traded  in Exchanges and OTC

Stocks are mostly traded on stock exchanges such as the New York StockExchange(NYSE) or the USA NASDAQ, NSE(National Stock Exchange) in India. Stock Exchange is the marketplace where investors buy and sell stocks or shares. Stock exchanges are regulated in the United States by government agencies such as SEC(Securities and Exchange Commission), SEBI(Securities Exchange Board Of India), which protects investors from fraud and keeps the exchange market smoothly functioning. You know about the scam of Harshad Mehta, an Indian stockbroker involved in a huge manipulation of stock.

While most stocks are traded in stock exchanges, some are traded on Over The Counter Market, where buyers and stock vendors are frequently traded through a dealer. OTC Market is not controlled by Govt Agencies

Types of Market 

1.Primary Market: It is the market where the first time on the market-fresh issuance of shares is traded. Under the Companies Act, 1956, if it results in a fraction of securities for 50 or more economic experts, a problem is referred to as open. Nonetheless, it is recognized as a personal scenario when the backer makes a securities problem to a select collection of individuals that do not exceed 49 and is neither a rights issue nor an open problem. 

2.Secondary Market: Secondary market is the market where shares are already issued that are traded or listed on the stock exchange on the primary market. Secondary market comprises equity, derivatives and debt markets. The secondary market is controlled by two media, namely the market of Over-the-Counter (OTC) and the market of Exchange-Traded. OTC markets are unofficial markets that negotiate trades.

Key Securities Market Indicators.

Index: An index is used to provide information on the budgetary, commodity or some other market value trends of products. The purpose of financial exchange documents is to capture the overall behavior of the value markets. The exchange of securities file is produced by selecting a collection of stocks that illustrate the entire market or a predetermined region or market section. NSE’s bluechip record is CNX Nifty.

Market Capitalisation: Market capitalization is described on the exchanges of the country as the value of all listed stocks. It is calculated daily. A specific company’s market capitalization on a specific day. The number of excellent shares and the closing cost of the share can be calculated as the product. The amount of excellent shares here relates to the stock’s problem size.

Market capitalization = share price closure * Outstanding number of stocks

Market Capitalisation Ratio:  The market capitalization ratio is described as GDP/divided stock market capitalization. It is used as a stock market size metric.

Turnover: By multiplying the traded quantity with the price at which the trade takes place, the turnover for a share is calculated. Similarly, we aggregate the traded value of all the businesses traded on the Exchange in order to calculate the turnover of the businesses listed on the Exchange.

Turnover Ratio:  The turnover ratio is defined as the total value of shares traded on the stock exchange of a country for a specific period divided at the end of the period by market capitalization. It is used as a measure of stock market trading or liquidity