THE 5-YEAR-OLD VERSION
Imagine a pizza shop that wants to open three more branches but needs money. The owner cuts the shop into 1,000 slices and sells them to neighbours. Whoever holds a slice owns a tiny bit of the shop, and shares in its profits. The stock market is the town square where people swap those slices, and the price goes up when more people want a slice than want to sell one.
What you actually own
A share (or stock) is a small piece of ownership in a company. If a company has 100 crore shares and you own 100, you own one-millionth of it. You do not get to walk into the office, but you do get a claim on the company's profits, paid as dividends or reflected in a rising share price over time.
Where the trading happens in India
- NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) are the two big exchanges. Think of them as the organised marketplace with rules and screens that match buyers and sellers.
- SEBI (Securities and Exchange Board of India) is the regulator. It writes the rules and polices the market.
- A broker lets you place orders, and a demat account holds your shares electronically, like a bank account for shares.
Why prices move
A share price is simply the last price at which a buyer and a seller agreed. It changes every second because people keep changing their minds about what the company will earn in future: new results, interest rates, news, even mood. Prices move on expectations, not only on today's facts.
How the whole market has behaved
The Nifty 50 is a scoreboard of 50 large Indian companies. Here is its price from September 2007 to April 2026, on a log scale so that equal percentage moves look equal:
Two things to notice
The line climbs over the long run, and it fell very hard twice: about 60% in 2008 and 38% in early 2020. Both are true at once. The rest of this course is about living with both.