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How To Invest in Stock Market


 There are various ways through which One can invest in stock market and these are 

  • IPO 
  • Direct Investment in Stocks
  • Bonds
  • Derivatives
  • Mutual Funds
  • ETF
Any company's stock gets listed in Stock Exchange through Initial Public Offer (IPO). So this is the first point when company ready to sell its equity in the form of stocks to public or other institutions. Primarily, one can invest in stocks through IPO. We need to apply for the same. Apply for IPO is not a guarantee to get the stock. It is based on Bid price and allocation of the stocks by company.

If you are not getting stocks through IPO then no need to worry. We can by the same stock from secondary market directly through registered stock broker at available price. 

Bonds are issued with assurance of certain rate of interest by certain date. It is comparatively less volatile and safer. Bonds are also traded in stock  market. 

Derivatives are future contract of fixed number of stocks called LOT to be sold or bought at fixed price on certain date in future. Generally it is termed as Future and Option contracts or F&O contract. One can invest in stock through Future and Option contract by paying required margin only. No need to pay full amount to buy Future and Option contract. Through derivatives, one can invest in Index, Stocks, Commodities and currency also.

Mutual Funds are safest way to invest in stock market for the beginners who is not having knowledge of investing or having less amount to invest. One can invest in Mutual Fund through Systematic Investment Plan (SIP) also. In SIP, we need to invest fixed amount at specified date at fixed interval like weekly or fortnightly or Monthly or as specified by Mutual Fund.

ETF (Exchange Traded Fund) is similar to Mutual Fund. ETF offers diversified portfolio. It invests in index, stocks, commodities and other financial instrument. It is managed by professionals.  Some of the ETF gives opportunity to invest in foreign market also.


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