Share market basics
How easily and quickly an asset can be bought or sold at a stable price; high liquidity means many buyers and sellers and tight spreads.
Liquidity describes how easily you can buy or sell something without moving its price. A liquid stock like SBI trades crores of shares a day, so a 1,000-share order fills instantly at a price a few paise from the last trade. An illiquid small-cap may trade a few thousand shares a day, and your 1,000-share sell order could push the price down 3% or sit unfilled. Liquidity shows up in the spread between bid and ask, the depth of the order book and the daily volume. It also disappears when you need it most: in a panic, buyers vanish and even large stocks gap. Options far from the current price and long-dated futures are often illiquid, with wide spreads that eat into any edge. Before trading anything, check volume and the order book, and use limit orders where liquidity is thin.
VideoA share is a portion of a company. The share market is where those portions change hands. Here is how it works, what you can trade in it, and why most people who trade actively lose money.
VideoThe share market runs on two activities that look alike and are nothing alike. Investing is owning a business for years. Trading is profiting from price moves over hours or weeks. Mixing them up is behind most early losses.
VideoTrading comes in a few distinct forms, and the one you pick decides how much time, capital and stress it takes. This lesson explains intraday, swing, positional, futures and options trading with Indian examples.
