Stock Market Basics · Lesson 2 of 14 · Updated October 2026 · 6 min read
The stock market is a regulated marketplace where buyers and sellers trade shares of listed companies. In India, almost all of this happens electronically on two stock exchanges, with a regulator watching over the whole system.
In short: You place an order through a broker. The exchange matches it with a seller. A clearing corporation makes sure money and shares change hands, and a depository holds your shares in your demat account. SEBI regulates all of them.
The main players
| Player | What it does | Examples |
|---|---|---|
| Stock exchanges | Run the marketplace where orders are matched | NSE (National Stock Exchange), BSE (Bombay Stock Exchange) |
| Regulator | Makes the rules and protects investors | SEBI (Securities and Exchange Board of India) |
| Brokers | Let you place orders on the exchange | Discount and full-service brokers registered with SEBI |
| Depositories | Hold shares in electronic form | NSDL and CDSL |
| Clearing corporations | Settle trades so both sides get what they are owed | Linked to each exchange |
Primary and secondary market
- Primary market: a company sells new shares to the public for the first time, through an IPO. Money goes to the company.
- Secondary market: investors buy and sell existing shares among themselves. Money goes to the other investor, not the company. This is what most people mean by “the stock market”.
What happens when you click buy
- You place an order on your broker’s app, say 10 shares of a company at ₹500.
- The broker sends it to the exchange.
- The exchange matches it with a seller’s order at that price.
- The trade is confirmed in seconds.
- Settlement happens the next working day (T+1): money leaves your account and the shares arrive in your demat account.
India moved fully to T+1 settlement in January 2023. An optional same-day (T+0) settlement also runs for a limited set of stocks, but T+1 remains the standard.
Market timings
The equity market is open Monday to Friday, except exchange holidays. A pre-open session runs from 9:00 to 9:15 am, and normal trading from 9:15 am to 3:30 pm. Special sessions, such as Diwali Muhurat trading, are announced separately.
Why prices move
Every trade needs a buyer and a seller. If more people want to buy than sell at the current price, the price rises until enough sellers appear. If more want to sell, it falls. News, results and the overall mood shift that balance.
Common questions
Is NSE better than BSE?
For an investor buying shares, both work. Most large companies are listed on both, and your broker usually picks the exchange with the better price.
Is my money safe with a broker?
Brokers are regulated by SEBI, your shares sit with a depository in your name, and funds you keep with a broker are subject to SEBI rules. Still, use a well-known SEBI-registered broker and check your holdings regularly.
Next lesson: Demat vs Trading Account: What You Need to Buy Shares → · See all 14 stock market lessons
Education, not investment advice. Figures and rules as of October 2026; check the latest before you act.