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Stocks : A Brief History Of Their Origins

Stocks are basically the equity stakes of the owners of a firm. They are issued to raise capital by the government or corporate firms. The stock is first issued as an Initial Public Offering (IPO) and once listed; it can be traded in the secondary market. Stockholders are paid only after clearing all secured and unsecured debts.

History of Stocks

The history of the stock market dates back to the Roman Republic period when the state had leased out its services to the private companies. These companies issued stocks, which also used to fluctuate. The earliest known joint stock company is the East India Company.

Bombay Stock Exchange (BSE)

The Bombay stock exchange is the first stock exchange in Asia. In the year 1855, five stockbrokers used to meet under a banyan tree in front of Mumbai's town hall. The group kept increasing and finally moved to Dalal Street in the year 1874. It then became official and was known as the Native share and stock brokers association. It was however recognised by the Indian government only in the year 1957 as BSE. After that, there was no stopping. It is now a completely electronic platform and is also regulated by SEBI. Your stock broker will give you the option to trade on the BSE exchange where you can trade on the cash and the derivatives market. The benchmark index of BSE, Sensex, is a group of 30 liquid stocks.

National Stock Exchange (NSE)

The National stock exchange is a relatively new exchange in India and also the most popular one. It is located in Mumbai and was established in the year 1992. NSE was the first electronic exchange and allowed screen based trading. The Nifty is the benchmark index and is a list of 50 liquid stocks. You can also trade in the derivatives market on the NSE exchange.

Securities and Exchange Board of India (SEBI)

Since BSE was run by a group of people, there was no proper system to monitor and check the transactions. In the year 1980, traders felt the need for modernisation of the existing financial system. This gave birth to SEBI, which completely monitors and regulates the Stock exchanges in India and has full power to take action against any fraud. It was created in the year 1988.