How stock market works

The very first sale of stocks to the public is called an initial public offering (IPO), and occurs on the primary market. So you can track the market in real time, analyze trends as they happen, and take action when the time is right. You'll also find a wide range of investing products and services to help you plan toward financial independence — however you define it. Corporations sell stock to the public as one way to raise capital. Before it can issue new stock, a corporation must first file registration statements with the Stock Exchange Board of India (SEBI).The Process of Issuing Securities Corporations sell stock to the public as one way to raise capital. A twenty day wait is required before it can sell the stocks. The issuing company may make their registration statement public with a preliminary prospectus called a red herring that summarizes the registration statement. Basic information about the new offering is also provided, including how many shares are being offered and which brokerage companies will distribute the stock to the public. At the time of issue, a final prospectus is presented. This includes the price of the stock (its offering price).So after the IPO is in the market it is open to the public for some days usually 3-5 days people subscribe to this IPO through brokers. Brokers are the persons which have license to buy and sell shares so they buy and sell shares on behalf of their clients .So there is one thing to keep a note here that ones a company has issued the shares to public for raising capital the company is out of the process of secondary market where every day buying and selling occurs this buying and selling is done by the investors and traders through brokers ,buying leads to market going up and selling leads to market going down.

What Broker-Dealers Are Not Allowed to Do
The following are practices that broker-dealers are forbidden to do:
Churning: Excessive trading of a client's discretionary account to increase
the broker's commissions ,use deception or manipulation to trade securities, or failing to state material facts Recommending low-priced, speculative securities without determining whether they are suitable for the client Make unauthorized transactions ,guarantee that loss will not occur Try to talk clients into buying mutual funds inappropriate for their means and goals Use fictitious accounts to disguise trades, not promptly transmitting the client's money or securities Because brokers have so much control over other people's money, their activities are highly regulated. Other Broker Services Brokers, when authorized by the client, may set up discretionary accounts. These accounts allow brokers to buy and sell securities for a client's account without contacting the client for each transaction. The authorized broker may determine the security traded, how much of it may be traded, the price and the time of transaction. Brokers may lend funds to clients who have margin accounts. With margin accounts, clients can buy additional securities with money borrowed from a broker.