Free Float Market Cap

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However, shares that is free for trading in open market by anyone. It is known as free-float shares. Probably, many different types of investor hold shares of company. Like government, directors and FDIs etc. may hold some of company. Similarly, in open market particular company has some shares. And that some share is not trading in open market.

Similarly, company has to submit complete report. So how many of company shares have to trade in BSE. Therefore, on basis of this BSE will decide free-float factor of company. In addition, free-float factor is very valuable number.

Hence, if you multiply free-float factor with market cap of that company. You will get free-float market cap. It shows value of shares of company in open market. Probably, it is simple way to understand free-float market cap. It will calculate on total cost of buying all shares in open market. In addition, one of 30 companies has stock split or bonus every time.

Free-Float Capitalization Methodology

In India Company free -float is determined according to shareholding format. But this format is specified by Securities Exchange Board of India (SEBI). Moreover, format is promoters and non promoters. Probably, promoters like Indian, Foreign and persons acting in concert. In addition, non promoters are corporations, public, financial and foreign institute.

 How Sensex 30 stocks are selected

Listing History: Probably, companies must have listing history at least one year on BSE.

Frequency trading: Moreover, company must trade on each and every trading day for last one year. But exceptions can be made for extreme reasons like share suspension etc.

Market capitalization: company must have market cap in top 100 market capitalization of BSE. And also market capitalization of each company shall be more than 0.5% of total Market cap.

Number of trades: scrip must list in top 150 companies by average number of trades. And it has to trade daily for last one year. Therefore, companies must be leaders in their industry group.

Track record: in view of index committee company must have an acceptable track record. See below list of 30 companies in BSE.

  • Adani Ports
  • Asian Paint
  • Axis Bank
  • Bajaj-Auto
  • Bharti Artl
  • Cipla
  • Coal India
  • Reddy’s Laboratories
  • GAIL
  • HDFC
  • HDFC Bank
  • Hero MotoCorp
  • Hindustan Unilever
  • HUL
  • ICICI Bank
  • Infosys
  • ITC
  • L&T
  • Lupin Limited
  • Mahindra & Mahindra
  • Maruti Suzuki
  • NTPC
  • ONGC
  • PowerGrid Corporation of India
  • Reliance Industries
  • SBIN
  • Sun Pharma
  • Tata Motors
  • Tata Steel
  • TCS
  • Wipro

As you know sensex contains of 30 stocks. Probably, when prices of these 30 stocks increase then sensex goes up. Similarly, when prices decrease they fall. Basically, all shares move up & down according to their demand and supply. Moreover, stocks prices of these top 30 companies go up by 1%. So then sensex number goes up 1%. Hence, in same way sensex falls.

Bull and Bear Market

In Stock trading there are bull and bears. But it sounds dangerous in market. You frequently hear market being bullish or bearish. See bull and bear history.

Bull Market: This is when market is showing confidence. But those who expect share prices to go up. And are likely to buy shares are called bull. Therefore when share prices go up market is termed as Bullish market. You can buy share when prices go up. And sell it later for profit. Hence, this is indication for public that firm will perform better in future. In addition, bull market is rise in value of market at least 20%.

Bears Market: Bear market is opposite to bull. If market fall by more than 20% then you entered bear market. However, bear market is showing lack of confidence. Probably, in bear market people will wait for bull to start driving. Moreover, share prices falls then market is termed as Bearish market. In same way if bears are expecting that prices will fall. Then you need to sell shares to avoid losses.

Market timing

However, basic idea behind buying stocks is to buy low and sell high. So this will give you profit. Similarly, to make money you buy stocks in bear market when stock price are low. And sell stocks in bull market when stock prices are high. Hence, knowing when is best time to buy and sell is not that simple.

Therefore, most investors are too emotional. And they sell in bear market because they are scared to lose money. But they buy in bull market because they don’t want to miss big gains. However, you can make some money in that way. Because, it also explains why you lose money in market time.

Hence, safest way to help you not make these mistakes. You buy stocks and invest in market by regularly to make fixed investments. And to hold your investment for long period. Check bull market examples

In India BSE’s normal trading session are on all days of the week. And except Saturdays, Sundays and holidays declared by the Exchange in advance. You must aware that it requires a lot of patience. Moreover, investors fear of investing their money when market fall down.

Finally, see what is sensex and nifty. Therefore for better understand terms bulls and bears. However, check difference between bulls and bear market. You can learn basics of stock market to get advance knowledge. Hence, view uses of indexes. To know more see analysis of the index price movements. It helps you to indentify broad trends of the market.

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