Home/Paison ki Paathshala/Financial Securities
The building blocks

Stocks, bonds and the instruments behind every portfolio.

A grounding in equities, bonds and the other instruments that make up the market — the vocabulary every investor needs first.

Start here

A "security" is just proof you own — or are owed — something.

Every financial security falls into one of two families: you either own a piece of something (equity) or someone owes you money (debt). Almost everything else — mutual funds, ETFs, derivatives — is built by combining or repackaging these two basic building blocks.

Equity — ownership

Buying a share of stock makes you a part-owner of that company. Your return depends entirely on how the business performs — there's no ceiling, and no floor.

Debt — a loan

Buying a bond or debenture means you've lent money to a company or government, in exchange for regular interest and your principal back at maturity. Lower risk, and a return that's capped by design.

No such thing as a free lunch

The risk-return spectrum.

Every instrument sits somewhere on the same trade-off: the more potential upside it offers, the more risk of loss it's carrying alongside it. Anyone offering high returns with "zero risk" is describing a contradiction, not a product.

Fixed deposits

Lowest risk, lowest return. Principal is protected; returns rarely outpace inflation by much.

Bonds & debentures

Moderate, predictable returns. Risk depends heavily on who's borrowing — a government bond and a small company's debenture are not the same risk at all.

Equities

Higher long-term return potential, with real short-term volatility. Ownership means sharing in both the upside and the downside.

Derivatives (F&O)

The highest-risk end of the spectrum. SEBI's own data shows the large majority of individual F&O traders lose money — this is a tool for hedging and experienced traders, not a shortcut to wealth.

The plumbing

What actually happens when you buy a share.

1

Demat & trading account

Opened with a SEBI-registered broker — your Demat account holds the shares, your trading account places the orders.

2

Order placed

Your buy order is routed to a recognised exchange — NSE or BSE — never settled privately off-book.

3

Matched & settled

The exchange matches your order and shares are credited to your Demat account, typically within one working day.

4

Contract note issued

A digital contract note confirms exactly what was bought, at what price, and the charges applied — your proof the trade was real.

This is exactly the process illegal Dabba trading bypasses — private ledgers, cash settlement, and zero contract notes. If any of these four steps is missing, you're not actually trading on the stock market, whatever the app on your phone shows you. (We cover this in detail in our Cyber Crime lesson.)

Primary market

Where securities are born.

A company raises fresh capital directly from investors for the first time — most commonly through an IPO (Initial Public Offering). The money goes to the company itself.

Secondary market

Where securities are traded.

Once listed, investors buy and sell existing shares among themselves on the exchange. This is the day-to-day stock market most people mean when they say "the market."

The safety net beneath the market

SEBI's job is to make sure the game is fair.

Registered intermediaries

Brokers, advisors and fund managers must hold a valid SEBI registration — checkable directly on sebi.gov.in/intermediaries.html.

SCORES 2.0

SEBI's official grievance portal for lodging complaints against any registered broker or advisor who's let you down.

Investor Protection Fund

Exchanges maintain an IPF to compensate investors in specific default scenarios — a protection that simply doesn't exist outside the regulated system.

More from this campaign

Explore the other topics

Cyber Crime Insurance Mutual Funds