How To Do Trading In Stock Exchange

Stock Exchanges in India

There are currently 24 stock exchanges functioning in India. Their names are given as follows:

1. Bombay Stock Exchange (BSE)
2. National Stock Exchange (NSE)
3. Over the Counter Exchange of India (OTCEI)
4. MCX Stock Exchange (MCX-SX)
5. India Connected stock Exchange of India Ltd. (ISE)
6. Calcutta Stock Exchange (CSE)
7. Saurashtra Kutch Stock Exchange Ltd. (SKSE)
8. Chennai stock Exchange
9. Hyderabad Stock Exchange
10. Indore Stock Exchange
11. Cochin Stock Exchange
12. Guwahati Stock Exchange
13. Kanpur Stock Exchange
14. Meerut Stock Exchange                             
15. Rajkot Stock Exchange
16. Delhi Stock Exchange (DSE)
18. Ahmedabad Stock Exchange
19. Bangalore Stock Exchange
20. Baroda Stock Exchange
21. Coimbatore Stock Exchange
22. Jaipur Stock Exchange
23. Mangalore Stock Exchange
24. Pune Stock exchange Central
25. Capital Stock Exchange Kerala Ltd.

Trading Procedure On a Stock Exchange

The trading Procedure of securities On a Stock Exchange is as the Following:

(1) Selection of a Broker: For trading Of securities On a Stock Exchange, first Of all, the selection Of a broker registered with SEBI is done. This is necessary because dealing on a Stock Exchange can be done only through a broker. the broker can be an individual, a partnership firm or a company.

(2) The Opening Of Demat Account With the Depository: These days all dealings in securities are one online or are Paperless. To make such a thing possible, it is obligatory to open a demat account. The Demat account is opened through one of the parties of depository service, a Depository Participant. The securities are kept by the depository in the electronic form. Currently, there are two depository institutions in India:
 • National Securities Depository Limited(NSDL)
 • Central Depository Service Limited(CDSL)

The depository comes into contact with the investors through the Depository Participant. The Depository Participants the agent of the accordance with the direction and guidance of SEBI, any bank, stockbroker, etc.can be depository Participants.
The main activity of the depository are as following:

 • opening the accounts of the investors.

 • maintaining the balances of the share-accounts of the investors.

 • sending the account statements to investors from time to time.

(3) Placing an Order: As soon as the Demant account of the investors is investors are opened, he can order the broker to buy securities. The order may be given personally or telephonically or through e-mail. While Placing the order the investors give a detailed description of the securities to be bought or sold out and also conveys the Price to which the transaction may be finalized.

(4) Executing the Order: In accordance with the order of the investor, the broker does the transaction of buying and selling of the securities. Soon after this, the broker started prepares the contract note to send to the investor. In the contract note, the name of the securities bought or sold out, along with the quantity and price is written. In this note, the information about the brokerage charges is also given. This note is duly signed by the broker and it is Preserved by the customer as a Proof the transaction.

(5) Settlement of Transactions: As you know this is the final stage of the deal on the Stock Exchange. Settlement implies the transfer of the securities from the Demat Account of the seller to the Demat Account of the buyer. Settlements can be of the following two types:

  •  ON THE SPOT SETTLEMENT: It implies immediate settlement of the particular deal. In such a situation 't+2' Rolling Settlement is enforced. Here 't+2' implies that if the transaction is done on a Monday, it will be settled on the following Wednesday. It means delivery and Payment both will be done on Wednesday.'t+2' can be understood in the Following manner:
           T: The day of the transaction.
           T+1: The information about the finalization of the transaction/preparing the contract note.
           T+2: Delivery and Payment.

  • FORWARD SETTLEMENT: It implies the settlement to be done on the same date in the future.Settlement Period may be 't+5', 't+7', etc.

Note:  All the  transactions on the Stock Exchange are done from 9:15 a.m. to 3:30 p.m from Monday to Friday sharp.

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