

Stock Exchange
 

Acknowledgement
I would like to thank my teacher, Kajal ma’am for giving me
such a wonderful project that helped me understand the
working and essence of the stock exchange.
 

Index
Sr no. topic signature
1. Meaning and history
2. Bombay stock exchange
3. Naonal stock exchange of India
4. Stock market mings in India
5. Role of stock exchange
6. SEBI
7. Role of SEBI
8. Terminologies
9. Trading procedure
10 10 companies performing well
11. 10 companies not performing well
12. Types of speculators
13. Investment of 50,000 equity
14. conclusion
15. bibliography
 

Meaning and history

A stock exchange, securies exchange, or bourse[note 1] is a
facility where stockbrokers and traders can buy and
sell securies, such as shares of stock, bonds, and other
nancial instruments. Stock exchanges may also provide
facilies for the issue and redempon of such securies and
instruments and capital events including the payment of
income and dividends. Securies traded on a stock exchange
include stock issued by listed companies, unit
trusts, derivaves, pooled investment products and bonds.
Stock exchanges oen funcon as "connuous aucon"
markets with buyers and sellers consummang transacons
via open outcry at a central locaon such as the oor of the
exchange or by using an electronic trading plaorm.[5]

Inial public oerings of stocks and bonds to investors is done

in the primary market and subsequent trading is done in
the secondary market. A stock exchange is oen the most
important component of a stock market. Supply and demand in
stock markets are driven by various factors that, as in all free
markets, aect the price of stocks
 

Bombay stock exchange

BSE Limited, formerly known as the Bombay Stock Exchange

Ltd., is an Indian stock exchange located at Dalal
Street, Mumbai.
Established in 1875, [5] it is Asia's oldest stock exchange. [6] The
BSE is the world's 10th largest stock exchange with an
overall market capitalizaon of more than US$2.2 trillion on as
of April 2018.[3]

The BSE has been instrumental in developing India's capital

markets by providing an ecient plaorm for the Indian
corporate sector to raise investment capital.

The BSE is known for its electronic trading system that provides
fast and ecient trade execuon.

The BSE enables investors to trade in equies, currencies, debt

instruments, derivaves, and mutual funds.
 

National stock exchange

The Naonal Stock Exchange of India Limited (NSE) is India's
largest nancial market. Incorporated in 1992, the NSE has
developed into a sophiscated, electronic market, which
ranked fourth in the world by equity trading volume. Trading
commenced in 1994 with the launch of the wholesale debt
market and a cash market segment shortly thereaer.

KEY TAKEAWAYS

 The Naonal Stock Exchange of India Limited (NSE) is

India's largest nancial market and the fourth largest
market by trading volume.
 The Naonal Stock Exchange of India Limited was the rst
exchange in India to provide modern, fully automated
electronic trading.
 The NSE is the largest private wide-area network in India.
 The NSE has been a pioneer in Indian nancial markets,
being the rst electronic limit order book to trade
derivaves and ETFs.
 

Stock market timings in India

As per the normal stock market mings, the market opens at
09:15 AM and closes at 03:30 PM. There’s a pre-opening
session before 09:15 AM and a post-closing session aer 03:30
PM. So, all in all, the share market mings consist of the pre-
opening session, the normal session, and the post-closing
session.
Pre-opening session
The pre-opening session starts at 09:00 AM and extends up to
09:15 AM. It’s further divided into three secons. During one of
these secons, you can place orders to buy or sell shares for a
limited period. Let’s look at the details of the pre-opening
session below.
Secon 1: From 09:00 AM to 09:08 AM

During these 8 minutes, you can place orders to buy or sell

dierent shares in the stock market. In addion to that, you can
also modify or cancel any orders that you may have placed.
When the normal trading session begins at 09:15 AM, the
orders placed during this secon of the pre-opening session get
preference in the queue of orders.
Secon 2: From 09:08 AM to 09:12 AM

During these 4 minutes, you cannot place any new orders,

modify exisng ones, or cancel any order. This secon is
necessary so that price matching can be performed. Price
matching involves comparing demand and supply. It helps
 

determine the nal prices at which dierent shares will be

traded when the market opens at 09:15 AM.
Secon 3: From 09:12 AM to 09:15 AM

This 3-minute window of me is like a connecon secon

between the pre-opening session and the normal trading hours.
It behaves like a buer to ease the transion into the regular
trading session. Again, during these 3 minutes as well, you
cannot place, modify, or cancel any orders.
Normal session
This is also known as the connuous trading session, and it runs
from 09:15 AM to 03:30 PM. During this session, you can trade
freely, place orders to buy or sell stocks, and modify or cancel
your buy or sell orders without any limitaons. During this
window of the share market mings, a bilateral order matching
system is followed. This means that each sell order is matched
with a buy order that has been placed at the same stock price,
and each buy order is matched with a sell order that has been
placed at the same stock price.
Post-closing session
This session begins when the regular trading session comes to a
close at 03:30 PM. The post-closing session, which runs up to
04:00 PM, consists of two secons.
Secon 1: From 03:30 PM to 03:40 PM

In these 10 minutes, the closing prices of stocks are calculated

by taking the weighted average of the stock prices traded
 

between 03:00 PM and 03:30 PM. The closing prices of indices

like Sensex and Niy are calculated by considering the
weighted average prices of all the securies that are listed in
that index.
Secon 2: From 03:40 PM to 04:00 PM

In this 20-minute secon, you can sll place buy and sell orders.
But the orders are conrmed only if there are sucient
numbers of buyers and sellers in the market.
 

Role of stock exchange

 A market for securies- It is a wholesome market where

securies of government, corporate companies, semi-
government companies are bought and sold.
 Second-hand securies- It associates with bonds, shares
that have already been announced by the company once
previously.
 Regulate trade in securies- The exchange does not sell
and buy bonds and shares on its own account. The broker
or exchange members do the trade on the company’s
behalf.
 Dealings only in registered securies- Only listed
securies recorded in the exchange oce can be traded.
 Transacon- Only through authorised brokers and
members the transacon for securies can be made.
 Recognion- It requires to be recognised by the central
government.
 Measuring device- It develops and indicates the growth
and security of a business in the index of a stock exchange.
 Operates as per rules– All the security dealings at the
stock exchange are controlled by exchange rules and
regulaons and SEBI guidelines.
 

SEBI
The Securies and Exchange Board of India (SEBI) is the most
important regulator of securies markets in India. SEBI is the
counterpart of the Securies and Exchange Commission (SEC) in
the U.S. Its stated objecve is “to protect the interests of
investors in securies and to promote the development of and
to regulate the securies market and for maers connected
therewith or incidental thereto.”

 The Securies and Exchange Board of India (SEBI) is the

leading regulator securies markets in India, analogous to
the Securies and Exchange Commission in the U.S.
 SEBI has wide-ranging regulatory, invesgave, and
enforcement powers, including the ability to impose nes
on violators.
 

Role of SEBI
Issuers of securies
These are enes in the corporate eld that raise funds from
various sources in the market. SEBI makes sure that they get a
healthy and transparent environment for their needs.

Investor
Investors are the ones who keep the markets acve. SEBI is
responsible for maintaining an environment that is free from
malpracces to restore the condence of general public who
invest their hard earned money in the markets.

Financial Intermediaries
These are the people who act as middlemen between the
issuers and investors. They make the nancial transacons
smooth and safe.

Protecon to the investors

The primary objecve of SEBI is to protect the interest of
people in the stock market and provide a healthy environment
for them.
Prevenon of malpracces
This was the reason why SEBI was formed. Among the main
objecves, prevenng malpracces is one of them.
Fair and proper funconing
SEBI is responsible for the orderly funconing of the capital
markets and keeps a close check over the acvies of the
nancial intermediaries such as brokers, sub-brokers, etc
 

Terminologies
Ask-The ask is the price a seller is willing to accept for a
security, which is oen referred to as the oer price.
Bid-The bid is the price a buyer is willing to pay for a security,
and the ask will always be higher than the bid.
Close-The opening and closing bells of the exchange mark the
beginning and end of the trading day. The opening bell is rung
at 9:30 a.m. ET and at 4:00 p.m. ET the closing bell is rung—
closing trading for the day.

Eps-Earnings per share (EPS) is calculated as a company's prot

divided by the outstanding shares of its common stock. The
resulng number serves as an indicator of a company's
protability. It is common for a company to report EPS that is
adjusted for extraordinary items and potenal share diluon.
Porolio-A porolio is a collecon of nancial investments like
stocks, bonds, commodies, cash, and cash equivalents,
including closed-end funds and exchange traded funds (ETFs).
People generally believe that stocks, bonds, and cash comprise
the core of a porolio.
Fill or kill- Fill or kill (FOK) is a condional type of me-in-force
order used in securies trading that instructs a brokerage to
execute a transacon immediately and completely or not at all.
This type of order is most oen used by acve traders and is
usually for a large quanty of stock.
 

Hedge-Hedging against investment risk means strategically

using nancial instruments or market strategies to oset the
risk of any adverse price movements. Put another way,
investors hedge one investment by making a trade in another.
A reducon in risk, therefore, always means a reducon in
potenal prots.
Limit order-A limit order is an order to buy or sell a stock at a
specic price or beer. A buy limit order can only be executed
at the limit price or lower, and a sell limit order can only be
executed at the limit price or higher.
Liquidity-In other words, liquidity describes the degree to which
an asset can be quickly bought or sold in the market at a price
reecng its intrinsic value. Cash is universally considered the
most liquid asset because it can most quickly and easily be
converted into other assets. Tangible assets, such as real
estate, ne art, and collecbles, are all relavely illiquid. Other
nancial assets, ranging from equies to partnership units, fall
at various places on the liquidity spectrum.
Fundamental analysis-Fundamental analysis (FA) is a method
of measuring a security's intrinsic value by examining related
economic and nancial factors. ... The end goal is to arrive at a
number that an investor can compare with a security's current
price in order to see whether the security is undervalued or
overvalued
IPO- Inial public oering is the process by which a private
company can go public by sale of its stocks to general public. It
 

could be a new, young company or an old company which

decides to be listed on an exchange and hence goes public.

Companies can raise equity capital with the help of an IPO by

issuing new shares to the public or the exisng shareholders
can sell their shares to the public without raising any fresh
capital.
Block market- A block trade is the sale or purchase of a large
number of securies. A block trade involves a signicantly large
number of equies or bonds being traded at an arranged price
between two pares. Block trades are somemes done outside
of the open markets to lessen the impact on the security's
price.
Insider trading- insider trading is dened as a malpracce
wherein trade of a company's securies is undertaken by
people who by virtue of their work have access to the
otherwise non public informaon which can be crucial for
making investment decisions.
Blue chip stock- A blue-chip stock is a huge company with an
excellent reputaon. These are typically large, well-established
and nancially sound companies that have operated for many
years and that have dependable earnings, oen paying
dividends to investors. A blue-chip stock typically has a market
capitalizaon in the billions, is generally the market leader or
among the top three companies in its sector, and is more oen
 

than not a household name. For all of these reasons, blue-chip

stocks are among the most popular to buy among investors.
Call opon- Call opons are nancial contracts that give
the opon buyer the right, but not the obligaon, to buy
a stock, bond, commodity or other asset or instrument at a
specied price within a specic me period. The stock, bond, or
commodity is called the underlying asset.
Tip- Tipping is the act of providing material non-public
informaon about a publicly traded company or a security to a
person who is not authorized to have the informaon. As long
as the informaon is accurate, pping can produce huge prots
for an investor who acts on it when performing a securies
transacon.
 

Trading procedure
The prices of shares on a stock market can be set in a number
of ways, but most the most common way is through
an aucon process where buyers and sellers place bids and
oers to buy or sell. A bid is the price at which somebody
wishes to buy, and an oer (or ask) is the price at which
somebody wishes to sell. When the bid and ask coincide, a
trade is made.

The overall market is made up of millions

of investors and traders, who may have diering ideas about
the value of a specic stock and thus the price at which they are
willing to buy or sell it. The thousands of transacons that occur
as these investors and traders convert their intenons to
acons by buying and/or selling a stock cause minute-by-
minute gyraons in it over the course of a trading day. A stock
exchange provides a plaorm where such trading can be easily
conducted by matching buyers and sellers of stocks. For the
average person to get access to these exchanges, they would
need a stockbroker. This stockbroker acts as the middleman
between the buyer and the seller. Geng a stockbroker is most
commonly accomplished by creang an account with a well
established retail broker.
 

10 companies performing well

 Reliance
 TCS
 HDFC Bank
 HUL
 Infosys
 HDFC
 ICICI Bank
 Kotak Mahindra
 Bhar Airtel
 Bajaj Finance
 SBI
 ITC
 HCL Tech
 Wipro
 Asian Paints
 Maru Suzuki
 Axis Bank
 Larsen
 Avenue Supermar
 Nestle
 Adani Green Ene
 

10 companies not performing well

Kansai Nerolac
Vodafone Idea
Tanla Soluons
JSPL
Ibull HousingFin
RIL
Asian Paints
Sunteck Realty
Firstsource Sol
AIA Engineering
Bank of Baroda
Maru Suzuki
 

Types of speculators
Bull
A bull is an investor who thinks the market, a specic security
or an industry is poised to rise. Investors who adopt a bull
approach purchase securies under the assumpon that
they can sell them later at a higher price. Bulls are opmisc
investors who are aempng to prot from the upward
movement of stocks, with certain strategies suited to that
theory.
Bear
A bear is an investor who believes that a parcular security, or
the broader market is headed downward and may aempt to
prot from a decline in stock prices. Bears are
typically pessimisc about the state of a given market or
underlying economy. For example, if an investor were bearish
on the Standard & Poor's (S&P) 500, that investor would expect
prices to fall and
aempt to prot
from a decline in
the broad market
index.

Stag
 

Stag is a slang term for a short-term speculator—a day trader,

for example— who aempts to prot from short-term market
movements by quickly moving in and out of posions. Day
traders, or stags, typically require access to a lot of liquid
capital to fund their posions and make a living. This is required
because they may be aempng to gain returns on small price
movements mulple mes each day or with mulple posions
at the same me.

Lame duck
Lame duck is an out-of-use term used with reference to a
trader who has defaulted on a debt or gone bankrupt due to an
inability to cover trading losses.
 

Investment of 50,000 Equity

I invested in 5 stocks for 3 days on money

control.

1. ABBOTT

Investment price=14748.65

Quantity=10

Gross amt=147486.50

Selling price=149900

Profit=2413.5

2.INDUSIND BANK

Investment price=932.80

Quantity=20

Gross amt=18656.00

Selling price=20675

Profit=2019
 

3.BAJAJ FINANCE

Investment price=4719.80

Quantity=10

Gross amt=47198.50

Selling price=54,296

Profit=7098

4.VODAFONE

Investment price=13.00

Quantity=1000

Gross amt=13000.00

Selling price=12150

loss=850

5.WIPRO

Investment price=431.55

Quantity=50

Gross amt=21577.50
 

Selling price=22175

Profit=597.5

Total profit=2413.5+2019+7098-850+597.5

=₹ 11,278
 

Conclusion
A stock exchange plays an important role in the economy. It
helps to raise capital for business, mobilize savings for
investment, facilitates the growth of companies, and enables
prot sharing. It assists in creang investment opportunies for
small investors, and raising capital for development projects
taken up by the government. It acts as a barometer of the
economy.