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STOCK EXCHANGE

EASY WAY TO EARN MONEY,


EASY WAY TO LOOSE MONEY
Presented BY
Raghav Maheshwari
13BSPHHO1O980
WHAT IS STOCK EXCHANGE?
Definition of Stock Exchange : The securities regulation act of 1956
defined stock exchange as an association , organization , or a
individual which is established for for the purpose of assisting ,
regulating , and controlling business in buying ,selling and dealing
in securities.
Meaning : This comes under treasury sector ,which provides
service to stock brokers & traders to trade stocks ,bonds and
securities. Stock exchanges helps the companies to raise their fund.
Therefore the companies needs to list themselves in the Stock
Exchange and the shares will be issued which is known as equity or
a ordinary share and these shareholders are the real owners of the
company the Board Of Directors of the Company are elected out of
these Equity Shareholders only.
FEATURES OF STOCK EXCHANGE
It is an organized market
It is a securities market
It is an important constituent of capital market i.e., market for long-
term finance
It is a voluntary association of persons desirous of dealing in securities
Stock exchange is a voluntary association, its membership is not open to
everybody
In a stock exchange, only the members can deal in i.e., buy & sell
securities
The members of a stock exchange can buy and sell securities either as
brokers for & on behalf of their clients
The dealings in a stock exchange are under certain accepted code of
conduct i.e., rules and regulations

IMPORTANT FUNCTION OF STOCK EXCHANGE
Provide central and convenient meeting places for sellers and buyer of
securities
Increase the marketability and liquidity of securities
Contribute to stability of prices of securities
Equalization of price of securities
Smoothen price movement
Help the investors to know the worth of their holdings
Promote the habit of saving and investment
Help capital formation
Help companies and government to raise funds from the investors
Provide forecasting service

HISTORY OF STOCK EXCHANGE
The stock exchange was established by East India
company in 18
th
century . In India it was established
in 1850 with 22 stock brokers opposite to town hall
Bombay .This stock exchange is known as oldest stock
exchange of Asia.






Initial members who are
still running their business
in stock exchange are
D.S.Prabhudas &company
Jamnadas Morarjee
Champak lal Devidas
Brymohan Laxminarayan

BROKER AND JOBBER
BROKER: He is one acts as a intermidiary on
behalf of others. A broker in a stock exchange ,is
a commission agent who transacts business in
securities on behalf of non members.
JOBBER: He is not allowed to deal with the
public directly .He deals with brokers who are
engaged with the investors . Thus, the securities
is bought by the jobber from members and sells
to members who are operating on the stock
exchange as broker.
DIFFERENCES BETWEEN A JOBBER AND A BROKER
JOBBER
A jobber is an independent
dealer in securities, purchasing
or selling securities on his own
account
A jobber deals only with the
brokers ,does not deal with the
general public
A jobber earns profit from his
operations i.e., buying and
selling activities
Each jobber specializes in certain
group of securities



BROKER
A broker deals with the jobber
on behalf of his clients. in other
words, a broker is a middleman
between a jobber and clients
A broker is merely an agent,
buying or selling securities on
behalf of his clients
A broker gets only
commission for his dealings
The broker deals in all
types of securities
SPECULATION AND SPECULATOR
SPECULATION : It is the transaction of members to
buy or sell securities on stock exchange with a view to
make profits to anticipated raise or fall in price of
securities.
SPECULATOR : The dealer in stock exchange who
indulge in speculation are called speculator . They do not
take delivery of securities purchased or sold by them , but
only pay or rescue the difference between the purchase
price and sale price . The different types of speculators are
BULL
BEAR
STAG
LAME DUCK
BULL {TEJIWALA}
He is speculator who expects the future raise in price of
securities he buys the securities to sell them at future date
at the higher price.
He is called as bull because his activities resembles as a bull ,
as the bull tends to throw its victims up in the air through its
horns. In simple the bull speculator tries to raise the price of
securities by placing a big purchase orders.
BEAR {MANDIWALA}
He is speculator who
expects future fall in prices
, he does an agreement to
sell securities at future
date at the present market
rate .
He is called as bear because
his altitude resembles with
bear , as the bear tends to
stamp its victims down to
earth through its paws . In
simple the bear speculator
forces of prices of
securities to fall through
his activities.
STAG {DEER}
He operates in new issue
of market . He is just like a
bull speculator . He applies
large number of shares in
the issue market only by
paying , application money
, allotment money. He is
not a genuine investor
because , he sells the
alloted securities at the
premium and makes profit.
In simple he is cautious in
his dealings . He creates an
artificial rise in prices of
new shares and makes
profits.
LAME DUCK
He is speculator when the
bear operator finds it
difficult to deliver the
securities to the consumer
on a particular day as
agreed upon , he struggles
as a lame duck in fullfilling
his commitment . This
happens when the prices
do not fall as expected by
the bear and the other
party is not willing to
postpone the settlement to
the next period.
Largest stock exchanges
IN THE WORLD
LONDON STOCK EXCHANGE
NEW YORK STOCK EXCHANGE
SHANHAI STOCK EXCHANGE
AUSTRALIA STOCK EXCHANGE
TOKYO STOCK EXCHANGE
HONG KONG STOCK
EXCHANGE
TORONTO STOCK EXCHANGE
DEUTSCHE BORSE
BM&F BOVESPA
NASDAQ OMX STOCK
EXCHANGE
IN INDIA
NATIONAL STOCK EXCHANGE
BOMBAY STOCK EXCHANGE
CALCUTTA STOCK EXCHANGE
COCHIN STOCK EXCHANGE
MULTI COMMODITY
EXCHANGE
DERIVATIVES EXCHANGE
OTC EXCHANGE
PUNE STOCK EXCHANGE
INTERCONNECTS EXCHANGE
LONDON STOCK EXCHANGE
It was the first stock exchange established by
east India company in 18
th
century in London.
The top gainer of LONDON STOCK EXCHANGE
is Blue chip shares.
BOMBAY STOCK EXCHANGE
It is oldest and first stock
exchange of India
established in the year
1875. First it was started
under baniyan tree
opposite to town hall of
Bombay over 22 stock
brokers. The top gainer in
BSE is 100 companies in
that GMR infra is first




NATIONAL STOCK
EXCHANGE OF INDIA(NSE
OR NSEI)
The NSE of India is the leading stock
exchange of India, covering 370 cities and
towns in the
country. It was established in1994 as a TAX
company. It was established by 21 leading
financial institutions and banks like the
IDBI,ICICI,IFCI,LIC,SBI,etc.






Features of NSEI
Nation wide coverage i.e., investors from all over country
Ringless i.e., it has no ring or trading floor
Screen-based trading i.e., trading in this stock exchange is done electronically.
Transparency,i.e.,the use of computer screen for trading makes the dealings in
securities transparent.
Professionalization in trading, i.e., it brings professionalism in its functions

OVER-THE-COUNTER EXCHANGE
OF INDIA(OTCEI)
The OTCEI is a national,ringless and computerized stock
exchange. It was established in october,1990.it started its
operation in september,1992.
Features of OTCEI
1. It is a nation-wide stock exchange. Its operational areas cover entire India.
2. It is a ringless stock exchange. The trading ring(i.e., trading place)commonly found in a
traditional stock exchange is not found in the OTCEI.
3. It is a computerized stock exchange
Advantages of OTCEI
1. It helps the investors to have easy and direct access to the stock exchange
2. It helps investors to get fair prices for their securities
3. It provide safety to the investors
4. To provide computerized trading system
5. To provide investors a convenient,effcient and transparent mode of
investment













SECURITIES AND EXCHANGE
BOARD OF INDIA(SEBI)
The SEBI was constituted on 12
th
April,1988 under a
resolution of the Government of India. On 31
st

january,1992,it was made a statutory body by the
Securities and Exchange board of India Act,1992.
The Companies (Amendment) Act,2000 has given certain
powers to SEBI as regards the issues and transfer of
securities and non-payment of dividend








Function Of SEBI
Regulating the business in stock exchange and any other securities
markets.
Promoting and regulating self-regulatory organization.
Registering and regulating the work of collective investment
scheme,incluing mutual funds.
Prohibiting fraudulent and unfair trade practices relating to
securities market.
Promoting education, and training of intermediaries of securities
market



Power of SEBI
Power to approve the bye-laws of stock exchange
Power to inspect the books of accounts
Power to grant license to any person for the purpose of dealing in certain areas.
Power to delegate powers exercisable by it.
Power to try directly the foliation of certain provision of the company Act
How to see the value of
shares in stock exchange
SENSEX is an indicator to checkout in
BSE
NIFTY is an indicator to checkout in NSE
Latest news of BSE and NSE
Most profitable company in BSE is GMR Infra
Most profitable company in NSE will be
RELIANCE and ICICI
During last three months nearly only 26% of
profit is earned by our stock exchanges the
working hours will be
From 9:15 to 3:30 from Monday to Friday

The Daily graph of the
companies will be showed in
following manner
How stock exchanges get
money
They get their money by listing fees
paid by the corporation to have their
company traded




HOW TO DEAL AND INVEST IN
STOCK EXCHANGE
In order to deal with a securities one as to have an
account called Demat a/c or Trading a/c. It is just like a
bank account. Same procedure of opening the bank
account is followed to open the a/c. But all the banks
does not give this facility of opening the account , only
few banks provide this facility. After demat a/c or
Trading a/s is opened then the securities is bought and
sold. The banks which gives facility of demat a/c in
India is
ICICI Bank
Citi Bank
Bank of Baroda
HAPPY INVESTMENT WITH
LOTS OF PROFITS
END
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