Trading system of stock exchange in india. In Indian Stock Market, majority of the trading takes place on its two stock exchanges market in India which are: 1. The Bombay Stock . With this order driven automated system the transparency is maintained with the display of all buy and sell orders in the trading system. These orders can be placed.

Trading system of stock exchange in india

Screen-based trading system at Bombay Stock Exchange, Mumbai

Trading system of stock exchange in india. The National Stock Exchange of India Limited (NSE) is the leading stock exchange of India, located in Mumbai. The NSE was established in as the first demutualized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading  ‎Markets · ‎Trading schedule · ‎Exchange Traded Funds · ‎Financial Literacy.

Trading system of stock exchange in india


NSE consciously opted in favour of an order driven system as opposed to a quote driven system. This has helped reduce jobbing spreads not only on NSE but in other exchanges as well, thus reducing transaction costs. All orders which are of regular lot size or multiples thereof are traded in the Normal Market. For shares that are traded in the compulsory dematerialised mode the market lot of these shares is one.

Normal market consists of various book types wherein orders are segregated as Regular lot orders, Special Term orders, Negotiated Trade Orders and Stop Loss orders depending on their order attributes.

All orders whose order size is less than the regular lot size are traded in the odd-lot market. An order is called an odd lot order if the order size is less than regular lot size.

These orders do not have any special terms attributes attached to them. In an odd-lot market, both the price and quantity of both the orders buy and sell should exactly match for the trade to take place. In the Auction Market, auctions are initiated by the Exchange on behalf of trading members for settlement related reasons. There are 3 participants in this market. The NSE trading system provides complete flexibility to members in the kinds of orders that can be placed by them.

Orders are first numbered and time-stamped on receipt and then immediately processed for potential match. Every order has a distinctive order number and a unique time stamp on it. If a match is not found, then the orders are stored in different 'books'. Orders are stored in price-time priority in various books in the following sequence:. Price priority means that if two orders are entered into the system, the order having the best price gets the higher priority.

Time priority means if two orders having the same price are entered, the order that is entered first gets the higher priority. The Regular Lot Book contains all regular lot orders that have none of the following attributes attached to them.

Currently, special term orders i. Stop Loss orders are stored in this book till the trigger price specified in the order is reached or surpassed. When the trigger price is reached or surpassed, the order is released in the Regular lot book. The stop loss condition is met under the following circumstances: Sell order - A sell order in the Stop Loss book gets triggered when the last traded price in the normal market reaches or falls below the trigger price of the order. Buy order - A buy order in the Stop Loss book gets triggered when the last traded price in the normal market reaches or exceeds the trigger price of the order.

The Odd lot book contains all odd lot orders orders with quantity less than marketable lot in the system. The system attempts to match an active odd lot order against passive orders in the book.

This book contains orders that are entered for all auctions. The matching process for auction orders in this book is initiated only at the end of the solicitor period. The best buy order is matched with the best sell order.

An order may match partially with another order resulting in multiple trades. For order matching, the best buy order is the one with the highest price and the best sell order is the one with the lowest price. This is because the system views all buy orders available from the point of view of a seller and all sell orders from the point of view of the buyers in the market.

So, of all buy orders available in the market at any point of time, a seller would obviously like to sell at the highest possible buy price that is offered. Hence, the best buy order is the order with the highest price and the best sell order is the order with the lowest price.

Members can proactively enter orders in the system, which will be displayed in the system till the full quantity is matched by one or more of counter-orders and result into trade s or is cancelled by the member. Alternatively, members may be reactive and put in orders that match with existing orders in the system. Orders lying unmatched in the system are 'passive' orders and orders that come in to match the existing orders are called 'active' orders.

Orders are always matched at the passive order price. This ensures that the earlier orders get priority over the orders that come in later. These conditions are broadly classified into three categories: DAY - A Day order, as the name suggests, is an order which is valid for the day on which it is entered. If the order is not matched during the day, the order gets cancelled automatically at the end of the trading day.

It will therefore be able to span trading days if it does not get matched. The maximum number of days a GTC order can remain in the system is notified by the Exchange from time to time. At the end of this period the order will get flushed from the system. The maximum number of days a GTD order can remain in the system is notified by the Exchange from time to time.

IOC - An Immediate or Cancel IOC order allows a Trading Member to buy or sell a security as soon as the order is released into the market, failing which the order will be removed from the market.

Partial match is possible for the order, and the unmatched portion of the order is cancelled immediately. Until then the order does not enter the market. A sell order in the Stop Loss book gets triggered when the last traded price in the normal market reaches or falls below the trigger price of the order.

A buy order in the Stop Loss book gets triggered when the last traded price in the normal market reaches or exceeds the trigger price of the order. If for stop loss buy order, the trigger is This order is added to the regular lot book with time of triggering as the time stamp, as a limit order of For example, an order of with a disclosed quantity condition of will mean that is displayed to the market at a time.

After this is traded, another is automatically released and so on till the full order is executed. The Exchange may set a minimum disclosed quantity criteria from time to time. For example, an order of units with minimum fill will require that each trade be for at least units.

In other words there will be a maximum of 5 trades of each or a single trade of The Exchange may lay down norms of MF from time to time. AON - All or None orders allow a Trading Member to impose the condition that only the full order should be matched against. This may be by way of multiple trades. If the full order is not matched it will stay in the books till matched or cancelled.

The higher the Percent of Deliverable Quantity to Traded Quantity the better - it indicates that most buyers are expecting the price of the share to go up. Normal Market All orders which are of regular lot size or multiples thereof are traded in the Normal Market. Odd Lot Market All orders whose order size is less than the regular lot size are traded in the odd-lot market.

Auction Market In the Auction Market, auctions are initiated by the Exchange on behalf of trading members for settlement related reasons. Initiator - the party who initiates the auction process is called an initiator Competitor - the party who enters orders on the same side as of the initiator Solicitor - the party who enters orders on the opposite side as of the initiator.

Orders are stored in price-time priority in various books in the following sequence: The Equities segment has following types of books: Regular Lot Book The Regular Lot Book contains all regular lot orders that have none of the following attributes attached to them. Stop-Loss Book Stop Loss orders are stored in this book till the trigger price specified in the order is reached or surpassed. Odd Lot Book The Odd lot book contains all odd lot orders orders with quantity less than marketable lot in the system.

Auction Book This book contains orders that are entered for all auctions. Time Conditions DAY - A Day order, as the name suggests, is an order which is valid for the day on which it is entered. Related Links Watch the market live!


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