ONLINE TRADING ON BSE AND

NSE
SHAIKH MOHD. JAHIR (Roll No: 47)
Presentation Outline
 Bombay Stock Exchange
 Vision
 Logo  SENSEX
 Standard  Closing Price of Scrip
 Listing  Basket Trading System
 Group of Companies  Compulsory Rolling System
 Why Trade Online???  Risk
 BOLT- BSE On-Line Trading  Reduction & Control Risk
 Timing
 Large Private Network
 मुंबई शेअर बाजार Bombay Stock Exchange
 Oldest Stock Exchange in Asia.
 3rd in numbers of listed Co. i.e.
4900 Co. & over 7700 scrips
on the stock exchange.
 Market Capitalization of
US$1.28 Trillion making it 12th
Largest in World.
मुंबई शेअर बाजार Bombay Stock Exchange
 “The Native Share & Stock
Brokers' Association” in 1875.
 Officially formed in 1956.
 SENSEX in 1986.

 BOLT in 1995

 Derivative in 2000

 Capacity of 80 lakhs orders per

day
मुंबई शेअर बाजार- VISION

"Emerge as the premier Indian stock

exchange by establishing global
benchmarks"
मुंबई शेअर बाजार- LOGO

New mission… smoother, seamless, and efficient,

whichever way you look at it.
 मुंबई शेअर बाजार- STANDARD
 1st exchange in India and 2nd in World to
obtain ISO 9000:2000 Certification.
 1st exchange in India and 2nd in World to
obtain BS7799-2-2002 Certificate for
Information Security and Management
System for BOLT operation.
 ISO 27001:2005 certified for Information
Security.
 मुंबई शेअर बाजार- SEVERAL FIRST
 · First in India to introduce Equity Derivatives
 · First in India to launch a Free Float Index

 · First in India to launch US$ version of BSE SENSEX

 · First in India to launch Exchange Enabled Internet Trading

Platform
 · First to have an exclusive facility for financial training

 · First in India in the financial services sector to launch its

website in Hindi and Gujarati

 · Shifted from Open Outcry to Electronic Trading within just

50 days
 · First bell-ringing ceremony in the history of the Indian

capital markets (listing ceremony of Bharti Televentures

Ltd.on     February 18,2002)
मुंबई शेअर बाजार- LISTING

Minimum Listing Requirements for

New Companies:
a) For Large Cap Companies

b) For Small Cap Compaies

 मुंबई शेअर बाजार- LISTING
 What is Large Cap Companies?
A large cap company is a company with a
minimum issue size of Rs. 10 crore and
market capitalization of not less than Rs. 25
crore
 What is Small Cap Companies?

A small cap company is a company other than

a large cap company.
 मुंबई शेअर बाजार- LISTING
 For Large Cap Companies:
 The minimum post-issue paid-up capital of the
applicant company (hereinafter referred to as "the
Company") shall be Rs. 3 crore; and
 The minimum issue size shall be Rs. 10 crore; and
 The minimum market capitalization of the
Company shall be Rs. 25 crore (market
capitalization shall be calculated by multiplying
the post-issue paid-up number of equity shares
with the issue price).
 मुंबई शेअर बाजार- LISTING
 For Small Cap Companies:
 The minimum post-issue paid-up capital of the Company
shall be Rs. 3 crore; and
 The minimum issue size shall be Rs. 3 crore; and
 The minimum market capitalization of the Company shall
be Rs. 5 crore; and
 The minimum income/turnover of the Company shall be
Rs. 3 crore in each of the preceding three 12-months
period; and
 The minimum number of public shareholders after the issue
shall be 1000.
 A due diligence Study.
 मुंबई शेअर बाजार- LISTING
For All Companies:
 Disclaimer clause forming a part of the offer
document that in the event of the market capitalization
requirement of BSE not being met, the securities of
the issuer would not be listed on BSE.
 The applicant, promoters and/or group companies,
shall not be in default in compliance of the listing
agreement.
 The above eligibility criteria would be in addition to
the conditions prescribed under SEBI (Disclosure and
Investor Protection) Guidelines, 2000
 मुंबई शेअर बाजार- GROUPS OF COMPANIES
 India’s leading stock exchange, has
classified Equity scripts into categories A,
B1, B2, S, T, TS, & Z to provide a
guidance to the investors which is
Classified on several factors such as market
capitalisation, trading volumes and
numbers, trackrecords, profits, dividends,
shareholding patterns, and some qualitative
aspects.
 Group A:
 It is the most tracked class of scripts
consisting of about 200 scripts. Market
capitalization is one key factor in deciding
which scrip should be classified in Group A.
 At present there are 216 companies in the A
group
 Group S:
 “The Exchange has introduced a new segment named
“BSE Indonext” .
 The “S” Group represents scripts forming part of the
“BSE-Indonext” segment.
 companies exclusively listed on regional stock exchanges
having capital of 3 crores to 30 crores.
 All trades in this segment are done through BOLT system
under S group.”
 Group Z:
 The companies which have failed to comply
with the listing requirements of the Exchange
and/or have failed to resolve investor
complaints or have not made the required
arrangements with both the Depositories, viz.,
Central Depository Services (I) Ltd. (CDSL)
and National Securities Depository Ltd. (NSDL)
for dematerialization of their securities.”
 Group B:
 All companies not included in group
‘A’, ‘S’ or ‘Z’ are clubbed under this
category.
 Group T:

“It consists of scripts which are traded

on trade to trade basis with
surveillances.”
 Group TS:

“The “TS” Group consists of scripts in

the “BSE-Indonext” segments which
are settled on a trade to trade basis as a
surveillance measure.”
 Group F:
 Fixed Income Securities
 Group G:
 Government Securities
Why Trade On-Line ???
 Speed
 Convenience & accessibility
 Cost
 No more Queues
 Service
 Information
BSE On-Line Trading (BOLT)
 BOLT came in to existence in 1995 within 55
days
 BSEWebx.co.in
 bseindia.com
BOLT Screen
Timing
Session Timing
Beginning of the Day Session 8:00 - 9:00
Trading Session 9:00 - 15:30
Position Transfer Session 15:30 - 15:50
Closing Session 15:50 - 16:05
Option Exercise Session 16:05 - 16:35
Margin Session 16:35 - 16:50
Query Session 16:50 - 17:35
End of Day Session 17:30
Large Private Network
 LAN- BSE Campus
 WAN- Different Service Providers
 V-SAT- Market participants in remote areas
 Online Surveillance System - integrated (BOSS-
i)- trading and settlement activities of the member-
brokers
SENSEX
 Sensex is calculated using the "Free-float Market Capitalization"
methodology.
 The level of index at any point of time reflects the Free-float market value
of 30 component stocks relative to a base period.
 The market capitalization of a company is determined by multiplying the
price of its stock by the number of shares issued by the company
 This market capitalization is further multiplied by the free-float factor to
determine the free-float market capitalization
 The base period of Sensex is 1978-79 and the base value is 100 index
SENSEX Formula

Aggregate Mkt Capitalisation * Base Index Value

Aggregate base Mkt capitalisation
How Closing Price of Scrip is Calculated?
 The closing price of scrips is computed by BSE on
the basis of weighted average price of all trades
executed during the last 30 minutes of a continuous
trading session. However, if there is no trade
recorded during the last 30 minutes, then the last
traded price of scrip in the continuous trading
session is taken as the official closing price.
Basket Trading System
 The investors through the Members are able to buy/ sell all 30 scrips of Sensex
in one go in the proportion of their respective weights in the Sensex
 The investors need not calculate the quantity of Sensex scrips to be bought or
sold for creating Sensex-linked portfolios and this function is performed by the
system.
 The investors can also create their own baskets by deleting certain scrips from
30 scrips in the Sensex
 The Members need to indicate the number of Sensex basket(s) to be bought or
sold, where the value of one Sensex basket is arrived at by the system by
multiplying Rs.50 to the prevailing Sensex.
Settlement
Compulsory Rolling Settlement

All transactions in all groups of securities in the

Equity segment and Fixed Income securities listed
on BSE are required to be settled on T+2 basis
DAY ACTIVITY

T Trading on BOLT and daily downloading of statements showing details of transactions and
margins at the end of each trading day.
Downloading of provisional securities and funds obligation statements by member-
brokers.
6A/7A* entry by the member-brokers/ confirmation by the custodians.

T+1 Confirmation of 6A/7A data by the Custodians upto 1:00 p.m. Downloading of final
securities and funds obligation statements by members

T+2 Pay-in of funds and securities by 11:00 a.m. and pay-out of funds and securities by 1:30
p.m. The member-brokers are required to submit the pay-in instructions for funds and
securities to banks and depositories respectively by 10: 30 a.m.

T+3 Auction on BOLT at 11.00 a.m.

T+4 Auction pay-in and pay-out of funds and securities by 12:00 noon and 1:30 p.m.
respectively.
BANKING
@ ANGEL BROKING SECURITIES LTD.
Risk
Risk can be classified?
 Risks associated with Paper Based Trading
 Lost/misplaced securities

 damage to securities

 loss of securities in transit

 Client Risk
 Client default

 Client absconding

 Fake/ forged/stolen securities introduced by the clients

Reduction & Control Risk
 Know Your Client Scheme
 Database of lost , Stolen , Misplaced Securities
 Client Caution Database
 Verification of shares at members office
 Inspection
Presentation Outline
 National Stock Exchange

 Introduction
 Mission
 Logo
 NEAT- National Exchange Automated Trading
 Market
 Order Condition
 Nifty Calculation

राष्ट्रीय शेअर बाज़ार National Stock Exchange
 It is the largest stock exchange in India in
terms of daily turnover and number of
trades, for both equities and derivative
trading.
 NSE has a market capitalization of around
Rs 47,01,923 crore.
 NSE was promoted by leading Financial
Institutions at the behest of the
Government of India and was incorporated
in November 1992 as a tax-paying
company unlike other stock exchanges in
the country.
राष्ट्रीय शेअर बाज़ार- National Stock Exchange
 Wholesale Debt Market (WDM) segment
in June 1994.
 Capital Market (Equities) segment
commenced operations in November
1994.
 in Derivatives segment commenced in
June 2000.
 15 million trades per day in Capital
Market segment.
राष्ट्रीय शेअर बाज़ार - MISSION
 Establishing a nation-wide trading facility for
equities, debt instruments and hybrids,
 Ensuring equal access to investors all over the

country through an appropriate communication

network,
 Providing a fair, efficient and transparent securities

market to investors using electronic trading systems,

 Enabling shorter settlement cycles and book entry

settlements systems, and

 Meeting the current international standards of

securities markets.
राष्ट्रीय शेअर बाज़ार - LOGO

The logo of the NSE symbolises a single nationwide securities

trading facility ensuring equal and fair access to investors,
trading members and issuers all over the country.
राष्ट्रीय शेअर बाज़ार - NEAT
 National Exchange for Automated Trading.
 NSE is one of the largest interactive VSAT
based stock exchanges in the world.
 NSE is displaying its live stock quotes on the
web site (www.nseindia.com) which are
updated online.
 NSE today allows members to provide internet
trading facility to their clients through the use
of NOW (NSE on web), a shared web
infrastructure.
राष्ट्रीय शेअर बाज़ार - SEGMENT
NSE has the following major segments of the
capital market:
 Equity

 Futures and Options

 Retail Debt Market

 Wholesale Debt Market

 Currency futures

 MUTUAL FUND

 STOCKS LENDING & BROWING

राष्ट्रीय शेअर बाज़ार - MARKET
4 Types of Market
 Normal Market

 Odd Lot Market

 Auction Market

 Spot Market
Normal Market
 All orders which are of regular lot size or multiples
thereof are traded in the Normal Market.
 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
Odd Lot Market
 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
 Currently the odd lot market facility is used for the Limited Physical
Market as per the SEBI directives.
Auction Market
There are 3 participants in this market.
 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

Spot Market
 Spot orders are similar to the normal market
orders except that spot orders have different
settlement periods vis-à-vis normal market.
 These orders do not have any special terms
attributes attached to them.
 Currently the Spot Market is not in use.
राष्ट्रीय शेअर बाज़ार – ORDER CONDITION

 Time Related Condition

 Price Related Condition
 Quantity Related Condition
Time Related Conditions
 DAY
 Good Till Cancelled (GTC)
 Good Till Day/Date (GTD)
 Immediate or Cancel (IOC)
Price Related Conditions
 Limit Price/Order
 Market Price/Order
 Stop Loss (SL) Price/Order
Quantity Related Conditions
 Disclosed Quantity
 Minimum Fill (MF)
 All or None orders (AON)
राष्ट्रीय शेअर बाज़ार – NIFTY CALCULATION

 Nifty index movement is based on the

movement of 50 scripts.
 Calculated on the bases of Free-float

Market Capitalization methodology

Opening an Account
 Filling an application form
 Issued with ID & Password
Choosing Broker
 Are lower dealing charges very important to you?
 How often will you trade?
 Are you willing to pay higher annual charges to get extra facilities?
 What type of account do you want?
Nominee Account
Certificated Account
Crest-sponsored member account
 How important is customer service to you?
 Do you want foreign dealing?
 Comparing brokers
Doing Deal
 EPIC code, a unique three or four letter code for
each listed company
 The broker's website will usually have a look-up
facility
 Properly execute the order
Finally, a word of warning about online
trading...!
 It is obviously extremely important to key in the correct information –
particularly the number or value of the shares you're trading. It’s easy to
make a mistake when you’re typing in numbers. It’s worth double-
checking before you complete your trade!
 Your computer may break down – whilst you can phone up most brokers,
some may penalise you for this.
 Trading online means you can make very quick decisions and it’s easy to
get carried away – remember, it’s just as easy to make a loss as it is a profit.
I don’t want to put you off, but Money Week (May 2004) said only 11.5%
of online traders actually make any money – what a sobering thought!!
 Never use public computer for trading with your ID and Password.
Thank you for patience listening