post 7
Dated8/5/2020
STOCK EXCHANGE
snippet There is always a word around-“Stock market” but what is it, read more to find out

The word stock exchange floats around quite often but we all tend to ignore the significance of it’s existance. Today we will discuss the functioning and a brief history of Indian stock exchanges. The Mighty Bombay Stock Exchange was the first stock exchange Of Asia and was set up in 1875 under a Banyan tree. The brokers (the one who sells and purchase stocks for clients) use to shout out the prices of shares and the whole scene would not be much different to a “Sabzi Mandi”. Usual fights and brawls were a daily scene and was a part of life of investors and brokers.

The platform of trading that we see today with all the complex comuter screens and techie stuff started in India with the establishment of NSE(National Stock Exchange) in 1995.
Earlier there used to be physical shares like a currency note or a Fixed deposit certificate, Those were used for trading and investement. But these posed several problems

  1. Physical shares could get damaged in rain fire or can get mispaced.
  2. These could be stolen and have to be delivered by post hence consumed time

So NSE sttarted trading in DEMAT format (Dematerialized form) or in electronic form and BSE followed the same pattern. Electronic trading is easier and quick. Today BSE is world’s fastest stock exchange it has a median trading speed of 6 micro seconds.

So what’s the function of a stock Exchange?? Why do we need them??
A stock exchange is a platform where various companies get listed to raise money(we’ll learn more about this in Future.) and it gives license to intermediaries called brokers who have completed necessary studies and are compatible enough. These brokers are then given a Terminal by the exchange to trade. These brokers are the persons whom we contact if we wish to buy or sell shares….
The stock exchange also regulates trading and prevents frauds under the guidelines of SEBI

There are 2 Natiopnal stock Exchanges in India and 22 regional Stock exchanges. My city also has one in Ludhiana.
When talking of markets there must be discipline and a strict routine?? lets zoom into a day of stock Exchange
Market is open for 5 days a week and also observes major festivals as holidays.


The day at stock Exchange starts with a pre opening session at 9:00 am with a pre opening session, here all the investors and traders pool requests of buy and sell for first 8 minutes, this session closes randomly between 7th and 8th minutes.

the next 7-8 minutes till 9:15 are used to analyze and match the buy and sell orders based on demand and supply.

The opening Bell is rung at 9:15 am and the trading continues till the closing bell of 3:30 pm

From 3:40-4:00 pm there is a post close session Here AMO (After market orders are placed) these are executed at Next day’s opening.

this was a day in life of a day trader, Hope you liked this lifestyle of working from 9-3 for five days a week.

Happy learning