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. National stock exchange of India
4. Stock market timings 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, securities exchange, or bourse[note 1] is a
facility where stockbrokers and traders can buy and
sell securities, such as shares of stock, bonds, and other
financial instruments. Stock exchanges may also provide
facilities for the issue and redemption of such securities and
instruments and capital events including the payment of
income and dividends. Securities traded on a stock exchange
include stock issued by listed companies, unit
trusts, derivatives, pooled investment products and bonds.
Stock exchanges often function as "continuous auction"
markets with buyers and sellers consummating transactions
via open outcry at a central location such as the floor of the
exchange or by using an electronic trading platform.[5]

Initial public offerings 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 often 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, affect 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 capitalization 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 efficient platform for the Indian
corporate sector to raise investment capital.

The BSE is known for its electronic trading system that provides
fast and efficient trade execution.

The BSE enables investors to trade in equities, currencies, debt

instruments, derivatives, and mutual funds.
National stock exchange
The National Stock Exchange of India Limited (NSE) is India's
largest financial market. Incorporated in 1992, the NSE has
developed into a sophisticated, 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 thereafter.

KEY TAKEAWAYS

 The National Stock Exchange of India Limited (NSE) is

India's largest financial market and the fourth largest
market by trading volume.
 The National Stock Exchange of India Limited was the first
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 financial markets,
being the first electronic limit order book to trade
derivatives and ETFs.
Stock market timings in India
As per the normal stock market timings, 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 after 03:30
PM. So, all in all, the share market timings 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 sections. During one of
these sections, 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.
Section 1: From 09:00 AM to 09:08 AM

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

different shares in the stock market. In addition 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 section of the pre-opening session get
preference in the queue of orders.
Section 2: From 09:08 AM to 09:12 AM

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

modify existing ones, or cancel any order. This section is
necessary so that price matching can be performed. Price
matching involves comparing demand and supply. It helps
determine the final prices at which different shares will be
traded when the market opens at 09:15 AM.
Section 3: From 09:12 AM to 09:15 AM

This 3-minute window of time is like a connection section

between the pre-opening session and the normal trading hours.
It behaves like a buffer to ease the transition 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 continuous 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 limitations. During this
window of the share market timings, 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 sections.
Section 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 Nifty are calculated by considering the
weighted average prices of all the securities that are listed in
that index.
Section 2: From 03:40 PM to 04:00 PM

In this 20-minute section, you can still place buy and sell orders.
But the orders are confirmed only if there are sufficient
numbers of buyers and sellers in the market.
Role of stock exchange

 A market for securities- It is a wholesome market where

securities of government, corporate companies, semi-
government companies are bought and sold.
 Second-hand securities- It associates with bonds, shares
that have already been announced by the company once
previously.
 Regulate trade in securities- 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 securities- Only listed
securities recorded in the exchange office can be traded.
 Transaction- Only through authorised brokers and
members the transaction for securities can be made.
 Recognition- 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
regulations and SEBI guidelines.
SEBI
The Securities and Exchange Board of India (SEBI) is the most
important regulator of securities markets in India. SEBI is the
counterpart of the Securities and Exchange Commission (SEC) in
the U.S. Its stated objective is “to protect the interests of
investors in securities and to promote the development of and
to regulate the securities market and for matters connected
therewith or incidental thereto.”

 The Securities and Exchange Board of India (SEBI) is the

leading regulator securities markets in India, analogous to
the Securities and Exchange Commission in the U.S.
 SEBI has wide-ranging regulatory, investigative, and
enforcement powers, including the ability to impose fines
on violators.
Role of SEBI
Issuers of securities
These are entities in the corporate field 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 active. SEBI is
responsible for maintaining an environment that is free from
malpractices to restore the confidence 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 financial transactions
smooth and safe.

Protection to the investors

The primary objective of SEBI is to protect the interest of
people in the stock market and provide a healthy environment
for them.
Prevention of malpractices
This was the reason why SEBI was formed. Among the main
objectives, preventing malpractices is one of them.
Fair and proper functioning
SEBI is responsible for the orderly functioning of the capital
markets and keeps a close check over the activities of the
financial 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 often referred to as the offer 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 profit
divided by the outstanding shares of its common stock. The
resulting number serves as an indicator of a company's
profitability. It is common for a company to report EPS that is
adjusted for extraordinary items and potential share dilution.
Portfolio-A portfolio is a collection of financial investments like
stocks, bonds, commodities, 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 portfolio.
Fill or kill-Fill or kill (FOK) is a conditional type of time-in-force
order used in securities trading that instructs a brokerage to
execute a transaction immediately and completely or not at all.
This type of order is most often used by active traders and is
usually for a large quantity of stock.
Hedge-Hedging against investment risk means strategically
using financial instruments or market strategies to offset the
risk of any adverse price movements. Put another way,
investors hedge one investment by making a trade in another.
A reduction in risk, therefore, always means a reduction in
potential profits.
Limit order-A limit order is an order to buy or sell a stock at a
specific price or better. 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
reflecting 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, fine art, and collectibles, are all relatively illiquid. Other
financial assets, ranging from equities 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 financial 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-  Initial public offering 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 existing 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 securities. A block trade involves a significantly large
number of equities or bonds being traded at an arranged price
between two parties. Block trades are sometimes done outside
of the open markets to lessen the impact on the security's
price.
Insider trading- insider trading is defined as a malpractice
wherein trade of a company's securities is undertaken by
people who by virtue of their work have access to the
otherwise non public information which can be crucial for
making investment decisions.
Blue chip stock- A blue-chip stock is a huge company with an
excellent reputation. These are typically large, well-established
and financially sound companies that have operated for many
years and that have dependable earnings, often paying
dividends to investors. A blue-chip stock typically has a market
capitalization in the billions, is generally the market leader or
among the top three companies in its sector, and is more often
than not a household name. For all of these reasons, blue-chip
stocks are among the most popular to buy among investors. 
Call option- Call options are financial contracts that give
the option buyer the right, but not the obligation, to buy
a stock, bond, commodity or other asset or instrument at a
specified price within a specific time period. The stock, bond, or
commodity is called the underlying asset.
Tip- Tipping is the act of providing material non-public
information about a publicly traded company or a security to a
person who is not authorized to have the information. As long
as the information is accurate, tipping can produce huge profits
for an investor who acts on it when performing a securities
transaction.
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 auction process where buyers and sellers place bids and
offers to buy or sell. A bid is the price at which somebody
wishes to buy, and an offer (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 differing ideas about
the value of a specific stock and thus the price at which they are
willing to buy or sell it. The thousands of transactions that occur
as these investors and traders convert their intentions to
actions by buying and/or selling a stock cause minute-by-
minute gyrations in it over the course of a trading day. A stock
exchange provides a platform 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. Getting a stockbroker is most
commonly accomplished by creating an account with a well
established retail broker.
10 companies performing well
 Reliance
 TCS
 HDFC Bank
 HUL
 Infosys
 HDFC
 ICICI Bank
 Kotak Mahindra
 Bharti Airtel
 Bajaj Finance
 SBI
 ITC
 HCL Tech
 Wipro
 Asian Paints
 Maruti Suzuki
 Axis Bank
 Larsen
 Avenue Supermar
 Nestle
 Adani Green Ene
10 companies not performing well
Kansai Nerolac
Vodafone Idea
Tanla Solutions
JSPL
Ibull HousingFin
RIL
Asian Paints
Sunteck Realty
Firstsource Sol
AIA Engineering
Bank of Baroda
Maruti Suzuki
Types of speculators
Bull
A bull is an investor who thinks the market, a specific security
or an industry is poised to rise. Investors who adopt a bull
approach purchase securities under the assumption that
they can sell them later at a higher price. Bulls are optimistic
investors who are attempting to profit from the upward
movement of stocks, with certain strategies suited to that
theory.
Bear
A bear is an investor who believes that a particular security, or
the broader market is headed downward and may attempt to
profit from a decline in stock prices. Bears are
typically pessimistic 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
attempt to profit
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 attempts to profit from short-term market
movements by quickly moving in and out of positions. Day
traders, or stags, typically require access to a lot of liquid
capital to fund their positions and make a living. This is required
because they may be attempting to gain returns on small price
movements multiple times each day or with multiple positions
at the same time.

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
profit sharing. It assists in creating investment opportunities for
small investors, and raising capital for development projects
taken up by the government. It acts as a barometer of the
economy.
Bibliography
https://www.investopedia.com/articles/investing/082614/how-
stock-market-works.asp#:~:text=Authority%20(FINRA).-,How
%20Share%20Prices%20Are%20Set,offers%20to%20buy%20or
%20sell.
https://www.elearnmarkets.com/blog/sebi-purpose-objective-
functions-sebi/#:~:text=The%20main%20duty%20of
%20SEBI,enforcing%20certain%20rules%20and%20regulations.
https://www.nseindia.com/

Thank you
Sharayu Wagle
11B
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