Secondary Market – Stock Exchanges & Trading

Introduction

Once securities are issued in the Primary Market, they are traded here. This provides Liquidity and Running Price discovery.

1. Major Stock Exchanges in India

1. BSE (Bombay Stock Exchange): Established 1875. Oldest in Asia. Index: SENSEX (30 stocks).
2. NSE (National Stock Exchange): Established 1992. Largest by volume. Electronic trading pioneer. Index: NIFTY 50.

2. Trading Mechanism

Trading is fully screen-based and automated.

• NEAT: NSE's trading system.
• BOLT: BSE's trading system.

Steps:

1. Place Order: Investor tells broker "Buy 100 shares of Tata Motors at ₹500".
2. Order Matching: System matches Buy and Sell orders anonymously.
3. Trade Confirmation: Broker informs investor.
4. Contract Note: Legal document of trade issued by broker.

3. Settlement Cycle (T+1)

India has moved to T+1 Settlement (Trade + 1 Day).

• If you buy on Monday (Trade Day), shares will come to your Demat on Tuesday (T+1).
• Earlier it was T+2. T+1 reduces risk and frees up capital faster.

4. Market Phases

• Bull Market: Prices are rising. Optimism.
• Bear Market: Prices are falling. Pessimism.

Summary

• Indices: SENSEX (BSE), NIFTY (NSE).
• Cycle: T+1 (Fastest in the world).
• Contract Note: Proof of trade.

Quiz Time! 🎯

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