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Stock Exchange/Screen-Based Trading
Let’s learn more about Stock Exchange/Screen-Based Trading. A stock exchange is a form of exchange that provides services for stockbrokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for the issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products, and bonds.
Index: It is the number used to represent the change in a set of values between a base time period and another time period.
Stock Index: The index is an indicator of the board market. Any index is an average of its constituents. The stock index represents changes in the value of a set of stocks that constitute the index over a base year.
Type of stock exchange
1. National Stock Exchange (NSE): The National Stock Exchange (NSE) is a stock exchange located in Mumbai, India. It is the 11th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number of trades, for both equities and derivatives trading. NSE has a market capitalization of around US$1 trillion and over 1,652 listings as of July 2012. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE’s key index is the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by market capitalization.
2. Bombay Stock Exchange (BSE): Bombay Stock Exchange, commonly referred to as the BSE, (Bombay Śhare Bāzaār) is a stock exchange located on Dalal Street, Mumbai, Maharashtra, India. It is the 10th largest stock exchange in the world by market capitalization. Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.), is Asia’s first Stock Exchange and one of India’s leading exchange groups. Over the past 137 years, BSE has facilitated the growth of the Indian corporate sector by providing it an efficient capital-raising platform. Popularly known as BSE, the bourse was established as “The Native Share & Stock Brokers’ Association” in 1875.
BSE is a corporatized and demutualized entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, derivatives, mutual funds. It also has a platform for trading in equities of small-and-medium enterprises (SME). Around 5000 companies are listed on BSE making it the world’s No. 1 exchange in terms of listed members. The companies listed on BSE Ltd command a total market capitalization of USD Trillion 1.2 as of October 31, 2012. BSE Ltd is the world’s fifth-most active exchange in terms of the number of transactions handled through its electronic trading system. It is also one of the world’s leading exchanges (3rd largest in July 2012) for Index options trading (Source: World Federation of Exchanges).
Over the counter exchange of India (OTCEI): An electronic stock exchange based in India that is comprised of small- and medium-sized firms looking to gain access to the capital markets. Like electronic exchanges in the U.S. such as the Nasdaq, there is no central place of exchange, and all trading is done through electronic networks.
