intro

● WHAT IS STOCK EXCHANGE? Definition of Stock Exchange : The securities regulation act of
1956defined stock exchange as “an association , organization , or aindividual which is established
for for the purpose of assisting ,regulating , and controlling business in buying ,selling and dealingin
securities.” Meaning :
● This comes under treasury sector ,which providesservice to stock brokers & traders to trade
stocks ,bonds andsecurities. Stock exchanges helps the companies to raise their fund.Therefore the
companies needs to list themselves in the StockExchange and the shares will be issued which is
known as equity ora ordinary share and these shareholders are the real owners of thecompany the
Board Of Directors of the Company are elected out ofthese Equity Shareholders only.
 History Of Stock Exchanges
The exchange was incorporated in 1992 as a tax-
paying company and was recognized as a stock
exchange in 1993 under the Securities Contracts
(Regulation) Act, 1956, when Mr. P. V. Narasimha
Rao was the Prime Minister of India and Dr.
Manmohan Singh was the Finance Minister

NSE commenced operations in the Wholesale

Debt Market (WDM) segment in June 1994. The
Capital market (Equities) segment of the NSE
commenced operations in November 1994, while
operations in the Derivatives segment
commenced in June 2000.
 Stock Exchanges Of India
● Ludhiana Stock Exchange
● Madhya Pradesh Stock Exchange
● Madras Stock Exchange
● Mangalore Stock Exchange
● MCX Stock Exchange
● Meerut Stock Exchange
● National Stock Exchange of India
● OTC Exchange of India
● Pune Stock Exchange
● Saurashtra Kutch Stock Exchange
● United Stock Exchange of India
● UP Stock Exchange
● Vadodara Stock Exchange
 Features
●
TIMINGS:
●
Trading on the equities segment takes place on all days of the week (except Saturdays and
Sundays and holidays declared by the Exchange in advance). The market timings of the
equities segment are:
● (1) Pre-open session
●
Order entry & modification Open: 09:00 hrs
●
Order entry & modification Close: 09:08 hrs*
●

●
*with random closure in last one minute. Pre-open order matching starts immediately after
close of pre-open order entry.
●

● (2) Regular trading session

●
Normal/Retail Debt/Limited Physical Market Open: 09:15 hrs
● Normal/Retail Debt/Limited Physical Market Close: 15:30 hrs.
●
Features(contd.)
 procedure
● PROCEDURE OF TRADING
●
1.Select of broker
● The first step is buying or selling of share is to select a broker for transaction business on behalf of the investor. The trading of securities on the stock
exchange can be done through members of the exchange.
● An investor prefers to select a broker who shall.
●
Act with due skill. Care and diligence in the conduct of all his business.
●
Not create false market either singly or in concert with other.
● 2.Opening An Account With The Broker
● The next step to open account with the broker. It helps the investor to provide his credit worthiness, if the clients were not to do margin money with the
broker.
●
3.Selection Of Securities
● This is application for buying securities. The investor may be consulted with broker and take advise for selection of securities.
● 4.Selection Of Time For Trading
●
This is important to get the best advantage from buying or selling the securities.
● 5. Placing An Order
● Various method of placing an order with the broker has been evolved to give the broker leverage when he is on the floor of the stock exchange.
●
6. Preparation Of Contract Note
●
SEBI circular of 4th Feb. 1991 requires that all member of the recognized stock exchange issue contract note to the investors on the execution of trade.
Brokers, therefore issue contract note to the client, which gives the name of the company, price of trade, brokerage, time of execution, provision regarding
arbitration etc. in term of the bye-laws of stock exchange, this is statutory requirement and mandatory.
● 7. Settlement
● The settlement is the process where by payment is made by brokers who have made purchase and share delivery by those brokers who have made sales.
 SEBI
● 9. SECURITIES AND EXCHANGE BOARD OF INDIA(SEBI) The SEBI was constituted on 12th April,1988 under a resolution of the
Government of India. On 31st january,1992,it was made a statutory body by the Securities and Exchange board of India Act,1992. The
Companies (Amendment) Act,2000 has given certain powers to SEBI as regards the issues and transfer of securities and non-payment of
dividend Function Of SEBIRegulating the business in stock exchange and any other securitiesmarkets.Promoting and regulating self-
regulatory organization.Registering and regulating the work of collective investmentscheme,incluing mutual funds.Prohibiting fraudulent
and unfair trade practices relating tosecurities market.Promoting education, and training of intermediaries of securitiesmarket
● 20. Power of SEBIPower to approve the bye-laws of stock exchangePower to inspect the books of accountsPower to grant license to
any person for the purpose of dealing in certain areas.Power to delegate powers exercisable by it.Power to try directly the foliation of
certain provision of the company Act
 Speculations And Speculators
● SPECULATION AND SPECULATOR SPECULATION : It is the
transaction of members to buy or sell securities on stock exchange with a
view to make profits to anticipated raise or fall in price of securities.
SPECULATOR : The dealer in stock exchange who indulge in speculation
are called speculator . They do not take delivery of securities purchased
or sold by them , but only pay or rescue the difference between the
purchase price and sale price . The different types of speculators are
● BULL
● BEAR
● STAG
● LAME DUCK
 Bull
● BULL {TEJIWALA}He is speculator who
expects the future raise in price ofsecurities he
buys the securities to sell them at future dateat
the higher price.He is called as bull because his
activities resembles as a bull ,as the bull tends
to throw its victims up in the air through
itshorns. In simple the bull speculator tries to
raise the price ofsecurities by placing a big
purchase orders.
 BEAR
BEAR {MANDIWALA} He is speculator who
expects future fall in prices , he does an
agreement to sell securities at future date at the
present market rate . He is called as bear
because his altitude resembles with bear , as the
bear tends to stamp its victims down to earth
through its paws . In simple the bear speculator
forces of prices of securities to fall through his
activities.
 Stag
● STAG {DEER} He operates in new issue of
market . He is just like a bull speculator . He
applies large number of shares in the issue
market only by paying , application money ,
allotment money. He is not a genuine investor
because , he sells the alloted securities at the
premium and makes profit. In simple he is
cautious in his dealings . He creates an artificial
rise in prices of new shares and makes profits.
 Lame Duck
● LAME DUCK He is speculator when the bear
operator finds it difficult to deliver the securities
to the consumer on a particular day as agreed
upon , he struggles as a lame duck in fullfilling
his commitment . This happens when the prices
do not fall as expected by the bear and the
other party is not willing to postpone the
settlement to the next period.
 List
● prepare a list of at least 25 companies listed on
a Stock Exchange
 Portfolio
● make an imaginary port folio totalling a sum of
Rs 50,000 equally in any of the 5
● companies of their choice listed above.
 Create Graphs
report the prices of the stocks on daily basis and
present it diagrammatically on the graph paper

Columns: Date,Action(Buy or Sell), Price On That Date,

Last Price(price a day before), Quantity, Money Flow(-ve
for purchase),change,change%,profit/loss,P/L%
 Reasons For Fluctuations
The students may conclude by identifying the causes in the fluctuations of prices.
Normally it would be related to the front page news of the Economic Times, for
example,
 Change of seasons.
 Festivals.
 Spread of epidemic.
 Strikes and accidents
 Natural and human disasters.
 Political environment.
 Lack in faith in the government policies.
 Impact of changes in government policies for specific industry.
 International events.
 Contract and treaties at the international scene.
 Relations with the neighboring countries.
 Crisis in developed countries,etc.
 EG:Reason -Tata Steel
● Moody's raises debt rating to Ba1; outlook
stable