National Stock Exchange

National Stock Exchange was established in the year 1992 with the prime objective of setting up a second national stock exchange in India with much transparent system. Unlike the BSE, the management, operations and trading of NSE were delinked i.e the control of each of the three verticle was handled by independent bodies. Also, there were multiple advantages of the online system. Firstly, the role of the broker in day to day trading was reduced significantly. Secondly, the online system reduced the lead time for transaction completion from 7days to 2 days, creating more liquidity in the market. Thirdly, manual handling of records was not required further.

Presently NSE has about 1600 companies listed with the average day to day trading amount of about Rs two lac crores. The index of NSE is S&P CNX NIFTY which includes 50 companies, listed as per the market capitalization.

The online trading offers various options to the trader. Some of them are options like Immediate or Cancel (IOC, which trades immediately or cancel the transaction), End of Day (where the transaction is queued until the buyer gets the seller or vice versa), Stop Loss (the shares will not be traded if the amount reduces to more than the specified amount ) etc. These options make the trading more user friendly and enable a smooth real time trading.

Learning from Session Three: Demonstration of Online trading of Derivative Market- F&Os.

Derivatives are of two types -- exchange traded and over the counter. NSE deals with exchange traded derivities. F&Os are the common exchange traded derivatives. A 'Future' is a contract to buy or sell the underlying asset for a specific price at a pre-determined time. Futures contracts are available for equity stocks, indices, commodities and currency. On the other hand, options contracts are instruments that give the holder of the instrument the right to buy or sell the underlying