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Several entities are involved in the process of clearing. These are clearing corporation, clearing members, custodians, Clearing banks, Depositories etc. Lets study the roles of each of these entities. Clearing Corporation The clearing corporation is responsible for post-trade activities such as risk management and clearing and settlement of trades executed on a stock exchange. The … Read more
Clearing refers to the process of comparing trades before settlement date or the determination of the net obligation of the broker participants (for both securities and cash) The settlement process refers to the exchange of cash and securities on the contractual settlement date. The settlement date can be agreed upon at trade execution or can … Read more
What are Auctions? Auctions are initiated by the Exchanges on behalf of trading members for settlement-related reasons. If a Trade happens today (T-day), the settlement of shares takes place on (T+2) days. In some cases, due to some reasons, the obligations of delivery of shares fails. The main reasons are shortages, bad deliveries, and objections. … Read more
Using the Screen Based Trading System (SBTS), an Investor enters a trade in the computer system. Depending on the type or order the order gets stacked in the corresponding Order book. If a perfect match is found the order gets executed which results in a trade. Let’s understand the entire process after Order placement. Order … Read more
Order types and conditions The system allows the trading members to enter orders with various conditions attached to them as per their requirement. These conditions are broadly divided into Time conditions, Quantity Conditions, Price Conditions and Other Conditions. Several combinations of the above are allowed thereby providing enormous flexibility to the users. 1) Time Conditions: … Read more
On the Stock Exchanges in India there are thousands of listed companies. Some companies are very large and some companies have small market capitalization. Therefore, the risk involved in investing in these companies varies accordingly. To help Investors in making well-informed decision both the exchanges have divided the Securities in different categories. The scrips traded … Read more
Trading System The trading system operates on a strict price-time priority. Best priced order gets the first priority for matching. Orders are matched automatically by the computer. If an order does not find a match, it remains in the system and is displayed to the whole market, till a fresh order comes in or the … Read more
Trading, Clearing and Settlement The trading in securities is buying and selling of securities listed on the recognized stock exchanges. The clearing is a process of determination of obligations of member-brokers by the stock exchanges after which the same are discharged by the concerned parties by settlement. The settlement is a process of settling of … Read more
There are 28 official stock exchanges (SE) in India. The largest exchanges in India are Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) Here are the names of others: Calcutta SE Cochin SE Inter-connected SE of India Multi-Commodity Exchange of India OTC Exchange of India Pune SE National Commodity and Derivative Exchange … Read more
What is Stock Exchange? As per the Wikipedia, A stock exchange, security exchange or bourse, is a facility where stock brokers and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments. Stock exchanges may also provide for facilities like the issue and redemption of such securities and … Read more
