Gone are the days when you needed a broker to help you buy and sell stocks, shares and make investments in the stock market. Through online investing, you can buy and sell stocks with just a few mouse clicks. The economic and capital market in India cannot exist without a stock exchange; there are two main stock exchanges where trading takes place; the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). While all major transactions take place here, there are more than 20 different stock exchanges located throughout the country.
Online trading in India has changed the meaning of trading in the country. Without the requirement of a broker, trading has become easier, faster and much more convenient than in the days before. Some of the main financial products and services offered through online trading are mutual funds, stocks, general insurance, life insurance, stock trading, portfolio management, commodity trading, and financial planning. In online trading, the investor has to pay less brokerage compared to offline trading. There is no need for any paperwork through online investing and the need for a middleman is eliminated. All share accounts are stored in a Demat account where they can be viewed.
BSE Online Trading was established in 1995 and is the first exchange to be established in Asia. It has the largest number of publicly traded companies in the world and currently has 4,937 publicly traded companies with over 7,700 instruments traded.
The only thing an investor needs to trade online through BSE is an online trading account. Trading can be done within trading hours from anywhere in the world. In fact, BSE has replaced the open shout system with automated trading. The open shout system is a common method of communication between investors on a stock exchange where they shout and use hand gestures to communicate and transfer information about buy and sell orders. It usually takes place in the ‘pit’ area of the trading floor and involves a lot of face-to-face interaction. However, with the use of electronic trading systems, trading is easier, faster and cheaper; and is less prone to manipulation by market makers and brokers/dealers.
The BSE offers an efficient and transparent market for the trading of debt instruments, shares and derivatives. This is done through a system known as BOLT – BSE Online Trading System.
In the stock market, a key index is used to track the major or most traded stocks on the exchange. The index used in BSE during trading is the SENSEX and it is displayed in all major portals, newspapers and magazines. It is the first Indian stock index to enjoy iconic stature and is tracked around the world. It is conducted on a free float methodology and is sensitive to market sentiments and realities.
There are also indices such as BSE small cap, BSE mid cap and BSE500 to cater to small and medium sized companies. Also, India index services and Products Limited has indices like CNX Nifty Junior, S&P CNX Nifty, CNX 100, S&P CNX 500 and CNX Mid cap. The BSE offers 22 indices to meet a multitude of needs, including 12 sector indices. For example, the BSE PSU Index tracks the performance of publicly traded PSY companies and also helps the central government monitor their wealth in grants.
The BSE has become a fully “embodied and demutualized” stock exchange through the use of online exchanges. With partners like Deutsche Borse (DB) and the Singapore Stock Exchange (SGX), it has global competitive strength. BSE has strategic relationships in almost every part of the world: Europe (DB)), Hong Kong (ETF) and Asia (SGX), leading public sector companies such as State Bank of India, Bank of India, Life Insurance Corporation of India and Central Bank of India.
Benefits of BSE trading system in India for stock brokers or newbies
There are a number of attractive services to empower investors and facilitate smooth transactions. Some of these include:
one) Investor Services: A range of services is offered to investors. Being the first exchange in the country to provide an amount of INR 1 million for the investor protection fund, the BSE had launched a national investor awareness program; ‘Secure Stock Market Investment’ under which there were 264 programs which were held in more than 359 cities in India.
two) BSE has an online trading BOLT system: The Online Trading System (BOLT) makes it easy to trade securities based on an online screen. It currently operates 25,000 Trader Workstations that are located in 359 cities in the country.
3) The BSE has the world’s first centralized exchange-based Internet trading system: BSEWEBX.com. This system helps investors from anywhere in the world to trade on the BSE platform.
4) The BSE has an Online Surveillance System (BOSS) which monitors in REAL TIME price movements, volume positions and member positions, as well as real-time measurement of default risk, generation of cross-market alerts and market reconstruction.
5) The BSE has a training institute. – known as the Bombay Stock Exchange Training Institute (popularly known as the acronym BTI). in collaboration with several renowned management institutes and universities. There are over 40 courses to choose from on different aspects of the capital market and the financial market of the Bombay Stock Exchange.
