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7/16/2019 Trading Mechanism
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INTRODUCTION
The trading on stock exchange in INDIA used to take
place through open outcry method without use of
information technology for immediate matching or
recording of trades. This was time consuming and inefficient. This imposed
limits on trading volumes and efficiency. In order to
provide efficiency, liquidity, and transparency NSE and
BSE introduced nation wide online fully automated
“SCREEN BASED TRADING SYSTEM”
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SCREEN BASED TRADING
NSE’s screen based trading is known as NEAT-
National exchange for automated trading.
BSE’S screen based trading is known as BOLT-Bombay online trading.
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Ticker window
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MECHANISM OF ONLINE
TRADING
NSE has main computer which is connected
through “VERY SMALL APERTURE
TERMINAL”(VSAT) installed at its office.
THE main computer runs on a fault tolerant
“STRATUS” mainframe computer at the
exchange. Brokers have terminals installed at
their premises which are connected through VSATS.
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HOW TO PLACE ORDER
An investor informs broker to place an order on
his behalf. The broker enters the order through
his PC, which runs under windows NT and
sends signal to the satellite via VSAT. The signal
is directed to mainframe computer at NSE via
VSAT at NSE’s office. A message relating to the
order activity is broad casted to respectivemember.
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To enter a buy order
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BASIS OF OPERATION
The online trading operates on the strict basis of
PRICE PRIORITY and TIME PRIORITY
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HOW TO ENTER SELL ORDER
Same as the process involved in the placing of thebuy order.
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To enter a Sell order
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LOGGING ON
On starting NEAT application, the logon screen
appears with the following details.
USER ID
TRADING MEMBER ID
PASSWORD
NEW PASSWORD
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TERMINOLOGIES OF ONLINE
TRADING
Snap quote:- feature available to getinstantaneous market information on a desiredsecurity.
Active and Passive orders:- when any orderenters the trading system, it is an active order. Ittries to find a match on the other side of books.If it finds a match trade is generated, if does notfinds match it turns to passive order which isstored in order book.
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Circuit breakers:- Started
implementing
compulsorily from July
02, 2001. The circuitbreakers will be operated
at the three stages of
INDEX movement,
either way viz at 10%,15%, 20%.
MOVEMENT TIME FREEZED
10% PRIOR 1pm
AFTER 1pm
1 HOUR
½ HOUR
15% PRIOR 1pm
AFTER 1pm-
2pm
AFTER 2pm
2 hours
1 hour
Freezed for the day
20% ANY TIME FREEZED FOR
THE DAY
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Market By Price
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Order Book
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Trade Book
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BY
LAKSHMEESH MR
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Thank You
