what is meant by stock exchange?

Answer 1

An organized marketplace where members gather to trade securities. Members may act either as agents for customers, or as principals for their own accounts.
Marketplace where brokers and dealers meet to buy and sell stocks of publicly traded companies on behalf of investors. Major US stock exchanges include the New York Stock Exchange (NYSE), the NASD and the American Stock Exchange. The NYSE is where most of the largest, most actively traded companies in the United States are listed. Many countries have stock exchanges where shares of companies in that country are traded.
SE is where listed stocks are bought and sold. Stock exchange participants are floor brokers and specialists. The following are the US exchanges: American (AMEX), Boston (BSE), Chicago (CHX), Cincinnati (CSE), New York (NYSE), Pacific (PSE) and Philadelphia (PHLX). The AMEX and NYSE are often referred to as primary exchanges, while the others are referred to as regional exchanges. The BSE, CHX, CSE, PSE and PHLX are also known as the National Market Exchanges (NMEs).

Answer 2

A stock exchange is a corporation/mutual organization, which provides facilities for stock brokers and traders, to trade company stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities, other financial instruments, and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and Bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for record-keeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions.

Answer 3

Stock Exchanges are service point for traders (also called brokers) and companies. One cannot directly invest through a stock exchange. They have to go through an Exchange specified broker (registered)

Exchange lists shares of Companies on their exchanges for trading. They offer a platform (terminal) for trading shares to their registered members (brokers). Various mechanisms are put in place to ensure risk free environment given the nature of securities trading.

Trading is held in Stocks (equities), Derivative products (this include futures & options market), Mutual Funds, Bonds, T-Bills etc. In India the 2 major stock exchanges are NSE & BSE.

NSE is a front-runner in terms of volumes of shares traded in Cash (Equity) & Derivative Segment. Commodities trading is offered by MCX & NCDEX. These Exchanges deal only in Commodities trading.

Normally trading in India is on T+2 basis i.e. if Trading is on Monday settlement is on Wednesday.

Due to efficient market cycles earlier where trading used to take place for a week and settlement used to take place over 3-4 days. The entire trading and settlement cycle has been shortened to just 3 days.

When trading for securities is completed they are to be settled on a date decided by the Exchange. Each settlement is numbered. On the settlement day each market participant involved in the trade has to settle his position either by bringing in securities which he sold or by paying cash for securities he bought. He may have an option to square off his transaction (intra-day trading) but before the close of the trading period.

The settlement is effected by the Exchange by receiving funds from parties that have bought shares and by giving them these shares and by receiving from sellers shares that they sold and by giving them the amount that is owed by the purchasing party. Which is called pay-in of securities or funds and pay-out of securities or funds. That is why terms like sauda is very common in trading because that is exactly what it is. The Exchange is like a self regulating authority. It is a medium of Exchange and for settling disputes arising out of transactions in the process.

The whole setup of an Exchange and its activities are very very complex. This is just a basic information I have provided.

If you want to guide yourself you can visit www.nseindia.com and check out the section under Assistance>Investors Center>FAQs

Answer 4

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Answer 5

It is the place where numbers get operated. Some get multiplied, some added up, some substracted and some get divided. Norms for registration exist. Some of the time manipulations exist.

Answer 6

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