STOCK EXCHANGE: The stock exchanges are exclusive centers for trading of securities.

Listing of companies on a stock exchange is mandatory to provide an opportunity to invest in the securities of local companies. the stock exchange has witnessed a rapid increase in turnover rate which is mainly because of transactions at big exchanges(NSE and BSE) .

STOCK MARKET: A stock market is a place where equity, commodities and other investments can be bought and sold. e.g., In India NSE and BSE account for the majority of stock market activity in India where buyers place orders of stock through brokers, who carry out the transactions. Demand for shares causes price to fluctuate and assets to gain or lose value.

HOW TRADING HAPPENS ON T,T+1,T+2: T refers to the settlement date of security transactions. The numbers 1,2,3 denote how many days after the transaction date the settlement or the transfer of money and security ownership takes place. T:It stands for transaction date, which is the day transaction takes place. T+1:It means that if a transaction occurs on Monday, settlement must occur by Tuesday. T+2:It means that a transaction occurring on Monday must be settled by Wednesday assuming no holidays occur between these days. Stock market operates between 9:15 am to 3:30 pm on week days(MonFri)

TYPES OF ORDERS: Stock market trading orders can be classified as following based on price conditions MARKET ORDER: In this order there is no price specified for the order to be executed, it is always matched against going market price. For buy orders the price is matched against the top quote on offer side and for a sell order the price is matched against the top quote on bid side. LIMIT ORDER: In a limit order, price at which the order should be executed is mentioned. Usually for a buy order it is specified as less than or equal to a particular price and for a sell order it is specified as greater than or equal to a particular price STOP LOSS:A customer can put an order in such a way that the order should be released only when the market price reaches a threshold price known a trigger price. In this order the customer has to enter a trigger price, limit price and quantity along with the security code and type. For a buy order the trigger price should always be less the or equal to the limit price and in a sell order the stop loss trigger price should always be greater than or equal to the limit price.

BULK ORDER AND BLOCK ORDERS: BULK ORDER:A single transaction or set of transactions in which the total traded quantity bought/sold under any single client code is more than 0.5%of the number of equity shares of a listed company. when the bulk deal occurs through a single trade it should be notified to the stock exchange immediately. If it happens through multiple trade it should be notified within 1 hour from the closure of trading. BLOCK ORDER:A trade with a minimum quantity if 5 lakhs shares or minimum value of Rs 5 crore , executed through a single transaction and by a separate window of exchange constitutes a block deal. Brokers should make a disclosure on a daily basis regarding block deals.

AUCTION SALE: What is Auction Sale? Auction Sale happens on t+2 day when the sellers Broker fails to deliver the shares to BSE/NSE who further transfer the shares to Buyer s broker. The auction sale is done by BSE/NSE to announce if any company who is ready to sell the shares at the same price or the BSE/NSE will transfer any shares to the Buyers broker pool account. Three things can happen in auction sale:1. If the price of the same shares rises then the sellers broker will be penalized with that extra amount. 2. If the price of the shares remain falls down then then extra money saved will be transferred to the IPF(Industry Protection Fund). 3. If nobody comes for auction the buyer is entitled to get the money back in addition to extra 20% which has to be paid by Sellers Broker. Auction settlement: Trading day Settlement Auction Auction settlement T T+2 T+3 Pay in/Pay out T+4(BSE) T+5(NSE) *However the penalty in charged on highest closing price of the three days from the date of auction & penalty will be decided by the stock-exchange. Buying/Selling Pay in/Pay out

CIRCUIT FILTER:

Circuit Filters are the daily circuit which sets limit to fluctuations in stock prices. NSE/BSE Circuit Filters are numeric percent limits set on individual scripts by stock exchanges to stop the unduly rates rising or falling of a

stock. NSE define circuit filters in 5 categories including 2%, 5%, 10%, 20% and no circuit filter.NSE Circuit Filters works in either ways. i.e. if circuit set for equity is 10%, stock price cannot move further +10% to lower then 10%.NSE changes limits every day and stock keeps moving between one circuit filter categories to other based on previous days closing price. A circuit is like a limit set during stock market trading hours. There is an upper circuit and a lower circuit, It means that if a stock price of a particular company rises or falls, trading will stop for that stock if it rises or falls ahead of the circuit. The same holds true for the stock market index. Different stock market have different circuits. Advantages of circuit filter: Circuit is used to control the stock price movements in either directions to certain percentage levels. It controls the unwanted operator activity. It controls volatility in price movements. e.g., If price of a share is Rs. 100 and this stock is fewer than 10% circuit. then price movements for upside is limited to Rs.110. and downside is Rs90.Hence, trading range for this stock is 90-110. i.e., Rs 20.

PAY-IN,PAY-OUT: Pay- in: In pay-in of funds, the funds are transferred from a clients bank account to HISL (HSBC Invest Direct Securities India) Limited pool account. The funds are then transferred to NSCCL (National Securities Clearing Corporations Limited as per obligation. Pay- out: In pay-out of funds, funds are transferred from NSCCL to HISL Bank account. All the funds are then transferred to the clients bank a/c.