CHAPTER : 4 STOCK MARKET OPERATIONS

TOPIC : GROUP A, B, C & EXECUTION OF ORDER & TYPES OF ORDER

ROLL NO NAME

1 AGARWAL POOJAL
2 ASMIANI RAVI
3 BHAVSAR KRINJAL
4 BHIKADIYA DHARMESH
5 BORAD FENIL
6 CHARANIA ALISHA
7 CHOVATIYA RAJ
8 DETROJA PARAG
9 DHANANI VISHAL
10 DOSHI ROOTU
 Group A , Group B And Group C (BSE)
The listed shares are generally divided into 3 categories namely :
1. Group A Shares ( Specified shares or cleared securities)

2. Group B Shares (Non- specified shares or non-cleared securities).

3. Group C Shares.

1. Group A Shares & Group B Shares :

Group A Shares represent large and well established companies

having a broad investor base. These shares are actively traded.
Naturally, these shares attract a lot of speculative multiples. These
facilities are not available in Group B shares. However, shares can be
moved from group b to group a and vice versa depending upon the
criteria for shifting . for instance , the Bombay Stock Exchange has laid
down several criteria for shifting shares from Group B to Group A , such
as , as equity base of rs. 10 crores, a market capitalization of rs. 25-30
crores, a public holding of 35% to 40 % , a shareholding population of
15000 to 20000, good dividend paying etc.. Group B2 Shares are again
dividend into B1and B shares on the Bombay Stock Exchange. B1
shares represent well traded scrip’s among the B group and they have
weekly settlement.

2. Group C Shares :

Apart from the above, there is another group called Group C

Shares. Under Group C, only odd lots and permitted securities are
included. A number of shares that are less than the market lot are
known as odd lots. Market lot refers to the minimum number of shares of
a particular security that must be transacted on a stock exchange. Odd
lots have settlement once in a fortnight or once on Saturdays. Permitted
securities are those that are not listed on stock exchanges in India. So
they are permitted to be traded on this stock exchange. Odd lots cannot
be easily transacted on the stock exchange and so they are illiquid in
nature.

EXECUTION OF ORDER
The important function of a broker is to execute his clients orders swiftly
and carefully. Hence, he has to obtain clear-cut confirmed order
instructions from the clients so that the necessary orders may be placed
on the system. To execute a trade order for a client, the broker must
obtain specific instructions as to:

1. The name of the company whose securities have to be bought or

sold.
2. The precise number of share required.
3. The limit / market price condition etc.

Big broker transaction that business through their authorized

clerks. Small ones carry out their business personally, order are
executed in the trading ring of a stock exchange which works from 12
noon to 2 p.m. on all working days from Monday to Friday and a special
one hour session on Saturday. Trading outside the trading hours are
called “kerb dealings”.
 TYPES OF ORDERS:-

1. ABO (At Best Order)

It is an order which does not specify any specify price. It must be
executed immediately at the best possible price. The client may also fix a time frame
within which the order has to be executed. E.g. “Bye100 Essar oil at best”.

2. Limit Order
It is an order for the purchase or sale of securities at a fixed price
specified by the client. E.g. “Sell 100 DCM 2 Rs.76”.

3. Immediate or Cancel Order

It is an order for the purchase or sale of securities immediately at the
quoted price. If the order could not execute at the quoted prices immediately, it
should be treated as cancelled. E.g. “Buy 100 DCM @ Rs.76 Immediate”.

4. DO (Discretionary Order)
It is an order to buy or sell shares at whatever price the broker thinks
reasonable. This is possible only when the client has complete faith on the broker.

5. Limited Discretionary Order

It is an order to buy or sell securities whiten a specified price range
and/or within the given time period as per the best judgement of the broker.

6. Stop Loss Order

 It is an order to sell as soon as the price falls up to a particular level or
to buy when the price rice up to a specified level. This is mainly to protect the clients
against a heavy fall or rise in price so that they may not suffer more than the pre-
specified amount.

On receiving the order s, they are first recorded in a rough memo book
and then they are transferred to the ‘Order Book’.

7. Day Order
A day order is an order which is valid for the day on which it is entered.
If the order is not executed during the day, the system automatically cancels the
order at the end of the day.

8. GTC ( A Good Till Cancelled)

It is an order which remains in the system until it is cancelled by the
user.

9. GTD ( A Good Till Days)

This type of order allows the user to specify the number of days/date
till which the order should stay in the system if not executed.

10. IOC ( Immediate or Cancel Order)

An immediate or cancel order allows the user to buy or sell a security
as soon as the order is released in to the system, failing which the order stands to
be cancelled from the system.

11. MKT (Market) Order

Market orders are orders for which the price is specified on ‘MKT’ at
the time of order entry. For such orders, the system determines the price.
12. ATO (At The Open)
At the open market orders are entered during pre-open stag.