STOCK EXCHANGE

EASY WAY TO EARN MONEY,

EASY WAY TO LOOSE MONEY
Presented BY
Avinash.A
Dinesh.R

WHAT IS STOCK EXCHANGE?

Definition of Stock Exchange : The securities

regulation act of 1956 defined stock exchange as an
association , organization , or a individual which is
established for for the purpose of assisting ,
regulating , and controlling business in buying ,selling
and dealing in securities.
Meaning : This comes under treasury sector ,which
provides service to stock brokers & traders to trade
stocks ,bonds and securities. Stock exchanges helps
the companies to raise their fund. Therefore the
companies needs to list themselves in the Stock
Exchange and the shares will be issued which is
known as equity or a ordinary share and these
shareholders are the real owners of the company the

FEATURES OF STOCK EXCHANGE

It is an organized market
It is a securities market
It is an important constituent of capital market i.e.,
market for long-term finance
It is a voluntary association of persons desirous of dealing
in securities
Stock exchange is a voluntary association, its
membership is not open to everybody
In a stock exchange, only the members can deal in i.e.,
buy & sell securities
The members of a stock exchange can buy and sell
securities either as brokers for & on behalf of their
clients
The dealings in a stock exchange are under certain
accepted code of conduct i.e., rules and regulations

IMPORTANT FUNCTION OF STOCK

EXCHANGE
Provide central and convenient meeting places for sellers
and buyer of securities
Increase the marketability and liquidity of securities
Contribute to stability of prices of securities
Equalization of price of securities
Smoothen price movement
Help the investors to know the worth of their holdings
Promote the habit of saving and investment
Help capital formation
Help companies and government to raise funds from the
investors
Provide forecasting service

HISTORY OF STOCK EXCHANGE

The stock exchange was established by East India

company in 18th century . In India it was
established in 1850 with 22 stock brokers opposite
to town hall Bombay .This stock exchange is
known as oldest stock exchange of Asia.

Initial members who are still

running their business in
stock exchange are
D.S.Prabhudas &company
Jamnadas Morarjee
Champak lal Devidas
Brymohan Laxminarayan

BROKER AND JOBBER

BROKER: He is one acts as a intermidiary on
behalf of others. A broker in a stock
exchange ,is a commission agent who
transacts business in securities on behalf of
non members.
JOBBER: He is not allowed to deal with the
public directly .He deals with brokers who are
engaged with the investors . Thus, the
securities is bought by the jobber from
members and sells to members who are
operating on the stock exchange as broker.

DIFFERENCES BETWEEN A JOBBER AND A

BROKER
JOBBER
A jobber is an independent
dealer in securities,
purchasing or selling
securities on his own
account
A jobber deals only with the
brokers ,does not deal with
the general public
A jobber earns profit from
his operations i.e., buying
and selling activities
Each jobber specializes in
certain group of securities

BROKER
A broker deals with the jobber
on behalf of his clients. in
other words, a broker is a
middleman between a jobber
and clients
A broker is merely an agent,
buying or selling securities on
behalf of his clients

A broker gets only

commission for his
dealings
The broker deals in all
types of securities

SPECULATION AND SPECULATOR

SPECULATION : It is the transaction of members to buy
or sell securities on stock exchange with a view to make
profits to anticipated raise or fall in price of securities.
SPECULATOR : The dealer in stock exchange who
indulge in speculation are called speculator . They do not
take delivery of securities purchased or sold by them ,
but only pay or rescue the difference between the
purchase price and sale price . The different types of
speculators are
BULL
BEAR
STAG
LAME DUCK

BULL {TEJIWALA}

He is speculator who expects the future raise in price of

securities he buys the securities to sell them at future date
at the higher price.
He is called as bull because his activities resembles as a
bull , as the bull tends to throw its victims up in the air
through its horns. In simple the bull speculator tries to raise
the price of securities by placing a big purchase orders.

BEAR {MANDIWALA}
He is speculator who
expects future fall in prices
, he does an agreement to
sell securities at future
date at the present market
rate .
He is called as bear
because his altitude
resembles with bear , as
the bear tends to stamp its
victims down to earth
through its paws . In simple
the bear speculator forces
of prices of securities to fall
through his activities.

STAG {DEER}
He operates in new
issue of market . He is
just like a bull speculator .
He applies large number
of shares in the issue
market only by paying ,
application money ,
allotment money. He is
not a genuine investor
because , he sells the
alloted securities at the
premium and makes
profit. In simple he is
cautious in his dealings .
He creates an artificial
rise in prices of new
shares and makes profits.

LAME DUCK
He is speculator when the
bear operator finds it
difficult to deliver the
securities to the consumer
on a particular day as
agreed upon , he struggles
as a lame duck in fullfilling
his commitment . This
happens when the prices
do not fall as expected by
the bear and the other
party is not willing to
postpone the settlement to
the next period.

Largest stock exchanges

IN THE WORLD

IN INDIA

LONDON STOCK EXCHANGE

NEW YORK STOCK EXCHANGE
SHANHAI STOCK EXCHANGE
AUSTRALIA STOCK EXCHANGE
TOKYO STOCK EXCHANGE
HONG KONG STOCK
EXCHANGE
TORONTO STOCK EXCHANGE
DEUTSCHE BORSE
BM&F BOVESPA
NASDAQ OMX STOCK
EXCHANGE

NATIONAL STOCK EXCHANGE

BOMBAY STOCK EXCHANGE
CALCUTTA STOCK EXCHANGE
COCHIN STOCK EXCHANGE
MULTI COMMODITY EXCHANGE
DERIVATIVES EXCHANGE
OTC EXCHANGE
PUNE STOCK EXCHANGE
INTERCONNECTS EXCHANGE

LONDON STOCK EXCHANGE

It was the first stock exchange
established by east India company in
18th century in London. The top
gainer of LONDON STOCK EXCHANGE
is Blue chip shares.

BOMBAY STOCK EXCHANGE

It is oldest and first stock
exchange of India
established in the year
1875. First it was started
under baniyan tree
opposite to town hall of
Bombay over 22 stock
brokers. The top gainer
in BSE is 100 companies
in that GMR infra is first

NATIONAL STOCK EXCHANGE OF INDIA(NSE

OR NSEI)
The NSE of India is the leading stock exchange of India, covering 370
cities and towns in the
country. It was established in1994 as a TAX company. It was
established by 21 leading financial institutions and banks like the
IDBI,ICICI,IFCI,LIC,SBI,etc.

Features of NSEI
Nation wide coverage i.e., investors from all over country
Ringless i.e., it has no ring or trading floor
Screen-based trading i.e., trading in this stock exchange is done
electronically.
Transparency,i.e.,the use of computer screen for trading makes the
dealings in securities transparent.
Professionalization in trading, i.e., it brings professionalism in its functions

OVER-THE-COUNTER
EXCHANGE OF INDIA(OTCEI)
The OTCEI is a national,ringless and
computerized stock exchange. It was established
in october,1990.it started its operation in
september,1992.

Features of OTCEI
1. It is a nation-wide stock exchange. Its operational areas cover entire India.
2. It is a ringless stock exchange. The trading ring(i.e., trading place)commonly found in a
traditional stock exchange is not found in the OTCEI.
3. It is a computerized stock exchange

Advantages of OTCEI
4.
5.
6.
7.
8.

It helps the investors to have easy and direct access to the stock exchange
It helps investors to get fair prices for their securities
It provide safety to the investors
To provide computerized trading system
To provide investors a convenient,effcient and transparent mode of
investment

SECURITIES AND EXCHANGE BOARD OF INDIA(SEBI)

The SEBI was constituted on 12 th April,1988 under a resolution of the Government of India. On 31 st january,1992,it was made
a statutory body by the Securities and Exchange board of India Act,1992.
The Companies (Amendment) Act,2000 has given certain powers to SEBI as regards the issues and transfer of securities and
non-payment of dividend

Function Of SEBI
Regulating the business in stock exchange and any other
securities markets.
Promoting and regulating self-regulatory organization.
Registering and regulating the work of collective investment
scheme,incluing mutual funds.
Prohibiting fraudulent and unfair trade practices relating to
securities market.
Promoting education, and training of intermediaries of securities
market

Power of SEBI
Power to approve the bye-laws of stock exchange
Power to inspect the books of accounts
Power to grant license to any person for the purpose of dealing in
certain areas.
Power to delegate powers exercisable by it.
Power to try directly the foliation of certain provision of the company
Act

How to see the value of

shares in stock exchange
SENSEX is an indicator to checkout in
BSE
NIFTY is an indicator to checkout in
NSE

Latest news of BSE and NSE

Most profitable company in BSE is GMR
Infra
Most profitable company in NSE will be
RELIANCE and ICICI
During last three months nearly only
26% of profit is earned by our stock
exchanges the working hours will be
From 9:30 to 3:30 from Monday to
Friday

The Daily graph of the companies

will be showed in following manner

How stock exchanges get

money
They get their money by listing
fees paid by the corporation to
have their company traded

HOW TO DEAL AND INVEST IN

STOCK EXCHANGE
In order to deal with a securities one as to have an
account called Demat a/c or Trading a/c. It is just
like a bank account. Same procedure of opening the
bank account is followed to open the a/c. But all the
banks does not give this facility of opening the
account , only few banks provide this facility. After
demat a/c or Trading a/s is opened then the
securities is bought and sold. The banks which gives
facility of demat a/c in India is
ICICI Bank
Citi Bank
Bank of Baroda

HAPPY INVESTMENT WITH

LOTS OF PROFITS
END
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