Future of Stock Market in India

1
Future of Stock Market in India

• To understand the future of stock market in
  India, we need to understand how the stock market
  works. India has two big stock exchanges, the
  Bombay Stock Exchange (BSE) and the National
  Stock Exchange (NSE) and most of Indias stock
  trading takes place in these two popular sites.
  The BSE is doing business since 1875 and the NSE
  was founded in 1992 and became fully operational
  in 1994. These two stock exchanges follow the
  same trading mechanism, trading hours, settlement
  process, etc. The BSE deals with 4,700 listed
  firms (approx.), whereas the NSE has about 1,200
  listed companies. But only about 500 companies,
  out of all the listed firms on the BSE,
  constitute more than 90 of its market
  capitalization the rest on the list consists of
  highly illiquid stocks.

2
Proprietary Trading

• Trading Mechanism
• The open electronic limit order book is used by
  both exchanges to trade through. The order
  matching is done by the trading computer. No
  market makers or specialists are needed to match
  orders and the entire process is order-driven,
  which means that market orders placed by
  investors are automatically matched with the best
  limit orders. This facilitates privacy and
  security of both parties as buyers and sellers
  remain anonymous. This practice brings more
  transparency, by displaying all buy and sell
  orders in the trading system. However, in the
  absence of market makers, there is no guarantee
  that orders will be executed. Professionals
  involved with proprietary trading plays a vital
  role here.

3
Trading Companies in India

• Trading companies in India do business by
  registering with both exchanges. All orders in
  the trading system need to be placed through
  brokers, who may provide online trading facility
  to retail customers. Proprietary trading
  companies in India can also take advantage of the
  direct market access (DMA) option, in which they
  use trading terminals provided by brokers for
  placing orders directly into the stock market
  trading system. The future of stock market in
  India is promising and will surely bring more
  security to investors.