In India, around 3% of the population actively engages with the Indian stock market. Why is this number not higher? While many people have certain negative preconceived notions about trading, the main reason for this lack of engagement is that the average Indian citizen does not know what the Indian Stock Market actually is.
Let us take a quick look at the history of the Indian Stock Market. First, the Bombay Stock Exchange (BSE) was established in the year 1875. Then came the National Stock Exchange (NSE), in 1992.
Around 7,000 companies are listed with the BSE and NSE. Including these two, a total of seven stock exchanges function simultaneously. It is through the combined work of these stock exchanges that the stock market is able to maintain its constant efficiency and manageable price range of the trades and investments.
There are certain important components which have been created to better facilitate the smooth flow of the stock market.
The Indian Stock Market is an order-driven market. All trade takes place between 9:15 AM and 3:30 PM, Monday to Friday, and is done through the aid of an open electric limit order book. This keeps the process anonymous for both the buyer and the seller, as the entirety of the trade is done by the trading computer.
Though the services offered by the Indian Stock Market are many, such as Mutual Funds, Future & Options, Wholesale Debt Market, etc., traders normally focus on three categories, namely, Intraday Trading, Swing Trading, and Equity Trading.
The Indian Stock Market is regulated by the Securities and Exchange Board of India, or SEBI. Founded in 1992, SEBI is an independent authority which consistently tries to maintain a balance in the stock market and ensures that honesty is maintained in all transactions by everyone.
These were the basics of the Indian Stock Market. If you wish to learn about the functions and powers of the institutions mentioned, and the various terms used in this article in greater detail, you will find the related articles on the Booming Bulls Academy blog.
If you want to know about Risk Management you can refer to our previous blog on Importance Of Risk Management In Trading.