Stock exchanges are organized markets where securities like shares and bonds are traded. The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia, established in 1875. It accounts for over two-thirds of trading volume in India. The BSE Sensex is the main index that tracks the performance of 30 large, well-established companies listed on the BSE. Another major stock exchange is the National Stock Exchange (NSE), which has indices like the Nifty 50 that track 50 large companies trading on the NSE. Stock exchanges provide a platform for investors to purchase and sell securities and for companies to raise capital.

1. Meaning of stock exchange
• Stock Exchange (also called Stock Market or Share Market)
is one important constituent of capital market.
• Stock Exchange is an organized market for the purchase and
sale of industrial and financial security. It is convenient place
where trading in securities is conducted in systematic manner
i.e. as per certain rules and regulations.
• It is secured mechanism or platform for transactions in
different securities. Such securities include shares and
debentures issued by public companies which are duly listed
at the stock exchange, and bonds and debentures issued by
government, public corporations and municipal and port trust
bodies.
• A stock exchange need not be treated as a place for
speculation or a gambling den. It should act as a place for
safe and profitable investment.
• It avoids several misuse of this platform for excessive
speculation, scams and other undesirable and anti-social
activities.

2. Definition
According to Husband and Dockerary,
"Stock exchanges are privately organized markets which are
used to facilitate trading in securities.“
The Indian Securities Contracts (Regulation) Act of 1956,
defines Stock Exchange as,
"An association, organization or body of individuals, whether
incorporated or not, established for the purpose of assisting,
regulating and controlling business in buying, selling and
dealing in securities."

3. Some important terms:-
Open
The stock price in beginning of day ( i.e. in morning).
High
The stock price reached at the highest level in a day.
Low
The stock price reached the lowest level in a day.
Close
The stock price at which it remains after the end of
market timings or the final price of the stock when the
market closes for a day.
Volume
The word ‘volume’ is related to QUANTITY
Bid
The buying price is called as bid price
Offer
The selling price is called as offer price.
DEMAT ACCOUNT

4.  DEMAT satnds for DEMATERIALIZATION. It is
process in which physical papershares are
converted into paperless or computerized form.
 In india there are two depositoryorganisations
called NSDL ( National securities depository ltd.)
& CDSL (Central depository services india ltd.)
 Brokers and most of the banks provides facility to
open demat account.
TRADING IN STOCK MARKET
 The market regulator, the securities and exchange
board of india (SEBI), has made it compulsory to
open the demat account if you want to buy and sell
stocks.
 A person want to buy/sell stocks in the stock
market has to first place his/her order with a broker
or can do themselves using onlinetrading system.
 The stocks purchased will be sent to the your demat
account. This process is called rolling settlement
cycle.
STOCK BROKER
 A stockbroker is person who is licensed to trade in
shares.

5.  Brokers also have direct access to the share market
and can act as your agent in share transactions.
 For this services they charge a fee i.e.
BROKERAGE (1% in both case buying and selling
of shares).
 They can also offer additional services like advice
on shares, debentures, government bonds and listed
propertiestrusts and non-listed investment options
(cash management trusts, propertyand equity
trusts).
BOMBAY STOCK EXCHANGE
 Location : Mumbai
 Index : Sensex ( SENSitve indEX )
 Consist of group of 30 stock
 Members : 852
 Date of Launch : 03 January 1986
 Base period : 1978-79
 Base index value : 100
 Sectoral indices
 Timing : 09.30 AM – 03.30 PM
 Listed Co. : over 6000

6. NATIONAL STOCK EXCHANGE
 Location : Mumbai
 Index : Nifty ( National stock exchange fifty)
 Consist of group of 50 stocks
 Date of Launch : April 1994
 Base period : 1993-94
 Base index value : 1000
 Members : 726
Bse
. There are 23 stock exchanges in the India. Bombay
stock exchange is the largest, with over 6000 stocks
listed. The BSE accountsfor over two third of the total
trading volume in the country.
It was established in 1875, the exchange is also the
oldest in Asia. Among twenty-two stock exchanges
recognized by the government of India underthe
securities contracts(regulation) act, 1956. It was the
first one to be recognized and it is the only one that had
the privilege of getting permanent recognition

7. Indicator
Sensex is an index, an index is basically an indicator. It
gives you a general idea about whether most of the
stock shave gone up or most of the stocks have gone
down. The sensex is an indicatorof all the prices of the
major companies of the BSE (Bombay stock exchange)
The SENSEX, short form of the BSE- Sensitive index,
is a “market capitalization-weighted”index of 30 stocks
representing a sample of large, well-establishedand
financially sound companies. It is the oldest index in
India and has gained a unique place in the collective
awareness of investors. The index is widely used to
measure the performance of the Indian stock exchange.
 1. AXIS Bank
 2. Bajaj Auto Ltd
 3. Bharat Heavy Electricals Ltd
 4. Bharti Airtel Ltd
 5. Cipla Ltd
 6. Coal IndIa Ltd
 7. Dr. Reddy's Laboratories Ltd
 8. GAIL (India) Ltd
 9. HDFC Bank Ltd

8.  10. Hero MotoCorp Ltd
 11. Hindalco Industries Ltd
 12. Hindustan Unilever Ltd
 13. Housing Development Finance Corporation Ltd
 14. ICICI Bank Ltd
 15. Infosys Ltd
 16. ITC Ltd
 17. Larsen & Toubro Ltd
 18. Mahindra and Mahindra Ltd
 19. Maruti Suzuki India Ltd
 20. NTPC Ltd
 21. Oil and Natural Gas Corporation Ltd
 22. Reliance Industries Ltd
 23. Sesa Goa Ltd
 24. State Bank of India
 25. Sun Pharmaceutical Industries Ltd
 26. Tata Consultancy Services Ltd
 27. Tata Motors Ltd
 28. Tata Power Company Ltd
 29. Tata Steel Ltd
 30. WiproLtd
CNX NIFTY JUNIOR
 The CNX Nifty Junior is an index for companies
on the national stock exchange of India.
 It represents the next rung of liquid securities after
S&P CNX Nifty.

9.  It consists of 50 companies representing
approximately 10% of the traded value of all stocks
on the NSE of India.
 The CNX Nifty Junior is owned and operated by
India index services and productsltd.
 It is quoted using the symbol NSMIDCP.
S&P CNX 500
 The S&P CNX 500 is India’s first broad-based
stock market index of the Indian stock market.
 The S&P CNX 500 represents about 96% of total
market capitalizationand about 93% of the total
turnover on the NSE of India.
 The S&P CNX 500 companies are disaggregated
into 72 industries indices, the S&P CNX industry
indices.
 Industry weight in the index reflects the industry
weights in the market.
INVESTMENT IN SHORT TERM, MID TERM AND
LONG TERM TRADING
SHORT TERM TRADING

10. Stock trading donefrom one week to coupleof months
is called as short term trading.
Mid term trading
Stock trading donefrom one month to coupleof
months, say six to eight months is called as mid-term
trading.
LONG TERM TRADING
Stock trading donefrom coupleof months to coupleof
years is called as long term trading.
Those Companies whose fundamentals are good and
have good future plans then the stock these companies
are used for long term trading. Generally traders having
good capital go for long term trading.
SROCK MARKET CONDITIONS
There are two ways to describe the general conditions
of the stock market.
1).BULL MARKET
2).BEAR MARKET
BULL MARKET

11. A bull market indicates the constant upward movement
of the stock market. A particularstock that seems to be
increasing in value is describing to be bullish.
BEAR MAEKET
A bear market indicates the continuousdownward
movement of the stock market. Stock that seems to be
decreasing in value is described to be bearish.
Benefits of investing in shares
 Possibility of increase in value of share
 Income from dividend
 Easy liquidity
 Tax benefits on income earned such as
exemptions u/s 10 (34) for dividends, sec
54 for calculating STCG & LTCG (short-
term capital gains and long-term capital
gains).
CAUSES OF PRICE FLUCTUATIONS
 Demand & Supply
 Bank rate
 Speculative pressure

12.  Actions of underwriters and other financial
institutions.
 Change in company’s board of directors.
 Financial position of the company.
 Trade cycle.
 Political factors.
 Other factors (expected monsoon and
natural calamities).