Trading With NSE and BSE Everything You Need to Know

As an amateur trader in India, it can get pretty overwhelming quickly. Your hard-earned money is involved, not understanding the different nuances in trading can lead to losses pretty quickly. If you're looking to build a second income today, you'll need to understand the different exchanges, and the types of trading in India. Without further ado, let's get into learning the different types of exchanges in India, and the different types of trading strategies that you can utilize to earn second income in India.

  How Many Different Types of Exchanges are There in India?

There are nine different types of stock exchanges in India that are recognized by the Securities and Exchange Board of India.

However, only two of these exchanges are commonly used for trading in Equity shares and derivatives in India

1. National Stock Exchange Ltd (NSE)

2. BSE Ltd (Formerly the Bombay Stock Exchange)

 What is NSE? 

The National Stock Exchange, often abbreviated as NSE, is India's leading stock exchange. Headquartered in Mumbai, the National Stock exchange has evolved significantly into one of the most advanced systems offering trading facilities to investors - both domestic and international, since its inception in 1992. NSE remains the largest stock Exchange in India (11th largest in the world), with a market capitalization of over $2.25 trillion, as of 2018, despite only accounting for 14% of India's GDP (as compared to the 70% in the USA). Stock exchange trading only accounts for a mere 4% of India's GDP. However, with increasing knowledge, rising awareness and easier access the number is slowly increasing.

Trading in the NSE takes place through an electronic order book, and orders are matched through special trading computers. No market makers, specialists or governments interfere in the trading process, and it's entirely based on the market forces of demand and supply. Thanks to this automatic order matching, the buyers and sellers remain completely anonymous.

NSE was established with a vision to offer high levels of transparency to the traders, investors and other stakeholders - which is accomplished by displaying every single buy and sell order in the trading system.

Pre Opening Session - Order entry opens at 0900 hours, and closes at 0908 hours.

Regular Session - Market Opens at 0915 hours and closes at 1530 hours.

 Types of Trading in NSE

The National Stock Exchange offers trading and investments in the following segments:

   1. Equity

The Equity segment consists of assets that are popularly used by investors to maximize   returns. This segment is usually considered volatile, and is therefore one of the preferred instruments for speculators and traders. Assets in the equity segment include mutual funds, equity shares, indices, ETFs, SLBM (Security Lending and Borrowing), and IPOs among others.

 2. Equity Derivatives, Currency Derivatives & Commodity Derivatives 

Derivatives - contracts that derives its value from the change in prices of the underlying asset class (in this case, equity). Apart from the regular Equity derivatives, NSE also deals with derivatives from global indices (the likes of Dow Jones Index, S&P 500, etc).  Despite being listed as "equity derivatives", NSE also deals with commodity, currency and interest rate derivatives.

   3. Debt

Includes debentures, bonds, securitised products, and the associated indices, mutual funds and Exchange Traded funds. The debt segment was launched as recently as the 13th of May, 2013 to provide stakeholders with a platform that enables liquid and transparent trading of all debt instruments.

 Benefits of NSE 

1. High levels of Transparency - Investors can trade efficiently, thanks to the highly transparent trading system. Anyone can easily look up all the buy and sell orders on the trading system, along with all the necessary information like market liquidity, capitalization, etc.

2. Super Fast Transactions - The National Exchange for Automated Trading (NSE's trading system) allows for extremely fast transactions - purportedly as fast as the "speed of light". Trading is executed almost instantaneously.

3. Economies of Scale - Being the largest exchange in the country, the sheer volume of transactions that go through in a day makes it easy on the pockets for investors and traders.

  What is BSE?

BSE is Asia's oldest stock exchange, located in (as the name rightfully suggests) Mumbai. Premchand Roychand, a Rajasthani Cotton Merchant was the visionary behind the establishment of this premier stock exchange.

BSE has the 11th largest market capitalization in the world, with a whopping $2.2 trillion market capitalization value (incidentally only .05 trillion less than that of the NSE, making it the second largest stock market in India). Similar to NSE, transactions in BSE are also executed automatically through specialized trading computers. Additionally, you can directly place market orders without external specialists through BSE online (available only to select preferential investors).

The online platform used to execute trade is called BOLD (Bombay Online Trading Platform). Transactions made through the BSE are settled through a T+2 rolling settlement, and all transactions are processed on a T+2 basis (all transactions will be settled within 2 days). Like NSE, BSE is also regulated by the Securities and Exchange Board of India.

  Types of Trading in the BSE

1. Equity - Same as NSE in this regard. While most companies are listed in both the NSE and BSE, some companies are exclusively listed either in the NSE or the BSE.

2. Debt Instruments and Government Securities - Same as NSE.

3. Derivatives - Equity, currency and commodity derivatives are available to be traded through the Bombay Stock Exchange.

  How To Invest in the NSE/ How to Invest in the BSE?

Investing in the two major stock exchanges is extremely easy - all you need to do is open trading account online, along with a Demat account and you're all set to go. To open a free demat and trading account online in India, all you have to do is find yourself a reputed broker, and sign yourself up.

One of the best brokers in this space is definitely 500 per crore. Not only do we guarantee the lowest brokerage in the industry, (literally, 0.005%), we also offer daily reports, stock market training, and trade calls like a full service broker (but at the prices of a discount brokerage). With a trading and demat account with 500 per crore, not only will you be able to trade in all the securities listed on stock exchanges like NSE and BSE, you'll also be able to get your hands on unlisted shares that are all set to get listed in the near future. These shares, often called Pre-IPO shares are considered an extremely lucrative opportunity to buy into major companies just before their valuations blow-up post IPO.

 How to Open Demat Account Online India 

Opening a Demat Account online in India is effortless.

Follow these steps, and you'll be all set to open your own Demat account in a few seconds.

Visit the 500 per crore website, and navigate to the Open Account section. Alternatively, you can visit this link here.

Read this page carefully, and once satisfied, leave your contact information at the bottom of the page. Our team of experts will contact you and guide you through the process of opening a Demat and trading account with 500 per crore seamlessly.

Benefits of Opening an Account With 500 Per Crore

500 Per Crore is one of the best discount brokerage service providers in India, and was established in the year 2008. Unlike most discount brokerage service providers, 500 per crore also provides you with daily market outlook, research calls, fundamental calls, technical classes, consistent reports among other things - consistently for over a decade.

Here is a list of benefits that you stand to gain from opening a demat account online with 500 per crore.

1. Completely free Demat and Trading Accounts.

2. Access to Equity, derivatives,  commodities, currencies, Mutual funds, IPO and Pre-IPO.

3. Easy-to-use, intuitive mobile trading app

4. Access to free, advanced charting and trading tools.  

5. Comprehensive Training program that allows you to make well-informed trades by staying on top of the latest market trends, current and the future scope of the markets among others.

6. Best Research advice in the industry.

7. 24/7 round the clock back office support for franchisees

8. Sub Broker and Franchisee facilities are available.

 A list of Mandatory Documents required to Open Demat Account Online India 

To open a Demat account, you'll need the following documents:  

1. PAN card and Passport Size Photograph

2. Identity Proof - Either PAN Card or Aadhar Card

3. Address Proof - Either Passport, driving licence, Aadhar Card, Bank Statement, Utility Bills.

4. Income Proof - Either latest salary slip, latest Income Tax Returns, Latest Bank Statement (6 months).

That's that, you're all set to open a free Demat account with 500 per crore. Usually, most of our clients have a PAN card, two passport sized photographs, an Aadhar card, and the latest salary slip/bank statement - making the whole process seamless.  

Have any more questions? Reach out to us through the messenger widget on our website, and we'll be glad to answer any queries you might have. Let's join together, and drive for a financially educated and sound India. Open your free Demat account now!