How Stock trading take place? – Explain the role of broker/exchange/ SEBI/ Govt/ BANK?

[Kumarasamy]

1):: stock markets are the place where buyers and sellers meet and decide on a price to trade in an organised manner.            2)role of broker- stock broker is an agent who represents client to buy or sell stocks and other securities.they are technically are registered in sebi exchange representative working for brokerage…..                                     3)… Role of bank …it is depositing place of money and mutual transfer money from bank to trading account and vice versa.  .         4)role of govt .. goverment regulates the actions of brokers to ensure fareness,this make large part of the stock market.                 5)role of exchange:it is place trade in systematised manner.

[Vishal Rath]

Buyer will tell the broker A buy shares. Broker A will forward this to exchange and according to bid price position trade will take place.

Seller will tell the broker B to sell the shares. Broker B will forward this to exchange and according to ask price position trade will take place.

Role of broker is to act as shock absorber between trader and exchange.

Role of exchange is to facilitate the trading of stocks with transparency.

Role of SEBI is to check for discrepancy and protect the public from those.

There is no role of government or bank.

[Vijayavani]

Stock trading happens when we place the order in online platform through the ID of authorized broker. Exchanges authorizes and allows us to perform the trade. SEBI regulates this trade.

[Dr Faiz]

After a trading plan is decided ,the order is placed with a broker or a sub broker to buy or sell a share. This can be done by going in person or through phone or on the internet. To this order  a time record is done and a contract note is given to the trader. This is an important step in the stock trading .

The broker takes the order from the trader and places that  order to the stock exchange .

The stock exchange assigns a Unique Order Code Number to each and every transaction.

The bank are the intermediaries between large corporates and the investor. They help in underwriting IPO or brokering a merger or advise the company on structuring any sort of deal to raise funds based on the current financial situation.

SEBI- Is the regulatory authority for the stock market, established to protect the investor  and promote and regulate the securities market.

The Govt does not have a active role in the stock market except regulating it. But indirectly the market is affected by the various laws that are passed . For eg change in taxation  on capital gains , dividends, interest gain may affect the market activity in either direction depending on the favorability.

[Dr. Karthik Jayachandran]

to buy stocks,

1. Open a trading account with a stock broker.
2. Open a demat account with depository participant.
3. Open a bank account
4. place an order with broker to buy shares
5. the broker buys the shares by executing orders on the electronic terminal provided by the stock exchange
6. the broker issues a contract note detailing the value of shares purchased, plus his brokerage cost plus incidental charges
7.  make payment to broker
8. the broker collects shares via a settlement process and make payment
9. the broker credits the share collected to depository account

to sell stocks,

1. place an order with the broker to sell shares
2. the broker sells the shares by executing orders on the electronic terminal provided by the stock exchange.
3. broker issues a contract note detailing the value of shares sold, his brokerage cost plus incidental charges.
4. transfer shares from ones depository account to broker`s pool account
5. broker delivers shares via a settlement process and collects payment
6. in turn brokers make payment to the seller

exchange is the place where trading ie exchange of stock happens NSE BSE

SEBI is the regulating body

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