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Stock trading in India has moved from floor-based to online trading. The article focuses on the factors that have changed the stock trading in India.
The origin of the Indian securities market can be dated back to 1875, when 22 enterprising brokers under banyan trees in front of the Mumbai's Town Hall established the Bombay Stock Exchange (BSE). Over the last 130 years, the Indian securities market has evolved continuously and today it is regarded as one of the most dynamic, modern and efficient securities market. Market-oriented economic reforms in India began in 1991. In this liberalized era, the capital market received a great impetus and has grown considerably, particularly in the last decade. Today, Indian markets conform to international standards, both in terms of structure and operating efficiency.
Equity trading in India was basically a floor-based activity in the BSE. Traditionally, stock trading was done through stock brokers, personally or through telephones. As the number of people trading in the stock market increased enormously in last few years, many problems started cropping up like location constrains, busy phone lines, miss communication, etc. Furthermore, as dependence on the brokers was high, they took undue advantage of the situation and even at times misled their clients in order to achieve their personal benefits. The National Stock Exchange (NSE) was set up in 1994 to solve these problems. It built an electronic order—matching system, where computers matched orders without human intervention. It used satellite communications to make the trading system accessible from different locations all over the country. Trading in equities commenced at the NSE in November 1994. Today, online share trading is the order of the day and is gaining popularity rapidly. Online Stock Market Trading is an Internet-based stock trading facility. Investors can trade shares through a website without any manual intervention from stockbrokers. Here, these Online Stock Trading companies act as stock brokers for the investors. They are registered with one or more Stock Exchanges. Online Trading websites in India trade mostly on the BSE and NSE. |
