What is Stock Exchange ? How to trade on the stock Exchange ? 

How to Trade Stocks on the Stock Exchange

Stock Exchange

A stock exchange is a place where stocks are bought and sold. It is also a place where companies can list their stocks. The purpose of an exchange is to provide a marketplace for buyers and sellers to meet and trade securities. The exchange also acts as a clearinghouse, which helps to ensure that transactions are completed correctly and quickly.

Major Stock Exchange in India

In India, there are two Major Stock Exchanges are existed. Those are 

  1. NSE ( National Stock Exchange )
  2. BSE (Bombay Stock Exchange )


  NSE is Stock Exchange located in Mumbai, Maharashtra. It was founded in 1992 and the key people in National Stock Exchange are Girish Chandra Chaturvedi as Chairperson and Vikram limaye as MD&CEO. NSE works under the supervision of SEBI.

National Stock Exchange was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered easy trading facilities to investors.

BSE : 

BSE is a Stock  Exchange. It was the oldest Stock Exchange in Asia located in Mumbai, Maharashtra.BSE was founded by Premchand Roychand in 1857. The Key persons in BSE are Vikramajit Sen as Chairman and Ashish Chouhan as MD CEO. Bombay Stock Exchange works according to the supervision of SEBI. There are around 6000 companies under BSE. The Benchmark Index of BSE was Sensex. In BSE Securities such as Equity, Derivatives, futures, and options are traded.

Auction Exchanges

Auction exchanges are websites or apps that allow buyers and sellers to trade items online. They are a popular way to buy and sell items online, as there is usually a wider range of items available on auction exchanges than on regular online auction websites.

The main benefit of using an auction exchange is that there is usually a wider range of items available, as auction exchanges are designed to be a marketplace for buying and selling items. This means that you are likely to find more rare, out-of-the-ordinary, and expensive items available on auction exchanges than on regular online auction websites.

Another advantage of using an auction exchange is that you can often save money on your purchase. This is because auction exchanges often have lower starting prices than regular online auction websites.

However, there are also some disadvantages to using an auction exchange. For example, auction exchanges can be less user-friendly than regular online auction websites.

Electronic Exchanges

Electronic exchanges are a type of market where traders can buy and sell securities. The exchanges allow buyers and sellers to connect to each other electronically and make transactions without having to go through a broker.

There are a number of benefits to using electronic exchanges.

 First, they are faster and more efficient than traditional exchanges.

 Second, they allow for more trading volume, which means that there are more opportunities to make a profit. 

Third, they are more secure than traditional exchanges, which makes them ideal for traders who are concerned about their security.

Overall, electronic exchanges are a valuable tool for traders who want to make quick and profitable investments.

The Indian Energy Exchange which is formerly known as IEX is an Indian electronic system-based power trading exchange that is regulated by the CERC which has the acronym Central Electricity Regulatory Commission. IEX started its work on June 27, 2008. Indian Energy Exchange was the cause of the development of power trading in India and provides an electronic platform to the various participants in the power market consisting of State Electricity Boards, Power producers, Power Traders, and Open Access Consumers.

Electronic Communication Networks (ECNs)

Electronic communication networks (ECNs) are a type of computer network used for stock trading. An electronic communication network (ECN) is a digital system that matches buyers and sellers looking to trade securities in the same financial markets. ECNs allow brokerages and investors in different geographic areas to trade without the involvement of third-party offering more privacy to investors.

ECNs are used in applications such as stock trading, telecommunications, and computer networking. They are also used in some types of gaming, such as online poker. ECNs are often used to reduce the lag time between trading.

ECNs use a different type of signalling system than traditional computer networks. Traditional computer networks use a protocol called TCP/IP to send and receive data. But 

ECNs use a digital signalling system called OFDMA which makes the trading accurate and faster.

How does Stock Exchange Work?

Stocks are bought and sold on stock exchanges, which are like mini-markets. When you buy a stock, you are buying a piece of ownership in the company. A stock market is a place where stocks are bought and sold.

When you sell a stock, you are giving up ownership of the stock. The stock market is where stocks are sold.

When you buy a stock, the company sells the stock to you. The company makes a profit from the sale. In this manner, stock Exchanges will work.

Benefits of Listing with Stock Exchange?

One of the benefits of listing with a stock exchange is that it can help the company to access a larger audience. By being listed on a stock exchange, Company can reach a greater number of potential investors, who can help you raise money and grow the business of the company.

 Listing with a stock exchange can help you build a strong brand. By being listed on a stock exchange, Company can attract more investors, which can help foster the growth of the company. 

Investment Method on Stock Exchange

There are two main ways to trade stocks on the stock market: through stock exchanges and through over-the-counter (OTC) markets.

Stock exchanges are where most stocks are traded. You must be registered with a stock exchange to trade stocks. You can also trade stocks over-the-counter (OTC) markets. OTC markets are private markets where stocks are traded between private individuals.

The most important thing to remember when trading stocks is to do your research. Make sure you understand the company’s financial statement and the stock’s price history.


A stock exchange is a place where traders and stockbrokers buy and sell securities such as shares, bonds, and other securities. Stock exchange functions as a ‘continuous auction’ market where transactions are conducted between the buyers and sellers at a given Market Hour. The stock market plays an important role in the economy of India. It helps for fundraising for the development projects taken up by the government. It acts as a backbone of the economy.

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