The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia and the first in India. Founded in 1875, it is also one of the largest exchanges in the world, with a market capitalization of over USD 2.2 trillion as of 2021. BSE plays a vital role in the Indian financial system by providing a platform for companies to raise capital and investors to trade securities.
What is BSE?
The BSE is a marketplace where securities like stocks, bonds, and mutual funds are bought and sold. It is a platform where companies can raise capital by issuing stocks and other financial instruments, and investors can trade these securities with each other. BSE operates as a secondary market where securities are traded after they have been issued by the company in the primary market.
How does BSE work?
BSE provides a platform for trading in various types of securities, including equity shares, preference shares, corporate bonds, government securities, and mutual funds. The exchange facilitates trading through an electronic platform known as the BSE Online Trading (BOLT) system. BOLT is a high-speed trading platform that enables investors to place buy and sell orders from anywhere in the world.
The BSE has two types of markets: the cash market and the derivatives market. The cash market is where equity shares, preference shares, and corporate bonds are traded. The derivatives market is where futures and options contracts are traded. In the derivatives market, investors can trade contracts based on the underlying securities like stocks, indices, or commodities. These contracts are standardized and traded on a separate platform known as the BSE Derivatives Segment.
Also Read: What is NSE in Trading & How It's Works?
BSE also provides other services like clearing and settlement of trades, risk management, and surveillance of trading activities. It ensures that all trades are settled in a timely and efficient manner and that the trading activities are monitored to prevent fraud and manipulation.
Conclusion
The BSE plays a vital role in the Indian financial system by providing a platform for companies to raise capital and investors to trade securities. It is a marketplace where various types of securities are bought and sold, and investors can place buy and sell orders through an electronic trading platform. The exchange operates in two markets, the cash market and the derivatives market, and provides other services like clearing and settlement of trades, risk management, and surveillance of trading activities. Overall, the BSE is an essential component of the Indian financial system and a key player in the global financial markets.
0 Comments