NAME – JEEVANSH AHUJA

CLASS - XII-B
SUBJECT - ECONOMICS
STOCK EXCHANGE
 INTRODUCTION
A stock exchange is a marketplace, where financial securities
issued by companies are bought and sold. They are part of the
broader capital market ecosystem. Securities issued by
companies, such as shares and bonds, are traded on the stock
exchanges, after they have been issued in the primary market. A
company, desirous of listing its securities on a stock exchange,
has to enter into an agreement
 FEATURES OF STOCK EXCHANGE
 Role of an Economic Barometer:  Stock exchange serves as an economic barometer that is indicative of the state of the economy. It records all the major and
minor changes in the share prices. It is rightly said to be the pulse of the economy, which reflects the state of the economy.
 Valuation of Securities: Stock market helps in the valuation of securities based on the factors of supply and demand. The securities offered by companies that are
profitable and growth-oriented tend to be valued higher. Valuation of securities helps creditors, investors and government in performing their respective functions.
 Transactional Safety: Transactional safety is ensured as the securities that are traded in the stock exchange are listed, and the listing of securities is done after
verifying the company’s position. All companies listed have to adhere to the rules and regulations as laid out by the governing body.
 Contributor to Economic Growth: Stock exchange offers a platform for trading of securities of the various companies. This process of trading involves
continuous disinvestment and reinvestment, which offers opportunities for capital formation and subsequently, growth of the economy.
 Making the public aware of equity investment: Stock exchange helps in providing information about investing in equity markets and by rolling out new issues
to encourage people to invest in securities. 
 Offers scope for speculation: By permitting healthy speculation of the traded securities, the stock exchange ensures demand and supply of securities and
liquidity.
 Facilitates liquidity: The most important role of the stock exchange is in ensuring a ready platform for the sale and purchase of securities. This gives investors the
confidence that the existing investments can be converted into cash, or in other words, stock exchange offers liquidity in terms of investment.
 Better Capital Allocation: Profit-making companies will have their shares traded actively, and so such companies are able to raise fresh capital from the equity
market. Stock market helps in better allocation of capital for the investors so that maximum profit can be earned.
 Encourages investment and savings: Stock market serves as an important source of investment in various securities which offer greater returns. Investing in the
stock market makes for a better investment option than gold and silver.
 LARGEST STOCK EXCHANGES
IN THE WORLD IN INDIA
 LONDON STOCK EXCHANGE  NATIONAL STOCK EXCHANGE
 NEW YORK STOCK EXCHANGE  BOMBAY STOCK EXCHANGE
 SHANHAI STOCK EXCHANGE  CALCUTTA STOCK EXCHANGE
 AUSTRALIA STOCK EXCHANGE  COCHIN STOCK EXCHANGE
 TOKYO STOCK EXCHANGE  MULTI COMMODITY
 HONG KONG STOCK EXCHANGE  DERIVATIVES EXCHANGE
 TORONTO STOCK EXCHANGE  OTC EXCHANGE
 DEUTSCHE BORSE  PUNE STOCK EXCHANGE
 NASDAQ OMX STOCK  INTERCONNECTS EXCHANGE
 LONDON STOCK EXCHANGE
Type Stock exchange
Location City of London, England, United Kingdom
Founded 30 December 1801; 219 years ago
Owner London Stock Exchange Group
Key people •Don Robert (Chairman)
•David Schwimmer (CEO)

Currency Pound sterling

No. of listings 2,483 issuers (April 2018)[1]
Market cap GBP £ 39,000,000,000 (USD $46.54 billion) (Feb 2021)[2]
Indices •FTSE 100 Index
•FTSE 250 Index
•FTSE 350 Index
•FTSE SmallCap Index
•FTSE All-Share Index

Website www.londonstockexchange.com
 HISTORY OF LONDON STOCK EXCHANGE
 The Royal Exchange had been founded by English financier Thomas Gresham and Sir Richard Clough
 on the model of the Antwerp Bourse. It was opened by Elizabeth I of England in 1571.
 During the 17th century, stockbrokers were not allowed in the Royal Exchange due to their rude
manners. They had to operate from other establishments in the vicinity, notably 
Jonathan's Coffee-House. At that coffee house, a broker named John Castaing started listing the prices
of a few commodities, such as salt, coal, paper, and exchange rates in 1698. Originally, this was not a
daily list and was only published a few days of the week.
 This list and activity was later moved to Garraway's coffee house. Public auctions during this period
were conducted for the duration that a length of tallow candle could burn; these were known as "by
inch of candle" auctions. As stocks grew, with new companies joining to raise capital, the royal court
also raised some monies. These are the earliest evidence of organised trading in marketable securities
in London.
 BOMBAY STOCK EXCHANGE
Type Stock exchange
Location Bombay, India
Founded 9 July 1875; 145 years ago[1]
Key people •Just. Vikramajit Sen
(Chairman)[2]
•Ashishkumar Chauhan
(MD & CEO)

Currency Indian rupee (₹)

No. of listings 5,439[3]
Market cap ₹218,730 billion (US$3.1 trillion) (May 2021)[4]
Indices BSE SENSEX
S&P BSE SmallCap
S&P BSE MidCap
S&P BSE LargeCap
BSE 500

Website www.bseindia.com
 HISTORY OF BOMBAY STOCK EXCHANGE
 While Bombay Stock Exchange Limited is now synonymous with Dalal Street, it was not always so. In
the 1850s, five stock brokers gathered together under Banyan tree in front of Mumbai Town Hall,
where Horniman Circle is now situated. A decade later, the brokers moved their location to another
leafy setting, this time under banyan trees at the junction of Meadows Street and what was then called
Esplanade Road, now Mahatma Gandhi Road. With a rapid increase in the number of brokers, they had
to shift places repeatedly. At last, in 1874, the brokers found a permanent location, the one that they
could call their own. The brokers group became an official organization known as "The Native Share
& Stock Brokers Association" in 1875.
 The Bombay Stock Exchange continued to operate out of a building near the Town Hall until 1928.
The present site near Horniman Circle was acquired by the exchange in 1928, and a building was
constructed and occupied in 1930. The street on which the site is located came to be called Dalal
Street in Hindi (meaning "Broker Street") due to the location of the exchange.
 NATIONAL STOCK EXCHANGE
Type Stock exchange
Location Mumbai, Maharashtra, India
Founded 1992; 29 years ago
Owner Government of India
Key people •Girish Chandra Chaturvedi (Chairman)
•Vikram Limaye (MD & CEO)

Currency Indian rupee (₹)

No. of listings 1,952[1]
Market cap US$3.0 trillion (May 2021)[1]
Volume ₹8,998,811 crore (US$1.3 trillion) (FY 2020)
Indices NIFTY 50
NIFTY Next 50
NIFTY 500

Website www.nseindia.com
 HISTORY OF NATIONAL STOCK EXCHANGE
 National Stock Exchange was incorporated in the year 1992 to bring about transparency in the Indian equity
markets. Instead of trading memberships being confined to a group of brokers, NSE ensured that anyone who
was qualified, experienced, and met the minimum financial requirements was allowed to trade. In this
context, NSE was ahead of its time when it separated ownership and management of the exchange under 
SEBI's supervision. Stock price information that could earlier be accessed only by a handful of people could
now be seen by a client in a remote location with the same ease. The paper-based settlement was replaced by
electronic depository-based accounts and settlement of trades was always done on time. One of the most
critical changes involved a robust risk management system that was set in place, to ensure that settlement
guarantees would protect investors against broker defaults.
 The exchange was incorporated in 1992 as a tax-paying company and was recognized as a stock exchange in
1993 under the Securities Contracts (Regulation) Act, 1956, when P. V. Narasimha Rao was the Prime
Minister of India and Manmohan Singh was the Finance Minister. NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. 
 BROKER AND JOBBER
BROKER: He is one acts as a intermidiary on behalf of others.
A broker in a stock exchange ,is a commission agent who
transacts business in securities on behalf of non members.
 JOBBER: He is not allowed to deal with the public directly .He
deals with brokers who are engaged with the investors . Thus,
the securities is bought by the jobber from members and sells to
members who are operating on the stock exchange as broker.
DIFFERENCE BETWEEN BROKER AND JOBBER
 SPECULATION AND SPECULATOR
 SPECULATION : It is the transaction of members to buy or sell securities on stock
exchange with a view to make profits to anticipated raise or fall in price of securities.
 SPECULATOR : The dealer in stock exchange who indulge in speculation are called
speculator . They do not take delivery of securities purchased or sold by them , but only
pay or rescue the difference between the purchase price and sale price . The different types
of speculators are:-
 BULL
 BEAR
 STAG
 LAME DUCK
BULL {TEJIWALA}

 He is speculator who expects the future

raise in price of securities he buys the
securities to sell them at future defeat the
higher price .He is called as bull because
his activities resembles as a bull ,as the bull
tends to throw its victims up in the air
through it shorns. In simple the bull
speculator tries to raise the price of
securities by placing a big purchase orders.
 BEAR {MANDIWALA}
 He is speculator who expects future fall in
prices , he does an agreement to sell
securities at future date at the present market
rate . He is called as bear because his
altitude resembles with bear , as the bear
tends to stamp its victims down to earth
through its paws . In simple the bear
speculator forces of prices of securities to
fall through his activities.
 STAG {DEER}
 He operates in new issue of market . He is
just like a bull speculator . He applies large
number of shares in the issue market only
by paying , application money , allotment
money. He is not a genuine investor
because , he sells the alloted securities at
the premium and makes profit. In simple he
is cautious in his dealings . He creates an
artificial rise in prices of new shares and
makes profits.
 LAME DUCK
 He is speculator when the bear operator
finds it difficult to deliver the securities
to the consumer on a particular day as
agreed upon , he struggles as a lame
duck in fullfilling his commitment . This
happens when the prices do not fall as
expected by the bear and the other party
is not willing to postpone the settlement
to the next period.
SECURITIES AND EXCHANGE BOARD {SEBI}
The SEBI was constituted on 12th April,1988 under a
resolution of the Government of India. On 31st
january,1992,it was made a statutory body by the
Securities and Exchange board of India Act,1992. The
Companies (Amendment) Act,2000 has given certain
powers to SEBI as regards the issues and transfer of
securities and non-payment of dividend.
 FUNCTION OF SEBI
 Regulating the business in stock exchange and any other securities
markets.
 Promoting and regulating self-regulatory organization.
 Registering and regulating the work of collective investments scheme
,including mutual funds.
 Prohibiting fraudulent and unfair trade practices relating to securities
market.
 Promoting education, and training of intermediaries of securities market.
 POWER OF SEBI
 Power to approve the bye-laws of stock exchange.
 Power to inspect the books of accounts.
 Power to grant license to any person for the purpose of dealing in certain
areas.
 Power to delegate powers exercisable by it.
 Power to try directly the foliation of certain provision of the company
Act.