Finance -
Stock & ShareTrading Tips For NSE
Tarun Jaswani
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By Tarun Jaswani
Published on 11/13/2008
The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company.

The National Stock Exchange of India Limited or S&P CNX NIFTY (NSE), is a Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. Though a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant stock exchanges in India, and between them are responsible for the vast majority of share transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of fifty major stocks weighted by market capitalisation.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries in India but its ownership and management operate as separate entities. As of 2006, the NSE VSAT terminals, 2799 in total, cover more than 1500 cities across India . In October 2007, the equity market capitalization of the companies listed on the NSE was US dollar 1.46 trillion, making it the second largest stock exchange in South Asia. NSE is the third largest Stock Exchange in the world in terms of the number of trades in equities.It is the second fastest growing stock exchange in the world with a recorded growth of 16.6%.

The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000.

NSE also conducts online examination and awards certification, under its programmes of NSE's Certification in Financial Markets (NCFM). Currently, certifications are available in 19 modules, covering different sectors of financial and capital markets. Branches of the NSE are located throughout India.

NSE has remained in the forefront of modernization of India's capital and financial markets, and its pioneering efforts include: Being the first national, anonymous, electronic limit order book (LOB) exchange to trade securities in India.

Since the success of the NSE, existent market and new market structures have followed the NSE model. Setting up the first clearing corporation National Securities Clearing Corporation Ltd in India. NSCCL was a landmark in providing innovation on all spot equity market (and later, derivatives market) trades in India.

The derivatives markets are the financial markets for derivatives. The market can be divided into two, that for exchange traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different as well as the way they are traded, though many market participants are active in both.

Derivatives are usually used to reduce risk that the value of the underlying asset will change unexpectedly. Because the value of a derivative is contingent on the value of the underlying asset, the notational value of derivatives is recorded off the balance sheet of an institution, although the market value of derivatives is recorded on the balance sheet.

There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that bonds are traded. Increasingly, stock exchanges are part of a global market for securities.