How trading takes place and what is the process of trading?
The normal course of online trading in the Indian market context is placed below:
Step 1. Investor / trader decides to trade
Step 2. Places order with a broker to buy / sell the required quantity of respective securities
Step 3. Best priced order matches based on price-time priority
Step 4. Order execution is electronically communicated to the broker’s terminal
Step 5. Trade confirmation slip issued to the investor / trader by the broker
Step 6. Within 24 hours of trade execution, contract note is issued to the investor / trader by the broker
Step 7 Pay-in of funds and securities before T+2 day
Step 8. Pay-out of funds and securities on T+2 day s
In case of short or bad delivery of funds / securities, the exchange orders for an auction to settle the delivery. If the shares could not be bought in the auction, the transaction is closed out as per SEBI guidelines.
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