To understand the future of stock market in India (manishhathiramani.com), we need to understand how the stock market works. India has two big stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE); and most of India’s stock trading takes place in these two popular sites. The BSE is doing business since 1875 and the NSE was founded in 1992 and became fully operational in 1994. These two stock exchanges follow the same trading mechanism, trading hours, settlement process, etc. The BSE deals with 4,700 listed firms (approx.), whereas the NSE has about 1,200 listed companies. But only about 500 companies, out of all the listed firms on the BSE, constitute more than 90% of its market capitalization; the rest on the list consists of highly illiquid stocks. Trading companies in India do business by registering with both exchanges. All orders in the trading system need to be placed through brokers, who may provide online trading facility to retail customers. Proprietary trading companies in India can also take advantage of the direct market access (DMA) option, in which they use trading terminals provided by brokers for placing orders directly into the stock market trading system.

1. Future of Stock Market in India
To understand the future of stock market in India, we
need to understand how the stock market works. India
has two big stock exchanges, the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE);
and most of India’s stock trading takes place in these
two popular sites. The BSE is doing business since 1875
and the NSE was founded in 1992 and became fully
operational in 1994. These two stock exchanges follow
the same trading mechanism, trading hours, settlement
process, etc. The BSE deals with 4,700 listed firms
(approx.), whereas the NSE has about 1,200 listed
companies. But only about 500 companies, out of all the
listed firms on the BSE, constitute more than 90% of its
market capitalization; the rest on the list consists of

2. Proprietary Trading
Trading Mechanism
The open electronic limit order book is used by both
exchanges to trade through. The order matching is done
by the trading computer. No market makers or
specialists are needed to match orders and the entire
process is order-driven, which means that market orders
placed by investors are automatically matched with the
best limit orders. This facilitates privacy and security of
both parties as buyers and sellers remain anonymous.
This practice brings more transparency, by displaying all
buy and sell orders in the trading system. However, in
the absence of market makers, there is no guarantee
that orders will be executed. Professionals involved with
proprietary trading plays a vital role here.

3. Trading Companies in India
Trading companies in India do business by
registering with both exchanges. All orders in the
trading system need to be placed through
brokers, who may provide online trading facility
to retail customers. Proprietary trading
companies in India can also take advantage of the
direct market access (DMA) option, in which they
use trading terminals provided by brokers for
placing orders directly into the stock market
trading system. The future of stock market in
India is promising and will surely bring more