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  • SEBI – Everything You Should Know About The Stock Market Regulator

    SEBI – Everything You Should Know About The Stock Market Regulator

    In the Indian stock market, there are transactions of crores taking place every day. Have you ever wondered how all these are kept in check? It is by SEBI, the stock market regulator in India. 

    In this article, we will read about SEBI in detail, its role in the stock market, its objective and a lot more. As an investor, it is important to be aware of the SEBI guidelines, and new regulations coming in and thus we have also included these pieces of information for you. So, let’s begin!

    What is SEBI in Stock Market?

    Securities and Exchange Board of India (SEBI) came into existence in the year 1992. The government of India established this organisation to regulate the stock market. It has its headquarters in Mumbai, and regional centres in other major cities like New Delhi, Chennai, Kolkata, Bengaluru, Hyderabad, Lucknow, Jaipur, Ahmedabad, Shimla and Kochi.

    SEBI has been mentioned as the regulatory authority of the capital market in India by Section 3 of the SEBI Act, 1992. The pivotal role of SEBI is to protect the interest of the investors who are investing in the securities. Other than this, SEBI also has the duty of promoting development in the securities market, regulating it, and related matters.

    Why Sebi Is Important?

    The existence of SEBI is crucial for the entire securities market and investors. In the 70s and 80s, when SEBI wasn’t there, multiple frauds such as insider trading, market manipulation, unofficial private placements, and legit brokers taking advantage of innocent investors were at their peak. To control this mess, and regulate the entire market, the government decided to establish SEBI and this is how SEBI came into existence and is important for every investor’s rights and safety.

    Powers of SEBI

    SEBI has been vested with certain powers which are as follows –

    – Quasi-Judicial: Any fraud or unfair activity taking place in the stock market is reported to the SEBI, and it has all the rights and authority to make a judgement about the scenario.

    – Quasi-Legislative: SEBI has the sole power to decide the guidelines for the securities market and stock market players such as NSE, BSE, CDSL, NSDL and others. Whether it is trading guidelines, listing requirements, or disclosure criteria, all are decided by SEBI.

    – Quasi-Executive: Thirdly, SEBI is vested with executive powers as well. The rules and regulations framed to safeguard the interest of the investors need to be executed correctly, and SEBI has the sole power of doing that. The institution has the right and authority to take legal action against people and companies or anyone violating these rules and regulations.

    Functions of SEBI

    Now after the powers of SEBI, let’s see the functions of the stock market regulator.

    While the primary function of SEBI is to protect the investors’ interest in the securities market, here are other functions that it has –

    • It takes care of different developments in the stock market.
    • It regulates depositories, credit card rating participants, custodians of securities, stock exchanges such as NSE and BSE, and foreign portfolio investors.
    • SEBI make sure there is no unfair activity in the market such as insider trading, manipulation of stock prices and others.
    • SEBI also regulates mergers and acquisitions of different companies.
    • SEBI regulates the operations of the stock market.
    • It decides the role of stock brokers, sub-brokers, agents, and Authorised persons in the market.
    • It decides the maximum brokerage that brokers can charge and also monitor their operations.
    • It makes sure that the market functions smoothly and investors have no grievances.
    • Finally, it helps all the investors and general people be aware of happenings in the market and also educates them by providing different online and offline resources about trading, investments, markets and related things.

    Guidelines of SEBI

    The guidelines by SEBI which are mandatory for every market participant to adhere are –

    • Investors shouldn’t invest in or trade unlisted companies. Unlisted companies are those companies which do not have their shares listed on any stock exchange, basically private companies.
    • Investors will not be allowed to trade in the market if they do not have a PAN and AADHAAR card and legitimate bank account details.
    • Investors cannot deal in the grey market.
    • Without a Demat account, no one can trade in the Indian share market.
    • The minimum age of an individual investor needs to be 18 years or above.

    SEBI New Rules and Regulations

    While there are new regulations that keep coming from SEBI, here are a few from the month of June 2023.

    • SEBI approved stricter rules related to disclosure for the FPIs. This is to safeguard the interest of the investors and for discouraging the illegitimate use of overseas investment channels.
    • New compliance rules are out for REITs and InvITs. Now they need to disclose the names of investment managers, along with the name of committee members, board members, directors and others related to the decision-making in these companies.

    Frequently Asked Questions

    1. What is the full form of SEBI?

    SEBI stands for Securities and Exchange Board of India.

    2. What is the tenure of the chairman of SEBI?

    The SEBI chairman can work till 65 years or five years whichever is earlier.

    3. Does SEBI come under RBI?

    No, SEBI and RBI are separate entities. SEBI regulates Securities market, while RBI regulates the Money market. However, both have to work closely to keep the economy in check.

    4. Do I need to register with SEBI for investing in the stock market?

    No, you do not need to register with SEBI for investing in the stock market. SEBI keeps an eye on all market participants for the protection of investors’ rights and interests.

    5. Is NSE and BSE regulated by SEBI?

    Yes, NSE, BSE and other stock exchanges in India are regulated by SEBI only. SEBI sets the framework for operations at all these stock exchanges and monitor their operations as well for the benefits of the investors.

    6. What is the role of SEBI in NSE?

    SEBI as the stock market regulator, sets rules and regulations for operations in NSE, and the companies seeking listing on NSE need to get approval from SEBI.

    7. How many companies are under SEBI?

    Any company which is listed on any stock exchange across India is under SEBI.

  • Exploring the impact of quantum computing on algo trading strategies

    Exploring the impact of quantum computing on algo trading strategies

    Recent years have seen a rise in interest in Quantum Computing, and both the scientific community and investors have high expectations for its future. This cutting-edge technology has the potential to fundamentally alter many facets of computers as we currently know them.

    Optimizing a portfolio could be one of the primary contributions to our interest because quantum computers are particularly good at optimization jobs. This article will take you through a highlight and introduce you to Quantum Computing, how it is being used in trading, the benefits of using quantum-based systems, and possible financial ramifications.

    Explore the potential of Quantum Computing to revolutionize your algo trading strategies and outpace the competition. Take advantage of its predictive capabilities, refined optimization techniques, and improved data analytics to gain an edge in the market. Let’s explore!

    What is Quantum Computing, and how does it work?

    The financial landscape is undergoing tremendous changes with the introduction of Quantum Computing and trading, potentially bringing about ground-breaking changes. Quantum Computing is a novel technology that uses the principles of quantum mechanics to tackle challenges beyond the scope of classical computers.

    It has been gaining traction as an emerging field over recent years. Financial services, such as algorithmic trading, are greatly enhanced by this technology. Its incredible speed and accuracy can considerably reduce the time and money spent on traditional trading processes. Prospects like this undoubtedly have the power to progress the financial sector exponentially. How does it work? Quantum computers leverage qubits to store and process data.

    This enables them to achieve calculations much faster than regular computers, making them more powerful. Quantum algorithms have the potential to revolutionize complex problem-solving. These algorithms can identify hidden patterns between data points by creating multidimensional spaces.

    To resolve a protein folding puzzle, the most energy-efficient combination of folds is the answer to the query. Such a pattern embodies the solution to this issue.

    Quantum Computing – Essential Characteristics

    Future technology transitions must be considered when organizations attempt to become more digital to improve planning and strategy. Companies may benefit significantly from Quantum Computing due to these technological developments. In light of this, let’s examine the characteristic features of Quantum computing:

    • Superposition – Quantum information is placed into superposition when a qubit is used, demonstrating its immense power. The superposition of various qubits can lead to the creation of an intricate, multidimensional computational space. This provides an alternate way to understand and tackle complex problems that are usually hard to solve.
    • Entanglement – Entanglement is a necessary part of Quantum Computing, which links pairs of qubits into a single state. This connection between the qubits means altering one will produce a predictable change in the other. So having this functionality makes quantum computing more powerful than ever before.
    • Faster and Better – Quantum algorithms are based on the principle of entanglement, which revolutionizes how complex problems are solved. Whereas a normal computer’s processing power only doubles when its number of bits is doubled, quantum computers experience an exponential increase in their computing capability with every qubit added.
    • Decoherence – Decoherence is when qubits lose their quantum characteristics due to vibration, temperature variations, or other environmental factors. As a result, the quantum state of the qubits gets interrupted abruptly.

    Errors in computing can be caused by qubits falling out of superposition due to external interference. To prevent this, qubits must be guarded against interruptions using supercooled refrigerators, insulation, and vacuum chambers.

    Why is Quantum Computing considered vital?

    Here are some of the benefits of Quantum Computing listed below:

    • Quantum Computing has several advantages over classical computers, including faster speed and accuracy for complex calculations. They also require less power to achieve the same results, making them a great alternative to classical computers.
    • Quantum Computing can store and process more information, possess higher computational efficiency, and produce far more accurate results.
    • Adding qubits to the register increases its storage capacity exponentially, allowing more information to be stored.
    • Quantum Computing has the edge over classical computing because it can execute tasks faster and more accurately. While traditional computers rely on atoms to change states slowly, quantum computers have their atoms changing with greater speed and precision.
    • Quantum Computing needs significantly less energy to function compared to traditional computing methods.

    Limitations of Quantum Computing

    Despite its apparent benefits, Quantum Computing also has several drawbacks. The following are some of its limitations:

    • Quantum computers could disrupt our current systems. One of the most profoundly affected would be RSA, which is the basis of many communication and privacy protocols like email and online shopping transactions.
    • Qubits are different than the usual binary bits which is why traditional error correction methods cannot be applied to them.
    • Quantum computers can crack encrypted messages, so security isn’t secure yet. Despite its many advantages, the technology risks disabling critical security measures that keep the internet and other applications safe.
    • Classical computers need far less energy than those running quantum logical operations, with the latter requiring at least five times more.
    • Quantum CPUs come with their issues, including efficiency and heat dissipation.
    • Making any measure to a quantum system causes the wave function to be broken down, and decoherence is annihilated, leading it to collapse into a single state.

    How may Quantum Computing impact financial services like algorithmic trading?

    Before 2020, the past two decades experienced multiple financial and economic crises, rapidly changing how banks and market participants evaluated and calculated prices of various asset classes. The effects of the COVID-19 pandemic have been a wake-up call for financial institutions to assess risk accurately and in a timely manner.

    Two key developments in Quantum Computing have occurred in recent years- The development of algorithms that automatically get better with use and advances in the study of quantum computers, which have the potential to be more powerful than any supercomputer.

    Quantum computers provide a new opportunity to the financial markets, including algorithmic trading, with their ability to quickly examine vast quantities of data. This can be used to make decisions about market trends and the best way to allocate resources for optimal returns.

    Also, certain arbitrage opportunities can be identified using this technology. Quantum Computing can be a powerful tool for financial institutions, helping them analyze large or complex datasets more quickly and effectively. The financial sector has a reason to rejoice, as many of the algorithmic tasks they require are optimization problems.

    Portfolio optimization, for instance, is one such task. The activities, such as securities pricing and portfolio optimization, require the evaluative capacity to pick the best result. Banks use algorithms and models to measure potential risks.

    This could provide many potential benefits, such as improved decision-making accuracy and increased cost savings. Quantum computers have exciting potential when utilized with algorithms powered by real-time data streams.

    Quantum Computing applications have traditionally been used only by financial institutions due to the need for expensive hardware and complex algorithms. However, this is gradually changing, with more initiatives being conducted daily, suggesting that a breakthrough is imminent.

    Businesses that rely on computing power to get ahead should take advantage of the current opportunities and start engaging with financial institutions now.

    Concept and Strategies of Algo Trading

    Learning how algorithmic trading works is essential, as investors employ it for various purposes. Algo trading is one of the most efficient ways to trade on the stock market.

    HFT is an integral part of algorithmic trading that involves making numerous trades quickly in different markets with various choices based on pre-set rules. It has become a popular option due to its high speed and accuracy.

    Effective algorithmic trading should be used to maximize your investment returns. Market timing, mean reversion, arbitrage, and index fund rebalancing are all great ways to ensure you get the most out of your investment.

    In addition to the main methods you’re already using, consider other tactics, including pairs trading, transaction cost reduction, and scalping. Here are some of the algo trading strategies:

    • Index fund rebalancing – To account for changes in the value of the fund’s assets, mutual fund portfolios, including IRAs and pension plans, are frequently modified. An increasingly common technique to invest in the stock market is through index funds. They are made to follow a particular benchmark index. To maximize returns while minimizing risk, index funds can ensure they are correctly distributed across various asset classes and sectors through rebalancing.
    • Arbitrage and Algos – Using sophisticated investing techniques, arbitrage uses price differences between two distinct exchanges. If handled properly, investors can benefit in the near term from these price fluctuations. It’s a fantastic method for building diverse portfolios and tapping into various marketplaces.
    • Mean Reversion – Stock traders can maximize their gains using the mean reversion method. Investors can determine their expected price ranges by looking at the highs and lows of a stock’s price over time. They can identify prospective purchasing and selling opportunities as a result.
    • Market Timing – Live testing, backtesting, and forward testing are all used in the market timing strategies, which include alpha generation techniques. Backtesting, or running simulated transactions in an in-sample data period, is the initial step in market timing.
    • Implementation Deficit – The implementation shortfall technique compares the cost of an order to the potential cost of delayed execution. Utilize this strategy to reduce market execution costs in real-time, and you will benefit from lower order costs and fewer opportunities lost due to execution delays.

    When the stock price travels in a positive direction, the strategy will raise the needed participation rate. However, when the stock price moves in a negative direction, it will lower.

    Final Takeaways – Future of Quantum Computing

    Quantum Computing has certainly shown some promising results, yet its widespread application is still in its initial stages. A wide range of industries and economic ecosystems have the potential to be transformed by Quantum Computing.

    This research aims to provide new tools and methods for utilizing the special characteristics of quantum systems to carry out calculations that are now impractical for conventional computers. Its full potential is yet to be realized, and there is an imminent need for further research before it can be deployed on a large scale.

    Quantum Computing allows you to keep up with the constantly changing market quickly and easily, giving you a leg-up on all your competitors. Develop more effective algo trading strategies, better tailored to real-world conditions, and stay ahead of the game.

    Seize this opportunity to start uncovering the limitless possibilities of Quantum Computing. Learn more about how to identify algorithmic trading strategies.

  • Top Five Algo Trading Softwares in India

    Top Five Algo Trading Softwares in India

    In a report published by NIFM, it has been stated that half of the trade orders at NSE and BSE are some kind of algo trade. Surprising, right? However, to surprise you even more, in the developed countries, this ratio is even higher at around 80% to 85% and thus here in India, there is a lot of room for more algo trading. If you are new to algo trading and looking for algo trading software to suit your trading needs, this article is just for you.

    In this article, you will not only read about the top algo trading software in India but also about their intriguing features, how NSE and SEBI encourage and also monitor these trades, and a lot more.

    What Is Algo Trading Software?

    Algo Trading Software is a computer-generated program which is pre-set with certain trading criteria. Algo trading is often referred to as automated trading or block-box trading as well as it is based on the programs set on the computer. Algo trading is gaining momentum in the market due to its promptness. 

    As the stock market is highly volatile and for a human trader, it is not always possible to place/cancel or modify trade orders as a pre-loaded computer-based program can. However, that is just one of the many reasons for using algo trading software.

    These software are loaded with different criteria which when matched in the stock market, triggers order and take necessary actions. One of the major reasons to use algo trading is to reduce market risk rather than maximising profits.

    Top Features of Algo Trading Software

    While every algo trading platform in India is unique and has its features, some of the features are in common and crucial. So, when you pick an algo trading software, you need to be aware of these features, whether they are in the software or not. To help you find the right feature, here is a list of top features of algo trading software in India which you cannot miss –

    • Automation: Traders use algo trading software to ease their trading experiences and thus algo trading platform’s must-have feature is automation. This feature helps accelerate and organise all the tedious work that you otherwise had to do. In turn, this saves a lot of time of yours which you can use elsewhere.
    • Efficient User-Interface: The algo trading platform that you pick must have an efficient user interface and is easy to use, and speed up your trading process. The software must have the capability of processing multiple orders in a second. You need to see whether the algo software is a multi-threaded system or not.
    • Availability of Data: For trading, data about the market and the companies are indispensable. You just need them for everything you do in the stock market and so is your algo trading software. Thus, you need to see whether the algo software you are opting for uses real-time data and prices or not. The software needs to use real-time stock market data and prices to make your trading at par with the market. The system should be such that it can incorporate these data easily either from the inbuilt system or other sources.
    • Backtesting: Algo Trading software is not only for placing orders or monitoring them but also used heavily for developing algorithmic trading strategies using pre-set criteria and data and information. Now, for different trades, you need different strategies usually to maximise the returns or minimise the losses. So, to make sure whether the trading strategy you are opting for a particular trade or instrument is full-proof or not, you need to use algo backtesting feature of the software. Using this software, you can make use of historical prices and check how your algo strategy would have performed in the past in a similar scenario.
    • Allowable Trading Strategies: Some of the Algo Trading software possess limitations on the number of trading strategies you can use. You need to make sure that the software you pick for algo trading doesn’t have such an upper cap or even if it does, the limit is high enough to have multiple trading strategies at work simultaneously. There are subscription plans as well for more trading strategies, you should check those plans and compare them with other software’s plans to make sure which will be more suitable for your trading needs and your pocket.
    • Sourcing Data: The algo trading platform, you pick to use for, must be compatible with the stock exchanges for sourcing market data. You can also source market data from third-party websites which complies with data from different stock exchanges together.

    Here are the Top Five Algo Trading Softwares in India

    1. Algobulls

    If you are looking for an algo trading software that helps you with abundant AI-driven trading strategies which you can also modify to suit your personalised trading agenda, then Algobulls is the one you need to add to your system.

    Best Features of Algobulls Trading Platform:

    • Multi-exchange trading facility – you can trade commodities, derivatives, forex along with equities.
    • Strategies that can help the high net worth investors as well as retail investors.
    • Modification features available for all trading strategies.

    Pros of Algobulls Trading Platform:

    • More than five hundred algo trading strategies are pre-set and along with that over ten million customization and modification options.
    • Backtesting facility available for all the strategies.
    • Paper trading support.
    • More than 150 trading indicators.

    Cons of Algobulls Trading Platform:

    • In the free plan, there are limited features, you can unlock more features with the premium plan.
    • Sometimes the data offered for trading and strategizing are not real-time data, some error or gap remains at times.

    2. Tradetron

    If you want to build new trading strategies for yourself or your clients but you do not know to code, don’t worry, Tradetron got you covered. With this algo trading software, even people with no knowledge of coding can build and automate algo trading strategies.

    Features of Tradetron Trading Platform:

    • Multi-currency software.
    • Trade any asset from any exchange – currency, commodities, derivatives, and equities.
    • Customized alerts for trade execution.
    • Connectivity with another platform via API.

    Pros of Tradetron Trading Platform:

    • Easy yet efficient features that suit beginners as well as pro traders or people creating strategies.
    • Share trading strategies with other traders, or modify the strategies of other traders to suit your needs.
    • Algo strategies are based on different market events and quant methods.

    Cons of Tradetron Trading Platform:

    • The free version allows only one strategy at a time that too with certain limitations.
    • For all the features, you have to pay for the premium version as the free version doesn’t offer them.

    3. uTrade

    If you are looking for an algo trading platform that not only offers algorithms for trading but also risk management solutions, exchange solutions, and multi-asset trading then uTrade is your go-to.

    Features of uTrade Trading Platform:

    • Multi-asset trading facility where you can trade across exchanges be it currency, or commodity or equities or derivatives.
    • You get a real-time market data broadcast facility.
    • Institutional sales trading OMS.

    Pros of uTrade Trading Platform:

    • Suitable for retail traders as well as High net-worth investors.
    • You get direct access to the market using this algo trading software.
    • Multiple trading APIs to enhance your trading experience.
    • Trading Strategies are customizable.

    Cons of uTrade Trading Platform:

    • Most of the features are accessible only with a subscription.
    • Not so suitable for beginners.

    4. Refinitiv

    Refinitiv is shaping the world of algo trading with its unique and innovative approach every day. This is one of the most demanded algo trading software across the globe for its exceptional performance and endless features.

    Features of Refinitiv Trading Platform:

    • Ample trading strategies using spread, equities, forex, and derivatives.
    • Cost analysis.
    • Surveillance.
    • Alerts and notifications.

    Pros of Refinitiv Trading Platform:

    • Offers the best workflow automation in the market.
    • Multi-exchange trading facility.
    • Post-trade tools for settlement, surveillance, and monitoring.
    • Easy and efficient user-interface.

    Cons of Refinitiv Trading Platform:

    • Suitable for the professional traders.
    • A limited number of features available with the free plan.

    5. Greeksoft

    If you are looking for high-frequency algo trading software that has very low latency and exceptional features to up your trading experience, then Greeksoft can be the solution.

    Features of Greeksoft Trading Platform:

    • Ample risk management tools for minimising the risk of your trade orders.
    • Multiple levels of algorithms to suit different trading requirements.
    • Entirely automated high-frequency order routing system which has exceptionally low latency level.

    Pros of Greeksoft Trading Platform:

    • Multi-asset trading options covering basic equities to currencies, everything you want to trade using algorithms.
    • A wide number of trading strategies to help you minimise risk and maximise profits from your trades.
    • Exceptional user support.
    • Wide variety of customization options for all strategies, alerts, products symbols, and a lot more.

    Cons of Greeksoft Trading Platform:

    • Not suitable for newbie traders.
    • Not all features and strategies are available with the free plan.

    How Does NSE Encourage Algo Trading In India?

    One of many reasons for Algo Trading becoming popular in India is the support it gets from the National Stock Exchange. While SEBI always keeps a strict eye on algo trading for benefiting the traders especially the retail traders and investors, NSE on the other hand give the required push for adapting algo trading for the benefit of the investors and traders. Here are certain ways in which NSE helps in encouraging algo trading in India –

    • Algo traders and vendors get ample data and information on historical prices of securities from NSE.
    • NSE also helps in researching algo trading tools and software to find out the best one for the traders and investors.
    • The organisation also checks which software has the best strategies and features that can be useful for the traders and vendors.
    • NSE along with other stock market regulators and educators help traders learn about algo trading and also publishes different research papers to help people gain knowledge about the same.

    Benefits of Algo Trading For Intraday Traders

    The rise of algo trading has been incredible and obvious due to its exemplary benefits which include –

    • Cost reduction for the intraday traders who do bulk trading. This is because, with algo trading software, there is no need for having multiple terminal staff as the trades can be automated.
    • Algo-trading software also helps in improving the liquidity of stocks and ensures no leakage of sensitive information which can affect the price of the stock. This helps in buying and selling shares at better prices.
    • Due to pre-set criteria in this algo trading software, they can react to market events and updates faster than a human intraday trader can do usually. This again helps in trading securities at better prices and making the most out of the market events and changes.
    • This software uses multiple metrics like VaR or hedging tools to reduce the risk of the trades all the time and the intraday trader need not stare at the screen all day for the same.

    Frequently Asked Questions

    1. Which Algo Platform Is Best For Trading?

    While all the five algo trading software are excellent, TradeTron can be considered one of the best amongst them as it offers a wide range of facilities.

    2. Is Algo Trading Profitable in India?

    Algo trading has been picking up rapidly in India and at present, out of all the trade orders at both the stock exchange – BSE and NSE, 50% of them are algo trades. This depicts that these trades are profitable enough.

    3. How Does Algo Trading Software Work?

    Algo Trading Software makes use of different pre-set programs and criteria which helps in triggering orders and other actions as per market movements.

    4. Is Algo Trading free in India?

    No, Algo trading is not entirely free. The charges depend on each of the software. While some of the software offer certain free features but most of them are offered when you buy the premium plans.

    5. Is Algo Trading Legal in India?

    Yes, Algo trading is legalised in India. It is controlled and monitored by SEBI and the stock exchanges.

  • Everything you need to know about NSE & BSE

    Everything you need to know about NSE & BSE

    Are you new to the stock market? Are you wondering how stocks are listed or traded and from where you can buy these stocks or other securities? Don’t worry, we have heard you and that’s why this article is going to cover all the important aspects of both the important stock exchanges in India which are – the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

    What is a Stock Exchange?

    Before we dig into NSE and BSE, let us understand what a stock exchange is. So, a stock exchange can be defined as a market where the companies are the vendors and the investors/ traders are the buyers. The companies list their stocks on the stock exchange after they come up with an IPO. 

    Once the IPO is launched by a company, and it is subscribed, approved and allotted, the stocks are listed. Now the investors who purchase stocks in the IPO, they become shareholders of the company. This means they own a portion of the company against which they have purchased stocks.

    Now, stock exchanges play an important role not only in listing the stocks as listing via IPO is the first step but then once the stocks are with investors, they can themselves buy and sell on the exchange with each other. So, the stock exchange facilitates both the companies and the investors.

    Now as you have understood what is a stock exchange, understanding NSE and BSE will be easy. These two are nothing but two of the largest stock exchanges in the economy.

    What is Index?

    An index shows how the stock market is performing overall. With many stocks listed, tracking them one by one can be tough. An index simplifies this by grouping companies based on size, sector, or industry. It gives a clear view of market trends and investor feelings.

    In India, Nifty is the main index for the NSE, consisting of 50 major stocks. Sensex represents the BSE with 30 significant stocks. The index value is calculated using Weighted Average Market Capitalisation. When stock prices rise, the index increases; when prices fall, the index decreases. This reflects market performance.

    What is NSE?

    NSE or National Stock Exchange is the largest stock exchange in India with around 2137 stocks listed on it as per data of March 31st, 2023. The total market capitalization of all these stocks is close to Rs. 2519504.61 crores as per the same data report of NSE. As per market capitalisation, the top ten stocks on NSE include Reliance Industries, TCS, HDFC Bank, ICICI Bank, HUL, Infosys and others. Investors and traders can trade currency derivatives, equity derivatives, debt instruments as well along with stocks.

    What is BSE?

    BSE or Bombay Stock Exchange is older than NSE as well, to be exact, it is the oldest stock exchange in the entire Asia. In the year, 1875, BSE was established but the name of the institution then was Native Share and Stock Brokers’ Association. As per current data, there are 5258 companies listed on BSE and the total market capitalization stands at Rs. 23232910.18 crores.

    How Do These Stock Exchanges Work?

    Both NSE and BSE function in the same manner and their main objective is to facilitate buyers and sellers in the stock market. When an investor places an order, the stock exchange receives the information from the broker of the investor.

    Then the stock exchange starts searching for orders from the opposite side to match this order. Once the order matches, the order gets executed. Now the stock exchange sends information to the broker of both the buyer and seller about the trade and the transaction taking place thereon.

    Let’s understand this with an example, suppose there are 4 buyers for Stock A and 5 sellers for the same stocks. The bids placed by them are as follows –

    No. Buyers Sellers
    1. 100 120
    2. 102 116
    3. 103 112
    4. 105 109
    5. – 105

    Now as you can see in the above table, the highest bid placed for buying stock A is Rs. 105 per share, by buyer no. 4, while seller no. 5 has placed the lowest bid for selling the same stock at Rs. 105. Now, suppose, this trade is taking place on NSE, so, the stock exchange will match buyer 4 with seller 5, and the trade will get executed at Rs. 105.

    Apart from matching trades, these stock exchanges also do much crucial work and one such is building and maintaining the stock indices such as Nifty or BSE Sensex.

    These indices act as standards for investors and traders and help them understand whether the return generated by their investment portfolio or stocks or any other securities they have invested in are as per market or not.

    How to Trade on NSE and BSE?

    Whether you want to trade on NSE or BSE, the steps are the same and those are:

    • Firstly, you need to open a Demat account and a trading account. You can open these accounts with Findoc for a hassle-free paperless account opening process.
    • Then you need to submit the documents for KYC verification. Once the KYC is verified, the account will be operable.
    • Now, you need to download the trading platforms you want to trade from. Whether it is a mobile trading place like StockZ or a trading terminal.
    • Then set it up with the stocks and other assets you want to track and trade.
    • You can now place orders for the securities you want.
    • However, before you start trading or investing on NSE or BSE, make sure, you learn about the transaction charges and other charges to make a correct estimate of your earnings.

    Benefits of Getting Listed on BSE and NSE

    Listing on the BSE and NSE has several advantages for companies, including raising capital and building credibility. It also provides safer and more transparent opportunities for investors.

    • Better fundraising: Once a company lists its shares, its financials are in the public domain, fostering investor confidence and enabling it to raise funds more easily. Both exchanges offer a readily available market with numerous buyers, allowing companies to raise money with ease.
    • Strict regulatory governance: SEBI regulates listed companies to adhere to guidelines that are revised from time to time to avoid fraud and misrepresentation. Compliance reduces investors’ risks and builds the company’s reputation.
    • Clear information dissemination: Companies are required to disclose information such as revenue, dividends, reinvestment schemes, and bonus issues, allowing investors to make decisions accordingly.
    • Access to loans using shares: Listed shares can be used as collateral with banks or financial institutions, helping companies and investors secure funding for new ventures.

    Similarities in the BSE and NSE

    While BSE and NSE differ in size and trading activity, they share several important features that make them equally important for India’s financial markets:

    • Both are recognised stock exchanges regulated by the Securities and Exchange Board of India (SEBI).
    • They provide a platform for companies to raise capital by listing shares and securities.
    • Both exchanges allow trading in equities, derivatives, debt instruments, ETFs, and mutual funds.
    • They operate on a fully electronic trading system, ensuring transparency and efficiency in transactions.
    • Both have a pre-open session prior to the regular market hours for prices to stabilise.
    • Both have benchmark indices—Sensex for BSE and NSE has Nifty, which indicates the overall market trend.
    • They also play an important role in price discovery and liquidity, facilitating buyers and sellers to trade smoothly.
    • Investors can use both exchanges with the same trading and Demat accounts.

    Which Exchange is Better: NSE or BSE

    Both NSE and BSE serve different types of investors. The right choice depends on your trading style, goals, and the kind of companies you want to invest in.

    • NSE is preferable if, as a trader, for most active traders, NSE would be the preferred option. It has greater liquidity, quicker execution, and a strong derivatives market. Institutional investors, day traders, and those trading in futures and options often prefer NSE because of its efficiency and its ability to handle large trading volumes.
    • BSE is better if you want a variety of companies. As a long-term investor seeking a diverse selection, BSE could be the best choice. It has the largest number of listings in India, with numerous mid-cap and small-cap companies listed. Retail investors looking for diversification, heritage businesses, and stable equity investments tend to prefer BSE for the creation of a diversified portfolio.

    Which Exchange Should Investors Transact In, Nse Vs Bse?

    NSE or BSE is your choice, and it would be based on your investment goals and preferences. If you like active trading, derivatives, and high liquidity, NSE is likely to be more appropriate due to faster execution and higher volumes. If you prefer long-term holdings, wider listings, and exposure to a large number of mid-cap and small-cap companies, BSE is the preferred choice. Both exchanges are safe, regulated, and accessible via the same trading account.

    Difference Between NSE and BSE

    The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are India’s leading stock exchanges, each with distinct characteristics in history, size, trading volumes, and investor preference.

    Conclusion

    Both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are an integral part of the stock market in India and in traders’ and investors’ life. While NSE has become the largest stock exchange in the country, BSE is the oldest in the continent offering the best of the services to the investors and traders to up the stock market game in the economy.

    Frequently Asked Questions

    NSE trading means purchasing and selling stocks, derivatives, and other securities on the National Stock Exchange. It is India’s largest and highly liquid stock exchange with sophisticated electronic systems.

    Trade on NSE by opening a Demat and trading account with a broker, doing KYC, using the broker’s platform, and entering buy or sell orders electronically.

    Yes, if the stock is listed on both exchanges. Selling on the BSE and buying on the NSE is no problem at all, since settlements are processed centrally through your Demat account.

    NSE is used for active trading and derivatives, and BSE is better for long-term investors who have more companies listed. Both are safe, regulated, and accessible from the same trading account.

    BSE is an acronym for Bombay Stock Exchange, formed in 1875 as Asia’s oldest stock exchange. NSE is an acronym for National Stock Exchange, established in 1992 with fully electronic trading mechanisms.

  • Initial Public Offering (IPO): A Comprehensive Guide

    Initial Public Offering (IPO): A Comprehensive Guide

    India is touching new heights in terms of business growth, and it is quite evident with the number of IPOs launched in the previous few years. If you are considering investing in upcoming IPO in India, then you must want to know how the IPOs are performing in the recent past, isn’t it? So, out of 119 IPOs launched between 2020 and 2022, only 1 IPO couldn’t make it, which indicates the huge success of new-age companies’ IPOs. This also showcases the new Indian approach towards businesses and why investing in IPOs can be a wise choice for investors.

    Until 2023, there have already been close to 60 IPOs launched, and many upcoming IPO launches in India are under the pipeline this year. However, before you dig into the individual IPOs to find the best IPO for yourself using the IPO screener, let’s understand what is ipo and how does it work?

    What is an IPO?

    IPO or Initial Public Offering can be described as making a private company public by selling its shares to the general public in the country. Businesses opt for IPO primarily for two reasons. One is to raise funds to grow the business, and the second is to become a public enterprise with more recognition.

    With the digitalisation of investments, nowadays, it is not difficult to find retail investors in IPO, which earlier was. Suppose you want to invest in IPOs launched in the coming months. In that case, you can easily find the information online or contact ipo consultants in India for better suggestions regarding which IPO will suit your investment profile.

    How does IPO work?

    The entire process of IPO involves–

    • The company wants to issue the shares by contacting an Underwriter and preparing the Draft Red Herring Prospectus (DRHP). This document will have all the information related to the company, its financial structure, business methods, objective for the issue, purpose of the issue, number of shares to be issued, share price, price range or bands, and everything that an investor must know about the company before investing in their upcoming IPO.
    • Once the DRHP is created, it is submitted to SEBI for evaluation; if SEBI approves it, the company publishes the final Red Herring Prospectus (RHP) for prospective investors.
    • You will now know the issue date, price range, and issue type. Once the IPO opens, it usually stays for around five days, but the timeline can vary from 3 to 21 days.
    • At this time, the investors must bid for the stocks via their brokers or banks.
    • After the IPO closes, the company evaluates the application received for the IPO and then allots shares accordingly.

    IPOs are usually of two types, and the company mentions the same in its RHP. These are –

    • Fixed Price Offering: As the name suggests, when the company issuing the shares fix a price for each share, it is known as a Fixed Price Offering or Fixed Price Issue. In this case, the share demand is known after the IPO is closed and not in between. Investors investing in a fixed-price offering must pay the entire amount to apply for the number of shares they want to purchase.
    • Book Building Offering: On the other hand, under the book-building method of IPO, the price of the issue is determined after the IPO is closed. The issuing company provides a price band of around 20%, and the investors looking to invest can bid any price within this range. The demand for the shares under this method can be known daily as the IPO progresses towards closing, and this helps the company determine the issue price. Once the IPO is closed, the share price will be determined per the demand for the same and analysing the investor bids.

    How can you invest in an upcoming IPO in India?

    If you are thinking about investing in any of the upcoming IPO in India, then here is the method of how you can invest in one with ease –

    • First, you will need to open a demat account, bank account, and trading account if you wish to trade the shares after getting the allotment or invest via the UPI route.
    • Now you can apply through the UPI route or ASBA route. Investing in IPO has become easier with the UPI route, initiated with digitalising the investment space.

    UPI Route

    • To apply for upcoming IPOs, you have to log into your trading account, or you can easily invest using your Findoc Account via the UPI route.
    • Enter the number of shares or lots you want to purchase.
    • Enter the price you want to purchase the shares if it is a book-building offering.
    • Enter the details in your IPO application form.
    • Enter your UPI ID.
    • You will receive a message for blocking the funds for the amount you want to invest in the IPO. Click on the approve button, and your application will be submitted.

    ASBA Route

    • Under this method, you must determine the bank participating in the IPO.
    • You can find a suitable IPO for your investment portfolio with the IPO screener.
    • Click on the ‘Apply’ button to apply for the IPO.
    • The application form will open, which you will have to fill in with the details like name, address, PAN details, bank details, and others as required.

    Then submit the form, and you will be asked to confirm the amount to be blocked for the IPO investment; once you confirm, your application will be submitted.

  • Join, Retain, and Partner with the Best Trading Firms and Grow as a Professional Trader

    Join, Retain, and Partner with the Best Trading Firms and Grow as a Professional Trader

    The global economy is going through a significant paradigm shift, and people are starting to invest in the stock market more than ever before. Be it the uncertain economic environment or a vision for financial stability, the number of professional traders is rising exponentially. As per the latest data, over 9.6 million active traders exist online, which accounts for 1 in every 780 people.

    For anyone who aspired to start trading, getting associated with a trading firm is advantageous. They let you trade in stocks by providing tailored investment advice based on specific risk levels and goals. Let us dig deeper and explore how these firms can be the ladder to your success in the stock market.

    How do Stock Trading Firms Assist Professional Brokers?

    Trading firms provide education, resources, trading tools, and other crucial services that make trading easier. Big-shot trading firms such as Findoc utilize the Algo trading software to facilitate HFTs (High-Frequency Trading), allowing for more efficient market making and risk management.

    The present-day trading firms offer training, mentoring, and networking opportunities, giving you access to the traders’ community for collective growth. They support multi-market and multi-asset investments, which broadens the investment possibilities. Besides, trading firms capitalize on robust, high-tech automated systems to enrich the trader’s experience and expertise.

    Why is Algo Trading an Important Aspect While Choosing the Stock Trading Firm?

    Since technology is at the forefront of stock market investments, it is no wonder why Algo trading is gaining much traction. It ensures that each trade is executed at the best possible price for the trader and in accordance with his strategy. From trade automation to risk mitigation, Algo trading is a pioneer for beginner and professional traders. The market size for Algo trading is estimated to reach from $2.19 billion in 2023 to a whopping $3.56 billion by 2030.

    Algo trading helps you test the waters despite having zero or little knowledge regarding the investments. Thus, trading firms leveraging the power of Algo trading can skyrocket your trading career through tech-enabled tools, hassle-free automation, and expert guidance.

    What Are the Features a Stock Trading Firm Should Have?

    There are numerous trading firms in the stock market, making it challenging for professional traders to narrow down their choices. There are many things to consider, from front-end trading interface to analytics tools and risk mitigation to order management system. The following are a few innovative features offered by the best trading firms, like Findoc, to help restructure and simplify trading.

    • Customized OSM: Findoc’s order management system is a computerized one that manages the trade execution through Algo trading. It lets professional traders fill orders for diversified securities, assess their progress, and ensure regulatory compliance. One can also monitor the real-time situation of trades, their prices, and demand & supply in the market.
    • Trade Management and Execution Support: With custom trading Algo and AI-backed systems of Findoc, professional traders can conduct portfolio analysis to reap higher returns as per current trends or historical data sets alongside other factors. It provides a systematic and disciplined approach for investments involving a certain risk factor. In addition, Findoc also offers mentorship and excellent support 24/7, with trading veterans and connoisseurs curating the strategies for you.
    • Robust and Efficient APIs: APIs are vital for applying automated strategies for trading. With Findoc, you can utilize third-party applications necessitating access through APIs. Likewise, professional traders can also develop their own systems to garner real-time data and place orders on the go using a single button click. Findoc’s API interfaces are tailored and developed by experts who are well-familiar with APIs’ capabilities.
    • In-House Development & Support: Algo trading requires understanding quantitative analysis, like programming skills and various algorithms you want to utilize. A successful professional trader needs comprehensive expertise concerning currency movements, and Findoc’s guidance plays a vital role here. Thus, you can apply strategies derived from mathematical equations for investments having the potential to generate good returns when tested by dynamic variables. With Findoc’s valuable training, you can become an expert at risk assessment of your trades based on certain factors.
    • Excellent 24/7 Support: Professional traders can contact Findoc’s Algo development & support team before placing their trades to ensure things are done right. Suppose you are a beginner and lack abilities to trade smartly in the market. In that case, the financial experts of Findoc will offer support as per your trade requirements and financial goals.

    How Algo Trading Software Are Beneficial for A Professional Trader?

    Leading trading firms such as Findoc offer a gamut of Algo Trading Software that helps professional traders make better investment decisions. Likewise, they can utilize features such as financial advice & tools, automated risk management, backtesting, portfolio management, and more. Let us explore in-depth and learn how Algo trading software benefits professional traders at a scale.

    • Automated Trading: Algo trading software allows traders to automate their trades and invariably run them. This helps them save time, reduce the risk of making mistakes, and avoid getting overwhelmed by the market.
    • Automated Backtesting: It permits traders to test out strategies before they are actually deployed on the market. Automated backtesting gives them a chance to see which strategies work best for them before they get into real trades with real money on the line.
    • Real-Time Data and Market Information: The Algo trading software provides real-time data, which helps in making accurate decisions. Besides, professional traders also get access to algo trading strategies and advice on what mistakes to avoid. The software can provide alerts about market conditions, which is helpful for those who want to be on top of their game regarding trading.

    Algo Trading Software Variants that Help Simplify and Streamline Your Stock Trading Goals

    The objective of Algo trading software, backed by artificial intelligence and machine learning, is to make your trading journey seamless. Trade software is indispensable for prudent investments, from third-party trade simulations to live backtesting. These are the top nine trading software platforms that top trading firms like Findoc deploy to facilitate sub-brokers and professional traders.

    Softwares Prime Features
    Algobulls Customizable trading algorithms for bespoke investment strategies powered by artificial intelligence.
    Tradetron Assists in automating quant strategies and building scalable algorithms minus any single code, which can be traded for monetization.
    uTrade Best suited for financial enterprises and their end customers, it offers multi-asset trading and single-digit microsecond latency.
    Refinitiv With robust technology, open software solutions & critical data, and expertise, it helps mitigate risk concerning your stock market investments.
    GreekSoft A multitasker software providing comprehensive solutions with the swiftest trading speed powered by a 10G Ethernet network and HFT support.
    Algobaba It is a trade execution platform utilizing its proprietary system STOXXO to offer features like live trading, a trade simulator, and tailor-made investment strategies.
    Multi Trade Extensively scalable software that enables trades of sizable volumes and comprises a user-oriented and straightforward UI design.
    XTS (Symphony) It is an advanced sell-side trading software preferred for its multi-asset and market compatibility and for streamlining enterprise trading.
    Robomatic It blends finance, innovation, and technology into the trading segment and lets you filter and select varied stocks.

    The Ball Is in Your Court Now

    Every professional trader needs a customer-centric, tech-enabled trading platform to begin their investment voyage in the market. While pumping your money into the stocks, a reliable trading firm like Findoc would be a turning point in making your investments profitable. It helps beginners and professional traders to learn the know-how of trading, test and execute trades through varied algorithms.

  • How Does Sub-Broker Franchise Work?

    How Does Sub-Broker Franchise Work?

    A stock market sub-broker franchise is a business opportunity that allows one to invest in the stock market and earn passive income. The stock market is a way of investing in companies. The more shares you own; the more dividends you will receive. Stock market sub-brokers are brokers who trade stocks on behalf of their clients. They can also provide research and other financial services such as portfolio management and tax planning.

    A stock market sub broker franchise is an investment-based business model requiring no upfront capital or inventory but a significant time commitment from the owner/operator. This blog will teach you about the sub-broker franchise cost, operations, and benefits.

    The Functions of a Sub-Broker Franchise

    It is a business model where the franchisee pays a fee to the franchisor to use its brand, and then they operate independently.

    A sub-broker is an individual who works for a stock brokerage firm and acts as an intermediary between clients and the firm. They are responsible for buying or selling shares on behalf of their clients, executing trades, and acting as an intermediary between clients and brokers.

    The primary function of this type of business is to provide stock market services to the public and make money off the spread between the bid and ask price.

    Since many types of businesses can be run as a franchise, there are many different functions that can be included with this type of business. Some standard functions include educational services, trading platforms, and research tools.

    The functions of a stock market sub-broker franchise are not just limited to the company’s business operations. It also includes the following:

    • Providing services such as in-depth research, stock recommendations, and personalized investment advice.
    • Marketing and advertising products and services related to stocks.
    • Creating an online platform for investors to buy stocks with ease.
    • Offering educational programs on investing and financial literacy.
    • Creating a community for investors who want to share their knowledge with others in their network.
    • Selling investment products like mutual funds or ETFs through the website or other channels like telemarketing or print ads.

    Advantages of a Sub-Broker Franchise

    From low sub broker franchise costs to flexible working hours, the advantages of having a franchise are pretty generous. One can also earn a passive income stream from fees generated from investments managed by the franchisee. Below mentioned are the prime benefits of acquiring one.

    • High Income Potential: The sub-broker is entitled to get a higher percentage generated from client brokerage. On the contrary, the franchiser retains a comparatively less brokerage percentage.
    • Pocket-Friendly Investment: The minimum sub broker franchise cost is Rs. 50,000 as an investment expense. Besides, a security deposit has to be incurred by the franchiser to cover the expenditures. However, in some instances, the franchiser does not even ask for a minimum sum for the deposit.
    • Comprehensive Assistance: With an investment in a stock market franchise, you can expect support from marketing and training and access to their database of investors who want to share their experiences with others looking for information on investing in stocks.
    • Excellent Advisory Support: The program provides you with the support that you need to succeed in the stock market business, including training, mentorship, and marketing assistance. It allows people to have an expert who will help them make their investments more profitable without dealing with all the stress and anxiety that comes with it.

    The Final Words

    Work flexibility, lucrative career prospects, and lower sub-broker franchise cost are some of the factors which are contributing to this business’s popularity. This type of franchise is more cost-effective for individuals who are just starting out in the business. It also allows for greater flexibility regarding location and hours of operation.

    A sub-broker franchise can be an excellent opportunity for those who want to work for themselves or are looking for a new career path. To become a successful stock market franchise owner, it is crucial to understand what it takes and what you need to succeed and the risks involved with this type of business venture.

  • Sub Broker Franchise without Deposit

    Sub Broker Franchise without Deposit

    As a protocol, a stock broker requires an initial investment deposit from the sub broker to launch a sub broking business, per the sub broker agreement between the two. Every stock broker requests a deposit of some kind from the sub broker they are forming a relationship with.

    In this blog, we will attempt to cover the fundamentals of the security deposit, its characteristics, the advantages of starting a sub broker franchise with a security deposit, and ultimately, instances of sub brokers without a deposit.

    Initial Security Deposit

    One of the essential items addressed in the sub broker contract is the initial investment or security deposit. Generally speaking, the stock broker clarifies what the security deposit is taken and for which specific business model.

    While some stockbrokers mention a variety of security deposits, others only mention the minimum amount.

    1. The typical security deposit ranges from 1,00,000 to 3,00, 000. It can be a bit low or high in this range, but this is a standard range. Any sum between these ranges may be deposited.
    2. With this security deposit, a sub-broker is granted the authority to launch a joint venture under the stock broker’s name. Additionally, they are granted permission to access the broker’s technology, trading platform, and research reports.

    Important Pointers About Security Deposit

    The following are some crucial aspects of the security deposit and the associated procedures:

    • The stock brokers take the security deposit as insurance if future payments are not made as agreed.
    • Almost all stock brokers indicate in the agreement that the security deposit is refundable and will be returned to you at the termination or closure of the deal.
    • Cash or stock can be used as the security deposit, whichever is preferred.
    • The security deposit amount partially determines the sub-revenue broker’s sharing portion. The percentage of revenue will also be significant if the security deposit is on the higher side.
    • A partner may open a trading or Demat account with the broker for formal transactions by depositing the security money with the stockbroker.
    • In general, it is seen that new brokers offer their partners ZERO investment or sub broker without deposit to grow their business.

    Understanding the Zero Deposit Sub Broker Franchise

    The big question is: Can anyone be a sub broker without a deposit?

    Some stock brokers offer opportunities to people looking to launch their businesses without requiring an upfront payment or security deposit.

    In today’s market, there is the fierce rivalry. Stock brokers are using a variety of tactics to entice more business partners for company growth.

    Lowering or eliminating the requirements for an initial payment to launch a partnership business is the first step. Some stock brokers reduce the initial deposit required, while others abolish it altogether, and it relies on the stock broker’s strategic requirements.

    Other aspects, such as the sub-reputation brokers and clientele, are also considered when determining the security deposit. There is a considerable probability that your initial payment may be wiped off, or at the very least substantially reduced, if a partner can commit to a minimum amount of trading per month.

    Now it’s your turn to consider why certain brokers require a security deposit for sub broker franchise and others do not. If you wish to launch a partnership in the broking industry without posting a security deposit, you should consider your long-term advantage first.

    Since it is frequently observed that brokers with weak brand equity and networks attempt to provide you with a free partnership, however, their long-term advantages are relatively few.

    Final Thoughts

    There are numerous choices available to those who want to start a sub broker business and pursue a career in the broking industry.

    Due to the intense competition among stock brokers, it is common to see them employ offers like sub broker franchise without deposit or zero initial investment to draw clients and expand their clientele.

    Let us help you get started if you want to become a sub broker or any other kind of partner in the stock market sector.

  • How to Become a Sub-Broker?

    How to Become a Sub-Broker?

    A stock market sub broker is a financial professional who facilitates the trading process. They are responsible for managing their clients’ risks and the risks associated with their own trades.

    A sub broker in the stock market trades in stocks on behalf of another brokerage firm. He or she is an agent having an association with a stock exchange’s trading member. To become a sub-broker, you should get registered with the Securities and Exchange Board of India (SEBI) alongside any of the local stock exchanges as well.

    Sub-brokers provide liquidity to the market and help investors who want to trade shares. This means that they are in charge of managing a portfolio of securities, arranging for the purchase or sale of those securities, and handling any complaints about the securities. This position typically requires strong math skills, analytical thinking, and experience working in the stock market. A successful applicant will also have knowledge of how to trade stocks and bonds.

    They are intermediaries that offer services to the brokerage firm that employs them. The role of the sub-broker in the stock market is to buy and sell securities on behalf of the brokerage firm, often at prices different from those offered by other brokers. This can be done either over the counter or on an exchange, but most often, it takes place over the counter. If you wonder how to become a sub-broker, here is all you need to know!

    Process of Becoming a Sub-Broker

    Most aspiring candidates are unaware of how to become a sub-broker regarding examination and registration. However, the process is relatively swift and hassle-less. Here are the steps you need to carry out:

    1. Apply for a certification exam by the National Institute of Securities Markets (NISM) consisting of modules on mutual funds, equities, derivatives, and commodities.
    2. Register yourself online with the Securities and Exchange Board of India (SEBI).
    3. Upload the essential documents on SEBI’s official website and complete the process by paying the registration fee with the amount for the initial deposit.
    4. Register with any local stock exchange.
    5. You will have to apply at a well-established and leading brokerage company to become a sub-broker to get access to training, study material, tech-enabled tools, and valuable assistance.

    Necessary Credentials for a Sub-Broker

    Before starting off your journey on how to become a sub-broker, you must fulfill the below-mentioned eligibility criteria:

    • A Secondary School Graduation Certification
    • He/she should be 21 years old
    • Having comprehensive familiarity with financial services
    • Must have passed the NSIM certification exam

    What Are the Functions of a Stock Market Sub Broker?

    • The primary function of a sub-broker in the stock market is to act as a conduit for large orders from one broker’s clients into another broker’s order book and vice versa, without allowing any direct trading between clients or brokers themselves.
    • Stock market sub-brokers help traders manage risks by providing them with advice, trading strategies, and risk management tools. They also provide information about different markets and trends so traders can make informed decisions.
    • Their job is to manage the risks of their clients, manage their own trades, provide information about different markets and trends, and provide advice on trading strategies. The sub-broker in the stock market is usually compensated by transaction fees and commissions on the securities they buy and sell.

    Significance of a Stock Market Sub-Broker

    The role of a sub-broker in the stock market is to provide liquidity to the market by buying and selling securities. The job is mainly done through the use of an automated trading system.

    There are three main types of stock market sub-brokers:

    1. Full-service brokers who offer a wide range of services, including research, portfolio management, trading on behalf of clients, and investment advice;
    2. Market makers who buy and sell securities to provide liquidity;
    3. Central counterparty clearing houses that work with banks and other financial institutions to settle transactions.

    Conclusion

    Sub-brokers are the key to the success of a stock market. They are the ones who make sure that investors get the best deals, and they can also provide them with recommendations on what to buy and sell. Sub-broker can earn commissions by trading in stocks that they own themselves. If you want to know how to become a sub broker, the information mentioned above will help you move ahead with this lucrative and flexible career option.

  • What are Flexi-Cap Funds? How is it different from Multi-Cap Funds?

    What are Flexi-Cap Funds? How is it different from Multi-Cap Funds?

    The Asset Under Management (AUM) of the Indian MF Industry has grown from ? 6.80 trillion as on April 30, 2012, to ?38.04 trillion as on April 30, 2022, more than 5.5-fold increase in a span of 10 years. Along with this, the mutual fund industry has crossed a milestone of 10 crore folios during the month of May 2021. The industry comprises various Asset Management Companies (AMCs) that offer a variety of schemes to the investors like equity-oriented, debt-oriented, hybrid, gilt, money market, etc. One such type of scheme that has been recently introduced in India is called flexi-cap funds. In this article, we will try to understand such schemes and how they are beneficial for investment.

    What Is Flexi-Cap Fund?

    Flexi-Cap Fund is an open-ended, dynamic equity scheme. It invests across companies of any market capitalizations i.e., large-caps, mid-caps, and small-caps companies. Such type of funds allows the investors to diversify their portfolio and alongside mitigate risk, reduce volatility and generate good returns. Unlike other funds like large-cap, mid-cap or small-cap funds which need to invest in companies restricted to their specific market capitalization size, flexi-cap funds offer the fund manager to be flexible and pick any stock from the benchmark to be included in the portfolio.

    Flexi-Cap Funds vs Multi-Cap Funds

    • As per regulation, a Multi-cap Fund has to invest at least 75% of its total assets in equities and in case of a Flexi-cap Fund, it has to invest a minimum of 65% of its assets in equity and equity-related instruments.
    • For a Multi-cap fund, the investment has to be minimum 25% in large-cap, minimum 25% in mid-cap and minimum 25% in small-cap companies. But in case of a Flexi-cap Fund, there are no minimum threshold for investments in large, mid and small cap.
    • A Multi-cap Fund is required to maintain the equity allocation regardless of the market conditions whereas a Flexi-cap Fund provides its fund manager better flexibility to explore investment opportunities and churn the portfolio whenever they want.

    Advantages of Flexi-Cap Funds

    • It can grab opportunities across the entire market spectrum like market capitalization, sector, style of investing, etc.
    • There is always a battle between risk and returns in the markets. Flexi-cap funds have a unique approach to balance the risk and returns in the market to ensure that the invested capital stays safe and fetches good growth.
    • Flexi-cap funds can be referred to as ‘all weather investing’ because there is complete freedom given the fund manager and based on the market cycles and swings, the AUM can be allocated accordingly to avoid any downsides and volatility.
    • It is one of the best equity investment avenues for investors who have a moderate to high risk profile with a long-term approach for investing.
    • Another big advantage is that they are dynamic in nature. If a particular theme or style of investing seems no longer profitable, the fund manager can modify or change the style that seems to fit in the current market environment.

    Top 3 best Flexi cap Funds based on the past Returns:

    flexi-cap-fund