Page 112 - DCOM507_STOCK_MARKET_OPERATIONS

Unit 5: Trading System in Stock Exchange

(c) Daily price bands of 10% (either way) on securities as specified by the Exchange. Notes
(d) No price bands are applicable on scrips on which derivative products are available or
scrips included in indices on which derivative products are available. In order to prevent
members from entering orders at non-genuine prices in such securities, the Exchange has
fixed operating range of 20% for such securities.

(e) Price bands of 20% (either way) on all remaining scrips (including debentures, preference
shares etc).
The price bands for the securities in the Limited Physical Market are the same as those applicable
for the securities in the Normal Market. For auction market the price bands of 20% are applicable.

Order Types and Conditions

The system allows the trading members to enter orders with various conditions attached to
them as per their requirements. These conditions are broadly divided into Time Conditions,
Quantity Conditions, Price Conditions and Other Conditions. Several combinations of the above
are allowed thereby providing enormous flexibility to the users. The order types and conditions
are summarised below:
1. Time Conditions
(a) DAY: All orders entered into the system are currently considered as Day orders
only.
(b) IOC: An Immediate or Cancel (IOC) order allows the user to buy or sell a security as
soon as the order is released into the system, failing which the order is cancelled
from the system. Partial match is possible for the order, and the unmatched portion
of the order is cancelled immediately.
2. Quantity Conditions
(a) DQ: An order with a Disclosed Quantity (DQ) allows the user to disclose only a
portion of the order quantity to the market. For example, if the order quantity is
10,000 and the disclosed quantity is 2,000, then only 2,000 is released to the market.
After this quantity is fully matched, a subsequent quantity of 2,000 is disclosed.
Thus, totally five disclosures with the same order number are shown one after the
other in the market.
3. Price Conditions
(a) Market: Market orders are orders for which price is specified as ‘MKT’ at the time the
order is entered. For such orders, the system determines the price.
(b) Stop-Loss: This facility allows the user to release an order into the system, after the
market price of the security reaches or crosses a threshold price called trigger price.

Example: If for stop loss buy order, the trigger is ` 93.00, the limit price is ` 95.00 and the
market (last traded) price is ` 90.00, then this order is released into the system once the market
price reaches or exceeds ` 93.00. This order is added to the regular lot book with time of triggering
as the time stamp, as a limit order of ` 95.00.
All stop loss orders are kept in a separate book (stop loss book) in the system until they are
triggered.
(c) Trigger Price: Price at which an order gets triggered from the stop loss book.
(d) Limit Price: Price of the orders after triggering from stop loss book.

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