Page 120 - DCOM507_STOCK_MARKET_OPERATIONS

Unit 5: Trading System in Stock Exchange

which the member can put a sell order in the auction for XYZ? (The price band applicable for Notes
auction market is +/- 20%)
Maximum price applicable in auction =Previous day’s close price × (100+price band)
= ` 160 × 1.20 = ` 192

Minimum price applicable in auction= Previous day’s close price × (100 – price band)
Self Assessment

State whether the following statement is true or false:
13. Auctions are initiated by the Exchange on behalf of trading members for settlement related
reasons.

5.6 Limited Physical Market

Pursuant to the directive of SEBI to provide an exit route for small investors holding physical
shares in securities mandated for compulsory dematerialised settlement, the Exchange has
provided a facility for such trading in physical shares not exceeding 500 shares. This market
segment is referred to as ‘Limited Physical Market’ (small window). The Limited Physical Market
was introduced on June 7, 1999.
5.6.1 Salient Features of Limited Physical Market

The salient features of limited physical market are given below:
(a) Trading is conducted in the Odd Lot market (market type ‘O’) with Book Type ‘OL’ and
series ‘BT’.
(b) Order quantities should not exceed 500 shares.
(c) The base price and price bands applicable in the Limited Physical Market are same as those
applicable for the corresponding Normal Market on that day.
(d) Trading hours are the same as that of the normal market.
(e) Settlement for all trades is done on a trade-for-trade basis and delivery obligations arise
out of each trade.
(f) Orders get matched when both the price and the quantity match in the buy and sell order.
Orders with the same price and quantity match on time priority i.e. orders which have
come into the system before will get matched first.
(g) Trading Members are required to ensure that shares are duly registered in the name of the
investor(s) before entering orders on their behalf on a trade date.

Self Assessment

Fill in the blank:
14. ....................................... are required to ensure that shares are duly registered in the name of
the investor(s) before entering orders on their behalf on a trade date

5.7 Block Trading Session

The Exchange has introduced a separate trading session for the block trades from November 14,
2005. In this session, trading is conducted in the Odd Lot market (market type ‘O’) with Book

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