Chartedge : Technical Analysis Institute
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Introduction : Market Participants
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the two major stock exchanges in India where market participants engage in buying and selling securities. These market participants play different roles in the functioning of the stock markets:
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Retail Investors:
These are individual investors who trade in stocks and other financial instruments for personal investment purposes. They can trade through brokers or online trading platforms.
Institutional Investors:
These are large organizations that invest on behalf of their clients or themselves. This category includes mutual funds, insurance companies, pension funds, and foreign institutional investors (FIIs).
Brokers:
Stockbrokers are intermediaries who facilitate the buying and selling of securities on behalf of their clients. They execute trades and provide advisory services. Brokers can be full-service or discount brokers.
Market Makers:
These entities facilitate liquidity in the market by quoting bid and ask prices for specific securities. Market makers help maintain orderly trading by ensuring that there are buyers and sellers for various stocks.
Depository Participants (DPs):
DPs are intermediaries that work with depository institutions like NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) to provide dematerialization and depository services for securities.
Regulators:
Regulatory bodies like the Securities and Exchange Board of India (SEBI) oversee and regulate the activities of all market participants to maintain market integrity and protect the interests of investors.
Companies (Listed):
Companies that want to raise capital from the public issue shares and list them on stock exchanges. They become important participants as their shares are bought and sold in the market.
Investment Banks:
These financial institutions assist companies in the process of going public by underwriting their initial public offerings (IPOs) and helping with the listing process.
Arbitrageurs:
These participants take advantage of price differences in the same asset or related assets on different exchanges. They buy low and sell high to profit from these differences.
These are some of the key market participants on the NSE and BSE in India. Each group plays a crucial role in the functioning and liquidity of the stock markets, contributing to the efficient allocation of capital.
If you found our guide “Market Participants” helpful, don’t forget to post comment! For more information please visit our websites www.chartedge.co.in. Must know websites for Indian stock market www.nseindia.com and www.bseindia.com
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