Stock Exchange
Stock exchange in one or other way helps to indicate, reflect the performance of the institution, company, country or individual in economic way. The stock exchange is carried out in Stock market or in India Share Market (Share Bazaar) i.e. the stock or share or security are bought and sold. It is basically exposed to high level of unpredictability, costs change within some time and is specified at the supply and demand of a particular share. Stock Broker acts as middleman who buys or sells securities instead of organization or individual with some commission.
There are 3 types of Share broking services available which are as follows:
- Execution-only: This means that client’s instructions are important to broker i.e. if client asks to buy or sell, the broker has to do that.
- Advisory dealing: Only a suggestion that which stock to buy/ sell is made by the Broker. But the investor has to finally decide which stock he has to buy.
- Discretionary dealing: Here the broker has rights to take decisions on behalf of the client. The client is only informed about the investments.
Stock broker in some cases can themselves invest money or trade in market. This affects in the ups and downs of market. This becomes very important tool in market speculation. In this type of investments the broker becomes dealers or traders themselves.
The various divisions of market are as follows:
Front Office: This is the place where broker, sales staff and traders sit and do trading. The front office does the order placements and entry of the values.
Middle Office: This is the office where risk management is done. It also helps in creating regular reports or updating status of the portfolios. Also various calculations are done here.
Back Office: This is the backbone of Brokers firm. Here trade clearance is done and also if there is failure it is handled or reported to concerned authorities. This place usually consists of the technical people because this is place where whole technicalities are done.
Now-a-days there is online dealing i.e. online brokers are available. This system is delivered by some broker firm who wants their working easy, fast and handy. Basically 2 types of support staff is required i.e. front office staff consisting of dealers, brokers and customer resource managers. Back office consisting of technical staff who helps in maintenance of web site along with the call center or BPO employees who helps the customer and satisfy their needs.
In India, SEBI (Securities and Exchange board of India) is the main share regulator i.e. each and every broker has to be registered under SEBI. In India the best index or the main market is considered as Bombay Stock Exchange (BSE). This is the place where the indexes of many companies are seen going up and down every now and then. The index in BSE is Sensex. The main function of stock exchange is to make sure that broker can carry on their business freely in Stock Market.