Types of Capital Markets


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The Capital Market system has four types of market.

Normal Market

Normal market consists of various book types wherein orders are segregated as Regular Lot Orders, Special Term Orders, Negotiated Trade Orders and Stop Loss Orders depending on their order attribute.

In a rolling settlement, trade day is T day, T+1 day and T+2 day for NSCCL. The trades executed each trading day are considered as a trading period and trades executed during the day are settled based on the net obligations for the day.

At NSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. Typically trades taking place on Monday are settled on Wednesday, Tuesday’s trades settled on Thursday and so on.

 

Odd Lot Market

The odd lot market facility is used for the Limited Physical Market.

Limited Physical Market: Settlement for trades is done on a trade-for-trade basis and delivery obligations arise out of each trade.

 

RETDEBT Market

The RETDEBT market facility on the NEAT system of capital market segment is used for transactions in Retail Debt Market session. Trading in Retail Detail Market takes place in the same manner as in equities (capital market) segment.

Members eligible for trading in RDM segment: Trading Members who are registered members of NSE in the Capital Market segment or Wholesale Debt Market segment are allowed to trade in Retail Debt Market (RDM) subject to fulfilling the capital adequacy norms.

Auction Market

In the Auction market, auctions are initiated by the Exchange on behalf of trading members for settlement related reasons. The main reasons are Shortages, Bad Deliveries and Objections. There are three types of participants in the auction market.

  1. Initiator: The party who initiates the auction process is called an initiator.
  2. Competitor: The party who enters on the same side as of the initiator is called a competitor.
  3. Solicitor: The party who enters on the opposite side as of the initiator is called a solicitor.

The trading members can participate in the Exchange initiated auctions by entering orders as a solicitor. E.g. If the Exchange conducts a Buy-In auction, the trading members entering sell orders are called solicitors.


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