So once we know what are shares in a company, let us understand what is stock exchange and what does NSE and BSE stand for ?
BSE or Bombay stock exchange was set up in 1875 and was the first stock exchange in Asia. It is located in Mumbai and boasts of fastest online trading speed of 6 microseconds. At the time of writing there were nearly 4056 actively traded companies at BSE. The 1992 scam in Bombay Stock exchange made investors loose trust in investing. This not only resulted in formation of SEBI but also NSE.
NSE or National stock exchange was established in 1992 and is presently fourth largest stock exchange by trade volume. NSE too is located at mumbai and boasts being the first stock exchange to start online trading. At the time of writing there were nearly 1738 actively traded companies at NSE.
Once you want to buy or sell a share of a listed company you cannot do that yourself ! These transaction of shares is done through Stock brokers at stock exchange. Stock Exchange facilitates transaction of stocks and connects a buyer and seller. Stock exchange allows these investors to transact through a stock broker.
While few years back BSE and NSE had different charges for transaction at their respective Stock Exchange, these days both charge almost same nominal fees. However, you can sometimes get good advantage, specially if trading in large quantity, by checking any difference of trading price at each Stock Exchange. Sometime you get few rupees difference which would certainly cover your broker charges and other tax expenses !
Stock exchange and stock brokers are not the only ones involved in a transaction, there are more intermediaries too. Lets move ahead in our stock market course to understand them at Financial intermediaries of stock market.