NSE (National Stock Exchange)
Full form: National Stock Exchange of India Limited
NSE stands for the National Stock Exchange of India. It is the electronic marketplace in Mumbai where shares and derivatives are bought and sold. It provides the venue and the rules for trading; it does not decide prices, which come from buyers and sellers.
What the NSE does
The NSE matches buy and sell orders sent by brokers from all over India and publishes the prices that result. Trading is fully electronic, so an order placed on a phone in one city can meet a matching order from another city within a fraction of a second.
It lists company shares and also runs markets for futures and options, which are contracts based on shares and indexes. The NSE is regulated by SEBI, the market regulator, which sets and enforces the rules that exchanges and brokers must follow.
NSE and BSE
India has two major exchanges, the NSE and the BSE (Bombay Stock Exchange). Many large companies are listed on both, and a share usually trades at almost the same price on each. Most trading in futures and options in India happens on the NSE.
The Nifty 50
The NSE's best-known index is the Nifty 50, which follows 50 large listed companies and is often used as a quick measure of how the Indian market is doing. An index is a measure, not something you buy directly. Funds that copy an index are a separate product, called index funds.
Trading hours
On working days the equity market is open for set hours, after a short pre-open session. The exact timings can change, so check the NSE website for the current schedule.
How an order reaches the NSE
You decide to buy 10 shares and enter the order in your broker's app. The broker sends it to the exchange. If another investor has offered to sell 10 shares at that price, the exchange matches the two orders and the trade is done.
The shares then arrive in your demat account once the trade settles, which takes a short, fixed period. The demat account is kept separately from both the exchange and your broker.
Common questions
- What is the full form of NSE?
- National Stock Exchange of India Limited.
- Is the NSE the same as the Nifty?
- No. The NSE is the exchange, the marketplace. The Nifty 50 is an index, a figure calculated from 50 large companies listed on it.
- Is the NSE the same as SEBI?
- No. The NSE runs the market. SEBI is the regulator that sets and enforces the rules for exchanges, brokers and other market participants.
- Can I buy shares directly from the NSE?
- No. You trade through a SEBI-registered broker, who sends your orders to the exchange.