There has been a 30-35% decline in the avg daily transaction at INX in the past 8-10 days. Does this signifies that there have been talks of levying some charges and doing away with the free trading??
Why is the general stock trade volime tilted towards NSE? What is stopping the investors from buying shares from BSE? I did some research but didn’t find why BSE is lagging behind so much in volumes.
The general sense is that NSE has better order processing. This helps in reducing the bid-ask during very large purchases. But of course, BSE is the oldest exchange and has more number of stocks listed in it than NSE (At least as of today).
Its just an liquidity game mate … more people come to NSE because there is more liquidity and because more people come liquidity is always good hence better price discovery.
Doesn’t BSE call it’s exchange world’s fastest and most efficient exchange? How then is NSE better? Plus why would somebody consider NSE over BSE. Why not bid at both exhcanges?
Just trying to understand the ground reality as I am not comfortable with the difference of daily trades between the two.
BSE still has the better order processing speed (6 ms), one of the fastest in the world. But that’s not what I intended to mention by “better order processing”.
NSE is famous for introducing F&O Trading in India well before BSE. They were also quicker to offer more and more trading platforms earlier than BSE. So, even today, many traders prefer NSE to BSE. In effect, on any given day, NSE has multiples times the trading volume of BSE. During large purchases, this helps the buyer a lot because of very narrow bid-ask spread. So, the biggest purchases are often done at NSE.
The advantage BSE has is that many stocks are still listed only in BSE and not on NSE. So buyers will be forced to buy it from there. But this gap will close fast, as companies tend to list themselves on both exchanges eventually.