How trading takes place and what is the process of trading

How trading takes place and what is the process of trading?

The normal course of online trading in the Indian market context is placed below:

Step 1.     Investor / trader decides to trade

Step 2.     Places order with a broker to buy / sell the required quantity of respective securities

Step 3.     Best priced order matches based on price-time priority

Step 4.     Order execution is electronically communicated to the broker’s terminal

Step 5.     Trade confirmation slip issued to the investor / trader by the broker     

Step 6.     Within 24 hours of trade execution, contract note is issued to the investor / trader by the broker

Step 7      Pay-in of funds and securities before T+2 day

Step 8.     Pay-out of funds and securities on T+2 day           s

In case of short or bad delivery of funds / securities, the exchange orders for an auction to settle the delivery. If the shares could not be bought in the auction, the transaction is closed out as per SEBI guidelines.