Introduction • The market for long term securities like bonds, equity and preferred stocks is divided into primary and secondary market. The primary market deals with the new issue of securities. Outstanding securities are traded in the secondary market, which is commonly known as stock market or stock exchange. • In secondary market, the investor can sell and buy securities. Stock market predominantly deals in equity shares.
The broker • A broker acts as a mediator between stock exchanges and investors. He purchases and sells securities on behalf of investors with their permission. • The broker has to abide by the code of conduct laid by SEBI. The code of conduct prevents the malpractice, manipulation and gives other statutory requirements. • If a broker is involved in manipulation, or price rigging or gives the false information, his registration is likely to be suspended. If the rules and regulations regarding insider trading and take over codes are not adhered to the registration may even be cancelled.
Types of orders • Limits order • Best rate order • Discretionary order • Stop loss order