Question : Case Study 78
GHI Ltd. is a conglomerate that has recently traded its shares on a stock exchange. The company's management is reviewing the process of placing an order.
Question :
What is the first step in the process of trading securities on a stock exchange?
Option 1: Settlement
Option 2: Execution of the order
Option 3: Dematerialization
Option 4: Placing an order
Correct Answer: Placing an order
Solution : The correct answer is (d) Placing an order
The first step in the process of trading securities on a stock exchange is "placing an order." Investors initiate the trading process by placing orders to buy or sell securities at a specified price. Once the order is placed, it is then processed, matched with corresponding buy or sell orders, and eventually executed at the prevailing market price. After execution, the subsequent steps such as settlement, where the ownership and funds are transferred, take place.
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