How SBTS Has Improved Online Stock Trading In India
In earlier times, there was no commercial software. Stock exchanges in India were based on a system of open protest. Under this system, brokers would meet at a central point, usually in the trading circle of the exchange, and begin trading with each other. This was seen as time consuming, inefficient, and limiting traders with limitations on trading volumes and trading hours.
Therefore, for the purpose of trading efficiency, liquidity and transparency, NSE decided to introduce a nationwide online trading system, which was a fully automated screen based trading system (also known as SBTS).
Under this system, a trading member can dial the number of securities and prices into a computer system in which he would like to transact. The transaction is executed as soon as it finds a matching buy or sell order from another counterparty.
This system was quickly accepted by market participants and in its first year of existing operation, NSE became the leading stock exchange in the country.
Technology has been used to bring the trading platform from the trading floor of the stock exchanges to the brokers’ premises. NSE later brought the trading platform to investors’ home computer systems via the Internet.
This had a huge impact and made all the difference in terms of equal access to investors, especially in a geographically vast and regionally diverse country like India.
The SBTS or screen based trading system has more advantages than the shout trading platform used before.
Mentioned below are some advantages of the SBTS or screen based trading system.
1) The SBTS or Screen Based Trading System matches orders with a strict price/time priority and thus saves a lot of time, cost and risk of error as well as fraudulent activities resulting in higher operational efficiency.
2) It allows a much faster absorption of price-sensitive information at current prices, thus increasing the information efficiency of the markets.
3) It allows market participants, regardless of their geographic location, to trade with each other simultaneously, thus improving market depth and liquidity.
4) Provides complete confidentiality by accepting orders, large or small, from members without revealing their identity, thus providing equal access to all.
5) Provides a seamless audit trail, which helps resolve disputes by logging into the entire trade execution process.
Thus, the SBTS or Screen Based Trading System has greatly improved the efficiency and performance of stock trading, resulting in quality trading, thereby increasing India’s GDP and boosting the economy of India. nation.