Alert
Some actions of the dealers need control approval. These actions come to control workstation as Alerts. The possible alerts that require control approvals are trade modification, trade cancellation, negotiated trade entry, auction initiation and auction order cancellation.

All or None (AON)
This is one of the Special Terms conditions. An order with this condition should be matched either with the entire order quantity or none at all.

At The Opening (ATO) Order
Market order entered during the Pre-Open period. These orders are priced according to the calculation of the opening price during the Pre-Open period.

Auction Market
The buy/sell auction for a Capital Market security is managed through the auction market. As opposed to the Normal market where trade matching is an on-going process, the trade matching process for auction starts after the auction.

Base Price
The price of a security at the beginning of the trading day which is used to determine the Day Minimum/Maximum and the Operational ranges for that day.

Batch
A period in the trading day for the different markets. Order entry, matching, inquiries and other functions at the workstation are not allowed during this period. The system maintains files and trading parameters and downloads the reports of the trading members during this period and makes the system available for next day.

Branch Order Value Limit
A limit placed on the daily aggregate value of orders entered by dealers or the Branch Manager. Orders entered by dealers or the Branch Manager with value exceeding the Order Value Limit for the branch are not allowed by the system.

Broadcast Circuit
This is a virtual circuit through which the system can send messages to all workstations. In this mode, the system does not await the response from the workstations.

Buyer
The trading member who has placed the order for the purchase of the securities.

Closing Price
The trade price of a security at the end of a trading day. Based on the closing price of the security, the base price at the beginning of the next trading day is calculated.

Competitor
The auction participant on the same side of the Initiator's order. If the Initiator is a buyer then the competitor enters buy orders for the same security.

Control User
An employee of the exchange who is a user of the Capital Market system having special control privileges. The control user can alter the master files, trading parameters and also perform market monitoring and control operations.

Counterparty
When a trading member enters an order, any other trading member with an order on the opposite side is referred to as the counterparty.

Day Minimum/Maximum Range
The minimum/maximum price range for a security on a trading day. Buy orders outside the Maximum of the range and sell orders outside the Minimum of the range are not allowed to be entered into the system. It is calculated as a percentage of the Base price.

Day Orders
If any quantity of a Day order is left untraded, the order is not cancelled by the system until the end of the trading day.

Dealer
A user belonging to a Trading Member. Dealers can participate in the market on behalf of the Trading Member.

Derivatives
Derivatives, such as options or futures are financial contracts that derive their value from their "underlying" asset. For example, wheat farmers may wish to contract to sell their harvest at a future date to eliminate the risk of a change in prices by that date. Such a transaction would take place through a forward or futures market.

This market is the "derivative market" and the prices in this market would be driven by the spot market price of wheat which is the "underlying". The terms "contracts" or "products" are often applied to denote the traded instrument.

World over, derivatives are a key part of the financial system. The most important contract types are futures and options and the most important underlying assets are equities, treasury bills, commodities, foreign exchange and real estate.

Disclosed Quantity (DQ)
A dealer can enter such an order in the system wherein only a fraction of the order quantity is disclosed to the market. If an order has an undisclosed quantity, then it trades in quantities of the disclosed quantity.

Forward Markets
The forward market is like the real estate market in the sense that any two consenting adults can enter into a contract with each other. This often makes them design terms of the deal, which are very convenient in that specific situation, but makes the contracts non-tradable. Also, the "phone market" here is unlike the centralization of price discovery that is obtained in an exchange.

Forward markets worldwide are afflicted by several problems: lack of centralisation of trading, illiquidity and counter party risk. In the first two, the problem is that of too much flexibility and generality.

Counter party risk in forward markets is a simple idea - when one party fails to honour the contract from his side, the other suffers. Forward markets have one basic feature - the larger the time period over which the contract is open, the larger are the potential price movements and hence greater is the counter party risk.

Even when the forward markets trade standardized contacts and avoid the problem of illiquidity, the counterparty risk always remains a real problem. A classic example of this was the famous future trade on tin at the London Metal Exchange (LME).

Forward contract
In a forward contract, two parties agree to trade at a future date, at a stated price and quantity. No money changes hands at the time the deal is signed.

Forward contracting is valuable in hedging and speculation. The classic hedging application would be that of a wheat farmer forward-selling his harvest at a known price in order to eliminate price risk.

Conversely, a bread factory may want to buy bread forward in order to assist production planning without the risk of price fluctuations. If a speculator has information or analysis, which forecasts an upturn in price, then he can go long on the forward market instead of the cash market.

A speculator would go long on the forward, wait for the price to rise and then reverse a transaction. The use of forward markets here provides leverage to the speculator.

Freeze
Orders entered into the system with prices outside the Operational range and orders with quantity greater than the Order Quantity Freeze percentage are sent to the Exchange for approval. Such orders are not reflected in the books and are 'frozen' till the Exchange approves them.

Futures contract
Futures markets were designed to solve all the three problems of forward markets- lack of centralized trading, illiquidity and counter party risk. Futures markets are like forward markets in terms of basic economics.

However, the contracts are standardized and trading is centralized, which makes the futures market highly liquid. There is no counter party risk (since the clearinghouse becomes the guarantor for the execution of the transaction to both the entities of the trade)

Unlike in forward markets, duration of futures contracts executed in future market doesn’t affect or increase the counter party risk.

Good Till Cancelled (GTC) orders
If any quantity of a GTC order is left untraded, the order is not cancelled by the system until it is cancelled by the dealer or after a parameterized number of days.

Good Till Date (GTD) orders
If any quantity of a GTD order is left untraded, the order is not cancelled by the system until the Good Till Date mentioned in the order.

Immediate or Cancel (IOC)
When a IOC order is entered, the system will immediately try to match this order as much as possible and cancel the remaining quantity, if any at all. In this attempt, the order might find a partial match.

Initiator
The trading member who starts the auction. The Initiator can be a buyer or a seller.

Interactive Circuit
This is a virtual circuit through which the system can send messages to a specific workstation and vice - versa.

Limit order
Is an order for which the price (limit price) has been specified at the time of making the order entry.

Market order
Is an order for which no price has been specified at order entry.

Matching
When a buy and a sell order satisfy the price - time priority, they can result in a trade. This process is called as matching. The match can be full or partial depending on the order conditions.

Minimum Fill (MF)
This is one of the special conditions where a minimum quantity is specified for an order. The quantity of the trade involving an order with a MF attribute should at least be the minimum quantity specified.

Negotiated Trade
Two Trading members can negotiate a trade outside the system. However, this trade is accepted by the system only upon approval from the Control. Both the parties enter each side of their trade in the system specifying each other's identity.

Normal Market
The orders entered in the system for normal trade matching depends primarily on a price/time priority. These orders can be Regular Lot, Special Terms, Stop Loss orders or Negotiated Trade entries. Each order must be equal to or be a multiple of the regular lot for that security.

Odd Lot Markets
The market in which odd lot orders are recorded. Odd Lot orders have a quantity less than one regular lot.

Open
A time period in the trading day for the different markets that the exchange deals in. Order entry, matching, inquiries and other functions at the workstation will be allowed during this period.

Operational range
The price range for a security on a trading day such that if buy orders outside the Maximum of the range and sell orders outside the Minimum of the range cause a price freeze and is sent to the Exchange for approval. It is calculated as a percentage of the Base price.

Order
A buy or a sell offer/bid for any of the Capital Market securities entered by the dealer in the system. The system generates a unique order number for each order entry.

Order Quantity Freeze percentage
A percentage of the outstanding quantity of a security is ascertained. An order with quantity exceeding this percentage causes a freeze and is sent to the Exchange for approval.

Participant
An entity responsible for the settlement of a trade is deemed to be a participant. Every order in the trading system has a participant associated with it.

Pre-Open
A time period in the trading day for the Normal market. Trading members are allowed to enter orders during this period. These orders in the system take part in the algorithm for the calculation of the opening price during this period.

Print/Report Circuit
This is a virtual circuit through which the system can download report data to all workstations. In this mode, the system does not await the response from the workstations.

Regular Lot
The minimum quantity of an order entered into the Normal, Spot and Auction markets. The order that does not carry any special conditions (Minimum Fill, All or None) is treated as a regular lot order.

Security
A Security is a valid and unique combination of Symbol and Series. Securities are traded in the Capital Market. Shares and Debentures are some examples of securities.

Seller
The trading member who has placed the order for selling the security.

Solicitor
The auction participant who is on the opposite side of the Initiator's order. If the Initiator is a buyer then the solicitor will enter sell orders for the same security.

Special Terms
The dealer can place an order that carries special conditions and restrictions regarding the way the order value can be matched. These terms are called Special Terms. The typical special terms are Minimum Fill and All or None.

Spot market
Orders that have spot settlement are entered into the Spot market.

Stop Loss
The dealer can enter a regular lot or a special term order with a 'trigger' price. Such orders are called Stop Loss orders. The stop loss orders are not taken for matching unless the trigger price is either reached or if it is surpassed by the last traded price for the security. Once the market price reaches or surpasses the trigger price, the 'stop loss' attribute is removed and the order is taken up for regular matching process.

Surcon
A time period in the trading day for different markets. Order entry and matching is not allowed. Only inquiries, requests for trade modifications and cancellations are allowed during this period.

Trade
When a buy order matches with a sell order following the price - time priority logic, a trade takes place. The system generates a unique trade number for each trade.

Trader Workstation
A dealer can participate in the Capital Market only from the trader workstation, where the trading functions are available.

Trading Member
A member of the NSE who is authorized to place orders in the Capital Market System. The term Broker or Brokerage house is also used to convey the same meaning.

Turnover Limit
This indicates the aggregate trade value limit on a daily basis set for a trading member. The Exchange sets the limit for each trading member of the Capital Market. The trade value for both buy and sell for a day are accumulated and the total is checked against this upper limit after every potential trade match.

User
A person is recognized as a user of the Capital Market system, when he or she possess a valid user identifier and password, both of which are essential requirements for accessing the system.

Warning Quantity Percentage
A percentage that reflects the quantity outstanding on a certain security. An order with quantity exceeding this percentage causes the system to force the dealer to confirm the entered order.