TYPES OF MARKET IN Dhaka Stock Exchange (DSE)

26/02/2013 22:22

There are four types of market in DSE which are described below-

  • Public Market

The public market is the market where instruments (shares, bonds, etc.) are traded in normal volume. This is the general market where investor’s trade in securities and the place where the new investor will probably start off trading in his/her desired shares. Here all securities are traded in multiples of lots. By lots we mean the numbers of shares the company issues that can be traded at a time, e.g. a lot of 50 shares means that the shares of the company can only be bought/sold in lots of 50, i.e. buy/sell 200 shares meaning buy/sell 50*4 shares, so 4 lots of 50 shares each.

  • Spot Market

In this market instruments are traded in normal volume (under corporate action, if any) without the settlement process as both trade and payment occur at the same time. Shares are also traded in lots in the spot market.

  • Odd Lot Market

In this market odd lots of all instruments are traded. Lots can become ‘odd’, i.e. not conforming to the lot specification of the company if the company offers say a share ‘bonus’ of 20%, so someone with 50 shares now has 50+10 shares of the company where 50 is the lot and the 10 is the odd lot. However, if the lot is 50, then 5 odd lots of 10 shares each will constitute a single 50 share lot again.

  • Block Market

The block market is the market where instruments are traded in bulk (very large volumes). All large volume trades take place in the block market where the minimum limit has been set at Tk. 5 lakh i.e. trades in the block market must exceed Tk. 5 lakh to be a valid block trade. Block trades are not auto-matched but rather open to negotiation between participants who may decide on a price that differs from the current market value.