This question is asked a lot and I am surprised how few traders understand how this works. In this article, we will answer the question of whether one can buy shares from one stock exchange and sell at the other.
There are two cases you need to consider:
Case 1: You got delivery of shares (after 2 days of buying)
Let’s say you bought 100 shares of Reliance Industries from BSE.If you use Zerodha, you will see the options of buying from NSE (one on the top) and BSE (bottom).
You wait for 2 working days and take delivery of those shares in your DEMAT account. After that, you have complete freedom to sell the shares on either of the exchange.
If you take delivery of the shares, then both these combinations are possible:
- Buy from BSE, sell at NSE
- Buy from NSE, sell at BSE
Here’s an example of the former:
It’s as simple as that!
Case 2: You did not get delivery of shares (within 2 days of buying)
Let’s say you want to take an intraday trading because you saw an arbitrage opportunity. A stock trading at ₹100 on BSE and ₹102 on NSE. How about buying it at ₹100 from BSE and₹102 on NSE and make a quick 2% profit?
Unfortunately, it can not be done.I know it’s kind of disappointing but that’s the way it is.
Now, why it can not be done is immaterial; what matters is understanding that it can’t be done and avoiding a very silly mistake that beginners make (read on).
Sometimes, beginners think that if they place a buy order at NSE and sell order at BSE and the second-order will close the first position. This is not how the system works.In this example, the trader has now in fact two open positions:A long position on NSE and a short position on BSE, which need to be squared off independently.
You can sell the shares at any exchange as long as you have them in the DEMAT account. So, if you are an investor or a positional trader, you have the complete freedom of buying from one exchange and selling at another.
FAQs
So, if you are an investor or a positional trader, you have the complete freedom of buying from one exchange and selling at another.
Can I purchase shares in NSE and sell in BSE? ›
An investor cannot buy a stock on BSE and sell it on NSE on the same day or vice versa. However, they can sell stocks bought on BSE on NSE after a gap of two trading days from the date of purchase and vice versa. Hence stocks are added to the investor's Demat account (Holdings) after T+2 days of purchase.
Where to buy from NSE or BSE? ›
NSE generally has a higher market capitalisation and trading volume. Especially, compared to BSE due to its larger number of listed companies and higher trading activity. This might make NSE more attractive to institutional investors and those seeking higher liquidity.
Can you arbitrage between NSE and BSE? ›
You can do an arbitrage trade intraday, where you can buy on NSE at 200 and sell on BSE at 204 thus making a profit of Rs. 4 per share. Please note that the above example does not include Brokerage and other regulatory fees levied by your broker. Your actual profit will be net of such costs for both Buy and Sell.
Can I trade directly with BSE? ›
Trading in the BSE share market has to be done through a brokerage agency against a stipulated charge. However, direct investment access is given to certain preferential investors making large transactions in the BSE stock market.
Can I transfer my shares from BSE to NSE? ›
You wait for 2 working days and take delivery of those shares in your DEMAT account. After that, you have complete freedom to sell the shares on either of the exchange. If you take delivery of the shares, then both these combinations are possible: Buy from BSE, sell at NSE.
Can I invest in BSE and NSE? ›
If you are a beginner in the share market and are looking in investing in shares, NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) are two stock exchanges where you can spend. While NSE is the biggest stock exchange, BSE is the oldest. Nifty and Sensex are the main indexes of NSE and BSE, respectively.
What is the difference between BSE and NSE in Zerodha? ›
NSE: Higher market capitalization, representing the total value of all listed companies. BSE: Lower market capitalization.
Which is better for intraday trading, BSE or NSE? ›
If you are a beginner who wants to trade on Intraday Basis, NSE will be suitable for you as it has better volume and liquidity. If you are a seasoned investor, BSE would be suitable for you as you would not have to worry a lot about daily volume and very good liquidity.
Why are there two stock exchanges in India? ›
NSE &BSE are most preferred one by investors hence their benchmark index NIFTY & SENSEX are more popular. Secondly, stock exchanges are not regulated by government like RBI (there can't be two reserve bank in one conutry) hence there can be n number of stock exchanges in a country.
In the United States, arbitrage is legal. However, there are some restrictions on how it can be done. For example, the Securities and Exchange Commission (SEC) has rules that prohibit certain types of arbitrage. These rules are designed to prevent insider trading and other forms of market manipulation.
Can you list on both NSE and BSE? ›
In India, there are two primary stock exchanges - the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Some companies choose to get themselves listed in just one exchange, whereas others prefer getting listed on both of them for better visibility.
Is arbitrage legal in India? ›
While arbitrage trading is legal in India, there is a catch. SEBI (the Securities and Exchange Board of India) does not allow the buying and selling of the same company's stocks on the same day on different exchanges. Therefore, intraday arbitrage trading isn't allowed in India.
Can I buy from BSE and sell on NSE? ›
Yes, you may buy stock from one exchange and sell it on another exchange after taking delivery of shares in your Demat account. Once the shares get reflected in your Demat, you can do either of the following, i.e. (i) Buy in NSE and sell in BSE; and (ii) buy in BSE and sell in NSE.
Is it legal to buy and sell the same stock repeatedly? ›
Just as how long you have to wait to sell a stock after buying it, there is no legal limit on the number of times you can buy and sell the same stock in one day. Again, though, your broker may impose restrictions based on your account type, available capital, and regulatory rules regarding 'Pattern Day Traders'.
Can I directly trade in NSE? ›
An investor cannot directly buy or sell shares on a stock exchange. Registered members of a stock exchange are called stock brokers. They trade on an investor's behalf. They are either an independent service provider, or employed at a brokerage firm.
Can a stock be listed on both NSE and BSE? ›
In India, there are two primary stock exchanges - the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Some companies choose to get themselves listed in just one exchange, whereas others prefer getting listed on both of them for better visibility.
Can I sell my holdings and buy on the same day? ›
Sold holdings are bought back on the same day before the market closes when MIS is selected instead of CNC. The MIS product type is used for intraday trading, and if chosen for selling holdings, it creates a new sell intraday position.
What is the difference between BSE and NSE share? ›
What sets NSE and BSE apart in terms of trading mechanisms? NSE operates through a fully automated trading system, providing efficient and automated trading facilities. BSE, on the other hand, offers high-speed trading, which emphasizes swift transaction execution.
