What steps are involved in trading of securities at stock exchange?

The following are the steps involved in the trading of securities at a stock exchange:
(1) Order Placing: An order is to be placed by an investor with the broker either to
buy or sale of certain number of securities at a certain specified price. An order
can be placed by telegram, telephone, telax, fax, letter or in person. There are
different types of orders. When in the order the client places a limit on the price
of the security it is called limit order. Where the order is to be executed by the
broker at the best price, such an order is called ‘Best Rate Order’. When the
client does not fix any price limit or time limit on the execution of the order and
relies on the judgement of the broker is called ‘Open Order’.
(2) Order Execution: The broker has to execute the order placed by his client
during the trading hours. The order is executed as per requirements of the
client. The broker may negotiate with other parties in order to execute the
orders.
(3) Contract Note: When the order is executed, a contract note is prepared by the
broker. It is the basis of the transaction. Particulars such as price, quantity of
securities, date of transaction, names of the parties, brokerage etc. are entered
in the contract note.
(4) Delivery and Clearing: Delivery of shares takes place through the instrument
known as transfer deed. The transfer deed is signed by the transferor (seller)
and is authenticated by a witness. It contains the details of the transferee,
stamp of the selling broker, etc. Delivery and payment may be completed after
14 days as specified at the time of negotiation. Delivery and clearing of security
takes place through a clearance house.
(5) Settlement: The procedure adopted for the settlement of transactions varies
depending upon the kind of securities. On the date of settlement cheques/drafts
and securities are exchanged as per the delivery order. The clearing house
makes the payment and delivers the security certificates to the members on the
payout day. Each broker settles the account with every client by taking delivery
or giving delivery of securities certificates and receipts or payment of cheques.