Suppose an FII want to buy RELIANCE shares. Do they place the buy order on the same order book as on which, I place my sell order for RELIANCE. That is to say when I see the market depth of RELIANCE, does that data contains the orders by FIIs also?
Or they have separate FII/DII window like bulk/block deals window?
Unless these are block/bulk deals, all other types of trades happen in the normal market. So the market depth of any stock you see will contain FII and DII orders as well.
To further expand on this thread, what are the different participants in Indian markets and what are their access channels?
Can you help confirm/correct this list:
Retail traders through retail brokers
HNIs through brokers / DMA
FIIs, DIIs through broker / DMA
Prop Desks, Market Makers, HFTs through DMA
Irrespective of channel - broker or DMA, the order book we see contains orders from all participants. Is that correct?
Is there any other channel except for the ones listed above through which one can trade in listed securities. Like Dark Pools etc.?
Also, in case of access through broker, broker ensures client has enough funds/collateral to settle the trades.
But in case of DMA, does exchange take responsibility of this risk management? Or is their a risk of the likes of HFTs having a free run and not being able to settle their trades on a black swan day?
Yes, everything apart from block deals, as I mentioned earlier. The volumes show up after the deal on the normal market depth window, but the deals themselves happen in another window.
All orders get executed on the exchange. So no dark pools etc. You can check this post.
Even in DMA, the broker is responsible. So, even DMA orders go through some broker risk management. I had written on a similar topic earlier.
Check the NSE market pulse magazine. You can also check for this daily on the NSE website.
This is a broad topic, hard to have one looooong thread. I have written about most bits here on Tradingqna or on Zconnect blogs. You will have to dig in.
What is this other window? What is the mechanism behind it? Who provides price quotes in this window?
Assuming big fishes use this other window to trade, what really moves the markets in the window/order book we see?
Sorry for asking too many questions but this has really piqued my curiosity.
Thanks to you Nithin and Karthik, you have really democratised trading and the whole ecosystem around it.
If two institutions have agreed to trade at a certain price, they can do it in this separate window. If they try to buy/sell on the normal market it will be hard to execute a deal like this.
You can track the block deal activity here on NSE.