Arrange the steps of trading procedure of stock exchange in the correct sequence.

A. Delivering the shares

B. Placing an Order

C. Opening a Demat Account

D. Execution of the order

E. Settlement of transaction

Choose the correct answer from the options given below :

C, B, D, A, E

The correct answer is option (2)- C, B, D, A, E.

C. Opening a Demat Account: The first step is to open a Demat account. The investor has to open a ‘demat’ account or ‘beneficial owner’ (BO) account with a depository participant (DP) for holding and transferring securities in the demat form. He will also have to open a bank account for cash transactions in the securities market.

B. Placing an Order: The investor then places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and the price at which the shares should be bought or sold. The broker will then go ahead with the deal at the above mentioned price or the best price available. An order confirmation slip is issued to the investor by the broker.

D. Execution of the Order: The broker then will go on-line and connect to the main stock exchange and match the share and best price available. Thus, the broker executes the order

A. Delivering the Shares : After the trade has been executed, within 24 hours the broker issues a Contract Note. This note contains details of the number of shares bought or sold, the price, the date and time of deal, and the brokerage charges. This is an important document as it is legally enforceable and helps to settle disputes/claims between the investor and the broker. A Unique Order Code number is assigned to each transaction by the stock exchange and is printed on the contract note. Now, the investor has to deliver the shares sold or pay cash for the shares bought. This should be done immediately after receiving the contract note or before the day when the broker shall make payment or delivery of shares to the exchange. 

E. Settlement of transaction : Following the extension of the order, the settlement process occurs, wherein securities and funds are transferred to complete the trade.