Last Updated on May 25, 2022 by Neera Bhardwaj

Stock exchanges are marketplaces wherein you can trade in listed shares and other listed securities like bonds and commodities, among others. Stock exchanges allow companies to list their stock for public subscription to raise additional funds for the business. On the other side, stock exchanges serve as a trading platform for investors where they can earn and create wealth.

The two main stock exchanges in India are the NSE and BSE. Both of these are independent stock exchanges. Let’s delve into the difference between BSE and NSE.

What is NSE?

Short for National Stock Exchange, NSE is the largest stock exchange in India on the basis of market capitalization. NSE was founded in 1992, and it brought with it the electronic mode of trading in stocks. Headquartered in Mumbai, NSE uses the Nifty 50 index as its benchmark which comprises the top 50 stocks of the share market across different sectors.

What is BSE?

BSE is an abbreviation for the Bombay Stock Exchange. It is the oldest stock exchange in India which was founded in 1875. It has earned permanent recognition under the provisions of the Securities Contract (Regulation) Act, 1956. BSE also boasts of being the first stock exchange in Asia and is recognised among the leading stock exchanges of the world. In 1986, BSE introduced the S & P BSE Sensex which consists of stocks of the top 30 companies listed on the Bombay stock exchange.

Similarities between BSE & NSE

Now that you know what is BSE and NSE, here’s a look at their similarities:

  • Both these exchanges are popular among investors.
  • Both allow stock trading.
  • Besides equity, you can trade in bonds, mutual funds and ETFs, commodities, derivatives, futures and options, and currencies, on these exchanges.
  • Both BSE & NSE are regulated by the Securities and Exchange Board of India (SEBI).
  • Both these exchanges have electronic trading facilities.
  • The headquarters of NSE and BSE are both located in Mumbai.

Difference between BSE and NSE

The similarities between NSE and BSE are not limited to the points mentioned above. However, these exchanges are different from one another too. Take a look at the difference between BSE and NSE.

Points of differenceNSEBSE
Full formNational Stock Exchange Bombay Stock Exchange 
Formed in19921875
Benchmark indexNifty 50S & P BSE Sensex
Companies in the index5030
Companies listed on the exchange 5000+Around 2000
Transaction charges0.003%0.00325%
Ranking in the worldNSE ranks 11th among the largest stock exchanges in the worldBSE ranks 10th among the largest stock exchanges in the world
Use of the electronic trading platformNSE started the electronic trading platform right from its inception in 1992BSE incorporated the electronic trading platform called BOLT (BSE On-Line Trading) in the year 1995
Trading volumeVery highLower than NSE
Products traded on the platformEquity stocksEquity derivativesCurrency derivativesCommodity derivativesMutual fundsExchange-Traded FundsSecurity Lending & Borrowing SchemeInstitutional Placement ProgramOffer for SaleCorporate BondsEquity stocksEquity derivativesCurrency derivativesCommodity derivativesMutual fundsExchange-Traded FundsOffer for SaleCorporate Bonds
Official website addresswww.nseindia.comwww.bseindia.com

Which platform to choose?

Both NSE and BSE provide you trading opportunities in different types of securities. NSE, however, boasts of a large trading volume making it easier for the price discovery mechanism to work effectively. This volume outweighs the limitation of the index containing only a few stocks and can allow better trading opportunities. Some stocks, however, are listed on the BSE only and so, if you wish to invest in such stocks, you would have to trade on the BSE.

So, you can compare the stocks across both these platforms and then choose one as per your requirements. Alternatively, you can opt for arbitrage trading and buy stock from NSE and sell it in BSE. Moreover, there would be a difference in the price of the same stock on NSE and BSE platforms depending on the stock’s liquidity.

Go through the difference between BSE & NSE before you choose either platform. Understand how these platforms work and then trade in them. Both these exchanges experience market volatility and so, a healthy risk appetite is recommended if you wish to trade in them.

Aradhana Gotur