What is the difference between NSE and BSE
Bombay Stock Exchnge (BSE)
The BSE is an Indian stock exchange located at Dalai Street, Mumbai. Established in 1875, the BSE formerly known as Bombay Stock Exchange Ltd is Asia’s oldest stock exchange. The BSE is the world’s 10th largest stock exchange in terms of overall market capitalization.
The Bombay stock exchange was founded by Late Premchand Roychand of Bombay (Now Mumbai), an influential businessman in the 19th century. He had made a fortune in the stock broking business and came to be known as the Cotton King, the Bullion Kind or just the Big Bull. He was also the founder of the Native Share and Stock Brokers Association, an institution that is now known as the BSE.
On 31st August 1957, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. In 1986. It developed the S&P BSE Sensex Index, giving the BSE a means to measure the overall performance of the exchange. In 2000, the BSE used this index to open its derivatives market, trading S&P BSE Sensex futures contracts. The development of the S&P BSE Sensex options along with equity derivatives followed in 2001 and 2002, expanding the BSE’s trading platform.
The Bombay Stock Exchange switched to electronic trading system developed by CMC Ltd. In 1995. This automated, screen based trading platform called BSE On Line Trading (BOLT). BSE had made IPO on 23th January 2017 to raise capital.
BSE also launched commodity derivatives contract on and from 1st October 2018
BSE offers trading and Investment in the following segments:
- Equity
- Equity Derivatives
- Currency Derivatives (Including Interest Rate Derivatives)
- Commodity Derivatives
- Debt
National Stock Exchange (NSE)
NSE was set up by a group of leading Indian financial Institutions at the behest of the government of India to bring transparency to the Indian capital market. Based on the recommendations laid out by the Pherwani Committee, NSE has been established with a diversified shareholding comprising domestic and global investors.
The key domestic investors include Life Insurance Corporation of India, State Bank of India, IFCI Limited, IDFC Limited and Stock Holding Corporation of India Limited.
The exchange was incorporated in 1992 as a tax paying company and was recongnized as a stock exchange in 1993 under the Securities Contracts (Regulation) Act, 1956, When P.V. Narasimha Rao was the Prime Minister of India and Manmohan Singh was the Finance Minister.
The Capital Market Segments of NSE commenced operations on 3rd November 1994.
It was the first exchange in India to introduce an electronic trading facility thus connecting together the investor base of the entire country.
NSE was the first exchange in the country to provide a modern, fully automated screen based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country.
The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures from 12th June 2000.
In August 2008, currency derivatives were introduced in India with the launch of Currency Futures in USD – INR by NSE. It also added currency futures in Euros, Pounds and Yen.
On 29th August 2011, National Stock Exchange launched derivative contracts on the world’s most followed equity indices, the S&P 500 and the Dow Jone Industries Average. NSE is the first Indian exchange to launch global indices. This is also the first time in the world that futures contracts on the S&P 500 index were introduced and listed on an exchange outside their home country.
NSE offers trading and investment in the following segments
- Equity
- Equity Derivatives
- Currency Derivatives (including Interest Rates Derivatives)
- Commodity Derivatives
- Debt
Difference NSE Vs BSE
Basis
National Stock Exchange (NSE)
Bombay Stock Exchange (BSE)
1. Year of Establishment |
2. Oldest Exchange |
3. Benchmark Index |
4. Number of Listed Companies |
5. Trading System |
6. Trading Volume |
7. Market Liquidity |
8. Popularity Among Traders |
9. Derivatives Trading |
10. Headquarters |
Established in 1992 |
Relatively newer |
NIFTY 50 |
Over 2600 to 2700 |
Fully electronic from inception |
Higher trading volume |
More liquid market |
Preferred by active traders & derivatives traders |
Dominates derivatives market |
Mumbai |
Established in 1875 |
Asia’s oldest stock exchange |
SENSEX (BSE 30) |
Over 5000 |
Shifted to electronic trading later |
Lower compared to NSE |
Less liquid than NSE |
Preferred by long-term investors |
Limited derivatives activity |
Mumbai |
Which exchange should investor transact in NSE or BSE
There is no single “better” exchange—it depends on your purpose. Here is a clear, practical answer from a market professional’s point of view:
NSE has very high trading volume, allowing traders to enter and exit positions quickly within the same day.
Trading options & futures
NSE dominates the derivatives market, with most option and futures contracts actively traded here.
Looking for high liquidity
High liquidity on NSE ensures more buyers and sellers, making trade execution fast and smooth.
Wanting tight bid–ask spreads
Due to heavy trading activity, the difference between buying and selling prices is usually very small on NSE.
Trading popular stocks and indices
Most actively traded stocks and major indices like NIFTY 50 have maximum participation on NSE.
A long-term investor
BSE is suitable for long-term investing as it focuses more on stable investments rather than short-term trading activity.
Investing in small-cap and mid-cap stocks
BSE has a large number of small-cap and mid-cap companies, offering better opportunities for long-term growth.
Looking for more listed companies
BSE lists more companies than NSE, giving investors a wider choice across different sectors.
Interested in less-traded / emerging companies
Many emerging and lesser-known companies are listed on BSE, which can provide early investment opportunities.
Frequently Asked Questions (FAQ)
What is the main difference between NSE and BSE?
The main difference between NSE and BSE is:
- BSE is the oldest stock exchange in Asia, while NSE is newer and fully electronic from the start.
- NSE has much higher trading volume and liquidity, especially in intraday and derivatives.
- BSE’s index is Sensex, whereas NSE’s index is Nifty.
- For investors both are same, but traders mostly prefer NSE due to liquidity.
Which is better for trading – NSE or BSE?
There is no single “better” exchange—it depends on your purpose.
For active trading and derivatives, NSE is preferred due to higher liquidity and tighter spreads.
For long-term investing, both NSE and BSE are equally reliable since returns depend on the company, not the exchange.
Why is trading volume higher on NSE than BSE?
Trading volume is higher on NSE because it was built as a fully electronic exchange from the beginning.
Most institutional investors and traders prefer NSE due to better liquidity and execution speed.
NSE dominates the derivatives (F&O) market, which contributes huge daily volumes.
Higher participation creates a liquidity loop, keeping volumes consistently higher than BSE.
Can I buy the same share on both NSE and BSE?
Yes, you can buy the same share on both NSE and BSE if it is listed on both exchanges.
The company is the same; only the trading platform is different.
Prices may vary slightly due to demand–supply and liquidity differences.
Your Demat account remains the same, regardless of the exchange used.
Why is the share price different on NSE and BSE for the same stock?
The share price differs on NSE and BSE due to differences in demand and supply on each exchange.
Higher liquidity on NSE usually leads to faster price discovery.
Order timing, volume, and bid-ask spread can vary between exchanges.
These differences are normally small and adjust quickly through arbitrage.
Which is better for long-term investment – NSE or BSE?
For long-term investment, there is no difference between NSE and BSE.
Both exchanges trade the same company shares with the same fundamentals.
Long-term returns depend on business performance, not the exchange.
You can invest through either NSE or BSE with confidence.
What is the difference between Nifty and Sensex?
Nifty is the benchmark index of NSE and consists of 50 large-cap stocks.
Sensex is the benchmark index of BSE and includes 30 large-cap stocks.
Nifty represents a broader market due to more companies.
Both reflect the overall performance of India’s stock market.
Is F&O (derivatives) available on both NSE and BSE?
Yes, F&O is available on both NSE and BSE.
However, NSE dominates derivatives trading with almost all market volume.
Most options and futures contracts are liquid only on NSE.
Therefore, traders generally prefer NSE for F&O trading.
Why do most traders prefer NSE over BSE?
Most traders prefer NSE because it offers much higher liquidity and trading volume.
Higher liquidity ensures quick execution and lower bid-ask spreads.
NSE has a strong and liquid derivatives (F&O) market.
This makes NSE more suitable for intraday and active trading.
Does it matter whether I buy shares from NSE or BSE?
For most investors, it does not matter whether shares are bought from NSE or BSE.
The company and ownership remain the same, regardless of the exchange.
Price differences are usually minor and temporary.
Choose the exchange with better liquidity at the time of buying.