Difference Between National Stock Exchange And National Spot Exchange?

The National Stock Exchange and the National Spot Exchange are two exchanges that are totally different from each other. More popularly they are known as the NSE and NSEL respectively.

Difference between NSE (National Stock Exchange) and NSEL (National Spot Exchange)

The major difference between the National Stock Exchange and the National Spot Exchange is that one has equities traded on its excange, while the other has commodities.

So, while the NSE caters to equities, including derivatives and also a debt segment, the NSEL purely caters to commodities.

Difference between NSE and NSEL

NSE	NSEL
Equity and debt are traded on the National Stock Exchange.	Commodity trading takes place on the National Spot Exchange
Established by the country's top banks and financial institutions.	Was promoted by Financial Technologies and NAFED
Unblemished track record	There was a major crisis that erupted at the National Spot Exchange
National Stock Exchange is much larger than the National Spot Exchange in terms of value traded.	NSEL is much smaller than the NSE.

The NSE was promoted by a host of institutions and the top banks in the country. State Bank of India is the largest shareholder along with LIC. The other shareholders of the NSE include Bank of Baroda, Punjab National Bank, IDBI SBI Capital markets etc.

On the other hand National Spot Exchange was promoted by the Jignesh Shah Controlled Financial Technologies and the National Agricultural Coperative Marketing Federation.

The National Spot Exchange had a major crisis, after a payment scandal rocked the exchange.

There were allegations of fake ledger accounts and a host of other problems, relating to brokers involved at the NSEL.

The National Stock Exchange on the other hand has had an unblemished and seamless track record.

It is now the largest stock exchange in the country in terms of the value of shares traded.

Should you trade in the NSE and NSEL?

It all depends on what you are trading. If you want to buy and sell shares or debt instruments, you cannot do it on the NSEL. It has to be on the NSE, BSE or the MCX. On the other hand, if you want to buy cotton in the futures segment, you have to go through the National Spot Exchange.

Clearly, the type of instruments or call it commodity traded at both the exchanges is different.

We are not sure, the kind of volumes that happen on the NSEL. The recent payment crisis, may have shook investor confidence in the exchange. The NSE on the other hand continues to be the national's largest exchange by far.

It has the largest volume of turnover as compared to the NSEL or the BSE. However, the BSE has the largest number of traded shares.

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