Every game has rules, and the DSE is no different. Before you risk your money, you need to understand the rules of the game — not just the ones in the handbook, but the ones that directly affect how and when you can buy, sell, and receive your shares.
These aren’t boring bureaucratic details. They’re the mechanics that protect you and, sometimes, constrain you.
Market Hours: When Trading Happens
The DSE operates on Bangladesh Standard Time (BST), Sunday through Thursday:
| Session | Time |
|---|---|
| Pre-Opening | 9:30 AM – 10:00 AM |
| Continuous Trading | 10:00 AM – 2:30 PM |
| Post-Closing | 2:30 PM – 2:40 PM |
Pre-Opening Session: During this window, you can place orders but no trades are executed. The system collects orders and calculates an opening price using a call auction mechanism. This prevents wild price swings at the market open.
Continuous Trading: This is when actual buying and selling happens. Orders are matched continuously based on price and time priority — the best price gets matched first, and if prices are equal, the order placed earlier gets priority.
Post-Closing Session: A brief window for closing price determination. This final price is what you’ll see quoted as the day’s closing price.
The market is closed on Fridays, Saturdays, and public holidays. Unlike the NYSE or London Stock Exchange, the DSE follows the Bangladesh workweek.
Circuit Breakers: The Emergency Brakes
Circuit breakers are price limits that automatically halt or restrict trading when a stock moves too much in a single day. They exist to prevent panic-driven collapses and speculative bubbles from spiraling out of control.
How They Work on the DSE
The DSE applies circuit breaker limits to individual stocks based on their previous day’s closing price. The standard limits are:
- General stocks: Price cannot move more than 10% up or down from the previous close in a single trading day
- Specific categories may have different limits — newly listed stocks, for instance, may have wider or no circuit limits on the first trading day
So if a stock closed at ৳100 yesterday, today it can trade between ৳90 and ৳110. If buying pressure pushes it to ৳110, it hits the upper circuit — orders can still be placed, but no trades can occur above that price.
What Happens When a Stock Hits Circuit
When a stock hits its upper or lower circuit limit:
- Trading continues at that price level, but orders cannot be placed beyond the limit
- Queue builds up: At the upper circuit, you’ll see a massive buy queue with no sellers willing to sell. At the lower circuit, a massive sell queue with no buyers willing to buy
- Next day reset: The circuit limit resets based on the new closing price
Hitting a circuit breaker is a signal — but what it signals depends on context. A stock hitting the upper circuit after strong quarterly earnings is very different from a stock hitting it because of a Telegram rumor.
Market-Wide Circuit Breakers
Beyond individual stock limits, the DSE also has index-level circuit breakers. If DSEX falls significantly in a short period, trading across the entire market can be halted temporarily. These broader circuit breakers are designed to prevent market-wide panics from feeding on themselves.
T+2 Settlement: When You Actually Get Your Shares
When you buy shares on the DSE, you don’t actually receive them immediately. The settlement cycle is T+2, meaning trades settle two business days after the transaction date.
What This Means in Practice
- Sunday buy → Tuesday settlement: You buy 100 shares of a company on Sunday. The shares appear in your BO account on Tuesday (2 business days later).
- Selling before settlement: You generally cannot sell shares you don’t yet own in your BO account. You need to wait for settlement.
- Cash settlement: The money is debited from your broker account on the trade date, but the formal settlement happens on T+2.
Why T+2 Exists
The two-day gap allows the central depository system (CDBL) to verify, match, and transfer shares between buyer and seller BO accounts. It also gives time for payment clearance.
If you’re coming from an era of instant digital transactions, T+2 feels archaic. But it’s the global norm — most major exchanges worldwide use T+2 or are just now moving toward T+1.
T+2 and Dividends
Understanding T+2 is crucial for dividend capture. To receive a declared dividend, you must be a shareholder on the record date. But because of T+2 settlement, you need to buy the stock at least 2 business days before the record date.
If the record date is Wednesday, you must buy by Monday at the latest for the shares to settle into your BO account by Wednesday. Buying on Tuesday means settlement on Thursday — too late.
Order Types: How You Buy and Sell
The DSE supports several order types through your broker platform:
Market Order
Executes immediately at the best available price. You’re saying: “I want to buy/sell now, at whatever the current price is.” Fast, but you might get a slightly worse price than expected in a fast-moving market.
Limit Order
Executes only at your specified price or better. You’re saying: “I’ll buy, but only at ৳85 or lower” or “I’ll sell, but only at ৳95 or higher.” More control, but the order may not execute at all if the price doesn’t reach your limit.
Best Practice
For liquid, large-cap stocks, market orders work fine because the bid-ask spread is typically narrow. For less liquid stocks, always use limit orders — the spread can be wide, and a market order could fill at a significantly different price than you expected.
Lot Sizes and Minimum Orders
On the DSE, the minimum trading unit is 1 share for most stocks in the regular market. However, there’s also a block market for large transactions (typically 500 shares or above, or trades above a certain value threshold) that operates with separate rules.
For most retail investors, the regular market is where you’ll trade. There’s no minimum investment amount beyond the price of a single share — if a stock trades at ৳15, you can literally start with ৳15.
Key BSEC Regulations You Should Know
The Bangladesh Securities and Exchange Commission (BSEC) is the regulatory body that oversees the market. Some regulations that directly affect you as an investor:
Margin Trading
If your broker offers margin, you can borrow money to buy shares. BSEC regulates the margin ratio — how much you can borrow relative to your own capital. Margin amplifies both gains and losses. If you’re new, avoid margin trading entirely until you have at least a year of experience.
Short Selling
Unlike many international markets, short selling is highly restricted on the DSE. You generally cannot sell shares you don’t own. This means you can only profit from stocks going up (as a regular investor).
Insider Trading
Buying or selling based on material non-public information is illegal. BSEC actively monitors for suspicious trading patterns, especially before major announcements. Penalties include fines and criminal prosecution.
Reporting Requirements
If you acquire 5% or more of a company’s shares, you’re required to report it. Directors and sponsors have additional disclosure obligations whenever they buy or sell shares.
Fees and Costs
Every trade on the DSE involves costs beyond the share price:
| Fee | Typical Rate |
|---|---|
| Broker commission | 0.30% – 0.50% (negotiable) |
| BSEC fee | 0.015% |
| DSE fee | 0.015% |
| CDBL fee | 0.01% |
| Total per trade | ~0.35% – 0.55% |
These apply to both buy and sell transactions. So a round trip (buy + sell) costs roughly 0.70% – 1.10% of the trade value. On a ৳1,00,000 trade, that’s ৳700 – ৳1,100 just in transaction costs.
This is why overtrading is expensive. If you’re buying and selling frequently, these costs eat into your returns significantly.
Think About This
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A stock hits the upper circuit for three consecutive days on massive buy volume. On the fourth day, it opens at the circuit limit but then reverses and falls 6%. What might be happening?
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You want to receive a cash dividend with a record date of Wednesday. What’s the latest day you can buy the stock and still qualify? What if there’s a public holiday on Tuesday?
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You’re comparing two brokers — one charges 0.30% commission with a basic platform, and another charges 0.50% with advanced research tools and real-time data. If you make about 40 trades per year averaging ৳50,000 each, how much is the commission difference? Is the extra cost worth it?
