Online Trading Santu

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A

Project Study Report

OnTraining Undertaken At

India bullsPortfolio Limited

Titled

ONLINE TRADING

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

ARYA INSTITUTE OF ENGINEERING AND TECHNOLOGY

Submitted By: -bmitted TO

SANTU KUMAR KHINCHI Nisha Goyal

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MBA 3 rd SEMMBA)

Arya Institute of Engineering and technology

P reface

The training is a practical approach of learning by experience and it helps in earning a

good wealth of knowledge and experience that may help us in our near future of career

endeavor. My project was pertaining to online trading at India bulls Portfolio Ltd., Jaipur a

leading Financial Services & Brokerage House with acknowledged industry Leadership

in execution and clearing services on Exchange Traded Derivatives and cash market

products. I made myself to learn and gain the methods, procedures as well as regulation

which makes a online trading successful and amicable for new investors and existing

players of trading in securities.

Indeed it was a great opportunity for me to undertake the significance of corporation

atmosphere and how employees coordinated with the policies and procedures being

issued by their seniors and superiors.

Also, how senior management lead the best planning efforts and guiding them to entire

personnel in the organization in order to obtain the utmost efforts for th achievement of the

goals and objectives.

As the Indian economy continues to surge ahead, its power sector has been expanding

concurrently to support the growth rate. The demand for power is growing exponentially

and the scope of of this sector is immense.growth

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.

ACKNOWLEDGEMENT

I express my, sincere thanks to my project guide, Mr.Piyush pandey (Regional Manager)

for guiding me right from the inception till the successful completion of the project. I

sincerely acknowledge her for extending their valuable guidance, support for literature,

critical reviews of project and the report and above all the moral support he had provided to

me with all stages of the project.

I would also like to thank the supporting staff of all the departments of the company, for

their help and their cooperation throughout, our project.

I would like to thank my faculty guide Ms.Nisha goyal for his valuable guidanceand support during my summer internship.

Santu kumar khinchi

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EXECUTIVE SUMMARY

The summer internship project Online Trading mainly focused on the methodology of online

trading in financial market. I did complete study about stock market and trading system.

A stock exchange, (formerly a securities exchange) is a corporation or mutual organization

which provides "trading" facilities for stock brokers and traders, to trade stocks and other

securities. Stock exchanges also provide facilities for the issue and redemption of securities

as well as other financial instruments and capital events including the payment of income

and dividends. The securities traded on a stock exchange include: shares issued by

companies, unit trusts, derivatives, pooled investment products and bonds. To be able totrade a security on a certain stock exchange, it has to be listed there. Usually there is a

central location at least for recordkeeping, but trade is less and less linked to such a physical

place, as modern markets are electronic networks, which gives them advantages of speed

and cost of transactions. Trade on an exchange is by members only. The initial offering of

stocks and bonds to investors is by definition done in the primary market and subsequent

trading is done in the secondary market. A stock exchange is often the most important

component of a stock market. Supply and demand in stock markets is driven by various

factors which, as in all free markets, affect the price of stocks (see stock valuation).

Trading markets may be defined as systems consisting of an order routing system, an

information network, and a trade execution mechanism (Stoll, 1992). A trading system is a

communications technology for passing allowable messages between traders, together with

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a set of rules that transform traders' messages into transactions prices and allocations of

quantities of stock among market participants.

Investors are generally not given free access to trading systems. Entry into the exchange's

systems is intermediated by brokers. Brokers may simply route orders to exchanges The

summer internship project Online Trading mainly focused on the methodology of online

trading in financial market. I did complete study about stock market and trading system.

A stock exchange, (formerly a securities exchange) is a corporation or mutual organization

which provides "trading" facilities for stock brokers and traders, to trade stocks and other

securities. Stock exchanges also provide facilities for the issue and redemption of securities

as well as other financial instruments and capital events including the payment of income

and dividends. The securities traded on a stock exchange include: shares issued bycompanies, unit trusts, derivatives, pooled investment products and bonds. To be able to

trade a security on a certain stock exchange, it has to be listed there. Usually there is a

central location at least for recordkeeping, but trade is less and less linked to such a physical

place, as modern markets are electronic networks, which gives them advantages of speed

and cost of transactions. Trade on an exchange is by members only. The initial offering of

stocks and bonds to investors is by definition done in the primary market and subsequent

trading is done in the secondary market. A stock exchange is often the most importantcomponent of a stock market. Supply and demand in stock markets is driven by various

factors which, as in all free markets, affect the price of stocks (see stock valuation).

Trading markets may be defined as systems consisting of an order routing system, an

information network, and a trade execution mechanism (Stoll, 1992). A trading system is a

communications technology for passing allowable messages between traders, together with

a set of rules that transform traders' messages into transactions prices and allocations of

quantities of stock among market participants.

. They sometimes make decisions as to what exchange, and what system within the

exchange, should process various parts of an order. In open outcry markets, brokers also

physically represent orders on the floor of the exchange.

Exchanges are differentiated most by a class of intermediaries known as market makers.

Market makers trade for their own accounts, usually providing an offer to sell and an offer to

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buy at the same time, but at different prices. In doing so, they both contribute to the pricing

process and supply immediacy to the market by a willingness to be a counterparty to an

order for which another investor may not be immediately available.

On some exchanges, most notably the NYSE, there is one primary market maker designated

by the exchange, known as the specialist. The specialist obtains consideration for the supply

of immediacy and the maintenance of an orderly market by having private access to order-

flow information through the order book for the stock. There may be multiple market makers

in a given stock, regardless of the precise form of trading system. The prototype example is

that of dealer markets, in which the dealers are the market

Makers. They post bids and offers, and trade out of their own inventory. Electronic limit

order book markets offer the possibility of trading without such financial intermediation. In

practice, however, market makers exist on electronic markets as well.Multiple market makers in a security are often designated by an exchange, fulfill obligations

not dissimilar to those of a specialist, and receive some consideration for the service.

Anyone with direct access to the trading system can function as a market maker, however,

simply by continuously offering quotes for stock on both sides of the market.

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TABLE OF CONTENTS

S.No. Topic Name Page No.1. INTRODUCTION OF INDUSTRY 092. INTRODUCTION OF ORGANIZATION 14

2.

1

Company profile 16

2.

2

Product & service 18

2.

3

India bullss affilition 22

2.

4

India bulls strength 23

2.

5

India bullss Management

Team

24

2

.6

India bullss Vision 26

2.7

India bullss Value 26

2

.8

India bullss Research Desk 28

2 India bullss technology 29

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.92.

10

India bullss Achievement 30

3 INTRODUCTION ONLINE TRADING 313

.1

What is Capital Market 35

3

.2

Process & Mechanic Online

Trading

39

3

.3

Terminology 43

3.4

Benefit & problem Online Trading

49

3

.5

Growth of online trading 55

4 RESEARCH METHODOLOGY 604

.1

Title of study 61

4

.2

Duration of the project 61

4

.3

Objective of study 61

4

.4

Type of research 62

4.5

Area of research 63

4

.6

My role 63

4 Type of sampling 63

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.74

.8

Data type 63

4.9

Limitation of study 64

5 FACTS & FINDINGS 666 QUESTIONNAIRE 807 SWOT ANALYSIS 938 CONCLUSION 959 RECOMMENDATION 9710 BIBLIOGRAPHY 99

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INTRODUCTION OF INDUSTRY

Broking industry is growing for last ten year with leaps & bounces to Indian economy and

stock market. Brokerages houses are known as intermediaries between market and

investor and play a key role in execute the functions to carry on the stock market. All the

brokerage houses having different sort of charges and fee according to their facilities and

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efficiency provided to investors. They manage the portfolio, risk management and

providing guidance to investor for dealing in security market the major players of Indian

broking industry are as follows:-

1. India bulls Portfolio Limited

2. Sharekhan Limited

3. Religare Limited

4. Hem Securities Limited

5. Angle Broking Limited

6. India bulls Securities Limited

7. Anand Rati Securities Limited

Analysis of players in the industry

Unicon

Unicon has been founded with the aim of providing world class investingexperience to hitherto underserved investor community. The technology todayhas made it possible to reach out to the last person in the financial marketand give him the same level of service which was available to only theselected few. We give personalized premium service with reasonablecommissions on the NSE, BSE & Derivative market through our Equitybroking arm Unicon Securities Pvt. Ltd. With our sophisticated technologyyou can trade through your computer and if you want human touch you canalso deal through our Relationship Managers out of our more than 100branches spread across the nation.

Religare securities

Trading In Equities with Religare truly empowers you for your investment

needs. We ensure you have a superlative trading experience through - A highly process driven, diligent approach

Powerful Research & Analytics and

One of the best-in-class dealing rooms

Further, Religare also has one of the largest retail networks, with its

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presence In more than 1800* locations across more than 490* cities and

towns. This means, you can walk into any of these branches and connect

to our highly skilled and dedicated relationship managers to get the best

services .

The Religare Edge

Pan India footprint

Powerful research and analytics supported by a pool of highly skilled

research

analysts

Ethical business practices

Offline/Online delivery models

Single window for all investment needs through your unique CRN

Anand rathi

AnandRathi (AR) is a leading full service securities firm providing the entire gamutof financial services. The firm, founded in 1994 by Mr. Anand Rathi, today has a

pan India presence as well as an international presence through offices in Dubai

and Bangkok. AR provides a breadth of financial and advisory services including

wealth management, investment banking, corporate advisory, brokerage &

distribution of equities, commodities, mutual funds and insurance, structured

products all of which are supported by powerful research teams.

How India bulls differ from other in the industry

India bulls Portfolio Ltd is an emerging leader in the high growth retail financial

services sector in India.

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India set to emerge as one of the worlds largest retail financial services markets

* Indias GDP growth has averaged 6.5% since 1994 and expected to continue to

grow at 8+%

* Increasing sophistication of financial markets

* Indian consumers affinity for equity

Emergence of large domestic retail brokerage houses

*India has nearly 10,000 brokers; most of them are small family businesses

* The last 5-7 years has witnessed the emergence of large institutional players

driving consolidation of the retail financial services market

Global players are starting to make strategic inroads into the retail financial

services market

*Foreign broking houses dominate FII based institutional broking

* Some global majors like Citigroup are making inroads into retail by leveraging

their network

* E-trade has announced majority ownership of IL&FS Investment

* BNP Paribas has invested in Geojit

*ABN Amro has started its own retail broking network in India

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Introduction of Organization

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Head office (Delhi)2/2-A, 1 ST Floor, LaxmiinsuranceBuilding, Asaf Ali Road,

New Delhi -110002

Corporate office (Mumbai )India bulls House, plot no.M-2,

Cama Industrial EstateWalbhat road,

Behind the hub,Goregaon(east)Mumbai-400063

Registered office (Delhi)4353/4C,Madan MohanStreet,Ansari Road, Drayman,

New Delhi-110002

Regional office Raj. (Jaipur)410-413,4 th floor,

Silver Square,Near Raj MandirCinema,

Bhagwandas Road,Jaipur-01

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Company Profile

India bulls, a leading financial services &brokerage house working diligently since

1994 can be describe in a single word as a financial powerhouse. With

acknowledged industry leadership in execution and clearing services on exchange

traded derivatives and cash market products, india bulls has spread its trustworthy

tentacles all over the country with more than 1050 outlets spread across 350 cities.

It provides an extensive range of services in equity, commodities, currency

derivatives, wealth management, distribution of third party product, etc.

Being at par with the modern tech-savvy world, india bulls makes an integrated

and an innovative use of technology. It also enables its clients to trade online as

well as offline the strategic tie-ups with he latest technology partners has earned

india bulls a prestigious place as one of the top brokerage houses in the country.

Client-focused philosophy backed by membership of all principal Indian stock and

commodity exchange makes india bulls stand apart from competitor as a preferred

services provider in the industry for value-based services.

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INDIA BULLS GROUP OF COMPANY

India bullsgroup of

companies

ndia bullsportfolioLimited

India bullsCommodityBrokers (p)

Ltd .

India bullsInsuranceBroker (p)

Ltd.

India bullsGlobalDMCC,Dubai

Sunglow Finvests Pv

Ltd.

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India bulls Product and Service

India bullss service encompasses the spectrum of wealth creation, management

and preservation. India bulls offers a wide range of product and services to help

client reach their financial goal.

India bullsProduct

&Services

BrokerageServices

WealthManagement Demat Distribution

Equity

Commodity

Derivatives

PMS

Advisory

NSDL

CSDL

Insurance

Mutual Fund

IPOS

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Prime Brokerage Services :

Equity and equity derivatives

Trading Platform offers online Equity & Equity Derivatives trading facilities

for investors. This high-end, efficiently integrated application makes trading

convenient, quick and hassle free.

Added advantages - Having access to resources like research charts,

advice, live quotes online assistance - to take well-versed decisions. Trading

through our branch network or phone available, by simply registering with us.

Commodity Derivatives

We offer access to future trading via multiple exchanges in wide-rangingcommodities agricultural commodities, base metals, energy and precious

metals.

We also provide investment opportunities in gulf commodities futures and

currency market .

Currency Derivatives

Known as being predecessors in contributing to unique financial products,

we have now added to our stable - currency Derivative.

This service, we provide both offline and online.

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Asset Management:

Portfolio Management Services (PMS)

Our team of portfolio managers design portfolios to suit every customers

needs. Constantly scrutinizing the developments in market and moving stocks, we

aim for maximum capitalization.

We suggest the most appropriate product to customers, based on factors

like their investment spheres, return expectation and risk tolerance. Our

experience, expertise and research helps us give our customers investments thebest upshots.

Advisory

India bulls guides and supports its clients to re-structure and streamline their

portfolios based on changing market conditions and client objectives.

Depository Services:

India bulls is a depository participant with NSDL and CDSL.

We provide an array of Depository Services to make share transactions

quicker, easier and cheaper for both Equity and Commodity.

Distribution:

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Insurance

India bulls offers insurance products in Life and General Insurance.Our IRDA certified advisors offer prudent advice on policy selection and assists

ugh the claim redressal process.

Our advisory team matches the insurance products to financial profiles of

mers to offer the best solution options, maintaining transparency and professionalism.

Mutual Funds

India bulls is one of the largest distributors of mutual fund in India.

With the help of our in-depth research across categories covering 20 parameters

our expertise, we guide our clients to take appropriate investment decisions.

Keeping in mind customers' budgets, needs and securities, our AMFI certified

tment advisors offer the best deals.

Initial Public Offer (IPO)

We offer our customers online investment access for Public offerings.

In-depth research advice for the forthcoming IPOs.

India bullss AffiliationsEquity

National Stock Exchange of India Ltd. (NSEIL)

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The Bombay Stock Exchange Ltd. (BSE)

OTC Exchange of India Ltd (OTCEIL)

Commodities

Multi Commodity Exchange (MCX)

National Commodity and Derivatives Exchange Ltd (NCDEX)

Dubai Gold Commodities Exchange (DGCX)

National Multi Commodity Exchange (NMCE)

Currency

National Stock Exchange of India Ltd.

The Bombay Stock Exchange Ltd. (BSE)

MCX-SX Ltd.

Depository participant with CDSL and NSDL

India bullss Strengths

India bulls has over 1050 outlets in more than 350 cities in India. (as on March

)

India bulls has more than 2 lakh clients comprising of Corporate Financial

ution Investors, Mutual Funds, High Net-worth Individuals and Retail Investors.

India bulls has a young dynamic team of 1900 professionals.

Strong infrastructure supporting over 3000 trading terminal supporting more than

VSAT's to support geographic reach and servicing capabilities.

24x7 service and support via our federal support system.

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India bullss Pillars: Management Team

Meet the minds behind the corporation India bulls - the Directors who are leading

this gigantic force.

S.P. Goel

The Founder Director of India bulls who has been instrumental in chartering critical

and strategic initiatives. With an experience of 25 years in the finance business,

Mr. Goel has also been appointed as the director of the OTC Exchange of India.

He represents NSEIL for the SEBI constituted Dr. J R Verma Advisory committeefor the development of the derivatives market in India.

He started his career as a CA in 1987 and soon after he embodied several

prominent committees on settlement issues (COSI), a policy generating body at

the NSE of India Ltd and Dispute Resolution Committee (DRC) of National Stock

Exchange Clearing CorporationLimited (NSCCL).

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Shivkumar Goel

Being the Founder Director of India bulls, he has been handling IT & risk initiatives

since inception. Formerly, designated as the CEO of SRF Finance Limited, Delhi;

Mr. Shivkumar Goel had also spearheaded the IT committee of the DELHI Stock

Exchange.

A CA & CS with more than 30 years of experience, he recently was nominated as

the executive committee member of Depository Participants Association of India.

He is currently a functional member with Association of National Exchanges

Members of India - NR

S.K. Goel

Has been India bullss Founder Director and a prominent CA for more than 35

years now. Being actively involved in managing the Business initiatives and

Accounting across India; Mr. S.K.Goel has been mainly heading India bullss

northern and eastern zone. He was formerly with the Modis & OSWALS - one of

the leading manufacturing companies, in addition to being empanelled with

various major banks as their Internal Auditor.Vishnu Kumar Agarwal

The Founder Director of India bulls with over 30 years of experience; Mr. Vishnu

has proficiently taken charge of Administration, Real Estate Investments and

Initiatives for all the group companies of India bulls.

Anand Prakash Goel

He has been playing a pivotal role as India bullss Founder Director by

resourcefully managing Taxation, Compliance and DP. A qualified CA with more

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than 30 years of experience in his stride, he has undertaken audits for leading

banks across India.

Saurabh Shukla

He plays a pivotal role as the Group COO and one of the Directors of India bulls

Commodity Brokers Ltd. He has been actively involved in varied key strategic

functions and management of retail business.

Previously, designated as Head of Marketing for the Refco Group, he has

also worked for Merchant and Investment Banking and Corporate Finance. He was

also ardently involved in developing and servicing corporate / institutional

customers at Blue Blends Finance Ltd. and Natsons Pvt. Ltd .

India bullss Vision

To be one of the most trusted and globally reputed financial Distribution

companies.

India bulls Values

Transparency

Honesty is our forte. We believe in dealing on thoroughly ethical grounds, being

fair and transparent with our customers

We recognize and appreciate efforts put in by our employees. And we, as a matter

of fact, reward and distinguish each one of them, ceaselessly.

Solidarity

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We believe in sharing a forthright and respectful relationship with our business

partners and employees. We consider them both as our team associates, who

work together. Succeed together.

Started at zero

Its biggest strength is that it started its business with a zero level, merely as sub

broker then taken the self trading membership, hence it understand the needs of

its clients and business partners very well.

Integrated and transparent services

It values integrity and transparency in clients transaction and providing the bestvalue for money to its clients.

Value of client service

Its dedicated relationship managers are trained to provide excellent services and

complete satisfaction to all their clients, strongly believes that success is only the

end result of clients growth.

All the service is one umbrella

All the memberships are in one company name, no hassle of account transfer,

deliveries adjustments, and buy stock in one exchange and sale in another, get

arbitrage opportunities.

Accurate and timely research

It is always endeavored to provide timely research based advice to its clients, its

research team comprises of experienced fundamentals and technical analysis,

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sector specialist and derivatives strategist, who are constantly looking for new

trading and investment opportunities.

Wide range of services:-

It is offering Sock broking, Investment Advisory Services, Depository Services,

Commodities Trading, Portfolio Management, IPO & Mutual Fund Distribution etc.

to its esteemed clients.

24*7 online back office software

Web enabled centralized back office software installed at head office, having direct

access to all branches. Business associates, sub broker and client to have onlineinformation about their transaction, account derivatives, open position and so many

things live updated. Its all client can obtain up to date information online at click of

a button on their desktop PC.

India bullss growth:

Clientele growthAfter spreading our wings across varied segments, we are now growing in all

direction with more than 2 lakh clients under the banner.

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India bulls Research Desk

India bulls Research desk has a dedicated team of research analysts and experts

that have an in-depth knowledge of the market place. They offer value

perspectives, focus on opportunities for investment and growth and endeavor to

reduce risk potential. It's premium advisory services are based on technical and

fundamental views and strategies.

Equity- SMS alert

- Daily market strategy

- Weekly market strategy

- Monthly market strategy - 'Equity talk'

- Daily derivative strategy

Commodity

- SMS alert

- Daily report

- Weekly report

- Monthly report: Commodity Review

Mutual funds

- Daily Performance Sheet

- Weekly Mutual Fund Report 'The Edge'

- Monthly free News Letter 'The Perspective'

Regular updates on products, performance and new launches .

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Currency Derivatives

-Daily Forex Insight report

India bullss Technology

Single VSAT Connectivity for NSE/BSE/F&O/NCDEX /MCX/MCX-SX through

al Private Network (VPN) Other connectivity links to branches through Leased Lines,

N, Radio Frequency and Broadband.

High Speed and Streaming live quote access via Internet for NCDEX/MCX/MCX-SX for

ches and retail clients.

Internet based Depository access (Speed-e/Easiest) to offer DP services to

il investors.

24x7 online access to a centralized support structure for all products offerings .

India bullss Achievement

Top Equity Broking House in terms of branch expansion for 2010

3rd in terms of Number of Trading Accounts for 2008

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6th in terms of Trading terminals in for two consecutive years 2007- 2008

9th in terms of Sub Brokers for 2007

Awarded by BSE 'Major Volume Driver 07-08,08-09,09-10.

Nominated among the Top 3 for the "Best Financial Advisor Awards '08" in the

category of National Distributors Retail instituted by CNBC-TV18 and Opti Mix.

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The Online Trading is having many features which make it most suitable for

the investors to go for. Some of

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These Freedom of Information features are as follows :

The Internet can provide a new sense of control over your financial future. The amount of

investment informatio available online is truly astounding. It's one of the best aspects of being a

wired investor.For the first time in history,

any individual with an Internet connection can:

Know the price of any stock at any time

Review the price history of any stock in chart format

Follow market events in-depth

Receive a wealth of free commentary and analysis about stock markets and the global

economy

Conduct extensive financial research on any company

Control of Money

One of the great appeals of using an online trading account is the fact that the account

belongs to you, and is under your direct control. When you want to buy or sell stock,

you no longer need to call your broker on the phone; hope that he is in the office to place

your order; possibly argue with the broker about the order; and hope that the transactionis executed instantly.

Access to market

At the most basic level, an online trading account gives you more agility in buying and

selling stocks. This is through sophisticated information streams, dedicated trading

platforms and sophisticated tools for accessing the markets .

Ensure thw price for investors

Every broker house aims at providing the investor with the best price available. Also due to

the high level of transparency with regard to display of information relating to the specific

stocks and company profiles, you will be able to get the best quote for your orders.

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Offers greater transparancy

Online trading offers you greater transparency by providing you with an audit trail. This

involves a complete

integrated electronic chain starting from order placement, to clearing and settlement and

finally ending with a credit into your depository account. All these stages are subject to

inspection, thus bringing in transparency into the system

.

Enables hassle free trading

Online trading integrates your bank account, your trading account and your demat accounts,

which leads to easy and paperless trading for you.

Allow instant Trade execution

You as an Investment online customer will be able to execute the entire trading transaction,

right from logging on to our site, to the execution and settlement of your bank account, in

a very short period of time.

Provides a level free Field

Trading on the net, gives even the smallest retail investor access to information that earlier

was available only to the big traders. This provides a level playing field for all investors in the

securities market.

Reduces the settlement risk

This method of trading reduces the settlement risk for the investor, as in this case all short

sell orders are squared off at the specified cut-off time and not allowed to be carried forward.

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In the case of a demat account your demat account is checked by us before executing your

sell transaction. This reduces the settlement risk for the buyer, who is assured of the delivery

of the securities and for you as a seller of the securities

Instant order trade confirmation

Every trade is confirmed immediately and you will receive an on-screen confirmation

following every trade with full details for your records. This avoids costly errors that would

have been discovered when it is too late.

Integrated accounts

Your Bank, Depository and online account are integrated for your convenience. Variousbroking houses provide access to many of the popular banks.

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Introduction to the capital market

The capital market is the market for securities, where companies and the government can

raise long term funds. The capital market includes the stock market and the bond market.

Financial regulators ensure that investors are protected against fraud. The capital markets

consist of the primary market, where new issues are distributed to investors, and the

secondary market, where existing securities are traded. Capital market thus plays a vital

role in channelizing the savings of individuals for Investment in the economic

development of the country. As a result the investors are not constrained by their

individual abilities, but by the abilities of the companies, which in turn enhance the

savings and investments in the country, liquidity of capital market is an important factor

affecting growth.

Since projects require long term finance, but on the other hand, the investor may not like to

relinquish control over their savings for a long time. A liquid stock market ensures a quick

exit without incurring heavy losses or costs. Thus development of efficient market system is

necessary for creating conductive climate for investment and economic growth.

Capital market Segment Primary And Secondary

Broadly , the comprises of two segments the new issue market which is commonly

known as primary market and the stock market which is known as secondary market.

Primary

A primary offering, such as with a corporate bond, means you are buying it directly from the

issuer, at par value, usually. A secondary market is where you sell or buy existing issues.I.E. If you bought a bond last year, now need to get your principal, you can sell it in the

secondary market. You may not get par value. If rates are up since you bought the bond,

then you will likely have to sell it at a discount to be able to get rid of it. If rates have fallen

since you bought it, you could get a premium for it.

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Secondary

The market where securities are traded after they azre initially offered in the primary

market.Most trading is done in the secondary market. To explain further, it is trading inpreviously issued financial instruments. An organized market for used securities. BombayStock Exchange (BSE), National Stock Exchange NSE, bond markets, over-the-counter markets, residential mortgage loans, governmental guaranteed loans etc

BRIEF ABOUT THE STOCK EXCHANGES

Stock Exchange is a market like any other centralized market where both buyers and

sellers come and conduct their business of purchase and sale of shares & securities.

In other words, it is a market place for shares and securities where trading takes place ina controlled and protected environment .

MEANING OF STOCK EXCHANGE

A stock exchange, share market or bourse is a corporation or mutual organization which

providess "trading" facilities for stock brokers and traders, to trade stocks and other

securities. Stock exchanges also provide facilities for the issue and redemption of securitiesas well as other financial instruments and capital events including the payment of income

and dividends. The securities traded on a stock exchange include: shares issued by

companies, unit trusts and other pooled investment products and bonds. To be able to trade

a security on a certain stock exchange, it has to be listed there. Usually there is a central

location at least for recordkeeping, but trade is less and less linked to such a physical place,

as modern markets are electronic networks, which gives them advantages of speed and

cost of transactions. Trade on an exchange is by members only. The initial offering of stocks

and bonds to investors is by definition done in the primary market and subsequent trading is

done in the secondary market. A stock exchange is often the most important component of a

stock market. Supply and demand in stock markets is driven by various factors which, as in

all free markets, affect the price of stocks (see stock valuation)There is usually no

compulsion to issue stock via the stock exchange itself, nor must stock be subsequently

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traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is

the usual way that bonds are traded. Increasingly, stock exchanges are part of a global

market for securities.

SETTLEMENT CYCLE SCHEDULE

SR. NO. DAY DESCRIPTION OF ACTIVITY TRADE

1 T Trading Day

2 T+2 PAY IN BY 10.30 am.

3 T+2 PAY OUT BY 2 pm.

4 T+3 Auction of shortage in deliveries

5 T+5 Auction pay-in by 10.30 (1 am/ pay Out by 2 )

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Functions of Stock Exchange

Stock exchange is established into the main purpose of providing a market place for the

members to deal in securities under well laid down regulations and to protect the interest

of the investors. The main functions of stock exchange are;

1. It brings the companies and investors together so that the i nvestors can put risk capital

into companies and thus, companies can use the capital.

2. It provides an orderly regulated market for securities.

3. It provides continuous, ready and open market for selling and buying securities.

4. It promotes savings and investment in the economy by attracting funds from theinvestors.

5. It facilitates take overs by means of acquiring majority of shares traded on the stock

market.

6. It acts as a clearing house of business information.

7. It motivates the managers of well reputed companies, to retain their shares in A group,

to improve performance.

8. It induces the managers to improve performance for converting non-specified shares

into specified shares in the exchange.

9. It enables the investors to evaluate the net worth of their holdings.

10.It also allows the companies to float their shares in the market.

ONLINE TRADING BY NSE & BSE

The central computer located at the Exchange is connected to the workstations of the

Brokers through satellite using Very Small Aperture Terminals (VSATs). Orders placed atthe Brokers' workstations reach the central computer and are matched by the computer

based on price and time priority.

Both the exchanges have switched over from the open outcry trading system to a fully

automated computerized mode of trading known as BOLT (BSE On Line Trading) and NEAT

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(National Exchange Automated Trading) System. It facilitates more efficient processing,

automatic order matching, faster execution of trades and transparency. The scrips traded on

the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares

represent those, which are in the carry forward system (Badla). The 'F' group represents the

debt market (fixed income securities) segment. The 'Z' group scrips aretheblacklistedcompanie

PROCESS & MECHANICS OF ONLINE TRADING:

An investor would be required to open a bank account with a scheduled bank and sufficient

balance should be kept in the account. Thirdly he would be required to open account with a

depository participant because only dematerialized shares can be traded on Internet.

interesting in trading through Internet shall have to, firstly register himself with an Internet

brokerage firm. Some formalities such as filling the account opening form of the e-broker,copies of identity proof, copy of residence proof are made to register him self with the e-

trader. Secondly, the investor

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PROCESS:-

Second, fill in the symbol, series and the default quantity. So, generally following steps

are followed while doing the trading through the Internet:

Step-I:

Those investors interested in doing the trading over Internet system, that is,NEAT -

ISX (NSE), should approach the brokers and register with the Stock Broker.

Step-2:

After registration, the broker will provide to them a login name, password and a

personal identification number (PIN).

The client places order via the net by logging on to his

Brokers site.

The broker accepts and executes the order and places itwith the exchange

The exchange accepts the order after checking the share limit for the day.

The broker makes the payment either directly via the client bankaccount or pays through its own account and recovers it later fromthe client.

The exchange receives money and completes the settlement.

The client is intimated about the settlement either through the demat or via e-mail.

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Step-3:

Actual placement of an order, Using the place order window as under can then place

an order:

(a) First by entering the symbol and series of stock and other parameters such

as quantity and price of the scrip on the place order window.

Step-4:

It is the process of review. Thus, the investor has to review the order placed by clicking the

review option. He may also re-set to clear the values.

Step-5:

After the review has been satisfactory; the order has to be sent by clicking on the send

option.Step-6:

The investor will receive an "Order Confirmation" 'message along with the order number

and the value of the order.

Step- 7:

In case the order is rejected by the Broker or the Stock Exchange for certain reasons

such as invalid price limit, an appropriate message will appear at the bottom of the

screen. At present, a time lag of about ten seconds is there in executing the trade.

Step-8:

It is regarding charging payment, for which there are different modes. Some brokers

will take some advance payment from the, investors and will fix their trading limits. When

the trade is executed, the broker will ask the investor for transfer of funds by the investor

to his account.

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CLIENT BROKER STOCK EXCHANGE

Places an order onthe net on the

brokers website

through thedistinctive I.D.code

Accepts theorder, Checks

the clientsIdentity and

places the order with the stock

exchange

Accepts the order after checking the

scrip limit of the

broker for the day

Executes the order

The settlement of the deal (buy/sellorder) gets reflectedin his Demataccount.

The client is

intimated about theexecution of thedeal by e-mail.

Pays the broker pending physical

delive

ry.

Pays the

Exchangethough his ownsaccount and

receives it fromthe clientaccount.

Receives themoney and

completes thesettlement

THE MECHANICS OF ONLINE TRADING

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TERMINOLOGY

Shares:-In everyday language, when we talk of shares we normally refer to equity shares or

ordinary shares of a company. The terms shares and stock essentially means the same

things, the letter being a more common American usage.

An equity share is evidence of ownership in a company. The physical evidence of this

ownership of this document is called the Share Certificate. Now days, shares are

usually kept in electronic, or dematerialized, form with a depository participant (Banks,

brokers, financial institutions) of the National SecuritiesDepository Limited (NSDL). However, if one wants one can still hold the share in the

physical form which has your name endorsed on it, and is proved that you are a part

owner of the company. Your ownership rights are proportionate to the number of share

you own.

Companies issue shares of a certain fixed denomination, called face value or par value of

that share, which is clearly indicated on a share certificate in the physical form.

vestment: -Investment essentially refers to what you do with your savings in order to preserve them

and make them grow or yield an income. If you keep your savings in the form of cash, they

are certainly going to diminish in value because the purchasing power of money is

constantly going down as a result of inflation. (The value of money is judged by the quantity

of goods and services you can buy with it). Therefore, if you want to maintain or increase

the value of your savings, you have to keep them in forms other than cash. This is whatinvestment is all about, deployment of your saving with the intentions of preserving or

increasing their value. This deployment can be done by using your savings to buy land,

residential properties, commercial properties, gold, jewelry, works of art, fixed deposits in

banks and companies, shares, bonds, infact, anything whose value is likely to either remain

constant or appreciate with time. Investment also refer to using one's savings with the

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intention of earning an income.

Demat A/c:-

On doing an online business ever customer has to open and demate account in any bankwhichever he likes. Demate account is the account in which the trading done by the

customer is mentioned. If the customer sales or purchases any share the details of this sale

and purchasing are in demate account. This account contents the name of the shares and

also the number of shares held or sold and also the rate of the share with this demate

account. It is also compulsory for every customer to open a saving account in the bank

because the amount which is to be received when the customers sales the shares are

transferred from the demate account to the saving account.

It is the responsibility of the customers that the share which he purchased or sales are

properly transferred in demate account from the stock exchange whichever he deals. The

amount of dividend whichever to be received on the shares when held for one or more year

are also transferred in this demate account. It is compulsory for every customer to have a

PAN no. For opening an demate account. If PAN no. Is not there is no chance for the

customer to do any trading on line. There is no limit of amount to deal in this account.

Circuit Limit:-While issuing the shares to the public the company has to fix a particular limit of the rate of

the per share this limit is called as circuit limit. This circuit limit is generally fixed on the

percentage basis. This circuit limit is applied to both the ends of the share. That is to the

upper limit also and also to the lower limit actually circuit limit is of two types

1) Upper limit

2) Lower limit

It is compulsory for every company to fix the circuit limit. This limit is beneficial to both. The

customer and also to the company generally every company fix below 10%of the rate of

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per share.

Upper Limit: -

While issuing the shares to the public the company has to fix the upper limit this limit is also

calculated in percentage the limit is also beyond which the rate of the shares cannot exceed

nor that the customer doing the trading can sell above the level.

For ex. Customer wants to sell a share which is of Rs10 and its upper limit is fixed at

10% so in this case the person will have to sell it at Rs11 or the rate which ever he wants but

the person cannot sell it beyond this Rs 11 because by addition of upper limit to the rate of

share the maximum amount of the shares is Rs 11 only and not above.

Lower Limit: -

At the time of issuing share the company has to fix the lower limit also. This lower limit is

calculated on the basis of the rate of the shares. This limit bears the same percentage,

which is mentioned for the upper limit of the share. Like upper limit in this limit also the share

minimum rate of the share is

fixed the customer who wants to see; the holding shares has to first consider the

bupper& lower limit of the share he cannot sell the share below the lower limit and

not above the upper limit like the upper limit Percentage generally in this limit also the

percentage is below 10% of the face value of the shares the percentage is below 10% of the

face value of the shares the percentage of the upper &lower limit is equal to every type of

share

For ex. Suppose the person wants to sell the shares and the rate of the share is Rs. 10/-and the lower limit percentage is 10% of the rate. So in this case the person cannot sell the

share at below Rs. 9/-. He will have to sell at above Rs. 9/- or up to the upper limit of the share.

Sensex:-

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When the shares are issued to the public the stock exchange gives a particular group to the

company. For ex. The Reliance Group is given the group A like this there are several

companies which fall in A Group. The weightage mean is calculated according to its equity when

all the companies of Group A has calculated this weightage mean they are added all together

when this addition is done the result which comes down is known as Sensex.

The trading of shares of A group is totally depended on this sensex value. The price of the share

rises this sensex value also rises and when the price of this share comes down the sensex value

also comes down. With the sensex

Scripts:-

The company, which has more than one working area, it has to issue the share separately than

that company is the company which has the script of its name.

For Ex. The Reliance this company has its several working area Namely Reliance, CapitalReliance, Infocom Reliance Energy, Reliance Industry. So reliance company issues separate

share for separate working area but the bold name which is given to the working area is

Reliance. So in this case Reliance has its own scripts. Other example Ambuja, Birla, Etc.

Groups:-When the shares are issued by the company they are given the particular group by the Stock

Exchange according to its demand in the market. There are mainly 7 groups

DIFFERENCE BETWEENDIFFERENCE BETWEEN ON LINEON LINE ANDAND

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OFF LINEOFF LINE TRADINGTRADING

while doing the trading. in offline trading there are some errors exist like barriers of

munication Online trading is very expensive as compare to manual trading or offline trading.

Online trading consumes less time as compare to manual trading.

Online trading has very helpful to finding the records easily but offline trading takes more

to finding the records.

In the help of online trading, there is no chance of any errors1

5. With the help of online trading, we know the international market rate of share very easily.

DEMATERIALISATION OF SHARES

Dematerialization is the process wherein shares certificates or other securities held in physical

form are converted into electronic form and credited to demat account of an investor opened

with a depository participant. SEBI has made compulsory trading of shares of all the

companies listed in stock exchanges in demat form with effect from 2 nd January 2002.The

procedure of opening a demat account with DP is similar to opening an account with a bank

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Market timings:

Nomal Market / Exercise Market Open time : 09 :00 hours

Normal market close : 15:30 hours

Set up cut of time for Position limit/Collateral value : till 15:30 hrs

Trade modification end time / Exercise Market : 16:15 hours

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Internet Based Trading through Order Routing Systems

Internet based trading on conventional exchanges, uses the Internet as a medium for

communicating client orders to the exchange, through broker web sites. Brokers websites may serve a variety of functions. These may include;

Allowing the clients to directly trade through investors;

Advertise the broker dealers services to potential investors;

Offer market information and investment tools similar to those offered by information

or or SRO web sites;

Offer real-time or delayed quote information, continuously update quotes while the user

s other sites, or allow investors to create a personal stock ticker;

Provide market summaries and commentaries, analyst reports and trading strategies and

et data on currencies, mutual funds, options, market indices and news; and

Offer investors access to portfolio management tools and analytic programs;

Information on commission and fees; and

Account information and research reports.

In an Order Routing system, a broker offering Internet trading facility provides an

electronic template for the customer to enter the name of the security, whatever it is to be

bought or sold, the quantity and whatever the order is a market or limit order. Once the

brokers system receives this information.

Use of have developed computerized alternative trading systems by which the system

centralize, display, match, cross or otherwise execute trading interest. Internet as

Alternative Trading Systems (Provision for price discovery and

matching outside conventional exchanges)

In foreign jurisdiction, Alternative trading systems have been developing outside

conventional securities markets, which provide investors with additional proprietary

electronic trading facilities for securities that are traded principally on securities

exchanges, or other organized markets. They have price discovery functions, matching

systems and crossing systems. The systems that are currently in use in outside

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jurisdictions are closed systems and are not accessible to the general public through the

Internet. The securities markets regulators abroad the maintained flexible and open

policies designed to encourage innovation in the secondary securities markets. As a

result, a number of market participants, usually broker-dealers,

BENEFITS & PROBLEMS OF ON LINE BROKING

Benefits:-

Less Costly: The most significant advantage of the Online broking is the cost reduction in the brokerage.

Due to the power of the Internet one has the privilege of becoming the clients of really large

brokerages with the benefits of enjoying the low charges hithelio before enjoyed only by the

big players. As the DP account has got linked to the trading account most players do not

charge a minimum transaction cost thus truly allowing one to buy a single share and achieve

meaningful rupee price averaging whatever be your buying power.

Peace of Mind:One can never have complete peace of mind but online investing does away with the hassles

of filling up instruction slips, visits to the broker for handing over these slips and consequent

costs.

Keeping Records:

The site one trades on keeps a record of all transactions down to unexecuted orders and

cancelled orders thus keeping one abreast of all your transactions 24 hours a day. No

paperwork means more time at ones disposal for research and analysis.

Access to Information and investment Tools:

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Most online investing sites have a wealth of information for their registered members. This

includes research reports, results, analysis and even gossip and the buzz in the market.

Unparalleled Liquidity:

The. bank account linked with the trading account invariably has an A TM free. Most partner

banks offer Internet banking as well. This results in ones money becoming available to him

whenever he like from his trading account. Conversely in case he spot an opportunity in the

market he can immediately allocate money from his savings account to his trading account

and make profits.

Unparalleled Safety:

Most sites are secure using 128-bit algorithms -highest available commercially anywhere in

the world. Moreover even if somebody broke in and tampered with ones account the money

from the stocks he sold or the stock bought from the money in his account is in his account

only.

Reduces the settlement risk:

This method of trading reduces the settlement risk for the investor, as in this case no Short sale

is possible i.e. the seller will not be able to sell the securities unless he has their actual

possession. In the case of a demat account (required for an online transaction), when a seller

wants to sell the securities, his demat account is checked by the Depository Participant before

executing the sale transaction. This reduces the settlement risk for the buyer, who is assured of

the delivery of the securities.

Offers greater transparency:

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Online trading gives greater transparency to the investors by providing them an audit trail. This

involves a complete integrated electronic chain starting from order placement, to clearing and

settlement and finally ending with a credit to the depository account of the investor. All thesestages are subject to inspection, thus bringing in transparency into the system.

Ease of trade:

It is the ease of doing the trade through net, with a click of mouse, one can buy or sell any

share that is dematerialized.Other than the above-mentioned advantages, Internet trading provides some additional

advantages to the investors, brokers and also helps the nation to channelize the resources.

Net trading would increase competition in the market hence increase in the bargaining power

of the investors. The entire communication between the investor, broker and exchange would

take place within milliseconds.

PROBLEMS :-There is a flip side to everything and online trading is no exception.

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Chart

21%

23%

27%

11%

14%

4%

More Costly

Lack Of Know ledge

Loyalty to Traditional Broker

Lack of Trust

Slow Speed

Other

Source:- www.lse.co.in27% Loyality is of traditional broker

23% people says that online trading is more costly than manual trading.

21% people not prefer online trading because of lack of knowledge.

So, the main problems of online trading are as follows:

Server not found"

This may appear on ones screens when he is desperately trying to get out of an unprofitable

position. Some of the online sites are providing a telephone number for use in case their sites

are overloaded or their server down.

Connectivity of the Broker with NSE:

Recently ICICI Direct had a connectivity problem with the NSE for two and halfhours during

trading hours. This problem is rare but be alive to its possibility.

Cyber attack:

In the event of a malicious attack on the systems of ones broker he is protected only if

the company is taking proper precautions against such attacks and if proper backup is

regularly been taken. He may like to choose a brokerage that has a stated security policy and

contingency plan in place.

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Non-availability of a seamless interface:

As a client one will access the NSE through a server of the online brokerage and this may

involve queuing delays. If a number of client access the server the server takes its own time

sending the orders to the NSE server. He must check out the seamlessness of this interface

before selecting an online brokerage. The faster the orders are processed the more seamless

is the interface.

Non- availability of personalized advice:

If one like to ask his broker " Aaj kya achcha lag raha hai " he may not be able to do so. If

he want advice on a particular stock in his portfolio he may not even be able to get that.

Margin:

If Internet trading alone is not fast and furious enough; many people are trading on margin.

That is where the brokerage firm lends you money by leveraging his account, allowing him to

buy a large amount of securities by putting up only a small amount of money. He may have

forgotten what he read in the small print of his agreement, but the brokerage firm has the right

to change the maintenance margin requirements without any warning or notice to him. In fact,

the firm has the right to liquidate his securities holdings (and it can pick and choose which

ones) without any notice to one if he fail to meet the margin call. And there he was leveraged tothe hilt, hoping to hit a home run when he discovered that he is required to make a large

deposit that he cannot make. The next thing one know, the firm is selling off his securities at a

point in time that is not the best for him. These are the perils of trading on margin.

Little use of advisory services:

The advisory services being promised by the brokers would be of little use to investors

looking for an insight into the market. Many would not like to rely on research reports, which

are there for all. So, net investors will have to do their own research and take their own

decision, whether wild or wise.

Increased charges:

Some of the brokers are of the view that they would have to provide advisory services to

the customers. But with increased volumes, they will have to follow the international

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practice of charging a little more than the normal charges from a customer looking for

personal advice.

WHY PEOPLE ARE BENDING TOWARDS ONLINE TRADING

Several broking houses now offer online trading facilities. You can trade online with

brokerages such as ICICI Direct, Kotakstreet, India bulls, India info lines 5paisa.com and

HDFC securities.

If you are already comfortable trading with your regular broker, here are few reasons why

you may consider switching to trading online, or at least another avenue of trading. an

obvious advantage of online trading is that your transaction would be virtually paperless.

Your trading account would be linked to your demat and bank account, ensuring a smoothtransaction process. This is especially

helpful in the extent T+2 settlement system, where you have just two days to settle your

transaction.

The normal process of issuing of delivery note, in case of a sale, or arranging for a

payment in case of purchaser of shares, is all taken care of the minute your order is

executed online. The absence of manual intervention ensures that you are completely incontrol of all transaction.

There is also little room for error, as your order is always confirmed before it is executed.

You can also make better decision as you have a clear record of all your previous

transaction. When you trade offline, a demat statement is normally sent to you only on a

quarterly basis .keeping track of your portfolio can be a hassle in such a case. The inter net

can provide a new sense of control over your financial future. The amount of investment

information available online is truly astounding. Its one of the best aspect of being a wired

investor for the first time in history, any individual with an internet connection can:

Know the price of any stock at any time

Review the price history of any stock in chart format

Follow market events in-depth

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Receive a wealth of free commentary and analysis about stock markets and globe

omy.

Conduct extensive financial research on any company

Talk with other investors around the world

At investsmart you can get real-time stock quotes, daily roundups of the stock market,

experts commentary, and a deep community of fellow investors.

Convenience is probably the greatest advantage online trading offers investors. if dont

have time to trade during market hours ,perhaps you are at work, you can log on the

web-trading site and place your order offline, during off market hours. Your order would

join the queue and be expected the next day. You would need to enjoy a good

relationship with your broker, for you to be able to reach him in the late hours. For non-

resident Indians (NRI), trading online is perhaps their easiest option to invest in the Indian

stock markets.

What is more, the time difference, in some cases, can work to their advantage .Antony, an

NRI-based in New York, places his order in the evening after work, when it is day time

India and the markets are open. We also have access to considerable information online.

By just logging on to ICICI direct online, for instance, we can get the latest news, market

information and company research.Moreover, if our connection is maddeningly slow and we want to get your order executed

immediately, most e-brokerages also provide a facility to trade offline by placing our order

via the phone

Concept Of Buying Limit

Suppose you have sold some shares on NSE and are trying to figure out that if you can

use the money to buy shares on NSE in a different settlement cycle or say on BSE. To

simplify things for ICICI Direct customers, we have introduced the concept of Buying Limit

(BL). Buying Limit simply tells the customer what is his limit for a given settlement for the

desired exchange. Assume that you have enrolled for a ICICI Direct account, which

requires 100% of the money required to fund the purchase, be available. Suppose you

have Rs 1,00,000 in your Bank A/C and you set aside Rs 50,000 for which you would like

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to make some purchase. Your Buying Limit is Rs 50,000. Assume that you sell shares

worth Rs 1,00,000 on the NSE on Monday. The BL therefore for the NSE at that point of

time goes upto Rs 1,50,000. This means you can buy shares upto Rs 1,50,000 on NSE or

BSE. If you buy shares worth Rs 75,000 on Tuesday on NSE your BL will naturally reduce

to Rs75,000. Hence your BL is simply the amount set aside by you from your bank

account and the amount realized from the sale of any shares you have made less any

purchases you have made. Your BL of Rs 50,000, which is the amount set aside by you

from your Bank account for purchase is available for BSE and NSE. As you have made

the sale of shares on NSE for Rs.100000, the BL for NSE & BSE rises to 1,50,000. The

amount from sale of shares in NSE will also be available for purchase on BSE. ICICI

Direct

3.5 GROWTH OF ONLINE TRADING

According to an article by Krishnamurthy B in 2005 after inception of online trading in

India in the year 2000 online trading is gained momentum with trading volumes growing

by 150 per cent per annum in the years 2003-2005 and it was more than approx. 200%

in the year 2008 The volume of all trades executed through the Internet on the National

Stock Exchange had grown from less than Rs 100 crore (Rs 1 billion) in June 2003 toover Rs 700 crore (Rs 7 billion) in July 2005 which was a handsome growth in the year

2005in the starting of 2008 the growth of online share was good but at the mid of the year

when subprime crisis affected India including all over the world, market of online trading

got shrunk by more than 50%

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Now the growth of online trading is on its right track ,Indian stock market has been

announced the one of the Safe and stable market of the world, so here in India the online

trading is growing like anything in comparison to the whole world

At the end of July 2008, there were more than 168 registered brokers on the NSE and the

number of Internet trading subscribers to about 2.024 million. In the year 2007 India has

8 crore (80 million) internet user , the % of internet user is growing in each year

At the same time the number of subscribers trading through the portal of Kotak Securities

had gone up significantly by 150 per cent and the number of online trading customers had

grown from 30,000 to 75,000. And the company expected to have at least 130,000

customers by the end of that fiscal. In the recent past years of 2005 ICICI Direct and

Indiabulls recorded an annual volume growth of 100 per cent and Indiabulls had about 30

per cent of India's online trading volumes.Today the total volume of online trade in India is about 29-31% of total trades.

According to brokers

the better broadband connectivity across the country and wider awareness of equity as

an asset class will raise the online trade volumes to over 50% of total trade.In India the

demography is such that 75% of the population is under the age of 36 and more than

50% of the 75% is under age of 25 and this is another supporting factor

The Chief Executive of Reliance Money Ltd says that online investing is still at a nascentstage in India and expects that Internet-based trading will eventually take about half of the

total stock market trading as like with developed markets such as the US. Philippines has

the highest online trade with about 55-60% execution of trade is online. The reason is

because they had wider Internet connectivity years before India. The biggest challenge in

India remains better Internet connectivity. The earlier Web-based technology used for

Internet trading has been replaced by specialized software which gives real-time global

data streaming rates to trader helping investors to analyze the market trends and helps in

faster execution of trades. Earlier the investors made trade calls over the phone which

sometimes led to the delays.

Online share trading in India was at a boom in the end of 2006 with daily-traded volumes

more than tripling from Rs 1,500 crore to Rs 5,000 crore in the last one year and

terminals was set up in small towns such as Rajkot, Hubli and Vijayawada .In that year

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the share of online trading rose dramatically from 7% last year to 20% as a percentage of

overall traded volumes. Due to this factor the top five US brokerage firms decided to

make a foray into India in the next year driven by strategic interest. Also at that time non-

metros accounted for half of the daily turnover of online trading.

Graph is showing the declining in the turnover of online trading in Indian stock exchange

during slowdown in economy due to subprime mortgage crisis.

A crash of the market in the early February 2008 the investors remained away fromonline trading the turnover of the NSE from internet-based trading dipped to a daily

average of Rs 1,648 crore between February 1 and February 8 as compared with Rs

3,450 crore in January 2008 Rs 3,587 crore in December 2007 and Rs 4,417 crore in

November 2007 in the exchanges cash market segment. In the mid February 2008 it

accounted for just 12% of NSEs total cash turnover as compared with a high of 24% in

November last year.

"Issues that need to be addressed are education on cyber crime and the security

solutions around it," says Vinesh Menon, Deputy CEO & Head for Online Investment &

Branch Channel, Bajaj Capital

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"It's a matter of time when we will see exponential growth in the online trading segment,

not just through the computer but also through our mobile phones," adds Menon. With

over 20 million investors, India boasts of the third highest investor base in the world,

unthinkable till a few years ago. The most online stock broking companies started from

2000 onwards because of development of global Internet economy and for years 2000 to

2003 the stock market was under a bear hug. The intense competition among a new

wave of online brokerage companies hammered down brokerage rates from 1% (in 2000)

to 0.25 %, or even lower to 5 paisa

The number of investors opting for online trading has gone up manifold, according to the

recently published 'Indias Leading Equity Broking Houses, 2008' by Dun & Bradstreet

(D&B). The publication says that less than 10% of the 191 broking firms surveyed

reported huge growth in opening of e-broking accounts and some firms saw a surge invalue of up to 400% in e-broking during 2007

According to the report, numbers of e-broking accounts registered in 2007 have grown

exponentionally. Indiabulls Securities Ltd added 4,51,611 accounts while a relatively new

firm in the industry, Reliance Money added 2,15,678 accounts during the same time

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period. Motilal Oswal Securities Ltd managed to add 19,065 accounts while Unicon

Financial Intermediates Pvt Ltd could increase their e-broking accounts by 13,787

According to market watchers, the rise in the value of on line transactions is also

because of sustained bull run witnessed in 2007, when the 30-share Sensex of the

Bombay Stock Exchange (BSE) gained from 13,842 points to 20,207 points, a gain of

6,365 points (up 47%).

E-broking is contributing a sizeable portion to the trading volumes and also to the revenue

generated for leading stock broking firms. Some examples of the percentage contribution

to trading volumes contributed by e-broking are 91% in case of Reliance Money, 62% for

India Bulls, 20% each for ASL Capital and Shreyas Stock, 19% Angel Broking, and 15%

Farsight Capital. In respect of revenues generated from e-broking, India Bulls (63%),Reliance Money (54%), Unicon Financial (30%) and Shreyas Stock (20%) reported higher

shares in 2007. Ashika reported 98% growth in e-broking business in the first 10 months

of 2007.

Another significant trend is the growth in international business of broking firms. Firms

that reported presence of offices outside India include Reliance Money, Motilal Oswal,

Karvy Stock Broking, JRG securities, Vogue and India bulls Portfolio.

HDFC Securities have 500,000 online customers deals in daily online trades worth Rs

250-300 crore is also in the black. The revenues it had in 2007-08 is Rs 100 crore. HDFC

Securities had revenues of Rs 67 crore and a net profit of Rs 7.21 crore in 2006-07.

ICICIdirect has 1.5 million online broking accounts and parent ICICI Securities reported

revenues of Rs 750 crore for March 2008. The new player Reliance Money has 2 million

online accounts trades worth Rs 2,000 to Rs 3,000 crore per day.

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.1 Title of study

Study of online trading

4.2 Duration of project

15-05-11 to 01-07-11

4.3 Objective of the study

The objective of the present study can be accomplished by conducting a systematic

market survey and online trading . Market Research is a systematic design, collection,

analysis and reporting of data and finding that are relevant to different market situation

facing by the company.

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As I have done my project training in India bulls Portfolio Limited. The following are the

objectives, which I kept in mind while doing summer training:

To know about practical concept in online trading in customer preference.

To gain an insight and knowledge with respect to online trading of shares and securities

e growing organization INDIA BULLS PORTFOLIO.

To know what a common thinks for stock market and is he interested in the times of

sion.

To know practical concept about equity research and portfolio management.

To study the general operation of the India bulls Portfolio Limited.

Analyzing the market survey and thereby finding out the investment pattern of the

umer.

To impart knowledge about the general working of the stock exchange and PMS.

The marketing research processes that will be adopted in the present study consist of

the following stages:

Defining the problem and research objective:

The research objective state that what information is needed to solve the problem.

Here the objective of other research is awareness and Investigation of investors

overconfidence and familiarity and Challenges faced by Reliance Money.

Developing research plan:

Once the problem is defined, the next step is to prepare a plan for getting the

information needed for the research. The present study will adopt exploratory

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approach where in there is a need to gather a large amount of information before

making a conclusion if required. The descriptive and casual approaches may also be

used. We can summarize objective as:-

To understand the Stock market and process from account opening to settlement of

securities.

To understand the securities, securities market, function of securities market and who

regulates the securities market.

To know the types of sectors available in the security market and methods for analysis.

To gain the knowledge, how one can invest in securities.

4.4 Type of Research

The type of research is descriptive Exploratory

4.5 Area of research

India bulls Portfolio Ltd

4.6 My Role

My role in India bulls portfolio ltd. was as a project trainee for the duration of the training

program. In that I had to do

Meet with the executives, know the procedure of online trading of shares and securities,

order processing and balancing at the day end.

Also I made myself to know regarding the interest, capability as well as how far can the

customer is willing to invest in various shares and securities.

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4.7 Type of sampling

Stratified sampling

4.8 Data type

To collect the data, relevant information is necessary as regards to the project; as a

result data was collected by using two ways:

5. Primary Data

6. Secondary Data.

Primary Data:

In this the information is being possessed with first hand information, which is new and

fresh.

The tools used by us for the primary data are:

Questionnaire

Face-to-Face Interview

Observation

Secondary data:

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The information that is received with the help of Journals, Magazines, Financial

reports or which is already present with the company

References used from management books

Gathered information through World Wide Web (www).

Support and knowledge provided by Faculty and Company guide.

4.9 Data collection technique

Questionnaire and Personal interview

Customer preference in online trading

Analyze the collected information:

This involves converting raw material in to useful information. It involves tabulation of data and using statically measures on them for developing frequency distribution and

calculating the averages and dispersions.

Report research findings:

This phase will mark the culmination of the marketing research efforts. The report with

the research finding is a formal written document.

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1. For how long you have been trading with on line-trading?

According to this survey we find that 44% people says that we are investing

the money online from one year. 11% people says that we are investing money

online from 4 year. so we can say that now online trading is very popular in the modern

market.

. How will you describe your experience with on-line trading till date?

According to this survey we find that 60% of people find very easy to

operate. and15% people find no secure. so we can say that online trading is very

simple to operate and easy to understand

. What amount of money you invest normally?

According to this survey we find that 35% of people invest money normally

50000. 14% of people invest money between 150000to200000. So we can say that the

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people are not invest more money in the share market because there is a great risk

involved while doing the trading.

How often do you trade?

According to this survey we find that 10% of people do trade Daily. 18%

people do trade more than month. So we can say that people are generally invest in

stock market weekly basis.

which trading you prefer?

According to this survey we find that 20% people prefer online trading and

32% people prefer offline trading. So we can say that mostly people are awareness

about the on line trading and because of this reason the mostly people are optimizingoffline trading.

Whether online trading settled in Indian investor psyche

According to this survey we find that 30% people says yes and 70% people

says no. so we can find that on line trading is not settled in the Indian psyche because

some people are not experience towards online trading.

What shortcomings do you feel in Indian derivatives market?

According to this survey we find that 37% of people says lack of awareness

49% says Shortage of expertise and 14% people says any other. So we can say that

mostly people are shortage of experience about the Indian derivatives market or share

market.

Which media would you prefer the most for investment?

According to this survey we find that 41% people Prefer T.V and 39% people

prefer newspaper and 20% people prefer magazines. So we can suggest that mostly

people are very easily grapped the knowledge through T.V

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ANALYSIS & INTERPRETATION OF THE DATA

Knowing the awareness and perception of the provide insight into the customer

behavior and his expectation from the industry players. A proper understanding of the

awareness and perception would definitely benefit the players. This survey attempt to

know the Stock market investor better. It examines some interesting choices of the

investor including the reasons behind investing in stock market and the risk tolerance

levels of the investors. The investor knowledge about the stock market and what

according to him are customers is very important in any industry. This kota city survey

was conducted to know the investor awareness and perception about stock market.

The total sample for the study was 100 across Kota city.

What is your education qualification?

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To invest in the stock market minimum 100000 or more than this should be the annual

income level of the people. In India the per capita income in also increasing so we cansay that there is a good opportunity for the online trading market.

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For how long you have been trading with on line-trading?

(a)1 year (b) 2 year

(c) 3 year (d) 4 year

Sample size 100

0

51015202530354045

YEAR

1 year2 year3 year4 year

According to this survey we find that 44% people says that we are investing the

money online from one year and 26% people says that we are investing the money

online from 2 years and 19% to 11% people says that we are investing money online

from 3 to 4 year. so we can say that now online trading is very popular in the modern

market.

How will you describe yo

Online Trading Santu

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