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“A STUDY OF STOCK EXCHANGE AND DERIVATIVES AT VENTURA LTD”
SKN SINHGAD MANAGEMENT SCHOOL OF BUSINESS
Amit Hatwalne(36) Bhagyashree Shinde(59) Girish Daswani(22)
Under the Guidance Of Manjula Dhulipala
SKN SINHGAD SCHOOL OF BUSINESS MANAGEMENT
We the undersigned, hereby declare that the Project Report entitled “A study on Stock Exchange & Derivative ” written and submitted by our team, under the guidance of Manjula dhulipala is my original work and the conclusions drawn therein are based on the material collected.
Place: Date : Signature of Student
Our sincere thanks to Prof. Manjula Dhulipala SKNSSBM for her support and encouragement in execution of our training and preparation of our report. This project would have been difficult to complete, but by the invaluable contribution from some important person. Let us take this opportunity to thank them. But firstly, I like to thank Ventura Securities Ltd. for giving me such a challenging project to work upon. I hope this challenge has brought the best out of us. We are greatful to the entire Ventura Securities Ltd. branch of Pune, Specially Mr. Girish Manani Branch Manager. We are indebted to our guide Mr. Abhishek Kumar, Sr. Relation Manager for the direction and purpose he gave to this project through his invaluable insight, which constantly inspired me to think beyond the obvious. His encouragement and patience helped me instill a great degree of self-confidence to deliver a good research work and for taking constructive interest in my project and (We are also grateful to Mr. Abhishek Kumar, Sr. Relation Manager, for having taken care of all our problems from
) 4 .the most threatening to the most trivial. but which nobody else could handle and saving me from all those worries.
The Project was of significance to me as it helped me to get an insight into the online share trading relating to future market. insurance. depositary services. This is one of the most reputed financial services company with its wide range of financial services and products from securities. derivatives trading. fundamental analysis. 5 .EXECUTIVE SUMMARY We have done our project in the field of Share Market in VENTURA SECURITIES Ltd. research & advisory services. The project required me to study Stock Exchange in details and to find out various derivatives used in Market and used Fundamental Analysis. market research. loan against shares and mortgage. The title of my project is “A study of stock exchange and derivative at ventura ”. It will also help the VENTURA SECURITIES LTD to get details of the trading strategies used by investors to minimize their risk and to earn profit.
Introduction and Research Methodology II. CHAPTERS PAGE NO. Data Presentation. I. No. Analysis & Interpretation V.INDEX Sr. Research Design & Methodology IV. Finding . Suggestion and Conclusion 6 . Profile of The Organisation III.
Market Phases 1. as well as on the many regional exchanges. over-the-counter market known as the bond market. Bonds are still traditionally traded in an informal.INTRODUCTION A stock market is a market for the trading of company stock.m. to 4:00 (includes Closing & Post Closing Session) 7 . The stock market in the India includes the trading of all securities listed on the BSE and NSE. and derivatives. OPEN PHASE. other securities. OPENING 8:45 a. and derivatives of same.m. Commodities are traded in commodities markets. The term 'the stock market' is a concept for the mechanism that enables the trading of company stocks (collective shares).9:55 a. MARKET CLOSE 3:30 p. and derivatives are traded in a variety of markets. to 9:54 am (includes Opening Session & Login Session) 1. to 3:30 pm (Trading Takes Place also called as continues secession) 1.m. The stocks are listed and traded on stock exchanges which are entities (a corporation or mutual organization) specialized in the business of bringing buyers and sellers of stocks and securities together. both of these are securities listed on a stock exchange as well as those only traded private.
This eliminates the risk to an individual buyer 8 .1. compared to other less liquid investments such as real estate. or raise additional capital for expansion. This allows businesses to go public. meaning that they collect and deliver the shares. (also called as Member Query Session) The stock market is one of the most important sources for companies to raise money. and guarantee payment to the seller of a security. etc. Exchanges also act as the clearing house for each transaction. This is an attractive feature of investing in stocks.m. to 6:00 p. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. gold. SURCON-Surveillance & Control 4:00.
or seller that the counterparty could default on the transaction. In this way the financial system contributes to increased prosperity. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. 9 .
customized and ready to use software to enable seamless processes and flawless execution We adhere to a well-defined risk management system and settlement mechanism thereby enabling fully compliant operations. Ltd. On its journey from then to now. Our registered office is strategically situated in the Central Business District of Mumbai We have set up branches in select metros and have business partners across the length and breadth of the country We have been appointed as a national level distributor for all mutual funds We have been enlisted as a corporate agency for life insurance We are a corporate member of both the BSE and the NSE. an associate company. This enables us to trade in equities. Ventura has a 25. it offers a whole range of investment products and services. currency products and offer depository services Ventura Commodities Pvt. Ventura has seen the capital markets mature and investors' requirements become more diverse..COMPANY PROFILE Ventura Securities Ltd. 10 . It has kept up with the times and today.000 sq ft head office a Vikhroli. is a trading member of MCX and NCDEX We have in-house. derivatives. Mumbai which houses its corporate office and all operations. (Ventura) commenced operations in 1994 as a stock broking house.
Director is a member of the Institute of Chartered Accountants of India. 11 . through constant innovation on a strong foundation of dedicated and trained resources. He has an international exposure to developed markets in Europe. He has more than fifteen years of experience in capital markets intermediation. Directors Sajid Malik. a company focused on outsourcing of GIS and engineering design services. . He is the CEO of Genesys International Limited.Ventura Mission To build relationships and strive towards customer delight. He has more than fifteen years of varied experience in corporate advisory structured finance and private equity transaction. Hemant Majethia. US and the Far East and has been personally involved in international equity offerings and cross border acquisitions. Majethia is the CEO of Ventura Securities Limited and is responsible for the day to day operations and is responsible for creating an all India network of sub-brokers and creating the distribution strength of Ventura Securities Limited. It was his vision to create an all India network of brokers’ relationship and build the distribution strength of Ventura. He has been instrumental in establishing broking centers and branches for Ventura Securities Limited across the country. equity research. Mr. Director is a member of the Institute of Chartered Accountants of India. He is a non-executive director of Ventura Securities Limited.
Gabajiwala is also responsible for setting up the wealth management business and the NRI desk. Keeping this in mind. We have dedicated & experienced team of derivatives experts and offer an integrated seamless service to our clients from the stage of making derivative strategy stage to confirmation of derivative trade. He has more than fifteen years experience in the field of finance and investment. Gabajiwala is responsible for setting up the entire Mutual Fund distribution business at Ventura and a network for PAN India operation. having exposure to the industrial segment prior to entering the capital markets. all the calls & confirmation are routed through SMS alerts. we strive to value add to our clients on the basis of their objective of leveraged trade opportunity and risk appetite by dealing in DERIVATIVES. Mr. 12 . Director is a member of the Institute of Chartered Accountants of India and The Institute of Company Secretaries of India. Understanding the need for flow of information at the best possible speed. DERIVATIVES At Ventura. at Ventura we are fully geared to meet the all Requirements of derivative clients through a fully equipped Derivatives Trading Desk.Juzer Gabajiwala. Mr.
Our strategies range from pure opportunistic calls for clients with higher risk appetite to Covered Calls for clients with moderate risk profile to pure hedging calls 13 . Our advisors take good care in profiling and ascertaining the clients trading objectives & risk appetite and accordingly suggest the strategies of Futures & Options.At the idea / call generation stage. we have people with proven capabilities both in Technical Aspects of stocks movement and having good pulse of the market mood. having optimum risk-reward ratio.
14 .RESEARCH DESIGN AND METHODOLOGY RESEARCH METHODOLOGY Research in common parlance refers to a search for common knowledge. Research is an academic activity and as such the term should be used in term should be used in a technical sense. Once can also define research as a scientific and systematic search for pertinent information on a specific topic.
Data Collection: The task of data collection begins after a research problem has been defined and plan chalked out.Objective of the Research: The entire project is based on the Analytical and Quantitative method. There different sources and methods of data collection follows: Primary data collection: The primary data is collected through Personal interview and information provided by the company. 15 . The project is concern with the Stock Market. Secondary data. The topic selected for research is “To understand and study Market Research”. Primary data. on the other hand. The Primary data those which are collected afresh and for the first time. and thus happen to be original in character. Primary Data & Secondary Data. The Secondary data . In research data is divided into two major parts i.e. There are two types of data viz. are those which have already been collected by some one else and which have been passed through the statistical process.
SECONDARY DATA COLLECTION The secondary data collected in project through Manuals. and newspapers etc. Internet. books. Marketing Strategies:- 16 .
marketing performance. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. target market selection. technology. promotion. political environment. India Ventura also provides other investment option to the same person at same place like Role of marketing research The task of marketing research is to provide management with relevant. Another factor in this mix is the complexity of consumers. intuition. They make decisions about potential opportunities. environment. and social and cultural changes. Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. competition. At India Ventura securities a person can purchase or sell shares. planning and implementing marketing programs. consumers' response to 17 . Further complications are added by uncontrollable environmental factors such as general economic conditions. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. valid. and distribution. public policies and laws. and current information. or even pure judgment. In the absence of relevant information. and control. These decisions are complicated by interactions between the controllable marketing variables of product. Sound decisions are not based on gut feeling. pricing. accurate. reliable. and consumers. Focus on the consumers who prefer almost all investment activities at same place by providing number of various financial services. It helps remove some of the uncertainty by providing relevant information about the marketing variables. and at the same place also demat it. debentures etc. market segmentation.
whereas marketing managers are becoming more involved with research. Traditionally. this information enhances the effectiveness of decisions made by marketing managers.15 paisa 0.05 paisa Rs.50 paisa Rs.07 paisa 0. 450/Next Year 400 + Tax 0. 1750/(4+5) NIL Sharekh an Rs.06 paisa 25OO/5 000 YES Brokerage Delivery Trade Intra day Trade F & O Trade Rs.25 paisa 0. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers.05 paisa 50 paisa 06 paisa 08 paisa Initial Amount Software NA YES 300/5000 YES 18 . 500/Rs. The role of marketing research in managerial decision making is explained further using the framework of the "DECIDE" model: Ventura Securiti es Ltd Charges Demat A/C Trading A/C AMC NIL Rs. 300/- India Info NIL Rs.1000/Rs.02 paisa YES India bulls Rs 1000/Rs. the roles are changing and marketing researchers are becoming more involved in decision making. marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However. 250/0.marketing programs cannot be predicted reliably or accurately.02 paisa 0. 1000/Rs.
At the lifetime of bond. you may get the interest payments. However. Presently. The field of investing is profitable field and highly competitive. The stock market is volatile and no one knows when bad time will come. Generally. Also. you will have more control at this in case you select to have the savings account online. Well. 19 . Presently. the World Wide Web is offering different types of methods on options investing. this gives place for the money. and you repay the principle. which is accessible than the bonds and CDs when accruing interest. bonds have the fixed rate of interest. If you are a newcomer to this field. The stock market never cares whether you are an experienced person or a newbie.Investment Idea The trend of globalization has attracted many local and foreign investors to dive into the stock market arena. for options investing there are lots of tips and rules that you can follow. then you have to be highly cautious and must plan everything correctly. options investing drawing lots of investors towards it and all of them are grabbing good results. there are always risk in stock trading and you have to be ready to accept loss. as well as when bond matures. Well. and they are traded like stocks. This is a unique platform for everyone those who are willing to earn money and to run successful stock trading.
it is possible to partially or fully transfer price risks by locking in asset price. For example. called bases (underlying assets. Such a transaction is an example 20 . index) in a contractual manner. wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. The emergence of the market for derivative products. Bullion or any other assets. can be traced back to the willingness of risk adverse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. most notably Forwards. The underlying assets can be Equity. Forex. Futures and Option.Literature Review Derivatives Forward Futures Option Derivative is a product whose value is derived from the value of one or more basic variables. commodity. the financial markets are marked by a very high degree of volatility. Through the use of derivatives products. By their very nature.
they accounted for about two third of total transactions in the derivatives products. The price of this derivative is driven by the spot price of wheat. However. The financial derivatives came into spotlight in post. which optimally 21 combine the risks and returns over a large number of financial assets. since their emergence. providing economic agents a wider choice of risk management strategies. c) Marked improvement in communication facilities and sharp decline in their costs. these products have become very popular and by 1990s. In recent years. their complexity and also turnover. lead- .1970 period due to growing instability in the financial markets. The factors generally attributed as the major driving force behind growth of financial derivatives are: a) b) Increased volatility in asset prices in financial markets. d) Development of more sophisticated risk management tools. Increased integration of national financial markets with the international markets. e) Innovations in the derivatives markets.of derivative. which is the “underlying”. the market for financial derivatives has grown tremendously both in terms of variety of instruments available.
3. speculators and 1. If. that 19s they can increase both the potential gains and potential losses in a speculative venture. Hedgers.ing to higher returns. 22 . for instance they see the future price of an asset getting out of line with the cash price. Participants:-The following three broad categories of participants hedgers. reduced risks as well as financial costs as compared to individual financial assets.face risk associated with the price of an asset. They use futures and options market to reduce or eliminate this risk. Future and Option contracts can give them an extra leverage. 2. arbitrageurs trade in the derivatives market. Arbitrageurs – are in business to take advantage of a discrepancy between prices in two different markets. Speculators – wish to bet on future movements in the price of an asset. they will take offsetting positions in the two markets to lock in a profit.
Put gives the buyer (holder) the right but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Futures: .Calls and Puts.Types of Derivatives: . Call gives the buyer the right but not the obligation to buy a given quantity of the underlying assets. Here I took a brief look at various derivatives contracts that have come to be used:Forwards: .A future contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Future contracts are special type’s forward contracts in the sense that the former are standardized exchange traded contracts. where settlement takes place on a specified date in the future at today’s pre-agreed price. at a given price on or before a given future date.A forward contract is a customized contract between two entities.The most commonly used derivatives contracts are forwards.Options are of two types. futures and options. Options: . 23 .
Leaps: - The acronyms LEAPS means Long term Equity Anticipation Securities. These are options having a maturity of up to three years.
Warrants: - Option generally has lives of up to one year, the majority of options traded on options exchanges having maximum maturity of nine months. Longerdated options are called warrants and are generally traded over the counter. Baskets: - Baskets options are option on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Swaps: - Swaps are private agreement between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are;a) b) Interest Rate Swaps Currency Swaps
DATA COLLECTION AND DATA ANALYSIS
DERIVATIVES STRATEGIES What are Strategies? Strategies are specific game plans created by you based on your idea of how the market will move. Strategies are generally combinations of various products – futures, calls and puts and enable you to realize unlimited profits, limited profits, unlimited losses or limited losses depending on your profit appetite and risk appetite. How are Strategies formulated? The simplest starting point of a Strategy could be having a clear view about the market or a script. There could be strategies of an advanced nature that are independent of views, but it would be correct to say that most investors create strategies based on views. What views could be handled through Strategies? There could be four simple views: bullish view, bearish view, volatile view and neutral view. Bullish and bearish views are simple enough to comprehend. Volatile view is where you believe that the market or scrip could move rapidly, but you are not clear
1. i.of the direction (whether up or down). Neutral view is the reverse of the Volatile view where you believe that the market or scrip in question will not move much in any direction. which works out an annualized return of over 700%. 220. Buy a Futures Contract If you buy a Futures Contract. Now if you have invested only 20%. you will need to invest a small margin (generally 15 to 30% of the Contract value). The danger of the Futures value falling is very important.150 in say 10 days time you gain 50 points. You can then gain the entire upward movement at the investment of a small margin.e. You are however sure that the movement will be significant in one direction or the other. if you buy Nifty Futures at a price of Rs 1. If the underlying index or scrip moves up.100 that moves up to 1. Bullish Strategies Various bullish strategies possible • Buy a Future • Buy a Call Option • Sell a Put Option • Create a Bull Spread using Calls • Create a Bull Spread using Puts Let us discuss each of these using some examples. For example. You should have a clear stop loss strategy and if your Nifty Futures in 27 . the associated Futures will also move up. your gain is over 22% in 10 days time.
This is also the maximum loss that you can ever incur. the buyer is adversely impacted. For example. The premium will be paid in cash upfront. the value of the Option will fall. unlimited profit profile. the maximum loss is Rs 21. Thus time affects the Call buyer adversely. The Call buyer has a limited loss. If the scrip moves nowhere. you will be paid the difference between the closing price and the strike price of Rs 260. The graph of a Buy Futures Strategy appears below: Buy a Call Option If you buy a Call Option.080.100 to say 1. your net profit is Rs 19. if Cipla closes at Rs 300.the above example were to fall from 1. As time passes. you will get Rs 40. your Option Premium is your cost which you will pay on the day of entering into the transaction. No margins are applicable on the buyer. the value of the Option which is currently Rs 21 would have fallen to nearly zero by that time. Thus if Cipla is currently at around Rs 260 and remains around that price till the end of May. The graph of a Buy Call position appears below: Sell a Put Option 28 . After setting off the cost of Rs 21. you should sell out and book your losses before they mount. If you buy a Cipla May 260 Call Option for Rs 21. If Cipla closes above Rs 260 on the expiry day.
you will be very happy. The profile of the Put Seller would appear as under: Bull Spreads First of all. As a Put Seller. You will however face a risk that you might have to pay the difference between 300 and the closing price of Reliance scrip on the last Thursday of May. Spreads are strategies. unlimited loss profile which is a high risk strategy. you will earn an Income of Rs 18 on the day of the transaction. Passage of time helps the Sellers as value of the Option declines over time. which combine two or more Calls (or alternatively two or more Puts). 29 . you will be asked to pay Rs 25. If time passes and Reliance remains wherever it is (say Rs 300). if you sell a Reliance May 300 Put Option for Rs 18. For example. the net loss will be Rs 7. These margins are calculated by the exchange using a software program called Span.Another bullish strategy is to sell a Put Option. the entire income of Rs 18 would belong to you. The margins are likely to be between 20 to 35% of the Contract Value. After setting of the Premium received of Rs 18. you are required to put up Margins. As a Put Seller. Reliance closes above Rs 300 (as per your bullish view). If on the other hand. Another series of Strategies goes by the name Combinations where Calls and Puts are combined. you have a limited profit. As a Put Seller. For example. you will receive Premium. if Reliance were to close on that day at Rs 275.
Bearish Strategies Various bearish strategies possible • Sell Scrip Futures • Sell Index Futures • Buy Put Option • Sell Call Option • Bear Spreads • Combinations of Options and Futures . You need to buy one Call with a lower strike price and sell another Call with a higher strike price and a spread position is created.Bull Spreads are those class of strategies that enable you benefit from a bullish phase on the index or scrip in question. How to decide the volume of the underlying to trade? 30 . you can also buy a Put with a lower strike price and sell another with a higher strike price to achieve a similar payoff profile. which you might be very comfortable with. Bull spreads allow you to create a limited profit limited loss model of payoff. Bull Spread using Calls/ Puts Bull spreads can be created using Calls or using Puts. Interestingly. 2.
Thus. You will look up the Delta of the option.16. 31 . the background is with a Delta of 0. You have a positive Delta which means that with Cipla going up the price of the Call will move up (Rs 0. you will find that the Option price has moved up to Rs 14. the net Option price will tend to go up by Rs 14. As one day has passed.e. which happens to be 0. For example.54 x Rs 5 upward movement in Cipla ).54.54 (derived from the Black Scholes calculator).00 in Cipla) and will move down correspondingly. Thus. You do not want to bet on this directional movement. if a Cipla 240 call option with 20 days to expire and Cipla itself quoting at Rs 240 is priced at Rs 12. This will neutralize the impact in such a manner that whether Cipla moves up or down. 648 Futures. the Option price should go up by Rs 2. the option is expensive and hence you sell the option.54.70 (0.200 x 0. The historical volatility is say 41%. You will therefore buy Cipla futures to the tune of 1. if Cipla moves up to Rs 245 tomorrow.200 Units. For example. One contract of Cipla is 1.54 for every upward movement of Re 1.54 i. the changes in Futures price will offset the changes in the Option price. the implied volatility is 51% (you can derive this from a Black Scholes calculator). the time factor will impact Option prices downward – say by Rs 0.54.This is based on delta of the option at that point in time. In case you wonder why.
thus generating a net gain of Rs 152.You will have lost Rs 3. You will find that you have gained 3. Dematerialization 32 .048 on the Call.240 on the Futures.
One such measure is the passing out of the Depository Act during the year 1996. Dematerialization of securities and under this system is one of the major steps aimed at improving and modernizing the capital market and enhancing the levels of investor’s protection measures which aims at eliminating the bad deliveries and forgery of shares and expediting the transfer of shares. 33 .Indian economy has been globalize and the capital market has been linked to the international Financial market. So. The draw back of the old system and the pool proof measures sought to improve efficiency in transfer and transparency standards prompted to evaluate the functioning of the dematerialization process and to focus on the 8 developments of the depository system in the Indian capital market. there is a need for raising the Indian Capital market in to the international standards in terms of efficiency and transparency. Foreign individuals and institutional investors have encouraged participating into it.
2. whose securities are eligible for dematerialization.Firstly. The process of conversion of securities into a dematerialized form or the issuance of the same in a dematerialized form can be explained thus: 1. 1996 (the Regulations) can be converted or issued in a dematerialized form. has to enter into an agreement with a depository for dematerialization of securities already issued.The study showed that there is a growth in the shares included in the Dematerialization process both in terms of volume of shares and value of shares. The investor is given an option to hold the securities in a dematerialized form and it is his prerogative to exercise the option to hold the securities in that manner. 34 . ANALYSIS Dematerialization Learning about dematerialization How to convert your security to demat form Process of conversion of securities into the demat form Securities specified as being eligible for dematerialization by the depository in its bye laws and as under the SEBI (Depositories and Participants) Regulations. the issuer company. or proposed to be issued to the public or existing shareholders.
(ii) The beneficial owner has to then surrender the said certificate to the participant. (iv) The participant then transfers the certificate pertaining to the said securities to the issuer along with the details and particulars of the securities. the person has to surrender the certificate pertaining to the securities sought to be dematerialized to the issuer.3. through the participant. (iii) The participant informs the depository about the particulars of the securities to be dematerialized and the agreement entered into between him and the beneficial owner. with the depository for availing the services provided by the depository. who is the registered owner of the said securities. The depository enters into an agreement with the participants who are the agents of the depository and co-functionaries in the process of dematerialization of securities. (I) The person (beneficial owner) who has entered into an agreement with the participant for dematerialization of the securities has to inform the participant about the details of the certificate of such securities. (v) These certificates are mutilated upon receipt by the issuer and substituted in the records against the name of the depository. Any person can then enter into an agreement. 5. This surrender is affected in the following manner. A 35 . 4. Upon the entering into such agreement with the depository.
36 . the depository has the responsibility to maintain all the records pertaining to the securities that have been dematerialized. Once the aforesaid process of dematerialization is carried out. the depository enters the name of the person who has surrendered the certificate of security as the beneficial owner of the dematerialized securities.certificate to this effect is sent to the depository and all stock exchanges where the security is listed. (vii) The depository also enters the name of the participant through whom the process has been carried out and sends an intimation of the same to the said participant. (vi) Subsequent to this.
e. At the outset. like: Elimination of bad deliveries In the depository environment. In the physical environment. this system rids the capital market of the dangers related to handling of paper. the ownership and transfer of securities takes place by means of electronic book entries. Elimination of all risks associated with physical certificates 37 .Benefits of Depository System In the depository system. buyer was required to take the risk of transfer and face uncertainty of the quality of assets purchased. NSDL provides numerous direct and indirect benefits. once holdings of an investor are dematerialized. In a depository environment good money certainly begets good quality of assets. the question of bad delivery does not arise i. they cannot be held "under objection".
he becomes the legal owner of the securities.Dealing in physical securities have associated security risks of theft of stocks. This problem does not arise in the depository environment. mutilation of certificates. Immediate transfer and registration of securities In the depository environment. No stamp duty For transfer of any kind of securities in the depository. There is no further need to send it to the company's registrar for registration. once the securities are credited to the investors account on pay out. loss of certificates during movements through and from the registrars. This process usually takes around three to four months and is rarely completed within the statutory framework of two months thus exposing the investor to opportunity cost of 38 . etc. Having purchased securities in the physical environment. debt instruments and units of mutual funds. the investor has to send it to the company's registrar so that the change of ownership can be registered. This waiver extends to equity shares. thus exposing the investor to the cost of obtaining duplicate certificates and advertisements.
not to register the change of ownership. This will enable faster turnover of stock and more liquidity with the investor. Faster settlement cycle The exclusive demat segments follow rolling settlement cycle of T+2 i. Faster disbursement of non-cash corporate benefits like rights. However. etc. the settlement of trades will be on the 2nd working day from the trade day.delay in transfer and to risk of loss in transit. NSDL provides for direct credit of non-cash corporate entitlements to an investors account. the normally accepted practice is to hold the securities in street names i. if the investors miss a book closure the securities are not good for delivery and the investor would also stand to loose his corporate entitlements. Reduction in brokerage by many brokers for trading in dematerialized securities Brokers provide this benefit to investors as dealing in dematerialized securities reduces their back office cost of 39 .e. To overcome this. thereby ensuring faster disbursement and avoiding risk of loss of certificates in transit. bonus.e.
transmission. Elimination of problems related to change of address of investor. 40 .handling paper and also eliminates the risk of being the introducing broker. where the investor is a registered holder of securities. Elimination of problems related to selling securities on behalf of a minor A natural guardian is not required to take court approval for selling demat securities on behalf of a minor. investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies. etc In case of change of address or transmission of demat shares. Ease in portfolio monitoring Since statement of account gives a consolidated position of investments in all instruments.
Disadvantages of Dematerialization The disadvantages of dematerialization of securities can be summarized as follows: A. Trading in securities may become uncontrolled in case of dematerialized securities. 41 .
the advantages of dematerialization outweigh its disadvantages and the changes ushered in by SEBI and the Central Government in terms of compulsory dematerialization of securities are important for developing the securities market to a degree of advancement. However. Multiple regulatory frameworks have to be confirmed to. Regulations and the various Bye Laws of various depositories. agreements are entered at various levels in the process of dematerialization. Freely traded securities are an essential component of such an advanced market and dematerialization addresses such issues and is a step towards the advancement of the market. needs to be supervised as they have the capability of manipulating the market. Depository System (working model) 42 . including the Depositories Act.B. It is incumbent upon the capital market regulator to keep a close watch on the trading in dematerialized securities and see to it that trading does not act as a detriment to investors. The role of key market players in case of dematerialized securities. such as stock-brokers. These may cause anxiety to the investor desirous of simplicity in terms of transactions in dematerialized securities. Additionally. C.
The entire integrated system (including the electronic links and the software at NSDL and each business partner's end) is called the "NEST" [National Electronic Settlement & Transfer] syst Ifs and Buts of Indian online share trading You have some money to dabble with. they allow you to buy and sell shares via Internet. There are 2 types of online trading service: discount brokers and full service online broker. Issuing companies and their Registrars and Share Transfer Agents. When will you ever find the time? And besides. Full service online brokerage is linked to existing brokerages.NSDL carries out its activities through various functionaries called business partners who include Depository Participants (DPs). Known as online brokers. Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them. Discount online brokers allow you to trade via Internet at reduced rates. Clearing corporations/ Clearing Houses of Stock Exchanges. Some provide quality research. brokers have taken their trading rooms to the Internet. the hassle of finding a broker is not easy. other don’t. NSDL is electronically linked to each of these business partners via a satellite link through Very Small Aperture Terminals (VSATs) or through Leased land lines. These brokers allow their clients to place 43 . Trading shares on BSE/NSE has always been your dream.
Home Trade. no online brokerage is currently making money and a shakeout is imminent in the near future. Sharekhan. the market will change form and shape. Home Trade is not unduly perturbed. There are currently close to 50 online brokerages in India with ICICI Direct.000 crore per month) is likely to be the threshold breakeven for online brokerages. Motilal Oswal. On an average.com. 5Paisa. Internet broking. Motilal Oswal. Tatatdw.com. notwithstanding the current sentiment in the market. Players such as TD Waterhouse have already entered the Indian market.online orders with the option of talking/ chatting to brokers if advice is needed. HDFCsec. “By mid-2002 we should be able to see substantial volumes in the domestic market for Internet-based stock trading. due to limited volumes. However. IndiaBulls and 5Paisa being some major players.com are some of the online broking sites in India. ICICIDirect.com. Hence. IndiaBulls.com. “We at Home Trade believe there is scope for multiple players as the entire segment is in a growth stage. Sharekhan. Kotak Street. However Hiren Gada.com. senior VP. and 44 . Kotakstreet. VP.com. Geojit securities. In the next 18 months a lot of players will get in. Brokerage rates here are higher. while others such as Schwab are expected shortly. Rs 40 crore per day (Rs 1. potential for online trading is still immense in India.” Says Manish Shukla. The going is expected to get tougher with the advent of capital account convertibility.com.
You will have the survivors and stable volumes. Usage costs.50% 10.20% Rs 700 0.50% 10.50% 10. Customer Value = Customer Benefits – Customer Costs Customer costs = Price + Other Costs (Acquisition costs. Ownership costs.” . How customer rating the brands.1.20% VENTURA KHAN Rs750 0. Which brand gives the more customer value? Customer value analysis. Disposal costs) Q. 2.many people will get out. 1) SHARE Accounting charges INDIAINFOLIN E Rs750 0. Maintenance costs.20% Brokerage Service tax 45 .
01% 0.A 3.01% 0.A 0.A N.A N.order Min.A 3.A VENTURA 0.01% 2) CASH MANAGEMNET Delivery trade Non-delivery trade SHARE KHAN N.A N.15 pm INDIAINFOLIN E N.08% 0.A 10 Paisa N.15% Rs500 N.STT 0.15pm Min.A N.brokerage Brokerage Jobbing 46 .05 N.A Rs500 N.
Trade Max.05% age 47 .3) Spot mana geme nt Min.A N.A Trade Broker 0.A Rs500 No limit N. SHARE KHAN INDIAINFOLINE VENTURA N.A N.A Rs500 N.
20% 0.05% VENTURA Rs500 N.20% 0.Balance SHARE KHAN 10.4) Marg SHARE KHAN INDIAINFOLINE in Seg ment Max. N.20% 0.A 5) Derivative Segment Service tax STT Min.01% Rs500 VENTURA 10.A Trade Brera 0.05% ge Rs15 0.01% N.A INDIAINFOLINE 10.01% N. N.A N.A 6) Bank Fee SHARE KHAN INDIAINFOLINE VENTURA 48 .A Rs500 Trade Max.
A 49 .A N.A N.A 7) Demat Account Rejection or Fails Remat charges Pledge Demat charges SHARE KHAN N.A 0.A N.A N.01% N.A N.A Free Free 0.02% N.A NIL 0.02% N.Min.01% Rs 5000 NIL NIL N.A NIL NIL N.A INDIAINFOLIN E NIL N.A N.A N.Balance Penalty Account Charges Custody Charges Transaction tobuy Transaction to – sell Stamp charges N.A Rs 10per% Rs 3 per% VENTURA Rs 20 Rs 15 0.A N.
A 4-7 times VENTURA N.A N.8) Depositary Participant Advance amount Thresh hold amount Funding IPO Research report Exposure SHARE KHAN N.A N.A 21% Yes 80% 6 times 50 .A Yes Yes 86% 4 times INDIAINFOLINE Rs2500 Rs1000 Yes Yes N.
FINDINGS 52 .
Chennai. a big part of Investors were found to be Interested in Commodity Market In survey few clients expressed full satisfaction for the products of Ventura Securities Mostly For PVS. FINDINGS During the Market Research business class people show positive attitude in Share Trading Those who have Interest in share trading most of them were aware of Ventura Securities. Mumbai. Mostly Investors show their first preference for share Trading in Ventura Securities Ltd.. Hyderabad etc. As per the survey results all Ventura Securities brokers and frenchancy in Pune area show positive attitude in share Trading In some areas especially Ventura Securities in Pune. (power Ventura Securities) 53 .
LIMITATION 54 .
only 1 month.e. 55 . • The project was undertaken in the Pune City.During the project the following limitations are found: • The major limitation of the project was time span i. and so that the clients very huge in number. • Many of the clients were not able to define the strategies used by them. • It is very difficult to collect the financial data relating to the Market Research & Fundamental or company. because it comes under business secrecy. So it was difficult to go in depth study in the respective subject. which is relatively a big city.
SUGGESTIONS 56 .
Therefore he should take care of such factors. Derivatives before dealing in Future market.SUGGESTIONS Following suggestion have been drawn after doing this project – The concept of Market Research is not very simple. the concept of derivatives is though. Ventura Securities is a service firm so company should apply 57 . Even though. But it is becomes easy to understand once the person starts trading in it. The investor should also note that the price of future contracts depends on many factors which are uncontrollable. An investor should therefore have sound knowledge of technical terms in Equity.
Ventura securities may go through “Investment Mela” Ventura Securities should come up with NCDEX Ventura Securities should conduct some kind of mock classes for new Investors who even don’t know about share market There should be employee ID-Card for them so that when they go on it shows good impression and Identity of employee 58 .
CONCLUSION 59 .
etc. Nasik. Mumbai.Conclusion Although Ventura Securities is the largest shareholder in the market. the next To follow is Leadership which is gearing up for expansion in all over India and Various nearer cities like Pune. with the spreading of Business in these cities and further developing on the key areas in Pune and All big Cities. Ventura Securities is all set up to become “The Company of the Future” 60 .
BIBLIOGRAPHY 61 .
National Certificate Financial Market NCDM Module – Derivatives Market (Dealer ) Module NCCM Module – Commodities Market Module Websites: www.bseindia.Bibliography SReference Book :.nseindia.com www.com www.com www.com 62 .derivativesindia.ventura1.venturasecurities.com www.
– Company Manager Manu Annexure 63 .Manuals: Ventura Securities Ltd.
S QUESTIONNAIRE 1. Do you invest in share market? Yes No 4. Name: 2. Address: 3. If Yes then which type of investment tool do you use (invest in)? Equities Commodities Mutual Funds Gold 5. Do you use Derivatives?(for Equity/Currency) Yes No 64 Insurance Currencies .
Are you aware of call and put options of future? Yes No 7.6. Which strategies do you use for Hedging? Long Call / Put Strategy Married Put Option Strategy Protective Strategy Bear Call Put Spread Strategy Covered Strategy Caller Strategy. Call 65 .
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