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WINTER INTERNSHIP REPORT

ON
“A STUDY OF ONLINE TRADING AND STOCK
BROKING”
AT

“SEVENHILL SECURITIES LIMITED”

SUBMITTRD BY
PRITI VERMA
ROLL NO.030018

MMS(Finance)
Batch :2017-2019

Under the Guidance of


Shree Gopal Kabbra

Jankidevi Bajaj Institute of Management Studies


(JDBIMS)
SNDT Women’s University,Mumbai
January 2019

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DECLARATION

I here by declare that this project report entitled “A STUDY OF


ONLINE TRADING AND STOCK BROKING” has been
prepared by me is an original work submitted to Jankidevi Bajaj
Institute of Management Studies towards partial fulfillment of
the requirement for the award of master management studies In
Finance. I also hereby declare that this project report has not
been submitted at any time to any other university or institute
for the award of any Degree or Diploma.

Priti Verma
ROLL NO.030018
MMS(FINANCE)

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ACKNOWLEDGEMENT

I take this opportunity to express my gratitude high regards and


sincere thanks to our respected Principal Ms. Meera Shankar
for providing excellent infrastructure. I thank Ms. Geeta Head
of the Department of MMS for his constant help, support. and
guidance. I have great regard for all the well wishers whose
help is beyond acknowledgement.

Priti Verma
ROLL NO.030018
MMS(FINANCE)

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TABLE OF CONTENT
Sr. no. Topic Page no.
1 Need for the Study 6
1.1 Objectives Of The Study 8
1.2 Methodology Of The Study 9
1.3 Limitations Of The Study 9
2 Industry profiles 10
2.1 Structure of Indian financial system: 11
2.2 Financial Market 12
2.3 Money markets 13
2.4 Capital markets 14
2.4.1  Primary market and 14
2.4.2  Secondary market 15
2.5 Stock Market In India 16
2.6 Stock exchanges History 17
2.7 Stock exchanges Functions 18
2.8 Various Stock Exchanges in India 19
2.9 major stock exchanges –NSE 21
2.9.1 BSE 22
2.10 SEBI 26
2.11 The Stock Broker 27
3. Company Profile 28
3.1 About the company 29
3.2 ACHIEVEMENTS 30
3.3 VISION 30
3.4 MISSION 30
3.5 The Major Players in ONLINE TRADING 30
(Competitors)

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3.6 Service Provided 30
4 Introduction of Market 31
4.1 Cash Market 32
4.2 Futures Market 32
4.3 Buy Futures contracts 33
4.4 Settle Futures contracts 34
5 Introduction of the assignment 37
5.1 Online Trading 38
5.2 Stock Trading 39
5.3 Types of Order 40
5.4 Speculator 41
Conclusion
Recommendation
Reference

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Chapter 1
NEED FOR THE STUDY:

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OBJECTIVES AND METHODOLOGY
NEED FOR THE STUDY:

The present study to review the online trading procedure a case


study of ONLINE TRADING at SEVEN HILLS SECURITIES
as the exchange has changed it‟s trading from the outcry mode
to online trading on 20th February 1997, there is need to assess
the performance of the capital market.

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OBJECTIVES OF THE STUDY:
 It is to analyze the changes in trading after the exchange
shifted from outcry to online trading system.
 It is to study the functions of SEVEN HILLS through
various departments.
 To know the online screen based trading system adopted by
SEVEN HILLS and about its communication facilities.
The appropriate configuration to set the network, which
would link the SHAREKHAN to individual / members.
 To know about the latest and future development in the
stock exchange trading system.

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METHODOLOGY OF THE STUDY:
The data collection methods include both primary and secondary
collection methods.
 Primary method: This method includes the data collected
from the personal interaction with authorized members of
SEVEN HILLS Securities limited.
 Secondary method: The secondary data collection method
includes:
 The lecturers delivered by the superintendents of
respective departments.
 The brochures and material provided by SEVEN
HILLS Securities limited.
 The data collected from the magazines of the NSE,
economic times, etc.

LIMITATIONS OF THE STUDY:


Despite of the training my level best, there were still some
limitation which I think remains there to draw fruitful
conclusion. There were some practical problem which come
across and could not be properly death with
 The advisory services being promised by the brokers would
be of little use to investors looking for an insight into the
market.
 As a client one will access the NSE through a server of the
online brokerage and this may involve queuing delays
 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.

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Chapter 2
Industry profiles

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Following diagram gives the structure of Indian
financial system:

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FINANCIAL MARKET:

Financial markets are helpful to provide liquidity in the system


and for smooth functioning of the system. These markets are the
centers that provide facilities for buying and selling of financial
claims and services. The financial markets match the demands
of investment with the supply of capital from various sources.

According to functional basis financial markets are classified


into two types.
They are:

 Money markets (short-term)


 Capital markets (long-term)

According to institutional basis again classified in to two types.


They are

 Organized financial market


 Non-organized financial market.

The organized market comprises of official market


represented by recognized institutions, bank and government
(SEBI) registered/controlled activities and intermediaries. The
unorganized market is composed of indigenous bankers,
moneylenders, individual professional and non-professionals.

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MONEY MARKET:

Money market is a place where we can raise short-term capital.


Again the money market is classified in to
 Inter bank call money market
 Bill market and
 Bank loan market Etc.
E.g.; treasury bills, commercial papers, CD's etc.

 Understanding the Money Market Funding Engine

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CAPITAL MARKET:

Capital market is a place where we can raise long long-term


capital. Again the capital market is classified in to two types and
they are
 Primary market and
 Secondary market.
E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:
Primary market is generally referred to the market of new issues
or market for mobilization of resources by the companies and
government undertakings, for new projects as also for
expansion, modernization, addition, and diversification and up
gradation. Primary market is also referred to as New Issue
Market. Primary market n. operations include new issues of
shares by new and existing companies, further and right issues
to existing shareholders, public offers, and issue of debt
instruments such as debentures, bonds, etc.
The primary market is regulated by the Securities and Exchange
Board of India (SEBI a government regulated authority).

 Function:
The main services of the primary market are origination,
underwriting, and distribution. Origination deals with the origin
of the new issue. Underwriting contract make the shares
predictable and remove the element of uncertainty in the

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subscription. Distribution refers to the sale of securities to the
investors.
The following are the market intermediaries associated
with the market:
1. Merchant banker/book building lead manager
2. Registrar and transfer agent
3. Underwriter/broker to the issue
4. Adviser to the issue
5. Banker to the issue
6. Depository
7. Depository participant

SECONDARY MARKET
The primary market deals with the new issues of securities.
Outstanding securities are traded in the secondary market, which
is commonly known as stock market or stock exchange. “The
secondary market is a market where scrip‟s are traded”. It is a
market place which provides liquidity to the scrip‟s issued in the
primary market. Thus, the growth of secondary market depends
on the primary market. More the number of companies entering
the primary market, the greater are the volume of trade at the
secondary market. Trading activities in the secondary market are
done through the recognized stock exchanges which are 23 in
number including Over The Counter Exchange of India (OTCE),
National Stock Exchange of India and Interconnected Stock
Exchange of India.

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Secondary market operations involve buying and selling of
securities on the stock exchange through its members. The
companies hitting the primary market are mandatory to list their
shares on one or more stock exchanges in India. Listing of
scrip‟s provides liquidity and offers an opportunity to the
investors to buy or sell the scrip‟s.
The following are the intermediaries in the secondary market:
1. Broker/member of stock exchange – buyers broker and sellers
broker
2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.

STOCK MARKETS IN INDIA:

Stock exchanges are the perfect type of market for securities


whether of government and semi-govt bodies or other public
bodies as also for shares and debentures issued by the joint-stock
companies. In the stock market, purchases and sales of shares
are affected in conditions of free competition. Government
securities are traded outside the trading ring in the form of over
the counter sales or purchase. The bargains that are struck in the
trading ring by the members of the stock exchanges are at the
fairest prices determined by the basic laws of supply and
demand.
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Definition of a stock exchange:

“Stock exchange means any body or individuals whether


incorporated or not, constituted for the purpose of assisting,
regulating or controlling the business of buying, selling or
dealing in securities.” The securities include:
 Shares of public company.
 Government securities
 Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19th century were


those of Mumbai setup in 1875 and Ahmadabad set up in 1894.
These were organized as voluntary non- profit-marking
associations of brokers to regulate and protect their interests.
Before the control on securities under the constitution in 1950, it
was a state subject and the Bombay securities contracts (control)
act of 1925 used to regulate trading in securities. Under this act,
the Mumbai stock exchange was recognized in 1927 and
Ahmadabad in 1937. During the war boom, a number of stock
exchanges were organized. Soon after it became a central
subject, central legislation was proposed and a committee
headed by A.D.Gorwala went into the bill for securities
regulation. On the basis of the committee‟s recommendations
and public discussion, the securities contract (regulation) act
became law in 1956.
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Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By


giving quotations to the listed companies, they help trading and
raise funds from the market. Over the hundred and twenty years
during which the stock exchanges have existed in this country
and through their medium, the central and state government
have raised crores of rupees by floating public loans. Municipal
corporations, trust and local bodies have obtained from the
public their financial requirements, and industry, trade and
commerce- the backbone of the country‟s economy-have
secured capital of crores or rupees through the issue of stocks,
shares and debentures for financing their day-to-day activities,
organizing new ventures and completing projects of expansion,
diversification and modernization. By obtaining the listing and
trading facilities, public investment is increased and companies
were able to raise more funds. The quoted companies with wide
public interest have enjoyed some benefits and assets valuation
has become easier for tax and other purposes.

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Various Stock Exchanges in India

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At present there are 23 stock exchanges recognized under the
securities contracts(regulation), Act, 1956. Those are:

 Ahmadabad Stock Exchange Association Ltd.


 Bangalore Stock Exchange
 Bhubaneshwar Stock Exchange Association
 Calcutta Stock Exchange Cochin Stock Exchange Ltd.
 Coimbatore Stock Exchange
 Delhi Stock Exchange Association
 Guwahati Stock Exchange Ltd
 Hyderabad Stock Exchange Ltd
 Jaipur Stock Exchange Ltd
 Kanara Stock Exchange Ltd
 Ludhiana Stock Exchange Association Ltd
 Madras Stock Exchange
 Madhya Pradesh Stock Exchange Ltd.
 Magadh Stock Exchange Limited
 Meerut Stock Exchange Ltd.
 Mumbai Stock Exchange
 National Stock Exchange of India
 OTC Exchange of India
 Pune Stock Exchange Ltd
 Saurashtra Kutch Stock Exchange Ltd.
 Uttar Pradesh Stock Exchange Association
 Vadodara Stock Exchange Ltd.

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Out of these major stock exchanges were:

NSE (National Stock Exchange)

The National Stock Exchange of India Limited has genesis in


the report of the High Powered Study Group on Establishment
of New Stock Exchanges, which recommended promotion of a
National Stock Exchange by financial institutions (FI‟s) to
provide access to investors from all across the country on an
equal footing. Based on the recommendations, NSE was
promoted by leading Financial Institutions at the behest of the
Government of India and was incorporated in November 1992
as a tax-paying company unlike other stock exchanges in the
country. On its recognition as a stock exchange under the
Securities Contracts (Regulation) Act, 1956 in April 1993, NSE
commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment
commenced operations in November 1994 and operations in
Derivatives segment commenced in June 2000

NSEs mission is setting the agenda for change in the securities


markets in India. TheNSE was set-up with the main objectives
of:

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 Establishing a nation-wide trading facility for equities
and debt instruments.
 Ensuring equal access to investors all over the country
through an appropriate communication network.
 Providing a fair, efficient and transparent securities
market to investors using electronic trading systems.
 Enabling shorter settlement cycles and book entry
settlements systems, and
 Meeting the current international standards of securities
markets.

The standards set by NSE in terms of market practices and


technology, have become industry benchmarks and are being
emulated by other market participants. NSE is more than a mere
market facilitator. Its that force which is guiding the industry
towards new horizons and greater opportunities.

BSE (Bombay Stock Exchange)

The Stock Exchange, Mumbai, popularly known as "BSE" was


established in 1875 as "The Native Share and Stock Brokers
Association". It is the oldest one in Asia, even older than the
Tokyo Stock Exchange, which was established in 1878. It is a
voluntary non-profit making Association of Persons (AOP) and
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is currently engaged in the process of converting itself into
demutualised and corporate entity. It has evolved over the years
into its present status as the premier Stock Exchange in the
country. It is the first Stock Exchange in the Country to have
obtained permanent recognition in 1956 from the Govt. of India
under the Securities Contracts (Regulation) Act 1956.The
Exchange, while providing an efficient and transparent market
for trading in securities, debt and derivatives upholds the
interests of the investors and ensures redresses of their
grievances whether against the companies or its own member-
brokers. It also strives to educate and enlighten the investors by
conducting investor education programmers and making
available to them necessary informative inputs.
A Governing Board having 20 directors is the apex body, which
decides the policies and regulates the affairs of the Exchange.
The Governing Board consists of 9 elected directors, who are
from the broking community (one third of them retire ever year
by rotation), three SEBI nominees, six public representatives
and an Executive Director & Chief Executive Officer and a
Chief Operating Officer.
The Executive Director as the Chief Executive Officer is
responsible for the day-to-dayadministration of the Exchange
and the Chief Operating Officer and other Heads ofDepartment
assist him.

The Exchange has inserted new Rule No.126 A in its Rules,


Byelaws pertaining to constitution of the Executive Committee
of the Exchange. Accordingly, an Executive Committee,
consisting of three elected directors, three SEBI nominees or
public representatives, Executive Director & CEO and Chief
Operating Officer has been constituted. The Committee
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considers judicial & quasi matters in which the Governing
Board has powers as an Appellate Authority, matters regarding
annulment of transactions, admission, continuance and
suspension of member- brokers, declaration of a member-broker
as defaulter, norms, procedures and other matters relating to
arbitration, fees, deposits, margins and other monies payable by
the member-brokers to the Exchange, etc.

REGULATORY FRAME WORK OF STOCK EXCHANGE


A comprehensive legal framework was provided by the
“Securities Contract Regulation Act, 1956” and “Securities
Exchange Board of India 1952”. Three tier regulatory structure
comprising
 Ministry of finance
 The Securities And Exchange Board of India
 Governing body

Members of the stock exchange:


The securities contract regulation act 1956 has provided uniform
regulation for the admission of members in the stock exchanges.
The qualifications for becoming a member of a recognized stock
exchange are given below:
 The minimum age prescribed for the members is 21
years.
 He should be an Indian citizen.
 He should be neither a bankrupt nor compound with the
creditors.
 He should not be convicted for fraud or dishonesty.

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 He should not be engaged in any other business
connected with a company.
 He should not be a defaulter of any other stock exchange.
 The minimum required education is a pass in 12th
standard examination.

SECURITIES AND EXCHANGE BOARD OF INDIA


(SEBI)

The securities and exchange board of India was constituted in


1988 under a resolution of government of India. It was later
made statutory body by the SEBI act 1992.according to this act,
the SEBI shall constitute of a chairman and four other members
appointed by the central government. With the coming into
effect of the securities and exchange board of India act, 1992
some of the powers and functions exercised by the central
government, in respect of the regulation of stock exchange were
transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI


 To protect the interest of investors in securities.
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 Regulating the business in stock exchanges and any other
securities market.
 Promoting and regulating self-regulatory organizations.
 Prohibiting insider trading in securities.
 Regulating substantial acquisition of shares and take over
of companies.
 Performing such functions and exercising such powers
under the provisions of capital issues (control) act, 1947and
the securities to it by the central government.

The Stock Broker

The stock broker is probably one of the most important


financial intermediaries that you need to know. A stock broker is
a corporate entity, registered as a trading member with the stock
exchange and holds a stock broking license. They operate under
the guidelines prescribed by SEBI.
A stock broker is your gateway to stock exchanges. To begin
with, you need to open something called as a „Trading Account‟
with a broker who meets your requirement. Your requirement
could be as simple as the proximity between the broker‟s office
and your house. At the same time it can be as complicated as
identifying a broker who can provide you a single platform
using which you can transact across multiple exchanges across
the world. At a later point we will discuss what these
requirements could be and how to choose the right broker.
A trading account lets you carry financial transactions in the
market. A trading account is an account with the broker which
lets the investor to buy/sell securities.

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Chapter 3
COMPANY PROFILE

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About Company

Seven hill Securities a leading Financial Services & Brokerage


House working diligently since
1994 can be described in a single word as a "Financial Powerho
use". With acknowledged industry leadership in execution and
clearing services on Exchange Traded Derivatives and cash
market products.

Sevenhill Securities LTD is a Non-govt company, incorporated


on 18 Apr, 1994. It's a public unlisted company and is classified
as 'company limited by shares'.

Company's authorized capital stands at Rs 150.0 lakhs and has


94.99333% paid-up capital which is Rs 142.49 lakhs. Sevenhill
Securities LTD last annual general meet (AGM) happened on 29
Sep, 2012. The company last updated its financials on 31 Mar,
2012 as per Ministry of Corporate Affairs (MCA).

Sevenhill Securities LTD is majorly in Finance business from


last 25 years and currently, company operations are strike off.
Current board members & directors are SURESH
SATYANARAYAN KABRA, GIREESH SATYANARAYAN
KABBRA and DILIP KABRA .

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ACHIEVEMENTS
1. 9th in terms of Sub Brokers for 2007*.

2.3rd in terms of Number of Trading Accounts for 2008*.

VISION
To be the best retail brokering Brand in the retail business
of stock market.

MISSION
To educate and empower the individual investor to make
better investment decisions through quality advice and
superior service.

The Major Players in ONLINE TRADING


(Competitors):

1. Sharekhan.com
2. 5paisa.com
3. Indiabulls.com
4. Icicidirect.com
5. Angel Broking

SERVICE PROVIDED
1. Share Broking
2. Commodity Broking

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Chapter 4
Introduction of Market

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What is a Cash Market?

A cash market is a marketplace for the immediate settlement


of transactions involving commodities and securities. In a cash
market, the exchange of goods and money between the seller
and the buyer takes place in the present, as opposed to
the futures market where such an exchange takes place on a
specified future date. This type of market is also known as
the spot market, since transactions are settled on the spot.

What is a Futures Market?

A futures market is an auction market in which participants buy


and sell commodity and futures contracts for delivery on a
specified future date. Examples of futures markets are the New
York Mercantile Exchange, the Kansas City Board of Trade, the
Chicago Mercantile Exchange, the Chicago Board of Options
Exchange and the Minneapolis Grain Exchange. Originally,
trading was carried on through open yelling and hand signals in
a trading pit, though in the 21st century, like most other markets,
futures exchanges are mostly electronic.

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How to Buy and Sell Futures Contracts
Buying and selling futures contract is essentially the same as
buying or selling a number of units of a stock from the cash
market, but without taking immediate delivery.
In the case of index futures too, the index‟s level moves up or
down, replicating the movement of a stock price. So, you can
actually trade in index and stock contracts in just the same way
as you would trade in shares.
Markets face volatility. VIX future by the NSE helps you
quantify the volatility.
In this section, we look at how to buy and sell futures contracts:

HOW TO BUY FUTURES CONTRACTS

One of the prerequisites of stock market trading – be it in the


derivative segment – is a trading account.
Money is the obvious other requirement. However, this
requirement is slightly different for the derivatives market.
When you buy in the cash segment, you have to pay the entire
value of the shares purchased – this is unless you are a day
trader utilizing margin trading. You have to pay this amount
upfront to the exchange or the clearing house.
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This upfront payment is called „Margin Money‟. It helps reduce
the risk that the exchange undertakes and helps in maintaining
the integrity of the market.
Once you have these requisites, you can buy a futures contract.
Simply place an order with your broker, specifying the details of
the contract like the Scrip , expiry month, contract size, and so
on. Once you do this, hand over the margin money to the broker,
who will then get in touch with the exchange.
The exchange will find you a seller (if you are a buyer) or a
buyer (if you are seller) ..

HOW TO SETTLE FUTURES CONTRACTS

When you trade in futures contracts, you do not give or take


immediate delivery of the assets concerned. This is called
settling of the contract. This usually happens on the date of the
contract‟s expiry. However, many traders also choose to settle
before the expiry of the contract.
For stock futures, contracts can be settled in two ways:

On Expiry
In this case, the futures contract (purchase or sale) is settled at
the closing price of the underlying asset as on the expiry date of
the contract.

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Example: You have purchased a single futures contract of ABC
Ltd., consisting of 200 shares and expiring in the month of July.
At that time, the ABC share‟s price was Rs 1,000. If on the last
Thursday of July, ABC Ltd. closes at a price of Rs 1,050 in the
cash market, your futures position will be settled at that price.
You will receive a profit of Rs 50 per share (the settlement price
of Rs 1,050 less your cost price of Rs 1,000), which adds up to a
neat little sum of Rs 10,000 (Rs 50 x 200 shares). This amount is
adjusted with the margins you have maintained in your account.
If you receive profits, they will be added to the margins that you
have deposited. If you made a loss, the amount will be deducted
from the margins.
.
Before Expiry
It is not necessary to hold on to a futures contract till its expiry
date. In practice, most traders exit their contracts before their
expiry dates. Any gains or losses you‟ve made are settled by
adjusting them against the margins you have deposited till the
date you decide to exit your contract. You can do so by either
selling your contract, or purchasing an opposing contract that
nullifies the agreement. Here again, your profits will be returned
to you or losses will be collected from you, after adjusting them
for the margins that you have deposited once you square off
your position.
Index futures contracts are settled in cash. This can again be
done on expiry of the contract or before the expiry date.

 On Expiry

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When closing a futures index contract on expiry, the closing
value of the index on the expiry date is the price at which the
contract is settled. If on the date of expiry, the index closes
higher than when you bought your contracts, you make a profit
and vice versa. The settlement is made by adjusting your gain or
loss against the margin money you‟ve already deposited.

Example: Suppose you purchase two contracts of Nifty future at


6560, say on July 7. This particular contract expires on July 27,
being the last Thursday of the contract series. If you have left
India for a holiday and are not in a position to sell the future till
the day of expiry, the exchange will settle your contract at the
closing price of the Nifty prevailing on the expiry day. So, if on
July 27, the Nifty stands at 6550, you will have made a loss of
Rs 1,000 (difference in index levels – 10 x2 lots x lot size of 50
units). Your broker will deduct the amount from your margins
deposited with him and forward it to the stock exchange. The
exchange, in turn, will forward it to the seller, who has made
that profit. However if Nifty closes at 6570, you would have
made a profit of Rs 1,000. This will be added to your account.

 Before Expiry
You can choose to exit your index futures contract before the
date of expiry if you believe that the market will rise before the
expiry of your contract period and that you‟ll get a better price
for it on an earlier date. Such an exit depends solely on your
judgment of market movements as well as your investment
horizons. This will also be settled by the exchange by comparing
the index levels when you bought and when you exit the

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contract. Depending on the profit or loss, your margin account
will be credited or debited.

Chapter 5
Introduction of the assignment

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ONLINE TRADING

Online Trading is an easy way to buy and sell shares from the
comfort of one‟s place instead of trading through individual
stockbroker and broking firms, the customer can transact with
the helpof mouse click and his visits to the neighborhood broker
will become a thing of the past. Eventhe older generation is
adapting the online trading route.Find the right depository to
provide with an online trading account can be difficult, but
many banks and companies offer excellent services for online
trading. Our needs will determine which online broker is best for
us. Online trading brings in total transparency between broker
aninvestor in case of secondary market operation.Whether we
are buying a mutual fund, investing in commodities market or
any other transactioncan be performed with minimal fuss. In
India presently online trading can take place throughorder
routing system, which will route client orders to
exchanges trading system for execution of trade on stock
exchange (NSE and BSE).One of the measure attractions of
online trading is the wealth of free commentary and
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analysisabout stock market and global economy. Any investor
with an ounce of market saviness canextract all the data needed
to make trading decisions and complete the trades. An
importantcatalyst behind the emergence of thriving
online brokerage system has been the buoyant stock market. One
can trade online with e-brokerage such as ICICI Direct, HDFC
Securities, IndiaBulls, Kotakstreet and India Info line‟s
zerodha.com

How does the stock get traded?

 You have decided to buy 200 shares of Infosys at 3030, and


hold on to it for 1 year. How does it actually work? What is
the exact process to buy it? What happens afer you buy it?
 Luckily there are systems in place which are fairly well
integrated.
 With your decision to buy Infosys, you need to login to your
trading account (provided by your stock broker) and place an
order to buy Infosys. Once you place an order, an order ticket
gets generated containing the following details:

a. Details of your trading account through which you


intend to buy Infosys shares – therefore your identity is
reveled.
b. The price at which you intend to buy Infosys
c.The number of shares you intend to buy Before your
broker transmits this order to the exchange he needs to
ensure you have sufficient money to buy these shares. If
yes, then this order ticket hits the stock exchange. Once the

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order hits the market the stock exchange (through their
order matching algorithm) tries to find a seller who is
willing to sell you 200 shares of Infosys at 3030.

Now the seller could be 1 person willing to sell the entire 200
shares at 3030 or it could be 10 people selling 20 shares each or
it could be 2 people selling 1 and 199 shares respectively. The
permutation and combination does not really matter. From your
perspective, all you need is 200 shares of Infosys at 3030 and
you have placed an order for the same. The stock exchange
ensures the shares are available to you as long as there are
sellers in the market.
Once the trade is executed, the shares will be electronically
credited to your DEMAT account. Likewise the shares will be
electronically debited from the sellers DEMAT account.

TYPES OF ORDER

An investor may place two type of order namely- market order


or limit order .
 Market order-In market order the broker is instructed by the
investor to buy or sell a stated number of share immediately at
the best price in the market.
 Limit order- It is an order for the purchase or sale of securities at
a fixed price specified by the client.
“ buy at Rs. 50 or less”
“ sell at Rs. 60 or more”

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No guarantee that limit order will be executed
 There are certain types of orders which may used by investors to
protect their profit or limit their losses.

Stop orders:-
 It is used by investor to protect a profit or limit a loss
 It is an order to sell as soon as the price falls up to a particular
level or to buy when the price rises up to a specified level. This
is mainly to protect the clients against a heavy fall or rise in
price. So that they may not suffer more than the specified unit.

Stop limit order:-

 The stop limit order gives the investor the opportunity of


specifying a limit price for executing the stop orders.
 The maximum price for a stop buy order and the minimum price
for a stop sell order.
 With a stop limit order, the investor specifies two prices, a stop
price and a limit price. When the market price reaches or passes
the stop price, the spot limit order becomes a limit order to be
executed within the limit price.
 Trading in stock exchange takes place continuously during the
official trading hours. Stock exchanges are open five days a
week, from Monday through Friday. An investor may place
orders for trade through his broker at any time during the official
trading hours.

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Day order :-
A day order is an order that is valid only for the trading day on
which the order is placed. If the order is not executed by the end
of the day , it is treated as cancelled.

Week orders:-
These are orders that are valid till the end of the week during
which the orders are placed. They expire at the close of the
trading session on Friday of the week.

Month orders:-
These are orders that are valid till the end of the month during
which the orders are placed. Month order expire at the close of
the trading session on the last working day of the month.

Open orders:-
 Open orders are orders that remain valid till they are
executed by the brokers or specifically cancelled by the
investor. They are also known as GTC orders.

Fill or Kill order:-


 These order are also known as FOK orders. These order
mean to be executed immediately, If not they are to be
treated as cancelled.

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Speculator

Speculator Are traders who intend to make high returns within a


short time, making short term profit from the fluctuation in
prices of securities in the stock market

Types of Speculator-

Traders engaged in speculative activity in the stock market are


described by different names based on the types of activity they
generally engage in. They are Bulls, Bears, Stag and Lame duck.

BULL

 A trader who expects a rise in price of securities is known


as a bull.
 He takes a long position with respect to securities.
 he buys the securities to sell them at future date at the
higher price

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 The bulls will able to make profit only if the prices rise as
anticipate otherwise they will suffer losses.
 When the prices of securities are generally rising in the
market the market is said to be in a bullish phase.

BEAR

 A bear is a speculator who expects a decline in the prices of


securities.
 He takes a short position on securities by engaging in short
sales.
 He attempts to cover of his short position by buying the
securities at lower prices when prices decline.
 The bear will suffer a loss if the prices of securities rise
after he takes a short position on securities, when there is a
general decline in prices of securities in the stock market,
the market is said to be bearish.

LAME DUCK

 He is speculator when the bear operator finds it difficult to


deliver the securities to the consumer of rise in prices of
securities subsequent to short sale on a particular day as
agreed upon , he struggles as a lame duck in fulfilling his
commitment .

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CONCLUSION

Online trading is the new concept in the stock market. In India,


online trading is still at its infancy stage. Online trading has
made it easy to trade in the stock market as now people can
trade while sitting at their home. Now stock market is easily
accessible by the people. There are some problems while doing
the trade through the internet. Major problem faced by online
trader is that the investors are loyal toothier traditional brokers,
they rely upon the suggestions given by their
brokers.Another major problem is that the people don't have full
knowledge regardingonline trading. They find it difficult to
trade themselves, as a wrong entry made by them, can bring
them huge losses. Nevertheless to say that online trading has the
bright future as the percentage of the trade done through online
trading is increasing day by day.

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Recommendations

The introduction of the Internet has surprisingly changed our


way of life as society. It has defined the way we do business and
the way we correspond. The Internet has opened many
opportunities for online trading. The financial industry revolves
around the Internet. Everything is just a few clicks away. This
makes online trading most convenient. But there are still
investors who prefer the old fashion way of offline trading and
they mainly prefer offline trading for security reasons. Internet
has introduced a way for consumers to manage their money
online. Not to mention, Internet has transformed the way
investment companies operate their business and has made it
easy for private investors to gain straight access to a range of
different markets and online tools that were atone point only
reserved by the use of investment professionals. Consumer
investing and online trading has dramatically changed over the
last decade.
Online trading dynamically continues to be redefined.
Services haveexpanded to include integrated management of add
itional financialaccounts. Not to mention, it has subsequently
expanded in conjunction with ground-breaking improvements to
the traditional trading interface, such as telephone interface
systems.Of course, online trading has many pros. There are seve
ral wonderfulreasons to invest online and consider online
trading.

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1. Money saving opportunities The amount of money you save d
ependsprimarily on the online brokerage firm that you choose.
No two firms are the same. There may be different regulations,
similar to bank regulations. There
are minimum deposits required that must be maintained.
As mentioned above, this will depend on the online brokerage
firm.
2. Instant online access you can gain instant access to your
account, the value of your portfolio updates immediately before
your eyes.
3. Enter online trades at anytime you can enter online trades at
anytime and from anywhere. This is very convenient if you live
in a different time zone than the country you are trading in. Not
to mention, it is especially fit for investors with busy schedules.
4. With online trading you are in charge You are in control of
your investments. No sales pitches and no hassle. You decide
where to invest your money

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Reference Websites

 https://www.nseindia.com/products/content/equities/ind
ices
 https://www.zaubacorp.com/company/SEVENHILL-
SECURITIES-LTD/U65990MH1994PLC077771
 https://www.bseindia.com/
 https://www.nseindia.com/
 https://www.slideshare.net/petkarshwt/online-trading-
ppt
 https://www.slideshare.net/matthewlawhead/south-america-
intro-ppt
 https://www.slideshare.net/SumitBehura1/trading-
system-in-stock-exchange

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