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A

PROJECT REPORT
ON

“INTERNET TRADING OF SECURITIES


AND
ITS INCREASING TREND’’
(A SURVEY OF CHANDIGARH CITY)

SUBMITTED TO
Department of Lovely School of Management
Lovely Professional University , Jalandhar
In partial fulfillment of the requirement for degree of

MASTER OF BUSINESS ADMINISTRATION


(2009-10)

SUPERVISED BY: - SUBMITTED BY: -


Miss Ashu kakkar Ankur Gupta
Dept. of LSM 10806962
RS1302A11

LOVELY PROFESSIONAL UNIVERSITY


JALANDHAR

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CERTIFICATE

This is to certify that the research project entitled “Internet trading of securities
and its increasing trend” submitted in the partial fulfillment of the requirement for
the award of degree of Master of Business Administration of the Guru Nanak
Dev University, Amritsar, is a bonafide research work carried out by the Ankur Gupta
under my supervision and that no part of this research work has been submitted for any other
degree.
The assistance and help received during the execution of the project has been fully
acknowledged.

July-August 09 (Miss. Ashu Kakkar)


Deptt. Of LSM,
LPU, JALANDHAR

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ACKNOWLEDGEMENT

At the very outset I am grateful to Miss Ashu Kakkar Department of Lovely School of
Management, Lovely Professional University Jalandhar, for giving me an opportunity to
undertake the project and providing an immaculate intellectual guidance during my entire
study.
Any endeavor cannot be satisfactorily completed without the advice and co-operation from
friends.
Further I am highly grateful to the respondents for the valuable information and the precious
time they spare for me to make this project.
Last but not the least I wish to acknowledge the support and final assistance received from
my parents without their invaluable positive approach, inspiration, their deep love and
unaccountable sacrifices made it possible to complete my work successfully.

ANKUR GUPTA

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CONTENTS
TOPIC NAME PAGE NO.
1 INTRODUCTION 5
1.1 Indian Capital market 6
1.2 NSE and BSE 10
1.3 Online trading 20
1.4 Internet trading 25
2 REVIEW OF LITERATURE 49
3 RESEARCH DESIGN 53
3.1 Statement of the problem 54
3.2 Objectives of the study 54
3.3 Scheme of the study 55
3.4 Research Methodology 57
3.5 Importance of the study 60
3.6 Limitations of the study 61
4 ANALYSIS AND INTERPRETATION 62
5 FINDINGS AND CONCLUSION 70
5.1 Findings 71
5.2 Conclusion 72
6 ANNEXURE 73
Questionnaire 74
Bibliography 77

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Indian Capital Market- An Overview

Evolution
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meager and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used to
be transacted towards the close of the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.

The 1850's witnessed a rapid development of commercial enterprise and brokerage business
attracted many men into the field and by 1860 the number of brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply from United States of Europe
was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about
200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began
(for example, Bank of Bombay Share, which had touched Rs, 2850 could only be sold at Rs.
87).

At the end of the American Civil War, the brokers who thrived out of Civil War in 1874, found
a place in a street (now appropriately called as Dalal Street) where they would conveniently
assemble and transact business. In 1887, they formally established in Bombay, the "Native
Share and Stock Brokers' Association" (which is alternatively known as " The Stock Exchange
"). In 1895, the Stock Exchange acquired a premise in the same street and it was inaugurated in
1899. Thus, the Stock Exchange at Bombay was consolidated.

Limited in 1907, an important stage in industrial advancement under Indian enterprise was
reached.

Indian cotton and jute textiles, steel, sugar, paper and flourmills and all companies generally
enjoyed phenomenal prosperity, due to the First World War.

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In 1920, the then demure city of Madras had the maiden thrill of a stock exchange functioning
in its midst, under the name and style of "The Madras Stock Exchange" with 100 members.
However, when boom faded, the number of members stood reduced from 100 to 3, by 1923,
and so it went out of existence.

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Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom, which was followed by a
slump. But, in 1943, the situation changed radically, when India was fully mobilized as a
supply base.

On account of the restrictive controls on cotton, bullion, seeds and other commodities, those
dealing in them found in the stock market as the only outlet for their activities. They were
anxious to join the trade and numerous others swelled their number. Many new associations
were constituted for the purpose and Stock Exchanges in all parts of the country were floated.

The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940)
and Hyderabad Stock Exchange Limited (1944) were incorporated.

In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the
Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947, amalgamated
into the Delhi Stock Exchange Association Limited.

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Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges are limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified securities (forward list) and
non-specified securities (cash list). Equity shares of dividend paying, growth-oriented
companies with a paid-up capital of at least Rs.50 million and a market capitalization of at least
Rs.100 million and having more than 20,000 shareholders are, normally, put in the specified
group and the balance in non-specified group.

Two types of transactions can be carried out on the Indian stock exchanges:

(a) spot delivery transactions "for delivery and payment within the time or on the date
stipulated when entering into the contract which shall not be more than 14 days following the
date of the contract”: and

(b) forward transactions "delivery and payment can be extended by further period of 14 days
each so that the overall period does not exceed 90 days from the date of the contract". The latter
is permitted only in the case of specified shares. The brokers who carry over the outstanding
pay carry over charges (cantango or backwardation) which are usually determined by the rates
of interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell securities for
his clients on a commission basis and also can act as a trader or dealer as a principal, buy and
sell securities on his own account and risk, in contrast with the practice prevailing on New
York and London Stock Exchanges, where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old conventional style of face-
to-face trading with bids and offers being made by open outcry. However, there is a great
amount of effort to modernize the Indian stock exchanges in the very recent times.

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National Stock Exchange (NSE)

NSE introduced for the first time in India, fully automated screen based trading. It uses a
modern, fully computerized trading system designed to offer investors across the length and
breadth of the country a safe and easy way to invest.

The NSE trading system called 'National Exchange for Automated Trading' (NEAT) is a fully
automated screen based trading system, which adopts the principle of an order driven market.

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all Insurance
Corporations, selected commercial banks and others.

NSE was set up with the Objectives of

• Establishing a nationwide trading facility for all types of securities;


• Ensuring equal access to investors all over the country through an appropriate
• communication network;
• Providing a fair, efficient and transparent securities market using electronic trading system;
• Enabling shorter settlement cycles and book entry settlements; and
• Meeting the international benchmarks and standards.

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Trading at NSE can be classified under two broad categories

(a) Wholesale debt market and

(b) Capital market.

Wholesale debt market operations are similar to money market operations - institutions and
corporate bodies enter into high value transactions in financial instruments such as government
securities, treasury bills, public sector unit bonds, commercial paper, certificate of deposit, etc.

There are two kinds of players in NSE

(a) Trading members and

(b) Participants.

Recognized members of NSE are called trading members who trade on behalf of themselves
and their clients. Participants include trading members and large players like banks that take
direct settlement responsibility.

Trading at NSE takes place through a fully automated screen-based trading mechanism, which
adopts the principle of an order-driven market. Trading members can stay at their offices and
execute the trading, since they are linked through a communication network. The prices at
which the buyer and seller are willing to transact will appear on the screen. When the prices
match the transaction will be completed and a confirmation slip will be printed at the office of
the trading member.

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Securities Available for Trading

The Capital Market (Equities) segment of NSE facilitates trading in the following instruments:

A. Shares
• Equity Shares
• Preference Shares

B. Debentures
• Partly Convertible Debentures
• Fully Convertible Debentures
• Non Convertible Debentures
• Warrants / Coupons / Secured Premium Notes/ other Hybrids
• Bonds
C. Units of Mutual Funds

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Trading Technology of NSE

• At both the Exchanges trading takes place through electronics trading system called screen
based trading system, which is cheaper, have wider reach & provides a better & transparent
trading & settlement mechanism.

• NSE's IT set-up is the largest by any company in India. It uses satellite communication
technology to energy participation from around 320 cities spread all over the country.

• NSE can handle up to 60 Lac trades per day in Capital Market segment, the trading
software of NSE is called NEAT which is a state-of-the-art client server based application.
• Each trading member trades on the NSE with other members through a PC located in the
trading member's office, anywhere in India.

• The trading members on the various market segments such as CM / F&O, WDM are linked
to the central computer at the NSE through dedicated 64Kbps leased lines and VSAT
terminals.

• The Exchange currently manages its data center operations, system and database
administration, design and development of in-house systems and design and
implementation of telecommunication solutions.

• NSE is one of the largest interactive VSAT based stock exchanges in the world. Today it
supports more than 3000 VSATs.
• The NSE- network is the largest private wide area network in the country and the first
extended C- Band VSAT network in the world.

• Currently more than 9000 users are trading on the real time-online NSE application.

• There are over 15 large computer systems, which include non-stop fault-tolerant computers
and high-end UNIX servers, operational under one roof to support the NSE applications.

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This coupled with the nation wide VSAT network makes NSE the country's largest
Information Technology user.

NSE is displaying its live stock quotes on the web site (www.nseindia.com) which are updated
online.

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NSE Trading Network

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NSE has several Advantages over the Traditional trading exchanges

• NSE brings an integrated stock market trading network across the nation.

• Investors can trade at the same price from anywhere in the country since inter-market
operations are streamlined coupled with the countrywide access to the securities.

• Delays in communication, late payments and the malpractice’s prevailing in the traditional
trading mechanism can be done away with greater operational efficiency and informational
transparency in the stock market operations, with the support of total computerized
network.

• Unless stock markets provide professionalism service, small investors and foreign investors
will not be interested in capital market operations. And capital market being one of the
major sources of long-term finance for industrial projects, India cannot afford to damage
the capital market path. In this regard NSE gains vital importance in the Indian capital
market system.

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Bombay Stock Exchange.

Bombay Stock Exchange limited is the oldest stock exchange in Asia with a rich heritage.
Popularly known as "BSE", it was established as "The Native Share & Stock Brokers
Association" in 1875. It is the first stock exchange in the country to obtain permanent
recognition in 1956 from the Government of India under the Securities Contracts (Regulation)
Act, 1956.The Exchange's pivotal and pre-eminent role in the development of the Indian capital
market is widely recognized and its index, SENSEX, is tracked worldwide. Earlier an
Association of Persons (AOP), the Exchange is now a demutualised and corporatised entity
incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE
(Corporatisation and Demutualisation) Scheme, 2005 notified by the Securities and Exchange
Board of India (SEBI).
With demutualisation, the trading rights and ownership rights have been de-linked effectively
addressing concerns regarding perceived and real conflicts of interest. The Exchange is
professionally managed under the overall direction of the Board of Directors. The Board
comprises eminent professionals, representatives of Trading Members and the Managing
Director of the Exchange. The Board is inclusive and is designed to benefit from the
participation of market intermediaries.
In terms of organization structure, the Board formulates larger policy issues and exercises over-
all control. The committees constituted by the Board are broad-based. The Managing Director
and a management team of professionals manage the day-to-day operations of the Exchange.
The Exchange has a nation-wide reach with a presence in 417 cities and towns of India. The
systems and processes of the Exchange are designed to safeguard market integrity and enhance
transparency in operations. During the year 2004-2005, the trading volumes on the Exchange
showed robust growth.
The Exchange provides an efficient and transparent market for trading in equity, debt
instruments and derivatives. The BSE's On Line Trading System (BOLT) is a proprietory
system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing &
settlement functions of the Exchange are ISO 9001:2000 certified.

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TRADING TECHNOLOGY BSE

• To facilitate smooth transaction, BSE had replaced its open outcry system with BSE On-
line Trading (BOLT) facility in 1995. This totally automated screen based trading in
securities was put into practice nation-wide within a record time of just 50 days.

• The BOLT platform capacity has been enhanced to 40 lakh trades per day by upgrading the
hardware.

• BSE’s Wide Area Network (WAN) connecting over 8000 BSE Online Trading (BOLT)
System Trader workstations (TWS) is one of the largest of its kind in the country.

• The trading and settlement activities of the member-brokers are closely monitored through
On-line Real Time System known as BSE Online Surveillance System (BOSS).

• Exchange has also introduced the world’s first centralized exchange based Internet
trading system, BSE WEBx.com. The initiative enables investors anywhere in the world
to trade on the BSE platform.

• The Exchange uses powerful RISC -based UNIX servers, procured from Digital and HP for
the back office processing. The latest software platforms like ORACLE 7 RDBMS, SQL/
ORACLE FORMS 4.5 Front - Ends, etc. have been used for the Exchange applications.

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Online Trading.

The essential component of Internet-based trading is the interface between Broker, bank and
depository participant, and as Net-based trading becomes a reality this interface will develop.

E - broking is the process of buying or selling securities electronically (through the Internet).
The Internet is nothing but a global network of both phones and computers. Hence, to trade
electronically, you need to have accessed to a personal computer (with a modem), a telephone
and an Internet account with any one of the Internet service providers. HDFC sec as a
brokerage house offers users an interface on the Internet (what you see when you log on to our
site) and also offers the required guidance for them to place buy or sell orders over the Internet.
In India, the National Stock Exchange (NSE) and The Stock Exchange, Mumbai (BSE) allow
brokerage houses like HDFCsec that are registered with the Securities Exchange Board of India
(SEBI) to offer e-broking facilities to their users

Online Trading is a service offered on the Internet for purchase and sale of shares. In the real
world you place orders with your stockbroker. In Online Trading, you will access a
stockbroker's website through your internet-enabled PC and place orders through the broker's
internet-based trading engine. These orders are routed to the Stock Exchange without manual
intervention and executed thereon in a matter of a few seconds.

You can now use your computer to screen stocks for any of a variety of criteria (such as low
price-earnings or price-sales ratios, or rapid earnings growth). Because online brokerages want
to keep you at their Web site, in the hope that you'll place a trade with them, many offer these
tools and information themselves. Some online brokers also offer free company reports by
Argus, Hoover's and Standard & Poor's--information that might cost money elsewhere on the
Web.
About the only thing full-service brokerages can still keep private are their own analysts'
reports. The changes wrought by the Internet have come with blinding speed and will almost
certainly accelerate. For almost two centuries, full-priced brokers were the only way to buy and
sell stocks. In 1975 the SEC changed the rules to allow discount brokers like Schwab to charge

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less than the fixed rate. But those commissions were still ten and 20 times higher than the fees
being levied today on the Internet.

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Some Basic Tips to Online Trading

If you are new to investing online, don't put your entire life savings into an online account.
Start with a smaller sum, which will be easier to handle and keep track of. Once you feel
confident, you can then decide to add more money to your investing online account.
Once online, many investors tend to concentrate on stocks, specifically large-cap domestic
stocks. While these stocks should make up part of your portfolio, they shouldn't be all of it!
Take into account your time horizon and risk tolerance to develop a well-balanced portfolio of
stocks, bonds, and cash.

If you're new to investing online and are looking to open a brokerage account, there are some
important facts you should know before choosing a broker. Each one has strengths and
weaknesses, but not everyone sees a broker in the same way. For example, if you're
comfortable finding your own research for investing online, then the deep discount brokers will
work well for you.

Ask yourself…What services are offered? Do they have research available? What is the cost to
you for investing online? What are the real commissions costs to do a trade, including any
handling fees? How are confirmations sent to you -- by e-mail, by snail mail, by phone? Can
you enter orders by phone, by e-mail, directly on-line? Does it cost extra to call and talk to a
broker for help with your account?

Basically you can make money from trading money. If you have US dollars you can buy
British pounds for a set rate and they trade the money back in the future at a different rate. This
can make your gains immense. Much larger than gains made on the stock market. Just as the
upside for currency trading is high, the downside is just as scary and can be immense also.
There are currency-trading brokers available on line that can provide strategies to limit your
losses and maximize your gains.

In a low interest rate environment like the US, it can be a problem to invest in secure high-
yielding fixed income investments. Most of these investments are around the base rate as set by

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the government. It would be difficult to get secure investments around the 3% mark. In New
Zealand or Australia some fixed interest investments are worth 7.5% or 8%. An issue with
making an investment abroad is that currency rates are so volatile that even though you make
5% on yield, that gain can be wiped out in currency rates.

Equally, currency rates can work in your favor and your investment will have an extremely
high yield. To eliminate this uncertainty you can make a foreign investment today using a spot
trade and also set up a forward trade at the time of investment maturity. This way you eliminate
currency risk in your investment and can capitalize on foreign products. Setting up a forward
trade costs money but in many instances the cost of the trade is minimal in comparison to the
gains that can be made

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Internet Trading.

The Securities & Exchange Board of India (SEBI) approved the report on Internet Trading
brought out by the SEBI Committee on Internet Based Trading and Services In January 2000.
Internet trading can take place through order routing systems, which will route client orders to
exchange trading systems for execution. Thus a client sitting in any part of the country would
be able to trade using the Internet as a medium through brokers' Internet trading systems.

SEBI-registered brokers can introduce Internet based trading after obtaining permission from
respective Stock Exchanges. SEBI has stipulated the minimum conditions to be fulfilled by
trading members to start Internet based trading and services, vide their circular no.
SMDRP/POLICY/CIR-06/2000 dated January 31, 2000

Internet trading is becoming increasingly popular amongst the private client community, as
some traders prefer to go it alone. The advantage of internet trading is that the client can be
permanently connected to the market and instantly receive updated live information as well as
trade straight through without having to ring the adviser ask for a quote and then place the
order. The Internet has the added advantage of being able to access the service from any
location where Internet is available.

It is highly recommended that you have some trading experience prior to using any Internet
trading service. Internet trading requires extreme discipline and even the best have come
unstuck here. Internet trading is a fast and efficient way of receiving live instant data and is
becoming particularly popular with clients seeking direct access to electronically traded
markets around the globe.

The Internet trading platform is a real time trading solution for users to watch market prices and
execute buy and sell orders instantaneously. The user screen as is fully customizable by the end
user to display information based upon his own preferences. The Internet trading platform is
available for the Cash, Futures & Options segments of NSE and Cash segment of BSE and
NCDEX.

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ALTHOUGH the information technology revolution has reduced distances and created a global
village, only a few, isolated pockets in India are privy to these facilities and the inherent
advantages that stem from the Net. And yet, for the business savvy stockbroker, these isolated
IT villages have thrown up tremendous opportunities. With just two technologies to choose
from, Internet-based stock trading is still in its infancy in the country. Thus, there is limited
choice for early entrants –NSE.IT and Financial Technologies. These technologies offer front-
end trading software, by providing the investor with a trading platform. For the broker, they act
as an interface between the stock exchange, the bank and the depository participant (DP) for
executing banking and securities transactions. The efficacy of the bank and DP interfaces is yet
to be fully tested in the domestic market .The final test of the efficiency and reliability of these
technologies will come when multi-bank and multi-DP interfaces are built with the broker.
This will be the major challenge for Internet software. The objective before the online broker is
to execute a large number of transactions from a large client base and a large order book
position. This calls for extremely sophisticated and efficient technology and software. The
advantage for a late entrant into Internet stock trading will be the presence of a wide array of
tested and proven technologies to choose from, at low costs. And, as time goes by, value
addition will become the norm for the existing software. Something which the early entrant is
not privy to. But, despite the advantages that exist for later entrants, time is of vital importance.
The early entrants would have created their customer base and consolidated their market share.
The choice then would be between value-added superior technologies and establishing and
consolidating the market. We at Geojit Securities Ltd. have been the early birds in Internet-
based trading. Technology can be upgraded as and when the requirement arises. Moreover,
technology is a scalable investment. To start with, a minimum investment of Rs50 lakh is
essential to start Internet based trading, but as the number of customers grows, an investment of
around Rs 5 crore will be required to facilitate trading for around 10,000 customers. While it is
neither essential nor desirable to upgrade technology until a critical mass is arrived at, fresh
investment in technology will become mandatory as the customer base increases. Thus, early
entry will prove to be an advantage rather than a handicap. Though much more refinement is
possible, Internet-based trading as we have it in India today is an order routing and execution
system, providing seamless trading in shares on the National Stock Exchange. The client, after
signing an agreement with the Net broker, gets a password, which enables him to get the
trading terminal on his computer. This terminal gives real-time information on the offers and
bids, as also various market information such as the Nifty index, volume last traded, rate,
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quantity and soon. The client can also set up his own market watch of shares in which he has an
interest. The trader can set up a portfolio watch so that the value of his portfolio can be updated
on a real time basis. When the client feeds in the order, the order goes to the broker’s trading
server and from there to the NSE system. Once the trade is executed, the confirmation along
with the order number and trade number and time of execution flows back to the client. The
essential component of Internet based trading is the interface between broker, bank and DP. A
broker-bank-DP is the best combination to begin Internet trading, but our experience has shown
that it is not mandatory that all three are in position before Internet-based trading commences.
The figure on the opposite page illustrates Geojit’s Internet trading model. As Internet trading
becomes a reality, the interface will develop with enquiries from interested parties. Here,
ICICI, with its bank, stock- broking united DP, has a distinct advantage. However, early
players are not likely to face a shortage of suitors in the form of banks and DP’s. Later, as
competition hoots up and the market gets crowded, only the major players are likely to survive.
The entry of ICICI has also tested available financial technologies and found the broker-
banker-DP interface to be efficient. With this interface, the broker can control the exposure of
the client on a real time basis and also fix advance exposure limits on the basis of the deposit
with the broker or on the basis of the brokers own credit assessment of the client. In the
perspective of overall risk management of the Net broker, the system provides a flawless
control mechanism, which, in any case, is essential when dealing with faceless customers. In
fact, trading is only a logical extension of the computer-to-computer link allowed by the NSE,
and hence the broker will be in a position to provide value additions, either on his own or
through the software vendor.

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Advantages to clients

Traditionally, investors have been doing stock transactions with their broker either by placing
orders on the phone or by visiting the brokers’ offices. During times of heightened market
activity, investors find it difficult to get the broker on telephone or fax. Even if the client goes
to the broker’s office, the attention he gets on a busy day is based on the size of his order, often
resulting in frustration, arguments and disputes. For Geojit, the biggest motivation to enter Net-
based trading bandwagon was this situation. Even after installing 25 telephone lines in the
company’s Cochin office, clients still complained that they did not get through. The retail
broking business is a mass business activity and a broking company cannot afford to have
dissatisfied clients. Internet trading is the only solution to this problem and investors will have
the facility to trade as and when they want provided they have a Net connection. I am sure that
very soon there will be a differential brokerage system, and clients who trade through the Net
will be able to do it with a lower transaction cost compared to traditional brokers. This trading
system helps the broker to expand his business. Traditionally, brokers were hesitant to expand
in a big way as there were problems in dealing with unknown clients. In this system, security
features can be built in, with the broker himself providing the degree of safety he requires.
Without much capital investment, the broker will be able to enlarge his client base. With just
one office in the metro, the broker will be able to do business with many times the number of
existing clients.

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Major issues

Internet-based trading, to become The essential component of Internet- based trading is the
interface between broker, bankand depository participant, and as Net-based trading becomes a
reality this interface will develop. Really popular, should have both seam less whereas now
only the former is possible. This prevents the Internet broking community from announcing
large-scale reductions in brokerage. Ease of trading and settlement along with reduction in
transaction costs is what investor’s look for in the new system. Hence, bankers and DP’s will
have to change their systems to enable seamless settlements.
At present, when the client pays an advance deposit, the broker fixes the exposure limit, and if
there is a sudden fluctuation in the share price, the client is not able to trade unless funds move
to the broker physically. This process takes a minimum of two days, by which time the price
would have changed. The ideal situation is where the client is able to trade on the basis of his
deposit in the bank, which will be accessible to the broker through networking. Another serious
issue is the efficiency of the Internet infrastructure in the country, which affects the speed of
execution. During the day, traffic is so great that either the line is not available or it is
frustratingly slow, defeating the very purpose of Net-based trading. In short, seamless
settlement of Net transactions and improvement of the Internet infrastructure are of vital
importance for exponential growth of Internet-based trading.

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Impact on broking industry

The advent of Internet-based trading in the country will change the face of the Indian capital
market very soon in terms of the volume of transactions, the nature and settlement of trade, and
the profile of market participants. I personally don’t think many of our colleagues in the
business have really understood the impact the Net can have on the broking business. Soon,
Internet brokers will announce a flat rate per transaction instead of the present system of
calculating brokerage as a percentage of the value. If the system enables the Internet broker to
have seamless trading and settlement through the network, there is no cost differential between
a trade of Rs 50 lakh and a trade of Rs 5. The broker will straight away announce his per-trade
broker age in absolute numbers. When this happens, it will be a rude shock to the broking
community unless it changes very fast. Today, as per NSDL statistics, we have only 2.4 million
investors with demat accounts in the country. Considering various investor combinations who
are holding accounts, we can presume the country has roughly 5-7.5 lakh active investors now.
This figure is unbelievably small compared to the potential number of investors, which is
anything between 200 million and 250 million. When we take into consideration the way
transaction risk and cost in the Indian capital market is coming down, there will be a massive
surge in the number of investors and also in volumes. The only way to manage this kind of
potential growth is to adopt state-of-the-art trading techniques. The growth of Internet-based
trading as a mass trading technique in the country is unstoppable, going by the indicators
available and the signals for the future. When it ultimately gathers momentum, the biggest
beneficiary will be the investor, who will be able to trade with greater speed and transparency,
and at lower costs.

The advent of Internet-based trading in the country will change the face of the capital market
very soon, and the biggest beneficiary will be the investor.

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Internet Trading Network

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Trading transactional cycle

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Market watch screen

The Main Screen of the Internet Trading Platform where we can see the prices that are sent by
the exchange. The ticks sent by the exchange can be seen side by side as well as one below the
other

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Buy

To buy the selected security / derivatives select File - > Buy or press F1

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Sell

To sell the selected security / derivatives select File - > Sell or press F2

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Order book
This will show the Pending Orders of the users under the user

37
Trade book
The orders that are traded, are shown in the trade book

38
Net position

Net position shows the open positions the person is holding. It shows the brought forward
positions, the day’s position and also the positions for carry forward. We can square off the
open positions using the Net Position Screen

39
Margins

This screen shows the user deposit and margin that are allocated to the user

40
MBP

The user can view the Market by Depth by pressing F6

41
MARKET TIMINGS

• Trading on the equities segment takes place on all days of the week

• The market timings of the equities segment are:

Normal Market Open : 09:55 hours


Normal Market Close : 15:30 hours

• The Closing Session is held between 15.50 hours and 16.00 hours

Limited Physical Market Open : 09:55 hours


Limited Physical Market Close : 15:30 hours

42
SERVICES OF ICICI BANK

Products and Services

A product for every need: ICICIdirect.com is the most comprehensive website, which allows
you to invest in Shares, Mutual funds, Derivatives (Futures and Options) and other financial
products. Simply put we offer you a product for every investment need of yours.
1. Trading in shares:
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Cash Trading: This is a delivery based trading system, which is generally done with the
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Margin Trading: You can also do an intra-settlement trading upto 3 to 4 times your available
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off the position within the same day settlement cycle.

MarginPLUS Trading: Through Margin PLUS you can do an intra -settlement trading upto
25 times your available funds, wherein you take long buy/ short sell positions in stocks with
the intention of squaring off the position within the same day settlement cycle. Margin PLUS
will give a much higher leverage in your account against your limits.

Spot Trading: This facility can be used only for selling your demat stocks which are already
existing in your demat account. When you are looking at an immediate liquidity option, 'Cash
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credited to your bank a/c the same evening & not on the exchange pay out date. This money
can then be withdrawn from any of the ICICI Bank ATMs.

BTST : Buy Today Sell Tomorrow (BTST) is a facility that allows you to sell shares even on
1st and 2nd day after the buy order date, without you having to wait for the receipt of shares into
your demat account.

43
Call N Trade: Call N Trade allows you to call on a local number in your city & trade on the
telephone through our Customer Service Executives. This facility is currently available in over
11 major states across India.

Trading on NSE/BSE: Through ICICIdirect.com, you can trade on NSE as well as BSE.

Market Order: You could trade by placing market orders during market hours that allows you
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Limit Order: Allows you to place a buy/sell order at a price defined by you. The execution can
happen at a price more favorable than the price, which is defined by you, limit orders can be
placed by you during holidays & non market hours too.

2. TRADE IN DERIVATIVES:

FUTURES
Through ICICIdirect.com, you can now trade in index and stock futures on the NSE. In futures
trading, you take buy/sell positions in index or stock(s) contracts having a longer contract
period of up to 3 months.
Trading in FUTURES is simple! If, during the course of the contract life, the price moves in
your favour (i.e. rises in case you have a buy position or falls in case you have a sell position),
you make a profit.
Presently only selected stocks, which meet the criteria on liquidity and volume, have been
enabled for futures trading.
Calculate Index and Know your Margin are tools to help you in calculating your margin
requirements and also the index & stock price movements. The ICICIDIRECT UNIVERSITY
on the HOME page is a comprehensive guide on futures and options trading.

44
OPTIONS

An option is a contract, which gives the buyer the right to buy or sell shares at a specific price,
on or before a specific date. For this, the buyer has to pay to the seller some money, which is
called premium. There is no obligation on the buyer to complete the transaction if the price is
not favorable to him.
To take the buy/sell position on index/stock options, you have to place certain % of order value
as margin. With options trading, you can leverage on your trading limit by taking buy/sell
positions much more than what you could have taken in cash segment.
The Buyer of a Call Option has the Right but not the Obligation to Purchase the Underlying
Asset at the specified strike price by paying a premium whereas the Seller of the Call has the
obligation of selling the Underlying Asset at the specified Strike price.
The Buyer of a Put Option has the Right but not the Obligation to Sell the Underlying Asset at
the specified strike price by paying a premium whereas the Seller of the Put has the obligation
of Buying the Underlying Asset at the specified Strike price.
By paying lesser amount of premium, you can create positions under OPTIONS and take
advantage of more trading opportunities.

3. Investing in Mutual funds:


ICICIdirect.com brings you the same convenience while investing in Mutual funds also -
Hassle free and Paperless Investing.
With the inclusion of Fidelity MF, you can now invest on-line in 19 mutual Funds through
ICICIdirect.com. Prudential ICICI MF, JM MF, Alliance MF, Franklin Templeton MF,
Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI MF,Reliance MF,Kotak
MF,Tata MF,DSP Merrill Lynch MF, ING Vysya MF,CHOLA MF,Deutsche MF,HSBC MF
and Standard Chartered MF are the Mutual Funds available for investment. You can invest in
mutual funds without the hassles of filling application forms or any other paperwork. You need
no signatures or proof of identity for investing.
Once you place a request for investing in a particular fund, there are no manual processes
involved. Your bank funds are automatically debited or credited while simultaneously crediting
or debiting your unit holdings.

45
You also get control over your investments with online order confirmations and order status
tracking. Get to know the performance of your investments through online updation of MF
portfolio with current NAV.

ICICIdirect.com offers various options while investing in Mutual Funds:

Purchase: You may invest/purchase Prudential ICICI MF, JM MF, Alliance MF, Franklin
Template on MF, Sundaram MF, Birla Sun Life MF, HDFC MF, Principal MF, UTI MF,
Standard Chartered MF , Reliance MF, Kotak MF, Tata MF,DSP Merrill lynch MF, ING
Vysya MF,CHOLA MF, Deutsche MF,HSBC MF and Fidelity MF without the hassles of
filling application forms.

Redemption: In addition to giving hassle-free paperless redemption, ICICIdirect.com offers


faster liquidity. You can redeem the mutual fund units through ICICIdirect.com. The money
will be credited to your bank account automatically 3 days after the order placement date.

Switch: To suit your changing needs you may wish to shift monies between different schemes.
You can switch your monies online from one scheme to another in the same fund family
without any hassles.

Systematic Investment plans (SIP): SIP allows you to invest a certain sum of money over a
period of time periodically. Just fill in the investment amount, the period of investment and the
frequency of investing and submit. ICICIdirect.com will do the rest for you automatically
investing periodically for you.

Systematic withdrawal plan: This allows you to withdraw a certain sum of money over a
period of time periodically.

Transfer-in: You can convert your existing Mutual funds into electronic mode through a
transfer-in request.

4. IPOs and Bonds Online:

46
You could also invest in Initial Public Offers (IPOs) and Bonds online without going through
the hassles of filling ANY application form/ paperwork.
Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are about to hit the
market and analysis on these. IPO calendar, recent IPO listings, prospectus/offer documents,
and IPO analysis are few of the features, which help you, keep on top of the IPO markets.

5. Content Features:

There are a host of features on ICICIdirect.com that shall help you make informed investment
decisions.
We provide you with the indices of major world markets, nifty futures and ADR prices of
Indian scrips. Get daily share prices of all scrips, monthly and yearly high/lows etc through

Market Watch.
Get breaking news from CNBC and Reuters. Catch a glimpse of News Headlines through our
scrolling Direct News Headlines.
Get a snapshot of the latest developments in the markets through the day using Market
Commentary. You can get weekly snapshots also. Use Pick of the week, which focuses on
fundamental stocks with sound prospects.
Catch interviews, reactions and comments from industry leaders with CEO Call. Track the
movement of leading scrips within a sector across 12 sectors using Market@Desktop.
Equip yourself with our barometers. Market Barometer gives you in-depth information of the
weightages of shares on Nifty and Sensex. Get a glimpse of the performance of various
industry sectors through Industry Barometer.

Direct Technical Charts offer interactive charting with advanced indicators. Get a bird's eye
view of over 5000 companies at a single click using Company Snapshot. Glance through
analyst recommendations using Multex Global Estimates.

In case, you are not too comfortable with share trading, try our Learning Center, which is a
tutorial on investments and My Research that helps you to research a stock better.

47
6. Personal Finance:
Use our Personal Finance section and get hold of tools that can help you plan your investments,
retirement, tax etc. Analyse your risk profile through the Risk Analyzer and get a suitable
investment portfolio plan using Asset Allocator.

7. Customer Service Features:


With 'ICICIdirect Customer Tools & Updates' you can trouble shoot all your problems
online.
Address your trading queries on-line through "Easy Mail". You can view and change your
profile or password on-line through General Profile option.

Get details of ICICI Centers, our sales and service offices, across India through branch
locator.

View your Account Statement and Bill Summary of your transactions online using bills &
accounts.

48
49
1. Robert Hudson, Kevin Keasey and Kevin Littler
The International Institute of Banking and Financial Services, The University of Leeds,
Leeds LS2 9JT, UK

Available online 9 March 2000.

Abstract
Given the rapid increase, over the past couple of years, of share dealing services available on
the web, this paper describes the findings of a research study into the design specification of
web-based (net) share trading sites. The purpose of the research is to highlight the key features
of net trading sites across the globe and to identify ‘best of breed’ examples of the features. The
research is based on the latest available literature and a review of the majority of the sites
across the globe. With this background in mind, the paper offers the first comprehensive review
of the types of features that are available on net trading sites across the globe.

2. Shi-Ming, Yu-Chung
Department of Information Management, National Chung Cheng University, Taiwan
Department of Decision Sciences and Management Information Systems, Miami
University,Miami,USA
Received 1 January 2003; accepted 1 February 2004. Available online 6 May 2004.

Abstract
With the influence of the Internet booming and global competition expanding, E-Commerce
(EC) is receiving considerable attention worldwide. Currently, most people in this new era are
thinking about whether or not EC could bring unlimited business opportunities and new
competitive advantages. Among all EC applications, Internet-based stock trading is really one
of the best ways to understand the attraction and popularity of EC. The purpose of this paper is
to figure out the decision factors that affect the brokers in Taiwan in adopting an online stock
trading system. This study had scrutinized 16 factors that are related to affect brokers' decision

50
in adopting an online stock trading system. Further, the results from this research also indicate
that five decision factors significantly distinguish the adopters from the non-adopters in terms
of the brokers' decision to adopt a stock trading system. In addition, this study provides some
useful suggestions and/or implications for the academician, government, and practitioners in
the area of online stock trading.

3. Graduate School of Management, Ming Chuan University, Taiwan.

Received 9 April 2003; revised 15 June 2004; accepted 9 July 2004. Available online 26
October2004.

Abstract
This study presents a decision model using the real options approach (ROA) for evaluating the
entry or exit of the Internet securities trading business in the face of both technological and
economic uncertainties. Furthermore, this study considers the effect of uncertainty and the
added profits after establishing electronic securities trading system (ESTS) to determine the
optimal threshold for implementing the entry/exit project. Additionally, the differences between
the real options approach and the net present value method are discussed. Numerical analysis of
the Taiwan stock market using the real options approach is more consistent with the observed
entry/exit data than similar analysis using the net present value method for supporting the
entry/exit decisions in the face of uncertainty.

51
4. An overview of online stock trading: history, characteristics, opportunities, challenges
and the impact of the SEC regulation reform on trading structure

Haroun Alryalat, Ray J. Paul, Mahmood Shah: School of Information Systems, Computing and
Mathematics, U.K.

International Journal of Business Information Systems 2007 - Vol. 2, No.1 pp. 58 - 74

Abstract
This paper discusses the impact of US Securities and Exchange Commission (SEC) regulation
reform on online and traditional trading structures. The aim is to provide a review of relevant
issues within online stock trading and subsequently form a research agenda. To achieve this
aim the following objectives are set: (1) to describe the current state of online trading, (2) to
provide an overview of Electronic Communications Networks (ECNs) and existing regulations
and (3) to discuss the impact of SEC regulation reform on trading structures. In doing so this
paper will provide insights into how ECNs are used and how their growth and development are
affected by the SEC regulation reform

52
53
RESEARCH DESIGN

Fundamental to the success of any formal project is a sound research design. A research
design is purely and simply the framework or plan for a study that guides the collection
and analysis of data. It is a blueprint that is followed in completing a study. A good
research design has the characteristics, viz., statement of the problem, objectives of the
study, scheme of the study, research methodology, importance of the study and finally the
limitations of the study. The functions of a research design are to ensure that the required
data are collected and they are collected accurately and economically.

3.1 Statement of the problem

The statement of the problem is, “To measures the present level of awareness among
the investor’s regarding ‘‘Internet trading of securities”. The criterion for doing
Investment through Internet is that it should be present in all areas.
This project is particularly linked to Internet trading of securities and it is done to evaluate
investor’s awareness towards Internet trading so it will help National stock exchange to
get an overview about investor’s intentions.

• Investor’s awareness regarding Internet trading of securities has to be evaluated with


respect to their awareness level of preference, sources of awareness, loyalty, services they
avail, frequency of visit, investment power.
• In addition to the above mentioned factors investor’s perception has also to be evaluated on
the parameters that influence them most for going for internet trading is satisfaction
towards services.

3.2 Objectives of the study

Objective setting is the initial stage or starting point of any project to be undertaken. It is
essential to know what objectives mean literally or from the study point of view. The
objectives of this project are:-

54
1. To measure the present level of awareness among the investors regarding Internet
trading in Jalandhar city.
2. To broadly access the awareness of investors about the companies who are dealing in
Internet trading of securities.
3. To determine various attributes that influences investors the most for going Internet
trading.
4. To identify the future trends and expectations of investors for Internet trading.

3.3 Scheme of the study

The entire study is divided into four chapters, but in a different configuration:

Chapter 1 “Introduction” Includes literature on the topics


1.1 An overview of Indian Capital market- it gives brief dicription about the
Indian capital market.
1.2 A brief description of the project undertaken.
Chapter 2 “Review of literature.

Chapter 3“Research Design”; This section deals with the Statement of the problem; Objectives
of the study; Scheme of the study; Research methodology, which deals with the research
design, data collection methods and sampling techniques that has been used; fieldwork that has
been carried out; the importance of the study and finally the limitations inherent in the project.

Chapter 4 “Analysis and Interpretation”; In this chapter various statistical tools that has been
used to analyze and interpret the collected data has been mentioned. This chapter
also contains tables, charts and graphs. Each table or chart is followed by a
detailed summary interpreting that. The study objectives are kept in mind while
analyzing and interpreting presenting results.

Chapter 5 “Findings, Suggestions and Conclusion”; In this chapter each of the objective is

55
considered and findings are concluded in view of that. Suggestions from my
side to the beauty industry are also given in this section.

The information, which is not directly related to the main body of the research
report, is included in the appendices for those readers who want to go in
depth of certain aspects of the research work, which includes – The
Questionnaire.

56
Research Methodology

This section deals with the type of research design, data collection methods, sampling plan and
the fieldwork to be carried out.

Type of Research Design

Descriptive type of Research Design has been used in this study. Surveys and Field studies are
best suited for descriptive research. Companies undertake them to learn about people’s
knowledge, beliefs, preferences and satisfaction.

Data Collection Method

After identifying and defining the research problem and specific information required solving
the problem, the next task was to look for the type and sources of the data, which will yield the
desired results.

Two types of data are available to a researcher. These are (1) primary data and (2) secondary
data. Before collecting primary data, secondary data was collected. It was collected from
exchange’s profile, magazines, books, websites and other periodicals. This process of
secondary data collection is also called desk research. Survey method was adopted for
collecting primary data. Survey research is a systematic gathering of data from respondents
through questionnaires. A copy of Questionnaire used is attached in the Appendix.

The Structured-Undisguised type of questionnaire has been used to collect the information.
There are in total eight questions in the questionnaire. Most of the questions are close ended
while few are kept open ended. Their significance with respect to the objectives is as follows:

• The first objective is to evaluate the percentage of respondents investing in share market in
Jalandhar is accomplished by question no.1st in the questionnaire.

57
• The second objective of accessing the way through which investor’s invest in market is
accomplished by question no.2nd
• Third objective i.e. evaluating for how long investor’s doing internet trading & how many
accounts they have can be analyzed specifically from question no. 3rd 4th.
• Fourth objective of accessing the awareness of investors about the companies who are
dealing in Internet trading is accomplished by question no. 5th.
• Fifth objective of studying that why investors prefer Internet trading over to online trading
is analyzed specifically by question no.6th.
• Sixth objective of evaluating that what kind of problems are faced by investors while using
Internet trading. It can be analyzed by incorporating question no.7th.

Sampling plan

After deciding on the type of research design and the data collection method, the next step was
to design the sampling plan. This plan calls for following decisions:

Sampling Unit: Who were surveyed?


Only Investor’s of different age groups in Jalandhar were surveyed so that a better idea
about their perception can be generated.

Sampling Size: How many people were surveyed?


In total 100 respondents were surveyed.

Sampling design: How were they selected?

Convenient sampling was used for conducting this survey. Samples were taken as such so
that they can cover almost every section of Investor’s so that there is less biasness. Samples
were taken from different companies like India bulls who are dealing in Internet trading.

58
Criteria of selection: how Investor’s were selected?

For Internet trading of securities: only those companies were selected who are dealing in
Internet trading.

For respondents: male and female both respondents who are investing in securities and who
themselves avail the services.

This criterion was used so that a perfect idea about which mode of Investment & respondents
are to be selected can be generated which can lead the project in accurate direction.
The respondents were contacted personally. Personal interview is the most versatile method.
The respondents were asked questions and responses were noted. Apart from the questions in
the questionnaire, other suggestions by the respondents were also encouraged during the visit.

59
3.5 Importance of the study

This project will help

1 To understand the Investor’s perception i.e. their awareness, preference, loyalty, their
consciousness about Internet trading, how frequently they invest, and for what major
services they go, their expenditure behavior, in Jalandhar City.
2 Since investors are the ultimate target of any company thus by getting a view about their
perception an idea about the trend that is going on in the market could be generated &
marketing strategy could be developed accordingly.
3 Since this study is not linked to any specific company so it will help to get a general view
of investors towards Internet trading companies that are present in Jalandhar without any
biasness.
4 To understand the effectiveness of their advertising mediums so that they can concentrate
on the medium which is more effective and can counter their weaknesses to penetrate the
market effectively.
5 To understand that whether investors are loyal to companies or not so that such strategies
could be made such that they can be made loyal.
6 It will help companies to focus on the major factors that customers consider for investment.
7 It will help to generate a view about what investors actually want, what services they
actually avail, and whether they are satisfied with the services that are currently provided to
them so that any flaws if found can be treated.

60
3.6 Limitations

There are always some limitations in every endeavor that any person undertakes. Some of these
limitations in this study are:

1. Due to limited time span and funds, sample size has been restricted to 100 only thus it can
be generalized for a larger population.
2. The sample is more a representative of Jalandhar city which may be biased as compared to
other areas.
3. The accuracy of the data depends upon the willingness and the honesty of the respondents
& unwillingness of few respondents to tell truth may create biasness in results.
4. The relevance of this study is short term. As the time lapses the authenticity of the study
may decrease due to changes in the various determinants i.e. change in trends, change in the
level of awareness, interest, and knowledge of the general public etc.

61
62
Before Analysis and Interpretation, the primary data which was collected by personnel
interviews, was edited, coded and tabulated. It was done because the data was scattered in
questionnaire.
Statistical tools that has been used for data analysis is Percentages and total values to
organize and summarize the data in order to increase the usefulness of the results in such a
manner that it helped me to relate the critical points with the study objectives.

Analysis of question no. 1st: -


It was general question as in this question respondents were asked about that wheather they are
investing in share market or not?

TABLE NO. 4.1 How many investor’s invest in share market.


Out of total 90 respondents following table shows wheather they invest in share market or not.

Investment in share market RESPONSE TOTAL

YES 90 90

NO --- 90

Graphical representation of table no. 4.1 is as follows: -

100

80

60
DO YOU INVEST IN SHARE MARKET
40

20

0
YES NO

63
It was concluded from the analysis that 100% of the respondents were investing in the share
market. This question is specifically asked from those respondents who are investing in the
share market. So the ratio of this response is 100%.

Analysis of question no. 2nd


It was an important question according to the study conducted as here respondents were asked
that how they invest in the share market. This question was specially designed to know that
how many investors are aware of Internet trading.

TABLE NO. 4.2 Mode of investment in share market

Following table represents data of 90 respondents

SOURCE AWARE
Terminals 10
Internet 52
Both 28

Graphical representation of table no.4.2 is as follows: -

60
50
40
30
HOW DO YOU INVEST
20
10
0
TERMINALS INTERNET BOTH

Thus it was concluded from the data that the most effective medium of investment is internet
57.77% investors are aware of internet trading and only 11.11% investors are those who are

64
still investing through terminals and the 31.11% investors are those who preferred both the
modes of investment.

Analysis of question no. 3rd


This question was designed to know for how long investors doing Internet trading.

TABLE NO. 4.3 FOR HOW LONG INVESTORS BEEN DOING INTERNET TRADING

OPTIONS RESPONSE TOTAL


Less than 6 months 24 90
6 months- 1 year 28 90
1 year – 3 years 22 90
3 years & above 6 90

Graphical representation of table no. 4.3 is as follows:-

35
30
25
20
15 HOW LONG HAVE YOU BEEN
10 DOING INTERNET TRADING
5
0
<6 6 TO 12 12 TO 36 > 36
MONTHS MONTHS MONTHS MONTHS

It was concluded from the above data that 31.11% investors are doing investment from 6
months to 1 year and only 6.66% investors are those who are dealing in market through internet
from more than 3 years. 11.11% (10 respondents) investors are those who are investing through
terminals so they were not eligible for this question and further questions.

Analysis of question no. 4th: -

65
Question no. 4th was an important question as in it respondents were asked about that how
many Internet accounts they have?

TABLE NO. 4.4 TOTAL NUMBER OF INTERNET ACCOUNTS INVESTORS


HAVE

NO. OF ACCOUNTS RESPONSE TOTAL

One 52 90

Two 24 90

Three 4 90

Four 0 90

Five or more 0 90

Graphical representation of table no. 4.4 is as follows: -

60
50
40
30 HOW MANY INTERNET TRADING
ACCOUNTS YOU HAVE
20
10
0
1 2 3 4 >5

It was concluded from the above data that the most of the investors have only one Internet
trading account I.E 57.77% and only 4.44% investors are having three accounts. No one have
more than three accounts.
.

TABLE NO. 4.5 AWARENESS ABOUT THE COMPANIES WHO ARE DEALING IN
INTERNET TRADING.

66
NAMES OF COMPANIES AWARE INVESTORS
SHAREKHAN.COM 24
INDIAINFOLINE.COM 34
INDIABULLS.COM 62
ANGELBROKING.COM 10
MOTILALOSWAL.COM 20
AOLBROKING.COM 00

Graphical representation of table no. 4.5 is as follows: -

80
AWARENES S ABOUT THE C OMP ANIES WHO ARE
60
DEALING IN INTERNET TRADING.

40

20

0
SHA REKHAN INDIA B ULLS M OTILALOSWAL

It was concluded that 68.88% of the respondents were aware of indiabulls. Not even a single
investor is aware about the aolbroking company most of the investors traded trough indiabulls.
In this the awareness about the companies are followed as indiabulls
>indiainfoline>sharekhan>motilaloswal>angelbroking>aolbroking.

TABLE NO.4.6 PREFERENCE OF INVESTORS FOR INTERNET TRADING TO


ONLINE TRADING.

67
REASONS ROSPONSE OF RESPONDENTS
On the spot trading 32
Easy to operate 40
Convenience 46
Transactional security 10

Graphical representation of table no. 4.6is as follows

60
40
20
0 WHY DO YOU PREFER INTERNET
TRADING

CONVINIE

SECURITY
ON SPOT

EASY

TRADING TO ONLINE TRADING.

TRASACT
IONAL
NECE

According to analyzed data it was found that major part of the 51.11% investors preferring
Internet trading to online because of convenience and 44.44% investors using it because it is
easy to operate. Number of the investors using it because of it provides on the spot trading
facility and the high transactional security to the investor’s fund.

Analysis of question no. 7th: -


This question is formulated to know that what kind of the problems does investor’s faced while
using Internet trading.

TABLE NO. 4.7 PROBLEMS FACED BY INVESTORS WHILE DOING


INTERNET TRADING.

68
PROBLEMS RESPONSE OF RESPONDENTS
Network problem 28
Slow speed 50
Transactional security 8
Freezing of market 10
Hanging of system 24
Other 2

Graphical representation of table no. 4.7 is as follows:-

PROBLEMS FACED WHILE


INTERNET TRADING

60

40

20

0
NETWORK SPEED TRASACTIONAL MARKET HANGING other
SECURITY FREEZING

According to the analyzed data it was clear that most of the investors facing the problem of
slow speed of the transaction because number of investors are using the same site for trading at
a time. 31.11% investors and 26.66% investors facing the problem of network and hanging of
the system because the files are too heavy on the net. Number of investors also facing the
problems of transactional security and freezing of the market.

69
Findings

This part of the report contains an assortment of the entire analysis considering the objectives
given in the beginning. From Analysis and Interpretation, findings are as follows: -

1. It was found that 100% of the respondents were investing in the share market.

2. It was found that most effective medium of investment is Internet. 57.77% investors are
aware of Internet trading and only 11.11% investors are those who are still investing
through terminals and the 31.11% investors are those who preferred both the modes of
investment.

3. It was found that 31.11% investors are doing investment from 6 months to 1 year and only
6.66% investors are those who are dealing in market through internet from more than 3
years. 11.11% (10 respondents) investors are those who are investing through terminals.

4. It was found that the most of the investors doing trading through one Internet account only.
The percentage of having more than one account is only 31.1%.

5. It was found that 68.88% of the respondents were aware of indiabulls. No. Of the investors
traded trough indiabulls. In this the awareness about the companies are followed as
indiabulls>indiainfoline>sharekhan>motilaloswal>angelbroking>aolbroking.

It was found that trading trough Internet is much convenient than to online. It is easy to operate
and transactional security is much higher in Internet trading.

6. It was clear that most of the investors i.e. 55.55% facing the problem of slow speed.
31.11% investors and 26.66% investors facing the problem of network and hanging of the
system. Number of investors also facing the problems of transactional security and freezing
of the market.

70
Conclusion

In the whole world trading in security market is increasing at a rapid rate so in India numbers of

investors are increases at rapid rate. In the past trading was done by auction system so it was

difficult to attract large number of investors. Then came the online trading now trading was

done through a single platform like BSE-Bolt. Now with introduction of internet trading almost

every broker is offering the services of trading through internet. Now it is very much easy for

investors to trade in shares because they can trade by use of internet from anywhere. But not

much of people aware about benefit of internet trading. So there is large scope of internet

trading.

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INTERNET TRADING OF SECURITIES AND ITS
INCREASING TREND
A SURVEY OF JALANDHAR CITY.

I SUNIDHI GUPTA, STUDENT OF MBA AT GNDU, REGIONAL CAMPUS, DAV COLLEGE


JALANDHAR CONDUCTING A SURVEY ON “INTERNET TRADING OF SECURITIES AND ITS
INCREASING TREND.” KINDLY ANSWER THE FOLLOWING QUESTIONS. YOUR RESPONSE WILL
BE KEPT CONFIDENTIAL AND USED FOR ACADEMIC PURPOSE ONLY.YOUR CONCERN WILL BE
HIGHLY OBLIDGED.

PERSONAL INFORMATION

A. NAME

B. PHONE NO.
.
C. AGE GROUP:
• 20-30
• 30-40
• Above 40

D. OCCUPATION:
• Student
• Businessman
• Govt. employee
• Any other (please specify)

E. MONTHLY INCOME:
• 0-10,000
• 10,000-20,000
• 20,000-40,000

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• Above 40,000

QUESTIONNAIRE

1Q: Do you invest in share market?

• Yes
• No

2Q: How do you invest?

• Through terminals
• Through Internet

3Q: For how long have you been doing Internet trading?

• Less than 6 months


• 6 months- 1 year
• 1 year- 3 years
• 3 years and above

4Q: How many Internet Trading accounts you have?


• One
• Two
• Three
• Four
• Five or More

5Q: Which companies are you aware of who are dealing with Internet Trading?

• Sharekhan.com

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• Indiainfoline.com
• Indiabulls.com
• Angelbroking.com
• Motilaloswal.com
• Aolbrooking.com

6Q: Why do you prefer Internet trading to Online trading?

• On the spot trading


• Easy to operate
• Convenience
• Transactional security
Any other___________________________________________________________

7Q: What are the problems faced while using Internet Trading?

• Network problem
• Slow speed
• Transactional security
• Freezing of market
• Hanging of system
Any other

8Q: Recommendations to solve the above problems.

Thank you for your valuable time.

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Bibliography

BOOKS

• Chandra, Prasanna, Financial Management: Theory and Practice, Tata McGraw Hill,
New Delhi, 1997.

• Elton E. J. and Gruber M.J., Modern Portfolio Theory and Investment Analysis,
Singapore: John Wiley and Sons, 5th edition, 1997.

• Malhotra, N.K., Marketing Research: An Applied Orientation, Pearson education


(Singapore) Pvt. Ltd. Publishers, fourth edition, 2004.
• Pandey, I.M., Financial Management, Vikas Publications, New Delhi, 1999.
Zikmund, William, Business Research Methods, Eastern press (Bangalore) Pvt. Ltd.
Publishers, seventh edition, Reprint 2003.

WEBSITES

• www.bseindia.com

• www.nse-india.com
• www.icicidirect.com
• www.sciencedirect.com
• www.sharekhan.com
• www.oznetlaw.net
• www.indiabulls.com
• www.indiainfoline.com
• www.kotaksecurities.com
• www.moneycontrol.com

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