National Institute Of Co-Operative Management

A
Project Report
On

Online trading
During Summer Training
At

Submitted To :-
National Institute of Co –operative Management

Submitted By
VIJAY CHOTALIA (56)
 National Institute Of Co-Operative Management

Guide’s
Certificate

This is to certify that VIJAY CHOTALIA, the student of NICM has carried
the project work as per the syllabus of Gujarat University. He prepare this Summer
Project on Study of Stock market in India under my guidance and his contribution
in making this report during the academic year 2005-06 is highly appreciated.

To the best of my knowledge the detail presented by him are original in

nature and have not been copied from any other source. Also this has not been
submitted earlier for the award of any degree or Diploma in Gujarat University or
any other University.

Guide’s Name
&
Sign
Mr. Urvish Shah
(M.D. Gandhinagar branch)
 National Institute Of Co-Operative Management

Acknowledgemen
t

It was unforgettable experience for me in SHAREKHAN

Gandhinagar. I don’t have adequate words to express my profound gratitude to our
project guide Mr. Urvish Shah (M.D.), who gave me a good opportunity to have
very in depth analysis in the field of Stock market during the time of heavy crash
and a new hike. So I heartily thank him for his tremendous support and guidance
that he provided us. I would also like to thank other members at Sharekhan
Gandhinagar including Mr. Nishit Gorasia and Mr. Sandeep Lotwani who gave
idea about the performance of the stocks and other back- office handling. Without
their guidance it would be difficult for me to make project report the way it should
have been.

My acknowledgement would be incomplete if I don’t express my

deepest sense of gratitude towards the clients at Sharekhan who provided us the
idea about the stock market movement and other members including our marketing
team who gave the idea about how the market for stock brocking firm is
performing

Finally I thank to all my guides and my friends who helps me in my project

directly or indirectly.

Date: Khyati Thekdi (56)

Place: Gandhinagar (2005- 2007)
National Institute Of Co-Operative Management
 National Institute Of Co-Operative Management

History of
Stock exchange

The first stock exchange in India, Bombay stock Exchange (BSE) was
established in 1875 as ‘The Native Share and Association’ and has evolved over
the years into its present status as the premier stock exchange in the country. It
may be noted that BSE is the oldest stock exchange in Asia, even older than the
Tokyo stock Exchange. Which was founded in 1878. The country’s second stock
exchange was established in Ahmedabad in 1894, followed by the Calcutta stock
Exchange (CSE). CSE can also trace its origin back to 19th century. From a get
together under a ‘NEEM TREE’ way back in the 1830s, the CSE was formally
established in May 1908.

Traditionally In stock Market, the investors invest their money in

shares under the guidance of the Brokers of any stock broking company. This is
convenient to those investors who are not familiar with the computer and the use of
internet. But it requires more dealers to the share broking companies to give
guidance related to investment. There was a chance of inaccuracy of price because
it is a time consuming process. The cost of the company also increases due to more
paperwork. The investor point of view, there was a problem of privacy. The
information of investor may leak by the broker. So, to remove these limitations of
traditional broking, there was an emergence of new concept e-Broking.
 Stock exchange is a place where securities are bought and sold. Stock
exchanges are exposed to high degree of volatility, price fluctuations and it is
driven by the demand supply of stocks. Stock Brokers are the authorized person
who is allowed to buy and sell stocks on behalf of individuals and institutions and
the authority is granted by SEBI.

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E- Broking

Today is world of technology. So, the person who adopt it, get the
success. So, E-Broking means broking through electronic means. E-Broking is the
broking in which the investors who are familiar with the use of computer and
Internet they directly trade in stock market. They trade any time at any place when
the stock market is open. The cost of transaction is also reducing with time. The
investors have a large range of option for the trading. It is a paperless transaction
so it reduces the cost of company. There was a facility of live streaming quotes,
which give exact price of share which prevailing in the market at that time.

Discount online brokers allow you to trade via Internet at reduced

rates. Some provide quality research, other don’t. Full service online brokerage is
linked to existing brokerage. These brokers allow their client to place online orders
with the option of talking/chatting to brokers if advice is needed. Brokerage rates
here are higher. Online trading is still in its infancy stage in India.

The development of broking in India can be categorized in 3 phases:

 1. Stock brokers offering on their sites features such as live portfolio manager,
live quotes, market research and news to attract more investors.
2. Brokers offering on line broking and relationship management by providing
and offering analysis and information to investors during broking and non-
broking hours based on their profile and needs, that is, customized services.
3. Brokers will offer value management or services such as initial public
offerings on line, asset allocation, portfolio management, financial planning,
tax planning, insurance services and enable the investors to take better and
well-considered decisions.

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INTERNET TRADING IN INDIA:

In the past, investors had no option but to contact their broker to get
real time access to market data. The Net brings data to the investor on line and net
broking enables him to trade on a click. Now information has become easily
accessible to both retail as well as big investors.
The development of broking in India can be categorized in 3 phases:
1. Stock brokers offering on their sites features such as live portfolio manager,
live quotes, market research and news to attract more investors.
2. Brokers offering on line broking and relationship management by providing
and offering analysis and information to investors during broking and non-
broking hours based on their profile and needs, that is, customized services.
3. Brokers (now e-brokers) will offer value management or services such as
initial public offerings on line, asset allocation, portfolio management, financial
 planning, and tax planning, insurance services and enable the investors to take
better and well-considered decisions.

OBJECTIVES OF INTERNET TRADING:

 Increase transparency in the markets.
 Enhance market quality through improved liquidity, by increasing quote
continuity and market depth.
 Reduce settlement risks due to open trades, by elimination of mismatches.
 Provide management information system (MIS).
 Introduce flexibility in system, to handle growing volumes easily and to
support nationwide expansion of market activity.
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PROCEDURE FOR INTERNET TRADING:

 Step-1: Those investors interested in doing the trading over internet system,
that is, NEAT-ISX, should approach the brokers and register with the Stock
Broker.
 Step-2: After registration, the broker will provide to them a login name,
password and a personal identification number (PIN).
 Step-3: Actual placement of an order. An order can then be placed by using
the place order window as under:
o First by entering the symbol and series of stock and other parameters
such as quantity and price of the scrip on the place order window.
o Second, fill in the symbol, series and the default quantity.
 Step-4: Thus, the investor has to review the order placed by clicking the
review option. He may also re-set to clear the values.
  Step-5: After the review has been satisfactory; the order has to be sent by
clicking on the send option.
 Step-6: The investor will receive an ``Order Confirmation'' message along
with the order number and the value of the order.
 Step-7: In case the order is rejected by the Broker or the Stock Exchange for
certain reasons such as invalid price limit, an appropriate message will
appear at the bottom of the screen. At present, a time lag of about ten
seconds is there in executing the trade.
 Step-8: It is regarding charging payment, for which there are different
modes. Some brokers will take some advance payment from the investors
and will fix their trading limits. When the trade is executed, the broker will
ask the investor for transfer of funds by the investor to his account.
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FACTORS TO KEEP IN MIND WHILE SELECTING ONLINE BROKERS:

Brokerage cost: It is important to weigh up the subscription and trading costs

charged by an online broker against benefits offered by the site. All online brokers
display their charges on their sites. Some make sure you find the charges easily,
while with others you will have to search a bit.

Safety: Please make sure site has 128-bit encryption to ensure safety of transaction
online. ICICIDirect.com, 5paisa.com are few sites with 128-bit encryption. You
normally get a secured Login id and password. It is always advisable to frequently
change trading password. Ideally online trading site should be fully integrated. The
greater the backward integration, the better it is for the customer. Ideally broking
account, demat account and bank account should be linked electronically.
Rate refresh: Rate refresh has to be real-time with no time lag. The speed and
reliability comes with huge investment in technology. It is always advisable to
check rates of online broking sites with BSE/ NSE terminal rates.

Speed of execution: System has to be fast and reliable that does just one job-
executes your trades. The last thing you need is a site that is heavily congested
with the users who are downloading heavy jpeg graphs or pulling the latest story
why market is moving. The site should be one click wonder where squaring off all
your positions or canceling all your pending orders takes one click and a
confirmation of action.

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Trading limit: For trading, all sites provide 4 times buy and sell limit against
margin money put in by customer. For delivery of shares, buying limit is equal to
margin money put in by customer. Couple of sites also provides margin funding
for buying of shares.

Free trial period: Site should allow users free trial period to familiarize yourself
with system before you decide to become trading member of the site.

Intraday chart/ historical chart: The site should provide intraday chart tick by tick
time and price data / historical chart for technical analysis by investors of particular
scrip. Lot of people trade based on charting packages.
IF YOU NEED THIS PROJECT PLEASE CONTACT
CHAUHAN BROTHERS
9855017625, 9217825228