A Brief Study of Equity Products at Indiabulls ventures Ltd.

&
Comparative Study of Equity Market

Prepared By
Name: Suraj Kant Pandey
Roll no. : 161152
Batch: 24th (2016-2018)

Under the guidance of:

SIP Guide: Mr. Pankaj Sharma
HOD of RMS Department
&
SIP Mentor: Mr. Kesava Rao NSNM
In Charge-Placements, VJIM

VIGNANA JYOTHI INSTITUTE OF MANAGEMENT

VJIM, Vignana Jyothi Nagar, Bachupally, (Via), Kukatpally, Hyderabad,
Telangana500090
Phone: 040 2304 4951, Website: www.vjim.edu.in

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General description of the internship
Title of the SIP project: A Brief Study of Equity Products at
Indiabulls ventures Ltd. &
Comparative Study of Equity Market

Name of the student: Suraj Kant Pandey

Name of the company: Indiabulls Ventures Ltd

Department: RMS Department

Company mentor details:

Name: Mr. Pankaj Sharma

Designation: HOD of RMS

Contact details: 09873709113

Email Id:pasharma@indabulls.com

Company address: Indiabulls House, 448-451

Udyog Vihar Phas-V Gurgaon-122016
Website: www.indiabulls.com

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 Certificate of Approval

This project titled “A Brief Study of Equity Product at Indiabulls ventures ltd. And
Comparative study of equity market”. Is hereby approved as a credible study of
business management carried out by suraj kant pandey student of MBA 4 th trimester is
satisfactory manner to warrant its acceptance as a prerequisite to the degree of MBA for
which it has been submitted.

Internal External

3
 CERTIFICATE

I hereby declare that this Project Report titled “A Brief Study of Equity Product at
Indiabulls ventures ltd. And Comparative study of equity market ” submitted by me,
is a bonafide work undertaken by me and it is not submitted to any other Institution or
university for the award of any degree/diploma certificate or published any time before.

Signature of the Guide In Charge-Placements, VJIM

Date:

4
 Acknowledgement

I take this opportunity to express my gratitude to all the people who are
instrumental in the successful completion of this project.

I would like to express my sincere gratitude to Mr. Pinku, Mr. Jai Prakash
Mishra, Mr. Rakesh Kumar, and Mr. Manish Chaubey for his continuous
support & guidance towards making this project success.

I would also like to thank my HOD, Mr. Pankaj Sharma for his kind
guidance towards analyzing the requirements of the project to be developed.

I would also like to show my greatest appreciation to all those who have
directly & indirectly supported me with their encouragement & guidance.
Without their encouragement & guidance this project would not have been a
success.

I am very thankful to Mr. Kesava Rao NSNM, VJIM- VIGNANA JYOTHI

INSTITUTE OF MANAGEMENT, for the guidance and interest evinced
throughout the preparation of this project.
Lastly I would like to thank VJIM for providing me such a good opportunity

Suraj Kant Pandey

4Th Trimester

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 EXECUTIVE SUMMARY

INDIABULL VENTURES LIMITED is a broking and distribution player, offering

Equity and Derivative trading through NSE and BSE and Currency Derivative on MSEI.
It is registered as a Depository Participant with both NSDL and CDSL and also provides
commodity trading on MCX and NCDEX through its subsidiary company.
Indiabulls Ventures Limited (Formerly Indiabulls Securities Limited) is one of India's
leading capital markets companies providing securities broking and advisory services.
Indiabulls Ventures also provides depository services, equity research services to its
clients and offers commodities trading through a separate company. These services are
provided both through on-line and off-line distribution channels. Indiabulls Ventures is a
pioneer of on-line securities trading in India. Indiabulls Ventures' in-house trading
platform is one of the fastest and most efficient trading platforms in the country.
Indiabulls Ventures is in the business of providing securities broking and advisory
services and is a corporate member of capital market, wholesale debt market and
derivative segment of NSE and of the capital market and derivative segment of BSE.
Indiabulls Ventures is a brokerage house to be assigned the highest rating BQ-1 by
CRISIL.

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 Table of Contents:

 PARTICULARS PG NO.
 Executive Summary 6
 PMCI Analysis 8
 Objective of study 10
 Indian stock market overview 11
 Online share trading in India 14
 Investors awareness 15
 Margin trading 18
 Online trading 20
 Comparative study of equity market 21
 Research Methodology 21
 Analysis and Findings 22
 Suggestions 22
 Limitations 23
 Relevance 24
 Learning 24
 Bibliography 25
 Glossary 26

PMCI Analysis of Indiabulls Ventures Ltd.

Product:

The following are the products and services of indiabulls Ventures limited are as follows:

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  Power Indiabulls(PIB)
 Indiabulls Signature account 
 Depository Services 
 Currency Derivatives
 Indiabulls Equity Analysis 
 IPO Online

MARKET:
The stock broking market falls under monopolistic competition. There are many
producers and many consumers in the market, and no business has total control over the
market price. Consumers perceive that there are non-price differences among the
competitor’s products and there are few barriers to entry and exit. In stock broking
market, there are various big companies alongside Indiabulls they are- Karvy, ICICI
direct, HDFC securities, Kotak securities etc.
The competition in this market is very stiff. At present Indiabulls major clients are
trading through online. Indiabulls has its branches all over the country and company is
growing fast.
The stock broking companies not only do trading on behalf of its clients, but also provide
them important advice, which makes their work interesting.

COMPANY:

Indiabulls Group is one of the country's leading business houses with interests in housing
finance, real estate, securities, construction equipment leasing and facilities sector. The
group had combined revenues of over Rs. 10,623.6 Cr. and PAT of over 2,341.2 Cr. for
the year ended 31st March 2015.Various companies of Indiabulls Group are listed on
Luxemburg Stock Exchange, Bombay Stock Exchange, and the National Stock
Exchange.The combined market capitalization of these companies as on 30st June 2016
was Rs. 34,277.4 Cr.

Indiabulls Ventures Limited (Formerly Indiabulls Securities Limited) is one of India's

leading capital markets companies providing securities broking and advisory services.
Indiabulls Ventures also provides depository services, equity research services to its
clients and offers commodities trading through a separate company. These services are

8
provided both through on-line and off-line distribution channels. Indiabulls Ventures is a
pioneer of on-line securities trading in India. Indiabulls Ventures' in-house trading
platform is one of the fastest and most efficient trading platforms in the country.

Indiabulls Group started with its securities trading business, which incubated the financial
services business. The financial service business went on to incubate other businesses.
Thus in many ways the securities business was the seed that today has grown to
independently manage and separately listed business of the group. Indiabulls Ventures
has been assigned the highest broker quality rating BQ1 by CRISIL.

Other main listed companies:

Indiabulls Housing Finance Ltd. (IBHFL) is the 2nd largest private housing finance
company in India, regulated by the National Housing Bank (NHB). We have the highest
rating of AAA from CARE ratings and Brickwork ratings.

The company offers home loans at competitive rates, especially loans of up to Rs. 25
lakhs. Our employees are specially trained to guide the customer through different stages,
right from the initial process of applying for a loan till the time he takes possession of his
dream home.

INDUSTRY:
The Financial Services (Diversified) Industry consists of a collection of companies that
offer a wide variety of products and services. Asset managers and credit card companies
are the two largest groups within the industry, but after that, little commonality exists.
Banking, commercial lending, insurance, student loan origination, pawn brokerage, tax
preparation, and aircraft leasing are just a few of the other businesses. Thus, given such a
span of operating models and market segments, it is important not to paint the industry
with too narrow an investment brush

Objectives of the study:

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Objective of this study is to get knowledge about Indiabulls Ventures Ltd for, Demat
account, Equity market, and Derivative market, future and options market. Project is sub-
divided into the following objectives:

 To study the competition among Equity Broking Companies, especially in NSE.

 To study the profile of retail investors and institutional investors using Indaibulls
ventures ltd.
 To find the advantages of the Demat account and charges by various depository
participants.
 To study the trading platform of Indiabulls Securities and comparison of the
broking firms.
 To find the cost saving analysis on the brokerage charges by the Indiabulls
Securities on the share and derivative trading with the other broking firms.
 Positioning of Indiabulls in Financial service.

Indian Stock Market Overview

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The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd
(NSE) are the two primary exchanges in India. In India, in addition, there are 22 Regional
Stock Exchange. However, the BSE and NSE have established themselves as the two
leading exchanges and account for about 80 percent of the equity volume traded in India.
BSE has become the world’s fastest Stock Exchange with an order response time of 6
microseconds and the largest exchange in the world in terms of number of companies
listed. As of March 2016, BSE is the 2nd largest exchange in the world for currency
options, 3rd largest in the world for currency futures, 10th largest by number of trades
and 11th largest exchange in the world by market capitalization. Total Revenue in FY17
₹ 800.75 crore, up by 19%, mainly due to increase in Income from Securities Services by
39% to ₹ 335.70 crore in FY17.Net Profit in FY17 ₹ 220.57 crore, up by 66%.EBITDA
Margin increased by 1% to 48 % in FY17.Net Margin increased by 8% to 28% in
FY17.EPS after exceptional items increased from ₹ 24.35 per equity share to ₹ 40.41 per
equity share. Exceptional item during FY17 was ₹ 20.79 crore representing provision
towards transfer of 25% of profits to Settlement Guarantee Fund. The said regulatory
requirement has been done away with from 29th August, 2016.NSE has around 1500
shares listed. The BSE has over 5713 stocks listed. Both exchanges have a different
settlement cycle, which allows investors to shift their positions on the bourses. The
primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the S&P NSE50
Index (Nifty), which consist of fifty stocks. Both the exchanges have switched over from
the open outcry trading system to a fully automated computerized mode of trading known
as BOLT (BSE on Line Trading) and NEAT (National Exchange Automated Trading)
System. It facilitates more efficient processing, automatic order matching, faster
execution of trades and transparency. The scrips traded on the BSE have been classified
into ‘A’, ‘B1’, ‘B2’, ‘C’, ‘F’, and ‘Z’ groups. The ‘A’ group shares represent those,
which are in the carry forward system (Badla). The ‘F’ group represents the debt market
(fixed income securities) segments. The ‘Z’ group scrips are the blacklisted companies.
The ‘C’ group covers the odd lot securities in ‘A’, ‘B1’ & ‘B2’ groups and right
renunciations. The key regulator governing Stock Exchanges, Brokers, Depositories,
Depository participants, Mutual Funds, FII and other participants in Indian secondary and
primary market is the Securities and Exchange Board of India (SEBI) Ltd.

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Benefit of listing on BSE

 Reduces price volatility due to multiple matching of orders at a single price

 Greater liquidity due to deeper demand supply schedule
 Better Price discovery
 Minimised impact cost
 Fairer market especially for small, non professional investors because all trades
get executed at the same price
 Simultaneity of trades eliminates possibility of front running customer order
 Supervision and Control of Trading in Securities.
 Ability to raise futher capital
 Ready Marketability of Security
 Fund Raising and exit route to investors
 Fair Price for the Securities
 Timely Disclosure of Corporate Information
 Collateral Value of Securities
 Benefits to the Public

Benefit of listing on NSE

 A premier marketplace
 Visibility
 Largest exchange
 Unprecedented reach
 Transaction speed
 Short settlement cycles
 Broadcast facility for corporate announcements
 Trade statistics for listed companies
 Investor service centers
 Nominal listing fees
There are many Stock Exchange in the world
New York Stock Exchange —$18.8 trillion.The NYSE's value is not only the highest on
earth, but is worth almost three times as much as its nearest competitor, the NASDAQ.
Companies listed include many of the world’s largest like Apple, Facebook, and Google.

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NASDAQ — $7.5 trillion. Second, but second by a long way, is the NASDAQ. Short for
National Association of Securities Dealers Automated Quotations, the New York-based
exchange includes eBay, Kraft, and Microsoft on its benchmark Nasdaq 100 index. 
Shanghai Stock Exchange — $3.9 trillion. China's largest stock exchange, based in the
country's financial centre, Shanghai, counts brewer Tsingtao, Air China, and Sinopec as
constituents. 

Working of the stock Market

A person desirous of buying/selling shares in the market has to first place his order with a
broker. When the buy order of the shares is communicated to the broker he routes the
order through his system to the exchange. The order stays in the queue exchange’s
systems and gets executed when the order logs on to the system within buy limit that has
been specified. The shares purchased will be sent to the purchase by the broker either in
physical or demat format.

Rolling Settlement Cycle

In a rolling settlement, each trading day is considered as a trading period and trades
executed during the day are settled based on the net obligations for the day. At NSE and
BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2 nd working day.
Typically trades taking place on the Monday are settled on the Wednesday, Tuesday’s
trades settled on Thursday and so on.

Primary Markets

Securities available for the first time are offered through the primary securities markets.
The issuer may be a brand-new company or one that has been in business for many, many
years, like that of S CHAND. The securities offered may be a new type for the issuer or
additional amounts of a security used frequently in past. The key is that these securities
absorb new funds for the coffers of the issuer.
Secondary Markets

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Once investors have purchased new issues, they change hands in the secondary markets.
There are actually two broad segments of the secondary markets the organized exchanges
and the over-the-customer (OTC) market. The primary middlemen in the secondary
market are brokers and dealers. Broker act as an agent while dealer as a principal in a
transaction.
Organized stages are physical market place where the agent of buyers and sellers operate
through the auction process.

Depository

The organization responsible to maintain investor’s securities in the electronic from is

called the depository. In other words, a depository can therefore be conceived of as a
“Bank” for securities. In India there are two such organizations viz. NSDL and
CDSL.The depository concept is similar to the banking system with the expectation that
bank handle funds whereas a depository handles securities of the investors. An investor
wishing to utilize the services offered by a depository has to open an account with the
depository through a depository participant. Depository participant: the market
intermediaries through whom the depository services can be availed by the investors are
called a Depository Participant (DP).

Online share trading in India

Realizing there is untapped market of investors who want to be able to execute their own
trades when it suits them, brokers have taken their trading rooms to the Internet known as
online brokers, they allow you to buy and sell shares via Internet. There are 2 types of
online trading service:

Discount brokers

Discount online brokers allow you to trade via Internet at reduced rates. Some provide
quality research, other don’t.

Full service online

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Full service online brokerage is linked to existing brokerages. These brokers allow their
clients to place online orders with the option of talking/ chatting to brokers if advice is
needed. Brokerage rates here are higher. IndiaBulls.com, Sharekhan.com, ICICIsecurity,
karvey, motilal oswal are some of the online broking sites in India.

Factors investors keep in mind while selecting online brokers in India

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.

Security

Please make sure site has 128-bit encryption to ensure safety of transaction online.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

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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 doe’s 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.

Trading Exposure

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

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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.

Before you can trade, you need to open an account and register as a trader as with online
broking site. This involves filling up trading account form, Demat account form and for
faster transfer of money- Internet enabled bank account. Please read terms and condition
of each site before commencing to deal with them. As per SEBI rule, Photo id proof and
current address proof is a must for opening trading account.

Online share dealing on the Internet is now a way of life for thousands of investors. 80%
of South Korea and 30%-40% US trade are executed online. If you want to deal in shares,
thereto deal in shares, there is no easier way.

Sensex and Nifty

Sensex and Nifty are the two important indices that track the Indian equity market. There
are however many differences in their construction and behaviour. Investors must choose
one between the two to benchmark their portfolios. It is sometimes seen that these indices
move with a low correlation to each other, that is to say that they are not moving
together.

An index is used to give information about the price movements of products in the
financial, Commodities or any other market. A stock index is created to provide investors
with information regarding the average share price in the stock market.
Generally the stock price of any company is vulnerable to three types of news:
 Company specific
 Industry specific
 Economy specific

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Functions of an index:

The main objective is to give all market participants an indicator of the general
movement of the stock.

 The primary function of a stock index is to serve as a barometer of the equity

market. The ups and down in the index represents the movement of the equity
market.
Investors can have a clear picture on equity market.
 Secondly, stock market indices are lead indicators of the performance of the
overall economy. Similarly, sectoral index serves as a lead indicator of the
performance of that particular sector.
Perhaps, the most important use of an equity market index is as a benchmark for a
portfolio of stocks. The systematic risk of one’s portfolio can also be measured by
comparing it to the index.
 Finally, indices are useful in modern financial applications of derivatives. Indices
serve as the underlying for Future & Options products. In the Indian market, both
Sensex and Nifty are underlying for Futures and Options contracts.

Margin Trading

Margin trading equivalent to borrowing money to invest in stocks, here the investor
borrows money from his/her broker to invest in stocks through the same broker. The
“margin” here is the money actually borrowed from the broker. The margin loan can be
up to 50% of the total amount invested. This effectively means that you can invest in
shares worth Rs 100 by borrowing Rs 50 from your broker. This is called buying shares
on a 50% margin. If the value of the shares goes down, the investor has to pay a
“maintenance margin” to bring the margin up to 40% of the market value of the shares.
This margin is paid when the broker makes a “margin call” to the investor, and investor
has to pay the difference between current margin and maintenance margin to take it to

18
40%. If the margin falls below 30%, the broker has the discretion of liquidating the
client’s holdings and thus recovering the loan advanced.

Risks in Trading:

 You can lose more money that you have invested

 You may have to deposit additional cash or securities in your account on short
notice to cover market losses;

 You may be forced to sell some or all your securities when falling stock prices
reduce the value of your securities

 Your brokerage firm may sell some or all of your securities without consulting
you to pay off the loan it made to you.

Benefits of Trading:

I. The main benefit of Margin Trading for the investors is that it serves as an
avenue for the investor who wants to buy more shares than the cash
available.

II. The investor leverages the transaction and aim to make more money on the
investment than the interest payable on the margin loan.
III. It can be very effective tool in the hands of the experienced and heavy
trades, who can invest up to double his investible sum in the hope to earn
high profits.

IV. Trading on Margin improves liquidity in the market. With lesser amounts of
cash with investors, they can assume higher risk and can invest in higher
value of stocks.

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 V. The Official and structured market for Margin Trading will most likely lead
to an expansion of day trading activity in the market.
Day Trading provides the market needed liquidity to the equity market.

Online Trading
Investors can have complete control of their stock investing actions, now that they have
the convenience of buying and selling shares on the NSE online and in real time. Each
individual has access to the latest information and tools to analyse any stock investment
decision. Plus the power to execute the sale or purchase right before them on their
personal computer screen.

Advantages of online trading:

 The convenience of desktop investment-trade from anywhere at any time.

 Not just online but real time-from placing an order to having it executed-in a few
seconds.
 Continuous feedback of all transactions orders and their status.
 Three level security via Firewalls, data encryption using Secure Socket Layer (SSI)
technology, User IDs and Passwords i.e your personal information remains for your
eyes only.
 Online access to a wealth of live information that can facilitate better investment
decisions.

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 Comparative Study of Equity Market

Activation and other charges of company

company Trading Brokerage Demat Interest Settlement Mode of Software use

A/c AMC rate period trading
opening
charges
Indiabulls Rs 750 3 paisa per Rs 450 T+2 Online/ PIB
share Offline
Sharekhan Rs 750 Rs 16 per Rs T+3 Online/ Sharekhan Mini
(adjusted scrip 400(free Offline v1.0
against for 1st
first 6 year)
months
brokerage)
ICICI Rs 975 Rs 35 per Rs 600 T+2 Online/ ICICIdirect.com
trade Offline
Securities
Angel 0 5 paisa per If paid Rs 18% T+2 Online/ ODIN
share 2500then Offline
Broking Free AMC
Lifetime

RESEARCH METHODOLOGY

The literature study is our main method. This is used in order to fulfill the
Purpose, i.e. to give a short, but full overview of the existing theoretical definitions for
Trading in secondary and primary market. A detailed description on trading and other
investment opportunities available in market place is given in order to help or aid the
readers in assessing a better investment avenue.

The centre point of our study is an Indiabulls Ventures ltd, about which a detailed
description is given which includes history, development stages and current scenario.

21
The information in the study is a secondary data taken from the various sites of the
concerned company and most of the information is furnished from the various web sites
official as well as non official.

Analysis of data:
Data analysis is done with the help of bar charts; pie charts, tables and certain
mathematical tools are also applied to derive the results.

There is a rise in the share price of the Indiabulls ventures in the last 3 months from the
Rs 67.3 to Rs190, it is just the 3 times of the share price before 3 months.

Suggestions
 Interest rate on Funds Provided to investors on margin trading have to be
reduced

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 From the survey conducted, I found that interest rate on funds provided to
investors is more than other competitive firms. So company should take care of
this issue and try to have solution on this aspect which I felt more important.

 Brokerage rate on trading have to be reduced. Even this one of the major factor
that has to be taken care of, because competitors are providing lesser brokerage
both Intraday and Delivery trading which satisfies customer who are investing
and trading frequently.

 Tapping the high income groups

Company should focus on High-income groups and Level to be maintained.
They can better profit to the company and can increase the turnover of the
company.

Limitations:

 Findings cannot be generalized all over India

 Several suggestions could not be included in the report because more of
research works are required for them.
 The findings of the research are directly in accordance with above mentioned
time period and are directly proportional to market conditions
 The result is just an instantaneous view of the equity market scenario.
 Although every care has been taken to make sure that the research is accurate
to the highest degree of significance but still a slight possibility of errors
cannot be ruled out.

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Relevance of the project to the company:

Objective of this study is to get knowledge about Indiabulls Ventures Ltd for:
 Demat account
 Equity market
 Derivative market: future and options market
By this project work we can understand about the competition among Equity Broking
Companies, especially in NSE. To study the profile of retail investors and institutional
investors using Indiabulls ventures ltd. This will help the investors in investment
planning. To find the advantages of the Demat account and charges by various depository
participants. To study the trading platform of Indiabulls Securities and comparison of the
broking firms. To find the cost saving analysis on the brokerage charges by the Indiabulls
Securities on the share and derivative trading with the other broking firms.
This project work will help in positioning of Indiabulls in Financial service.

Learnings:

I learn NEAT software and BOLT software. I have done mock trading on this software
three Saturday. In this software I learnt how to book order, check pending order, check
position etc. Daily check circular of NSE and BSE.I learnt what is EOD ,EOS,IOC,Trade
for trade, Modifying pending order and what is cash market,CDS and detail in mutual
fund .In mutual fund learn different investment plan and fund of fund and future and
option.

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Bibliography

1) www.nseindia.com
2) www.sebi.gov.in
3) www.indiabulls.com
4) www.bse.com
5) www.icicidirect.com
6) www.sharekhan.com
7) www.angelbroking.com

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GLOSSARY\TERMINOLOGY

Arbitrage- Profiting from differences in price of the same share traded on two or more
stock exchanges.

Automated Screen Trading- Electronic trading in stocks through Visual Display Units
(VDU). The associated computer enters, matches, and executes the deal. It makes
possible a floorless exchange and brings transparency to deals.

Bears- Those who sell shares anticipating a fall in prices.

Bear Hammering- Persistent selling pressure by bears, bringing the prices down.

Beta Shares- Listed, but infrequently traded, shares of companies with a generally low
equity capital.

Blank Sales- Sale of securities by BEARS who do not possess the securities at the
moment of selling, but hope to buy them at a lower price when the market has fallen.

Book Closure-Before a company declares a dividend or issues bonus or rights shares, it

closes its register of members for a certain period, from one week to a month, during
which no transfer of shares is registered.

Brokers- are intermediaries who compete for the right to help people buy or sell
something of value on his client’s behalf.

Bulls-Those who buy shares in anticipation of increase in price.

Call Option- Right to buy at fixed price.

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Capital Market-includes primary market, securities market term lending institutions,
banks, investors engaged in providing long-term capital (whether equity capital or debt
capital) to the Industrial Sector.

Commodities Market-Market for trading bulk & basic goods like grain, edible oils,
rubber, cotton, metals, etc. Certain special items like tea & coffee are traded in auctions
with inspection facilities for the goods.

Day Trading-Buying and selling the same share during a single day, hoping to make a
profit from price fluctuations.

Depth market- refers to the number of participants in the market ready to transact at a
given price to ensure sufficient liquidity.

Derivatives- is a product whose value is derived from the value of underlying asset,
index etc. The underlying assets can be equity, forex commodity, or any other asset.
Government Securities- means a security created & issued by the Central Government
or State Government for the purpose of raising a public loan.

Grey Market- Unofficial premium market in which new, not-yet-listed shares rebought
and sold.

Equity Market- Ownership of tangible assets are bought & sold in Equity Market.

Ex-Dividend Date-A publicly announced date on or after which a buyer will not be
entitled to the dividend declared on a share. The share price is usually shade lower on the
ex-dividend date.

Exercise-To put into effect, the right to buy or sell.

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Financial Market- provide the channel for allocation of savings to investment & provide
a variety of assets to savers as well as various forms in which the investors can raise
funds.

FI- Financial Institution

FII-Financial Institutional Investor

Floor Broker-A person who actually does the buying & selling of shares on behalf of a
member of the stock exchange for a small share of the commission charged by a broker.

Forward Dealing/Trading-Contracts to buy or sell specific quantities of goods,

currency, or freight at a stated price and a stated time in the future. Forward contracts are
bought & sold in the FUTURES MARKET.

Futures-Shares or commodities bought or sold for delivery at a future date. These can be
sold at a profit before delivery if prices in the market have changed.

Holding the Market-Market intervention by public corporations like the UTI or LIC
with large buy orders of shares to stabilize a falling market. It is a part of their
government mandate.

Hot Shares- 1. Shares in great demand.

2. Stolen shares.

In-and-Out Trader-One who buys and sells the same share in the course of the trading
day, hoping to profit from sharp price movements & keeps no over-night position.

IPO- Initial Public Offering. New shares offered to public in the Primary Market.

Jobbers- Broker’s broker. One who specializes in specific securities catering to the needs
of other brokers.

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Liquid Market- One where the size of an order creates minimal affects on the
transactions price.

Lot-A fixed number in which shares are bought & sold.

Low-The lowest price paid for a share in the last twelve months.

Mark Down- When a broker is buying shares on his own account from a customer he
takes the best Bid Price and deducts a commission, which is the mark down.

Mark Up- When a broker is selling from his own account to a customer, he charges the
best Ask Price and adds a commission, which is the mark up.

Market at Rest- The day’s closing prices that are taken into account while preparing
share price movements charts.

Market Capitalization- The total market value, at the current stock exchange list price,
of the total number of equity shares issued by a company.

Market Order- Order to the stockbroker to buy or sell a share at the best available price.

Market Price- The last reported price of a share at which it was sold on the stock
exchange.

Market Lot- Each Company specifies the minimum number of securities, which makes
an even or market lot.

Margin- The difference in prices at which a Jobber will buy and sell. Also called a
Haircut.

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Margin Account-An account with a brokerage firm, which will allow the client to buy
shares with money borrowed from the broker. Margin requirements can be met with a
deposit in cash or shares.

Maturity-Day on which option is exercised.

Meltdown- The phenomenon of fast, uncontrolled fall in share prices.

Member Code- A unique code given to each member of the stock exchange to enable the
clearinghouse to check his payment or delivery position.

Member Firm- A brokerage firm which has at least one membership on a major stock
exchange.

MIT- Market If Touched. A limit order which automatically becomes a market order
when the price is reached.
Naïve Buy-and-Hold Strategy- Selecting shares randomly, buying them, and holding
them regardless of any information available in the market.

Naked Call Writing- Selling a call option on shares the writer does not own.

Naked Option - A Call option for which the seller does not own the supporting shares.

One Way Market- A market dominated by only buyers or sellers.

Out of the money-Option exercised price is above (in case of call) or below (in case of
put) prevailing price of underlying asset.

Over the Counter Market or OTC Market- A market where shares which are not listed
on the stock exchange are traded.

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Panic Selling- A condition of the stock market in which not only inexperienced
investors, but also sturdy bulls, take fright and start selling.

Portfolio- Combined holding of many kinds of financial securities- shares, debentures,

government bonds, Unit Trust certificates, and other financial assets. Reducing risk by
diversification and maximization of gains are the primary objects.

Portfolio Manager- A professional who manages other peoples’ or institution’s

investment portfolios with the objectives of profitability, growth and risk minimization.

Premium- 1. A price above the face value of a share or any other financial security.
2. Price paid for buying an Option.

Price Gap- A share’s high and low during a day does not overlap the prices on the
previous.

Profit Booking- Selling shares when their prices have risen above their purchase price.

Profit Taking- Selling a share, bought when its price was relatively low, when the
market price has risen.

Punter- Small speculator who hopes to make a quick buck by buying shares, holding
them for short period, and selling them to make a quick profit.
Purchase Order- Written instruction to a share broker to buy or sell particular shares in
a particular way.

Put Option-Right to sell at fixed price.

Quotation- Highest bid and lowest offers for a share.

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Quoted Price- The price at which a share was last bought and sold on the stock
exchange.

Quoted Shares- The shares of a company which are officially registered on a stock
exchange, and whose prices are quoted on the Official List.

Rally- Noticeable rise in the price of a share, or a noticeable rise in the share market
index, after a period of stagnancy or a declining trend.

Ramping- Large-scale buying of a stock from the market with the object of boosting the
image of the stock and the company behind it to increase its demand and consequently its
price.

Rate of Turnover- Total annual sales divided by the average inventory shows the speed
with which stock has been turned over.

Record Date- For the purpose of dividend distribution and entitlements to Bonus or
Rights Issues, a company fixes a date on which a shareholder must officially own shares
to qualify.

Resistance Level- A level at which the rise in price of a share has repeated halted, as
there are more sellers at that price than buyers.

Retail Investor- He is the individual buying shares for himself, as opposed to the
institutional investor who buys for others.

Rigging- Manipulation of share prices so as to attract naïve investors to buy or sell

shares.

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Rights Issue- Issue of shares at par or at a premium by an existing company to its
shareholders in a certain proportion to their holdings, as a matter of their right to receive
preferential treatment.

Roll Over- Transfer of funds from one investment to another.

Round Lot- The minimum number of shares in a trading lot; 10 or 50 in the case of
Rs.10 shares, and 10 or 5 for Rs.100 shares.

Running Ahead- A broker buying or selling a share on his own account before his
client’s order for the same share.
Sauda Book- A book used by members of a stock exchange or their authorized assistants
to record sales and purchase transactions.

Screening Stocks- A process of looking for shares, which meet predetermined, financial
and investment criteria. With computerized share scan the process has now become much
simpler.

Scrip- Share Certificate.

SEBI (Securities & Exchange Board of India) - is the National Regulatory body for the
securities market set up under the SEBI ACT, 1992 to ‘protect the interests of investors in
securities & to promote the development of, & to regulate, the securities market & for
matters connected therewith or incidental to.’

Secondary Market- Place where already issued and outstanding shares are bought and
sold. Distinguished from the primary market in which the issuer sells shares directly to
the investor.

Securities Market-refers to the markets for those financial instruments/ claims/

obligations that are commonly & readily transferable by sale.

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Seller’s Market- Characterized by a shortage of shares in the market in relation to their
demand and consequent high prices, indicating a BULL MARKET.

Sell Out- When a client fails to pay and take delivery of the shares bought on behalf of
him by the broker, the broker sells off the shares at the best market price and the client is
responsible for any financial loss to the broker.

Selling Short- Sale of shares, which he doesn’t possess, by a speculator.

Sensitive Market- Market easily influenced by good or bad news.

Settlement Date- In a spot delivery contract the delivery of share certificates and
payment for them have to be concluded on the same day or the next day. In hand delivery
contracts the delivery and payments have to be made on an agreed date, not exceeding a
fortnight from the date of contract.

Settlement/Badla Trading –Buy share even if we do not have the requisite amount of
money or sell shares even if we do not have the Share Certificates.

Share- A share is one unit of ownership of a company.

Share Certificate- Documentary evidence of the ownership of a block of shares.

Shareholder- A person or a legal entity who owns equity or preference shares of a
company.

Share Premium- An amount in excess of the face value of a share charged by a company
on its share issue.
SHCIL-Stock Holding Corporation of India Ltd. Set up in 1988 to provide post-trade
services like holding stocks on behalf of investors.

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Specified Shares- The most widely traded shares, also known as GROUP A
SECURITIES, CLEARED SECURITIES, transactions in which are made through the
clearinghouse of the stock exchange.

Spot Delivery- Delivery of shares and payment for the same on the date of purchase or
within 48 hours.

Spot Market- Commodities market in which goods are sold against cash and delivered
immediately.

Squaring Up- Settling of accounts on ACCOUNTS DAY, by actual delivery of shares or

carrying forward one’s transactions to the next account day, by paying
BACKWARDATION.

Stock Exchange- A marketplace where shares change hands for consideration. An

association of individual members called member brokers/ members/ brokers formed for
the purpose of regulating & facilitating the buying & selling securities by the public &
institutions at large.
Stock Exchange operates with due recognition from the Government under the Securities
& Contracts (Regulations) Act, 1956. BSE controls 80% of total volume of transactions.

Stock Option- In share trading, it is the right to buy or sell a hare at a particular price
within a particular period, in order to hedge the investment.

Striking or Exercise Price: Fixed price at which the option may be exercised and the
underlying asset bought or sold.

Take a Position- To buy a share for the long-term.

Take Delivery- Physical acceptance of shares, which have been bought on his account,
by a client.

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Trading Floor- The area in a stock exchange in which dealers trade through personal
contact, as against impersonal screen trading.

Trading Halt- Suspension of trading in a share for a time while important news from the
issuing company is being evaluated.

Unloading- Selling shares off when prices are falling to avoid further loss.

Wash Sale- Buying & selling of a share simultaneously or within a short period of time
by an individual or a group to generate artificial market activity and a rise in the share’s
price which the manipulator’s can then cash in on.

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