“A STUDY ON ONLINE TRADING OF SHARES”.

“A STUDY ON ONLINE TRADING OF SHARES”
Dissertation submitted in partial fulfillment of the requirements for the Award of the Degree of MASTERS IN BUSINESS ADMINISTRATION As prescribed by BANGALORE UNIVERSITY
By

BASAVARAJ BAGEWADI
Register Number: 06KXCM6002 Under the guidance of

Dr.SUDHA B S

SURANA PG CENTRE BANGALORE-60 2007-08

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“A STUDY ON ONLINE TRADING OF SHARES”.

DECLARATION

I hear by declare that this dissertation titled “A Study on Online

trading of Shares” submitted by me, under the supervision of
Dr. Sudha.B.S. towards partial fulfillment of the Master of Business Administration, department of management, Bangalore University. I also declare that this project report has not been submitted to any other university or any institution for the award/diploma/certificate published any time before.

Date: Place: Basavaraj Bagewadi (06KXCM6002)

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“A STUDY ON ONLINE TRADING OF SHARES”.

ACKNOWLEDGEMENT

The successful accomplishment of any task is incomplete without acknowledging the contributing personalities who both assisted and inspired and lead us to way of success. It is my pleasure to thank Department of MBA, Bangalore University, for having provided me with such an opportunity to undergo the Project Work. I thank the Almighty God for his grace bestowed on us throughout this project. My special thanks to my project Guide Dr.Sudha B S, who guided me with the timely advice and expertise and has helped remarkably to complete the project. Last, but not the least, I express my deep sense of gratitude to my beloved Parents & Sister for their constant inspiration throughout my study and I thanks to all my Friends and I thank all who helped me directly or indirectly during my study.

Date Place: Bangalore Basavaraj Bagewadi. (06KXCM6002)

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CONTENTS Sl. No.
1.

Particulars
EXECUTIVE SUMMARY INTRODUCTION - Definitions of Online Trading - Online Trading Patterns - Sources of Marketing - Background of Study - Online Trading of Stock Exchange - Types of Stock Exchange - Function of Stock Exchange - Online Trading of Shares - Advantages - Disadvantages - Effectiveness - Why Online Share Trading RESEARCH DESIGN - Introduction - Title of the Project - Statement of the Problem - Review of The Literature - Objectives of the Study - Scope of the Study - Sources of Data - Sample Design - Sample Procedure - Conceptual Definitions of the Study - Respondent Profile - Limitations of the Study PROFILE OF NSE/BSE - History of Online Trading - Technology and NSE/BSE - Online Trading Potential - Securities Exchange Board of India (SEBI) PROCESS AND REQUIREMENTS OF ONLINE TRADING OF SHARES - Online Trading Process - Benefits of Online Trading - Basic Risks Involved in Trading the Stock Exchange - Investors Rights and Obligation - General Conditions of NSE/BSE ANALYSIS AND INTERPRETATION OF THE DATA SUMMARY OF FINDINGS, SUGGESSION AND CONCLUSIONS  BIBILIOGRAPHY  ANNEXURES

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1-14

2.

15-23

3.

24-36

4. 5.

37-76 77-92

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Sl. NO
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Particulars GENDER WISE DISTRUBUTION OF INVESTORS
AGE GROUP DISTRUBUTION OF INVESTORS QUALIFICATION OF RESPONDENTS OCCUPATION OF INVESTORS ANALYSIS OF THE INVESTMENT DURATION INVESTMENT OF INVESTORS SOURCES OF INFORMATION FOR INVESTORS OBSERVATION OF BSE / NSE SENTIVE INDEXES FACTORS CONDUCTED BY INVESTORS FACTORS INFLUENCING ON INVESTMENT CONSIDERSTION OF RISK FACTORS WHILE INVESTING IMPORTANT FACTORS WHILE SELECTING A COMPANY TO INVESTMENT STAGES OF LIFE CYCLE WHILE INVESTING STAGES OF THE LIFE CYCLE OF THE INDUSTRY PREFERED TO INVEST INCOME FROM INVESTMENT ANNUAL SAVINGS OF INVESTORS ANALYSIS OF PREFERED MARKET STRUCTURE IMPORTANCE OF THE SHARE PRICE MOVEMENT BSE / NSE INDEXES ON THE INVESTMENTS ANALYSIS OF THE TERMS OF PATTERN ANALYSIS OF AVERAGE HOLDING PERIOD FOR INVESTORS ANALYSIS OF THE FAMILIARITY OF ONLINE TRADING SERVICES AMONG INVESTORS

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37 38 39 40 41 42 44 46 47 51 55 57 59 61 63 65 67 69 71 73 75

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“A STUDY ON ONLINE TRADING OF SHARES”. GRAPH LIST Sl.No . 1 2 3 4 5 6 7 8 9 9.1 9.2 9.3 9.4 9.5 10 10.1 10.2 10.3 10.4 10.5 11 12 13 14 15 16 17 18 19 20 21

Headings
COMPOSITION OF MALE AND FEMALE AGE GROUP OF INVESTORS QUALIFICATION OF INVESTORS OCCUPATION OF INVESTORS ANALYSIS OF INVESTMENTS THE DURATION OF INVESTMENT SOURCES OF INFORMATION FOR INVESTORS FOLLOW THE CHARTPATTERN OF BSE/NSE SENSITIVE INDEXES BEFORE INVESTMENT FACTORS CONDUCTED BY INVESTORS MOST IMPORTANT VERY IMPORTANT IMPORTANT UN IMPORTANT NOT AT ALL IMPORTANT FACTORS INFLUENCING ON INVESTMENT MOST IMPORTANT VERY IMPORTANT IMPORTANT UNIMPORTANT NOT AT ALL IMPORTANT CONSIDERATION OF RISKS FACTORS BEFORE INVESTMENT IMPORTANCE OF FACTORS BEFORE INVESTING IN A COMPANY STAGES LIFE CYCLE INDUSTRYBEFORE INVESTMENT STAGE LIFE CYCLE OF THE INDUSTRY PREFFERED TO INVEST INCOME FROM INVESTMENT ANNUAL SAVINGS OF INVESTORS TYPE OF MARKET STRUCTURE PREFERED IMPORTANCE OF MOVEMENT OF SHARE PRICES IN THE BSE/NSE INDEXES SHORT TERM OR LONG TERM INVESTORS AVERAGE HOLDING PERIOD OF INVESTORS FAMILIARITY OF ONLINE TRADING SERVICE

Page No. 37 38 39 40 41 42 44 46 48 48 49 49 50 51 52 52 53 53 55 57 59 61 63 65 67 69 71 73 75

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EXECUTIVE SUMMARY
Stock exchange is an organized market place where securities are traded. The Government, semi- Government bodies, public sector undertakings and companies for borrowing funds raising resources issue these securities. Securities are defined as any monetary claims and include stock, shares, debentures, bonds etc. Under the securities Contract Regulation Act 1956, the Central Government regulates securities trading and such trading can take place only in stock exchanges recognized by Government under this Act. As referred to earlier there are at present 23 such recognized stock exchanges in India. Of these, major stock Exchanges, like Mumbai, Delhi, Calcutta, Chennai, Hyderabad, Bangalore etc. A project entitled “A Study on Online Trading of Shares.” deals with the priorities of the investors in investing their resources. The study considers the preferences of the investors in Bangalore, taking into consideration their age group, income earning capacity and their educational qualification. The data for the study was collected using a structured questionnaire. The main limitation of the study is that, the survey was conducted on investors only in Bangalore, due to lack of time.

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CHAPTER - I INTRODUCTION
E-business describes the use of electronic means and platforms to conduct business. By this means the company has reduced all kinds of the paper work and all information are flowing through the computer screen only. E-commerce is more specific than e-business. It means that in addition to provide information to visitors about the company, its history, policies, and job opportunities the company or the site offer to transact or facilitate the selling of the products and services online. E-commerce has given rise in turn to e-purchasing and e-marketing. E-purchasing means companies decide to purchase the goods and information or services from various online suppliers. Smart e-purchasing has already saved company’s million of rupees. E marketing describes company’s effort to inform, communicate, promote and sell its products and services over the Internet. E-business and e-commerce take place over four Internet domains

• B 2 B – business to business:
Online business selling to other businesses. Example eSteel.com is a steel industry exchange that creates an electronic market for steel producers and users. At first B2B e-commerce primarily involved inter-business exchanges, but a number of other B2B business models have developed, including e-distributors, B2B service provider’s matchmakers, and infomediaries that are widening the use of B2B e-commerce.

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“A STUDY ON ONLINE TRADING OF SHARES”.

• B 2 C – business to consumer:
Online business selling to individual consumers. Example amazon.com is a general merchandiser that sells consumer products to retail consumer. Grown exponentially since 1995, and is the type of e-commerce that most consumers are likely to encounter.

• C 2 C – consumer to consumer e-commerce:
Consumer selling to other consumers. Example eBay.com creates a market space where consumers can auction or sell goods directly to other consumers.

• P 2 P Peer-to-Peer e-commerce:
E-commerce provides a way for consumers to sell to each other, with the help of an online market such as auction site eBay. Use of peer-to-peer technology, which enables internet users to share files and computer resources directly without having to go through a central web server, in e-commerce. Examples Gnutella is a soft ware application that permits consumers to share music with one another directly, without intervention of a market maker as in C2C e-commerce.

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Definition of Online Trading on the web:
As per the web the sale of goods or services over the Internet. Customers must enter and submit their credit card details online; the sale will often proceed without the retailer and customer ever having personal contact.

Online Trading Patterns:
• Online Trading should be screen-based system only.

T+ 2 settlement (T means trading day).

• It is a Stock wise and Financial wise. • Shares or security should be in D-Mat only. • Penalty clauses should be applied • Notionally any trade will be done by buying / selling took place by NSE. • It is only cheque system but no cash system. • This is no intermediaries from 1-10-2004. • It is agreement between stockbrokers and investors. • It not even through authorized person.

It is transaction is franchisee (hand post) or directly should register with SEBI (Securities Exchange Board of India) through respective brokers.

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Sources of the online marketing:
In the online marketing the most important is to know the customer, and in order to know the customers the company must collect information and store it in the customer’s database and do the database marketing. A customer database is the organized collection of comprehensive information about individual customers or prospects that are current, accessible and actionable for such marketing purpose as lead generation led qualification. Database marketing is the process of building, maintain and using customer’s databases and other databases for the purpose of contacting, transacting, and building relationship. Customer mailing list is totally different from customer database. A customer mailing list is simply a set of names, address and telephone numbers. A customer database contains much more information. Companies accumulate this information through customer transactions, registrations, and telephone queries. A customer database would ideally, contain the customer past purchase, demographic, psychographics and other useful information.

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BACKGROUND OF THE STUDY
Online community is defined as a gathering of individuals in a computer mediated environment who are united by a common purpose and governed by self-determined policies. Online community has five characteristics they are Purpose, Boundary, Mutuality Rules, and Self-organization.

Why do people join online trading?
Internet has changed the pace of all activities in all over the world. The share trading has also been affected with the winds of the changes. Now the complicated procedure of share trading in share market has become very easy because of the usage of the Internet in this type of trading. The customers are getting the trading accounts through which they can trade in the market. And for paying the money also they have no need to go any where, the money will be debited or credited to customer’s account automatically. So in the online trading the customers can by sitting in the home only, trade in the share market. Online trading will probably be one of the biggest drivers of penetration as well as successes on the net. Even in India, however far fetched the idea might be seen, right now. The reasons for this are  A lot more than shares will be traded on the net.  The savings on customer’s brokerage expenses on online trading will be one of the most satisfying wages to gate.  The transparency, anonymity and certainty it offers are surefire ways to enhance loyalty.

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Online Trading on Stock Exchanges:
Stock exchange is an organized market place where securities are traded. The Government, semi- Government bodies, public sector undertakings and companies for borrowing funds raising resources issue these securities. Securities are defined as any monetary claims and include stock, shares, debentures, bonds etc. Under the securities Contract Regulation Act 1956, the Central Government regulates securities trading and such trading can take place only in stock exchanges recognized by Government under this Act. As referred to earlier there are at present 23 such recognized stock exchanges in India. Of these, major stock Exchanges, like Mumbai, Delhi, Calcutta, Chennai, Hyderabad, Bangalore etc.

Function of Stock Exchange:
The function of stock exchange can be set out as follows: • Provides quotation for shares/stocks for facilitating trading and market ability.

Extends liquidity to such stock, as they are easily marketable and traded.

• Promotes savings and investment in the economy by attracting funds for investment in corporate shares and securities.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Leading Stock Exchanges:
a) National Stock Exchange b) Bombay Stock Exchange

NSE:
NSE in the world 6th best stock exchange it is introduced first online trading later on regional stock exchange

BSE:
BSE is one of the regional stock exchanges it is private oldest stock exchange in India, 26 regional stock exchanges in India.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Online trading of shares:
A share is a unit or part of the share capital of the company having a special value of amount Sec 2(46) of the company Act of 1956 defines a Share as a “a share in the share capital of the Co. and includes stock and share is expressed or implied.

Advantages of online trading:
• Investment benefits • Liquidity is very high • Transparency trade is available • To easy for transferability • Storage stocks are not needed • Pledge and hypothecation is easy.

Quality control is not needed.

• Any loss or gain enjoyed by investors directly.

We can buy / Sell the share quickly or directly anywhere in the world.

Which company shares we want, it can be opted at a faster phase.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Disadvantages of online trading:
 Assessment of the company performance is not proper means suffering from financial losses.  The process of Online Trading of Shares is very difficult to understand for common people.

Facing problems in Internet like Hackings and Hangings.

EFFECTIVENESS:
• Rates are changing at every second • We can find easily true value • We can do technical analysis and charts • Total number of companies volume is very high compare to manual trading

Why online share trading?
 Safety  Security of money and demoting the shares  Easy  Economic  Independence  Updated and latest price  Two way access

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 Competitive brokerage

Internet safety:
The safety of transaction on the Internet depends on the encryption system used. The better this transaction system, the more difficult for any person to back the site. Secondly, customers can too ensure the safety of the transaction online. They normally gets a secured user ID and pass word, the secrecy of which is to be maintained by customers only. Thirdly, if the transaction system requires no manual intervention, customers further improve the safety of the transactions. This enables the elimination of the possibility of any manual intervention. This means orders are directly send to the exchanges, ensuring that the customers get the best right price.

Security of money:
In systems where the broking, banking and demat accounting are completely integrated, customer’s money remain in his own bank account, and does not get transferred to the broker’s pool.

Easy:
The experience of trading through Internet depends a great deal on the type of product offered by the site. Say, for example one of the issues bothering customers may be tiered of the paper work after every trading in writing cheques or TIFDs. Customer would then seek a system that eliminates these processes. In online trading sites, the greater the backend integration of the system, the greater the amount of work do the site

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for the customers. Therefore, the greater convenience is available for them. For example, in case of ICICIDirect.com broking account, bank account, and demat account are linked electronically. So when customers punch in a buy or sell order, the system checks the funds/shares availability and automatically credits/debits the accounts once the order been executed by the exchange.

Economical:
Contrary to common perception, trading through Internet does not require either any expertise in working on computer, or any special financial skills. Customers could try the demo (demonstration) of the online trading sites like ICICIDirect.com to find that customers can, with little or no knowledge about the Internet or finance, have switched on to online trading. Or they can attend the demonstration sessions held by such websites in their city. The convenience provided by online trading is even then worth the cost involved. And online trading sites are not that costly. For example, a trader can trade shares on margin at rate as low as 0.10% on ICICIDirect.com and if one wishes to trade in cash, then rates applicable as low as 0.4%. However it is important to compare various online trading sites on brokerage rates, inclusive of all sub changes.

Independence:
Many of those customers, who have chosen to trade shares online today, had at one point of time been trading through offline brokers. They took a change to go online trading and trade shares. After realizing the

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advantages of trading shares online, they have shifted to online trading now. In fact there are more than one lakh customers already opened an account with ICICIDirect.com.

Updated Prices:
The tickers available at online trading sites provide instantaneous updates. Also, some websites con offer to transact in those shares instantaneously and with convenience. The solution to this problem could be provided in different ways in different online trading sites. At ICICIDirect.com, for any trade order, customer is asked to click “Proceed” after he has the opportunity to completely check the order verification form. Moreover the customers have the option to modify or canceling the order till the moment the order is executed at the exchange. Finally the online trade confirmation reaches customer’s within 4 minutes. While contract notes are dispatched at the end of the day and reach within 24 to 36 hours, with ICICIDirect.com customer can decide what they want to buy and buy the share at price they want to and therefore they are in total control of their trade.

Two Way Access:
Brokers too gain. In physical setup, they generally refrain from taking and retain clients, as the cost of service as percentage of the volume of their transactions tends to be at higher side. With a Net trading platform, however, the number of profile of clients has little bearing a broker’s operational efficiency.

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Competitive Brokerage:
Net trading has turned out to be a cost effective proposition. Brokerage is similar to that under the physical setup – 0.25% to 0.35% up to the transaction value for delivery-based trades and 0.05% to 0.15% for speculative trades. The only additional cost for investors opting for the Net trading route is that of the computer, modem and Internet connection.

Other Services:
Internet has brought to retail investors, what was till some times ago the sole prerogative of large brokerage houses, high net worth individuals. For example, at ICICIDirect.com one can access multitude of resources to arrive his stock picks. Reliable research with an enviable track record is available for customers. An investor can now access ICICIDirect.com and do his technical analysis to know what other leading brokers think about a company, whether it is a buy or a sell. An investor can access live news from international news agencies such as Rulers, CNBC, read abut what the leading CEOs think about the state of economy and capital market.

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CHAPTER - II RESEARCH DESIGN OF THE STUDY Introduction:
Research methods are all those methods/techniques that are used for conducting to the researcher’s use in performing research. Here more emphasis is made on collection of the data directly through the customers with directly interacting with them.

Title of the study:
“A Study on Online Trading of Shares” A special reference to investors.

Statement Of The Problem:
As online trading of securities has been introduced very recently in India, so as to help the common people from all over the country to invest in the share market. To make the share market truly democratic in nature, it is considered as a vital step. We are unaware of the market condition. This study is totally concerned about the expectations and behavior of the online-traders. We are totally unaware of the investor’s choice of portfolios, their mode of selecting and investing on securities in net trading and their method of collection of information about the securities. And it is an effort to know the online trading of securities and the investors in online trading in a better way.

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Review Of The Literature:
Review of the literature is nothing but the subs seeing fact or retiring or viewing back of the literature, which is available of the same time. To the best of the knowledge and believe of the researcher, online trading is new to the market. So review of the literature is not available and as per as the study concerned, it is immaterial to review of the literature.

Objectives Of The Study:
The importance objectives of the study are as follows 1. To study the investors preferences towards the portfolios. 2. To study the various methods available to the investors for investing as per as the portfolios. 3. To study various sources of information for traders/investors. 4. To knows awareness of customers about the online trading. 5. To understand the various online trading patterns utililsing by the investors. 6. To study the customers opinion towards online trading. 7. To give suggestions and recommendations to the investors.

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Scope Of The Study:
The study mainly covers the whole Bangalore City. And respondents are from all age group and all type of profession. This study finds out the customer’s choice towards the share trading and their opinion about their investment. This study gives the information about the performance of online traders, brokers and the online sites available as a whole.

Sources Of Data:
Two types of data is collected in this study 1. Primary Data 2. Secondary Data

1. Primary Data:
It involves collection of data from sources from which the researcher directly collect data that have not been previously collected. In this study, primary data are collected by the use of two types of methods: i. Questionnaire ii. Interviews In this study questionnaires are used to collect the data from the respondents, since where the questionnaires are not adequate, researcher has used personal interview method for collecting data to draw the effective conclusion.

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2. Secondary Data
These are the data collected from various sources, used in addition to the primary data in the research. The various sources are the government publications, research organizations, journals, newspapers, websites etc. The website under are. www.nseindia.com www.bseindia.com www.investmentz.com www.sharekhan.com www.icicidirect.com

Data Collection Instruments:
1) The research instrument in the study is questionnaire method. 2) Personal interview was conducted along with it. 3) The set of questionnaires were used for all respondents. Research has mainly one instrument for collecting the primary data, i.e. questionnaire. Here the questionnaire has been made much easy to understand and answer, and hence clearly it takes lesser time to respond.

Sampling Design:
Sampling methods or technique may be classified into two generic types. a. Probability or random sampling and b. Non-probability of non-random sampling

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a. Probability or random sampling: It is based on theory of probability. It provides known zero change for selection of each population element. Under this sampling design every item of the universe has an equal chance of inclusion in the sample. It is so to say a lottery method in which individual units are picked up from the whole group, not deliberately but by some mechanical process. b. Non-probability or non-random sampling It is not based on the theory of probability. This simply does not provide change of selection of each population element. The only merits of this type of sampling are simplicity convenience and low cost. Non-probability sampling is classified into. 1) Convenience or accidental sampling 2) Judgment sampling

Sample Unit:
In this study the respondents are from whole Bangalore City.

Sample Size:
Sample size has taken 50 respondents.

Sampling Procedure:
In this study non-probability sampling and particularly the Convenience sampling has been used.

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Conceptual Definition Of The Study: Shares:
Share is a share in the Share Capital of the Company. Shares are the tools, which are giving the ownership rights to its holders.

Bonus shares:
Bonus shares are shares issued by a company out of its accumulated profits to the existing equity shareholders either as fully paid shares or as partly paid shares free of cost.

Demat:
Demat is the abbreviation for the dematerialization. In this the shares are kept in the electronic form. In other words Demat means dematerialization it means from physically form converted into electronically form. Demat shares introduced in 1998 earlier days is transaction only physically like bonds.

Remat:
Remat is the abbreviation for rematerialization. In this electronic shares are transferred in to the physical form.

Cash Trading:
This is delivery based trading system. This is generally done with the intention of taking delivery of shares on monies.

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Margin Trading:
Customers can also do an intra-trading up o four times their available funds. Where in they take in long buy/short sell position in stokes with the intension of squaring of the position within the same settlement cycle.

Spot Trading:
When customers are looking at an immediate liquidity option, ‘cash on spot’ may work best for them. On selling shares through ‘cash on spot’, money is credited to their bank account the same evening and not on the exchange payout date.

T + 2 settlements:
T (Trading day) + 2 settlement means the settlement of transaction will be taken place after 3 days from day of transaction. Government of India under SEBI (Securities Exchange Board of India) controls it.

BTST:
Buy Today Sell Tomorrow (BTST) is a facility that allows customers to sell shares even on day after the buy order date. Without this, they have to wait for the receipt of shares into their demat account.

CallNTrade:
CallNTrade allows customers to call on a local number in their city and trade on the Telephone through customer Service Executives.

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Call in Advance:
The amount received from the shareholders before a call is made is known as calls paid in advance or calls in advance.

Calls in Arrears:
When a call is not paid by the members within the date specified in the call notice, the amount of call unpaid on the shares is called calls in arrears.

Surrender of shares:
Surrender of shares means the return (i.e. giving back) of shares by a shareholder to the company voluntarily for cancellation. It is a shortcut to the long and cumbersome procedure of forfeiture of shares.

Market Order:
Customers can trade by placing market orders during market hours that allow them to trade at the best obtainable price in the market at the time of execution of the order.

Limit Order:
This allows customer to place a buy/sell order at a price defined by them. The execution can happen at a price more favorable than the price, which is defined by them. They can place limit orders during holidays and non-marketing hours too.

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Respondent Profile:
 The numbers of respondents are 50. The respondents belong to the

Bangalore.
 The respondents were from various age groups.

 The respondent’s behavior towards the researcher is friendly and helping attitude.  The respondents were eager to give suggestions.

Limitations Of The Study:
1. Questionnaire contained a few number of the questions to facilitate the respondent.
2. Area under the study was limited. 3. I had limited time to get the detailed information about

Online trading of Shares.

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CHAPTER - III PROFILE OF NSE/BSE History Of Online Trading in India:
In the mid-nineties screen based trading changed the face of transactions on Indian business. Net came as a helping hand, which also enhanced the comfort factor of the investors. Now, it is Internet based trading. Buying and selling shares via Net that is promising to take the investing experiences to another plane. BSE and NSE are the two leading stock exchanges in India. BSE was established in 1875 and is the oldest in Asia. The NSE was established as a corporate body in 1993, with the primary objectives of ensuring nation wide electronic trading, high level of transparency and faster settlement circle. The NSE has been playing a catalytic role and has significantly contributed to the reforming of the secondary market in India in terms of micro-structure; market practices, trading volumes and use of state of the art technology. The use of satellite communication technology for trading, using Very Small Aperture Terminals (VSATs), enabled NSE to rapidly expand across the length and breadth of the country. Subsequently, after the BSE was granted the required site permissions, it expanded its trading facilities to the remote corners of the land.

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Technology in NSE and BSE: NSE:
TATA Consultancy Services, a division of Tata Sons Ltd. was selected as the prime contractor and system integrator by the NSE to provide a total turnkey solution for the money markets and capital markets floor less trading system. The aim was to enable NSE to provide nation wide electronic trading with highest transparency in the market place. Using the client server architecture, fault-to-learn computing and in-memory database, Tata Consultancy Services, solution gave NSE high visibility and impact. For the year 2006-07, the National Security Clearing and Settlement System (NSCS) processed settlements for over 172 million trades with a turnover of around Rs 5, 08,121 crores. In the year 2006-07 nearly 2 million contracts were traded on NSE Future and Option system, with a national turnover of Rs. 1, 01,925 crores. Here approximately 818 companies listed in NSE. NSE has the option for trading of securities in both Cash Trading and Future trading. Hence, while dealing with securities an investor can negotiate with the price listed in the NSE index.

BSE:
The stock Exchange Mumbai, popularly known as the Bombay stock Exchange limited is the oldest stock exchange in Asia with a rich heritage. It was established as “The Native Shares & Stock Brokers Association” in July 1875 with 22 share brokers. 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.

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“A STUDY ON ONLINE TRADING OF SHARES”.

BOLT, i.e. BSE’s online trading system is designed and developed by CMC Ltd., now a Tata Group company. This screen based trading system manual entry method of trading in the ring, and went line on March 1995. This enabled BSE to provide floor-less and fully automated screen based trading facilities in capital market instruments, with equal access to investors all over the country. BSE has only the option for trading of securities in Cash Trading. Hence, while dealing with securities an investor can not negotiate with the price listed in the BSE index. Approximately 5639 companies listed in BSE & around 9400 brokers are trading in BSE & NSE along with 29 foreign brokers participating in Online Trading. One big advantage of web trading is that, market lot ceases to matter. A registered user, just need to log in the corresponding site and place order confirmation, which may be followed by physical slip. With Net trading it make little different, where the investor is,; ebroker gives him real time quotes and a chance to react immediately.

Still to catch on:
Online trading has not yet been taken off for various reasons: I. The concept is very new. II. Security concerns (Hacking and Connectivity) III. Potential investors in India are yet to trust their e-brokers. Hacking is a problem even with e-banking or e-commerce, and potential users may well fear to live with this. Connectivity is another major problem. Right in the middle of hectic trading one may go offline, or the web may jam during heavy trading.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

SECURITIES EXCHANGE BOARD OF INDIA (SEBI)
SEBI, which was a earlier established as an administrative body in April 1988, was given a statutory status January 1992. Controller of Capital Issue (CCI) was abolished with a view to have SEBI as a single agency to look after control over capital market. SEBI Act mainly deals with formation, management, staffing, accounts, reports, and audit of SEBI etc. It is the supervisory and regulatory authority for the stock and capital markets.

SEBI functions:
The SEBI can take following measures to fulfill its objectives: Regulate business in stock exchanges and other securities market.  Control and Regulation of the stock Exchanges and stock brokers.  Development of stock and capital markets in the right direction.
 Registering and regulating self-regulatory organizations (like stock

Exchanges).
 Promoting investors education and training of intermediaries.  Prohibiting fraudulent and unfair trade practices relating to

Securities Market.  Prohibiting insider trading in securities.  To ensure investor protection.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

SEBI Guidelines:
Highlights of the guidelines issued by SEBI are summarized below.
 At least 60% of each kind of securities issued by company must

offer to public subscription.
 Offer must be made through a prospectus in news papers for a

period not less than three days,
 Minimum capital for listing on stock exchanges – It should be

noted that minimum equity capital requirement for listing on Bombay Stock Exchange is Rs. 10 crores.  Fresh issue must be de-materialized – All fresh issue of capital will have compulsorily get their securities admitted with all depositories for de-materialization.
 Company shall promptly forward to Stock Exchange copies of

Annual reports, notice, circulars sent to Share Holders.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

PROCESS AND REQUIREMENTS OF ONLINE TRADING OF SHARES:
Online Trading is one the true revolutions brought about by the internet. Few things have changed as much as trading stocks and other securities, especially for the average person. Where any can come to take part in the amazing opportunities of the stock market. But this kind of access also has dangers. While the average person can now buy stock, participate in the forex market, buy bonds, and purchase shares in mutual funds, the average person is certainly not guaranteed success in those investments. The information is provided here is designed to help familiarize the beginning investor with of the most basic concepts of the stock market and stock market trading. Stock market trading system or form of analysis for your investing strategy. Online Trading is the mechanism of buying /selling securities via the Internet.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Online Trading Process:

The client places an order via net by logging on to his broker’s site The broker accepts and executes the order. And places it with the exchanges

The exchange accepts the order after checking the share limit for the day

The broker makes the payment either directly via the client’s bank account or pays through his own account and recovers it later from the client The exchange receives money and completes the settlement The client is intimated about the settlement either through the De-Mat account or via email

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

The various transaction involved in the online trading can be shown from the point of view of the • Client • Broker • Stock Exchange

Client:
Client is a person and he receiving some benefits from brokers or institutions and is an ultimate consumer.

Broker:
An individual or firm who acts as an intermediary between a buyer and seller, usually charging a commission. For securities and most other products, a license is required.

Stock Exchange:
Stock Exchange is an organized market place where securities are traded. The Government, semi- Government Bodies, public sector undertakings and companies for borrowing funds and rising resources issue these securities

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Benefits of Online Trading:
This mode of trading has shifted the trading power from stockbrokers to individual investors. The advantages are that it:  Ensures the best price for the investors: This technique offers the best price for the buying and selling transactions of the investors, by ensuring proper matching of their orders within the communication network itself.  Offers liquidity to the investors: Online trading offers 24-hour trading facilities for longer hours when compared to the traditional stock exchanges. This provides added liquidity to the investors.  Offers greater transparency: Online trading gives transparency to the investors by providing them an audit trail.  Enables hassle free trading: Online trading integrates the bank, the brokerage firm and the demat accounts, which leads to easy and paperless trading for the client.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

 Allows quick trading: The investor will be able to execute the entire trading transaction, right from logging on to the broker’s site to the execution and settlement of his bank account, in very short period of time.  Provides a level playing field: Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders.  Reduces the settlement risk: This method of trading reduces the settlement risk for the investor, as in this case no short sale is possible I.e. the seller will not be able to sell the securities unless he has their actual possession.

Basic Risks Involved in Trading on the Stock Exchanges:
In considering whether to trade or authorize someone to trade for you, you should be aware of or must get acquainted with the following:  Risk of higher volatility: Volatility refers to the dynamic changes is price that securities undergo when trading activity continues on the stock exchange. Generally, higher the volatility of a security /contract, greater is its price swings.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

 Risk of lower liquidity: Liquidity refers to the ability of market participants to buy and /or sell securities / contracts expeditiously at a competitive price and with minimal price difference. Generally, it is assumed that more the numbers of orders available in a market, greater are the liquidity.  Risk of wider spreads: Spreads refer to the difference in best buy and best sell price. it represents the differential between the piece of buying a security and immediately selling it or vice versa.  Risk reducing orders: Most exchanges have a facility for investors to place “limit orders”, “stop loss orders”, etc. • • • A “market” order will be executed promptly, subject A “limit” order will be executed only at the “limit” A stop loss order is generally placed “away” from to availability of orders on opposite side. price specified for the order or a better price. the current price of stock/contract, and such order gets activated if and when the stock/ contract reaches, or trades through, the stop price.  Risk of News Announcements: Issuers make news announcements that may impact the price of the securities/ contract.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Investors Rights and Obligations:
• You should familiarize your self with the protection accorded to the money or other property you may deposit with your member, particularly in the event of a default in the stock market or the broking firm’s insolvency. • Before you begin to trade, you should obtain a clear idea from your member of all brokerage, commission, fees and other charges, which will be levied on you for trading. • In case where a member surrenders his membership, NSE/BSE gives a public notice inviting claims, if any, from investors. • In case where a member is expelled form trading membership, NSE/BSE gives a public notice inviting claims, if any, from investors.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

General Conditions Applicable to Deal in Cash /Derivative Segments of NSE/BSE:
(These conditions shall be apply on and effective from the date of this agreement)

Definition:
Meaning of the phrases used in the agreement unless otherwise specified or unless the context otherwise requires, the meaning of the following words and phrases used in this agreement shall be under  “He” means she and “she” means he  Singular means plural and plural means singular  SEBI means Securities Exchange Board of India  CLIENT means any person, natural or legal with whom this agreement is entered into.  Exchange/s means National Exchange of India Limited and Stock Exchange Mumbai.  Sub broker means any person appointed as sub broker and holding valid certificate of registration issued bySEBI  Shares means and include all kinds of securities permitted by Exchange/s permitted for trading or dealing by the Exchange/s.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHAPTER - IV ANALYSIS AND INTERPRETAION OF DATA
Based on the primary data collected the analysis has been made the following data.

TABLE – 1 THE TABLE SHOWING SEX WISE DISTRIBUTION OF RESPONDENTS
PARTICULARS Male Female Total CHART NO-1
CHARTS SHOWING SEXWISE DISTRIBUTION OF RESPONDENTS
40 40 30 20 10 0 NO OF RESPONDENTS 10 Male Female

NO OF RESPONDENTS 40 10 50

PERCENTAGE 80 % 20 % 100 %

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
From the above table among 50 respondents the majority of respondents are from a male group whose count was 40 (80%) The female group makes a share of 10 (20%) total sample respondents.

INTERPRETATION
The above data clearly specifies that male respondents are more then female respondents

TABLE – 2 THE TABLE SHOWING AGE GROUP DISTRIBUTION OF THE RESPONDENTS
PARTICULARS Less Than 25 Years 25 – 35 Years 35 – 45 Years 45 – 55 Years 55 & above Total CHART NO- 2 NO OF RESPONDENTS 7 10 15 10 8 50 PERCENTAGE 14 % 20 % 30 % 20 % 16 % 100 %

CHART SHOWING AGE GROUP DISTRIBUTION OF RESPONDENTS
15 15 10 5 0 7 10 10 8

NO OF RESPONDENTS 25 – 35 Years 35 – 45 Years 45 – 55 Years 55 & above

Less Than 25 Years

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
From the above table shows among the 50 respondents 7 (14%) respondents are below 25 years of age, 10 (20%) respondents are 25 –35 years of age, 15(30%) of respondents are comes under 35 – 45 age groups , 10 (20%) respondents are comes under 45-55 years and only 8 (16%) respondents are above 55 years.

INTERPRETATION
The majority of investors are 35- 45 age group who trades on line.

TABLE NO-3 TABLE SHOWING QUALIFICATION OF RESPONDENT
PARTICULARS Under Graduate Graduate Post Graduate Others Total CHART NO- 3
CHART SHOWING THE QUALIFICATION OF RESPONDENTS
18 12 20

NO OF RESPONDENTS 12 18 20 0 50

PERCENTAGE 26 % 36 % 40 % 0 100 %

20 15 10 5

Under Graduate Graduate Post Graduate Others 0

0

NO OF RESPONDENTS

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
The above table shows among the 50 respondents 12 (24%) respondents are graduate, 18 (36%) respondents are graduate, 20 (40%) respondents are comes under post graduate.

INTREPRETATION
With reference to qualification of members trading on line post graduates contribute 40%.

TABLE NO – 4 THE TABLE SHOWS THE OCCUPATION OF THE INVESTORS
PARTICUALARS Business men Salaried Employee Retired Employee Professional Student Others Total NO OF RESPONDENTS 20 10 6 10 4 0 50 PERCENTAGE 40 % 20 % 12 % 20 % 8% 0 100 %

CHART NO-4
CHART SHOWING THE OCCUPATION OF INVESTORS
25 20 15 10 5 0 NO OF RESPONDENTS 10 6 10 4 0 20 Business men Salaried Employee Retired Employee Professional Student Others

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
From the above table out of 50 respondents, 20 (40%) are business men, 10 (20%) respondents are salaried employees, 6 (12%) are Retired employees and Professional are 10 (20%) and only 4 (8%) respondents are Students.

INTERPRETATION
With reference to occupation businesses men majorly use on line trading contributing 40%.

TABLE NO – 5 ANALYSIS OF THE INVESTMENTS
SECTORS Banking Insurance Manufacturing Infrastructure IT Others
TOTAL

FREQUENCY 8 13 3 10 11 5
50

PERCENTAGE 16 % 26 % 6% 20 % 22 % 10 % 100 %

CHART NO-5
CHART SHOWING THE INVESTMNETS ACCORDING TO DIFFERENT SECTORS
14 12 10 8 6 4 2 0 FREQUENCY 3 5 8 13 10 11 Banking Insurance Manufacturing Infrastructure IT Others

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among the 50 respondents, 16 % of them have invested in “Banking”, 26 % in “Insurance”, and 6 % in “Manufacturing”, 20 % in “Infrastructure”, 22 % in “I T” and 10% in “others”. By the above table we can consider that 26% insurance, and 20% in infrastructure, 22%in I T it has are the major investments sectors in online trading of shares.

INTERPRETATION
Major investment is done by investors through insurance sectors i.e 13%.

TABLE NO – 6 ANALYSIS OF DURATION OF INVESTMENT OF INVESTORS
PARTICULARS Less then 1 year 1 to 2 year 2 to 4 year 4 to 6 year More than 6 Year TOTAL NO OF RESPONDENTS 21 7 12 5 5 50 PERCENTAGE 42 % 14 % 24 % 10 % 10 % 100 %

CHART NO - 6
CHART SHOWING THE DURATION OF INVESTOR'S INVESTMENT
25 20 15 10 5 0 NO OF RESPONDENTS 7 12 5 5

21 Less then 1 year 1 to 2 year 2 to 4 year 4 to 6 year More than 6 Year

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS:
Among 50 respondents, only 21 people are investing in Online Trading of Shares for less then 1 year, 7 for1-2 years, 12 for2- 4 years, 5 for 4-6 years and 5 for more than 6 years. It means that 42 % people are investing for less then 1 year, 14% for 1-2 years, 24 % for 2-4 years, and 10 % each for 4-6 years and more than 6 years.

INTERPRETATION
The numbers of investors in Online Trading of Shares are increasing due to increased awareness and prospects of this form of investment. A gradual increase in the participation in “Online Trading of shares” can be easily seen in the above table and following graph. The proper mix of moderate risks and high returns are attracting the investors to Online Trading of Shares.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO –7 ANALYSIS OF SOURCES OF INFORMATION FOR INVESTORS
PARTICULARS News Papers Journals T.V News Internet Family & Friend Brokers TOTAL NO OF RESPONDENTS 14 4 9 10 2 11 50 PERCENTAGE 28 % 8% 18 % 20 % 4% 22 % 100 %

CHART NO-7
CHART SHOWING THE SOURCES OF INFORMATON TO INVESTORS
14 14 12 10 8 6 4 2 0 NO OF RESPONDENTS 4 2 9 10 11 News Papers Journals T.V News Internet Family & Friend Brokers

ANALYSIS
In Bangalore are among 50 respondents, 28 % get the required information from “News Paper”, followed by 22 % from “Broker”, 20 % from “Internet”, 18 % from “T.V. News’, 4 % from “Family & Friends”, and remaining 8 % from “Journals” respectively for their requirement.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

INTERPRETATION
Online traders in Bangalore still depend upon the “News Papers” for their required information in the Online Trading. Being the cheapest and readily available means of information, the news papers are more favorite among them. The second favorite source of information is the brokers themselves. The brokers give all the necessary information to the online traders with the periodic updated information of those, followed by T.V News, Family and Friends and Journal In the century of Electronic Media, the Printed Media is still a reliable and favorite source of information for online traders.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO –8 OBSERVATION OF THE BSE/NSE SENSITIVE INDEXES ON THE INVESTMENT

PARTICULARS NO OF RESPONDENTS PERCENTAGE

Yes 41 82 %

No 9 18 %

TOTAL 50

100 %

CHART NO-8
CHART SHOWING THE SESITIVITY INDEX OF NSE/BSE

50 40 30 20 10 0

41

YES 9 NO

NO OF RESPONDENTS

ANALYSIS
Among 50 respondents, 41 people analyze the chart pattern of BSE/NSE sensitive indexes before they go for investing in any security, while 9 do not. That is 82 % of the investors go for the analysis of chart pattern and remaining 18 % does not.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

INTERPRETATION
Analysis of chart pattern of sensitive indexes is concerned with “Technical Analysis”. Since the technical analysis deals with the supply and demand of securities as reflected in the behavior of the market, the investors go for it. They are more concerned about the demand and supply position of securities, as they influence the price of the securities. Online traders thus do not distinguish between current income and capital gains.

TABLE NO – 9 FACTORS CONDUCTED BY INVESTORS FOR MAKING INVEVESTMENT
FACTORS Time Liquidity Returns Safety Risk Past Performance Marketability Capital Appreciation Most Very Important Un Not at all TOTAL Important Important Important Important 14 13 19 16 19 7 9 11 14 19 10 19 10 16 7 16 19 13 13 8 21 19 18 14 4 8 5 0 4 16 4 0 1 0 2 0 4 6 5 50 50 50 50 50 50 50 50

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHART N0-9.1

CHART SHOWING THR DIFFERENT FACTORS MOST IMPORTANT FOR ON LINE TRADING
Time 20 15 10 5 Marketability 0 Most Important Capital Appreciation

14

19 19 16 13 7 9

Liquidity Returns

11

Safety Risk Past Performance

CHART N0-9.2

C H AR T S H OW IN G T H E FAC TOR W H IC H IS V E R Y IMP OR TAN T FOR ON LIN E TR AD IN G
Tim e 20 15 10 5 0

19 19 14 16 10 10 7 16

Tim e Liquidity Returns S afety Risk P ast P erform anc e P ast P erform anc e M ark etability Capital A pprec iation Capital A pprec iation

V ery Im portant

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHART N0 - 9.3

CHART SHOWING THE FACTOR WHICH IS IMPORTANT FOR ON LINE TRADING
Time 25 20 15 10 5 0 Important 19 13 13 8 Time 21 19 18 14 Liquidity Returns Safety Risk Past Performance Past Performance Marketability Capital Appreciation Capital Appreciation

CHART N0 - 9.4

C H AR T S H OW IN G T H E FAC TOR S W H IC H IS U N IMP OR T AN T F OR ON LIN E T R AD IN G
16 14 12 10 8 6 4 2 0 4 8 5 4 0 Un Im portant 4 16 Tim e Tim e Liquidity Returns S afety Ris k P ast P erform ance P ast P erform ance M ark etability Capital A ppreciation Capital A ppreciation

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHART N0 - 9.5
CHART SHOWING THE FACTOR WHICH IS NOT AT ALL IMPORTANT FOR ON LINE TRADING
6 5 4 3 2 1 0 0 1 0 0 2 4 6 5 Time Time Liquidity Returns Safety Risk Past Performance Past Performance Marketability Capital Appreciation Capital Appreciation

Not at all Important

ANALYSIS
The 18 % investors has preferred to analyze “Return” at first as the “Most Important” factor followed by, 17 % called “Safety” as the “Very Important” factor, 18 % called “Risk” as “Important” factor, 36 % called “Marketability” as the “Un Important” factor, and 42 % called “Capital Appreciation” as the “Not at all Important” factor, before investing in Online Trading of any Security. This can be clearly understood by the following graphs.

INTERPRETATION
The investors of “Online Trading of Security, are very sensitive towards the return they expect from their investments. Along with this fact, they are seeking safety in their investments with avoiding risk as much as possible. These investors do not consider difference between the capital appreciation of their fund and the growth of their capital invested.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO-10 ANALYSIS OF FACTORS INFLUENCING ON INVESTMENTS
PARTICULARS

Most Important 18 9 7 11 9 11 11 10

Very Important 10 13 18 14 15 14 11 11

Important 16 16 20 20 14 14 15 11

Un Important 6 11 4 4 8 11 10 14

Not At All Important 0 1 1 1 4 0 3

TOTAL 50 50 50 50 50

Economic Growth Monsoon and Agriculture Inflation Interest Rates Foreign Exchange Reserve Tax Rates Political Situation International Changes in Capital Market

50 50 50

4

CHART NO –10.1

CHART SHOWING THE MOST IMPORTANT FACTORWHICH INFLUENCE THE INVESTMENT
20 15 10 5 0 Most Important Monsoon and Agriculture Interest Rates Tax Rates International Changes in Capital Market 18 9 11 7 9 11 11 10

Economic Growth Inflation Foreign Exchange Reserve Political Situation

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHART NO – 10.2
C H A R T S H O W IN G T H E V E R Y IM P O R T A N T F A C T O R W H IC H IN F L U E N C E T H E IN V E S T M E N T
20 10 0 10 18 13 1 4 15 14 11 11

V ery Im po rta n t

E c on om ic G row th M o ns oo n an d A g ric u ltu re M o ns o on a nd A gric u lture In fla tio n Inte re s t R a te s F oreign E x c ha n g e R es erve F o re ign E x c h an ge R e s e rve Tax R ates P o litic a l S itu a tio n In te rn ation al C ha ng e s in C a pital M a rk e t Inte rn a tio na l C h an ge s in C ap ita l M a rk et

CHART NO – 10.3

CHART SHOWING THE IMPORTANT FACTOR WHICH INFLUENCE THE INVESTMENT
20 20 15 10 5 0 Important Monsoon and Agriculture Inflation Foreign Exchange Reserve Tax Rates International Changes in Capital Market 16 16 20 14 14 15 11

Economic Growth Monsoon and Agriculture Interest Rates Foreign Exchange Reserve Political Situation International Changes in Capital Market

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHART NO – 10.4
CHART SHOWING THE UNIMPORTANT FACTORS INFLUENCING THE INVESTMENT
14 14 12 10 8 6 4 2 0 Un Important
Economic Growth Monsoon and Agriculture Interest Rates Foreign Exchange Reserve Political Situation International Changes in Capital Market Monsoon and Agriculture Inflation Foreign Exchange Reserve Tax Rates International Changes in Capital Market

11 8 6 4 4

11

10

CHART NO – 10.5
CHART SHOWING THE FACTORS WHICH IS NOT AT ALL IMPORTANT FOR INVESTMENT 4 3 2 1 0 Not At All Important Economic Growth Monsoon and Agriculture Interest Rates Foreign Exchange Reserve Political Situation International Changes in Capital Market

Monsoon and Agriculture Inflation Foreign Exchange Reserve Tax Rates International Changes in Capital Market

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
The 21 % investors has preferred to analyze “Economic Growth” at first as the “Most Important” factor followed by, 18 % called “Inflation” as the “Very Important” factor, 16 % called “Interest Rates” as “Important” factor, 20 % called “International in Capital Market” and ”Tax Rates” as the “Un Important” factor, and 29 % called “Foreign Exchange Reserve” as the “Not at all Important” factor, before investing in Online Trading of any Security. This can be clearly understood by the following graphs.

INTERPRETATION
The Stock market does not operate in vacuum. It is an integrated part of the whole economy of the country. The growth rate of the Economy increases the participation in the “Online Trading of Securities”. As inflation erodes the purchasing power of the investors, they prefer to have a close watch on inflation rates before investing. A low rate of interest is preferred by investors, since when cost of money is high one cannot compete effectively. The effect of monsoon is seemed to be less on the online traders. And the foreign exchange reserve gets the lowest concern from investors, since our country has enough of it, i.e., second highest in the world.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO–11 CONSIDERATION OF RISK FACTORS WHILE INVESTING
Rank 1 8 4 11 9 14 5 Rank 2 11 14 4 15 2 3 Rank 3 10 9 14 5 4 9 Rank 4 5 16 7 10 4 8 Rank 5 7 4 6 5 12 15 Rank 6 9 3 8 6 14 10

TYPE OF RISKS Market Risk Interest-rate Risk Purchasing Power Risk Business Risk Financial Risk Default/Insolvency Risk

TOTAL 50 50 50 50 50 50

CHART NO-11
CHART SHOWING THE VARIOUS RISK FACTORS 18 16 14 12 10 8 6 4 2 0 Rank 1 8 Market Risk 4 11 9 14 5 Interest- Purchasing Power Business Financial Default/Insolvency rate Risk Risk Risk Risk Risk Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 5 11 10 7 4 3 4 9 14 16 14

15

14 12 10

15

9 7 6

8 5 5 6 44 2 3

9

10 8

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among the risks, 27.5 % investors ranked “Financial Risk” the first, followed by 30 % ranked “Business Risk” as the second, 28. % ranked “Purchasing Power Risk” as third, 32. % Ranked “Interest-rate Risk” as fourth, 30 % ranked “Default/Insolvency Risk” as fifth, and remaining 17.5 % ranked “Market Risk” as they prefer to cover for their investments.

INTERPRETATION
The investors want to withdraw their funds as and when required by them, to make specific payments at specific time periods. They thus like to have a close watch on the debt financing of the firm they want to invest. They don not want to invest on those firms which have uncertain income sources. The purchasing power of the income from a given investment is also having a great importance on their decision of investment on a given firm. Uncertainty of future income due to fluctuation in general level of interest-rate also concerns the investors.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 12 IMPORTANT FACTORS WHILE SELECTING A COMPANY TO INVEST
PARTICULAR

Most Important 23 9 11 10 15

Very Important 11 23 16 9 16

Important 9 7 18 21 9

Un Important 6 11 5 10 10

Not At All Important 0 0 0 0 0

TOTAL 50 50 50 50 50

Promoters Management Technology Product Range Marketing

CHART NO -12

CHART SHOWING THE FACTORS TO CONSIDER BEFORE INVESTING
25 20 15 10 5 0
er s Pr om ot

23

23 21 18 16 16 15 10 10 9 5 0
t em en

Most Important Very Important Important Un Important Not At All Important

11 9 6

11 9 7

11

10 9

0
y og

0
tR an ge

0
ke tin M ar g

0

ag

Te c

hn ol Pr od

Surana PG Centre, Bangalore.

M an

uc

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Before investing in a given company, 23 online traders out of 50, rank “Promoters” as the “Most Important” factor, followed by 23 online traders who think “Management” of the company is “Very Important” factor to analyze. Out of 50 investors 21 take “Product Range” of the company as “Important” factor to analyze, and 10 think, as “Marketing” is a “Un- Important” factor. None of the traders selected any of the above factors as “Not At All Important” factor.

INTERPRETATION
The investors are well aware of any company before investing in it. They know who are the promoters, the efficiency of the management of the company, the types of technology it is adopting, its product range, its marketing policies and practices, etc. Online traders give much importance to the promoters of the company before investing into it. As it can be seen in above table. Management of the company is also considered as a very vital factor; as people like to invest in a company with an efficient management. A company with a number of products in its hand is also considered as a good one to invest in. People less often go for evaluating the marketing strategies of the company before investing into it, as well satisfied with other factors like “Management”, “Promoters”, “Product Range” etc., they find it unnecessary.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 13 CONSIDERATING OF STAGES OF LIFE CYCLE WHILE INVESTING
PARTICULARS Yes No TOTAL NO OF RESPONDENTS 36 14 50 PERCENTAGE 72 % 28 % 100 %

CHART NO – 13

C H AR T SH OW IN G D IFFER EN T LIFE C YC LE OF IN VE STIN G

Y E S, 36 40 30 20 10 0 NO, 14 YE S NO

NO OF RE SP ONDE NTS

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among 50 respondents, 36 people use to analyze the life-cycle of the particular industry before investing into it, and 14 people do not. Thus 72 % of them go for the study of industry life cycle before investing into it, and 28 % not.

INTERPRETATION
The purpose of industry analysis is to identify those industries with potential to earn profit for itself and for the investors. Every industry undergoes a life-cycle. An industry doing well today may be faced with stagnation and decline in future. Investors like to study the phases of life-cycle of industries before investing into a particular industry. Since Industrial Analysis is one of the major parts of Fundamental Analysis, knowingly or unknowingly they are conducting Fundamental Analysis within their limits.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 14 STAGE OF LIFE CYCLE OF THE INDUSTRY PREFERRED TO INVEST
PARTICULARS Pioneering Stage NO OF RESPONDENTS PERCENTAGE 11 31 % Expansion Stage 14 38 % Stagnation Stage 9 24 % Declining Stage 2 7% TOTAL

36 100 %

CHART NO – 14

CHART SHOWING THE LIFECYCLE OF INDUSTRY TO INVEST
Declining Stage 2

Stagnation Stage

9 NO OF RESPONDENTS

Expansion Stage

14

Pioneering Stage 0

11 5 10 15

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among 36 respondents who study the life-cycle of the industries before investing in a particular industry, 11 like to invest in” Pioneering Stage”, 14 like to invest in “Expansion Stage” , 9 like to invest in “Stagnation Stage”, and remaining 2 in “Declining Stage”.

INTERPRETATION
The online traders prefer to stay as secured as possible by investing in an industry which is growing or which has grown to its maturity. Thus they seek benefit by investing in these two stages of life-cycle. A large percentage of investors also like to invest in industries at “Pioneering Stage”, showing their ability to take more risk in anticipation of more return. A very small percentage of investors, 7 % goes for investing in “Declining Stage”, in expect of unknown benefit they can extract with sudden boom in the industry.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 15 INCOME FROM INVESTMENTS OF ON LINE TRADING SHARES
Particulars No Income Below Rs.1, 00,000 Rs.1, 00,000 to Rs.2, 00,000 Rs.2, 00,000 to Rs.3, 00,000 Rs.3, 00,000 to Rs.4, 00,000 Rs.4, 00,000 & Above Total NO OF RESPONDETS 10 30 6 4 0 0 50 Percentage 20 % 60 % 12 % 8% 0 0 100 %

CHART NO-15

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among the 50 respondents, 10 have no income, 30 are getting below 1,00,000., 6 are getting 100,000 – 2,00,000., 4 are getting 200,000. 3,00,000., and no one is getting 3,00,000 – 4,00,000, and above.

INTERPRETAION
Majority of respondents are getting income in online trading of shares in the range of below 1, 00,000 (60%). 20% of respondents are getting negatives income because of their neglected or improper information about shares. Who are not satisfied in getting the online shares, so increasing the awareness about Online Trading of Shares?

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 16 ANALYSIS OF ANNUAL SAVINGS OF INVESTORS
Particulars Below Rs.10,000 Rs.10,000 to Rs.20,000 Rs.20,000 to Rs.30,000 Rs.30,000 to Rs.40,000 Rs.40,000 & Above Total NO OF RESPONDENTS 30 6 4 0 0 40 Percentage 75 % 15 % 10 % 0 0 100 %

CHART NO – 16
C H A R T S H O W IN G T H E A N N U A L S A V IN G S O F N V E S T O R S
35 30 25 20 15 10 5 0 6 4 0 N O O F R E S P O N D E N TS 0 30 B elow R s .10,000 R s .10,000 to R s .20,00 0 R s .20,000 to R s .30,00 0 R s .30,000 to R s .40,00 0 R s .40,000 & A b ove

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANANLYSIS
Among the 40 respondents 75% were saving below 10,000., 15% are Rs.10,000 to 20,000., 10% are Rs. 20,000 to 30,000., and No one is saving are saving are Rs.30,000 to 40,000 and Rs.40,000 & above.

INTERPRETATION
Maximum respondents are savings (30) in this scale of below 10,000 which majorly contributes 75%.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 17 ANALYSIS OF PREFERRED MARKET STRUCTURE
PARTICULARS Absolute Monopoly Perfect Competition Imperfect Competition TOTAL

FREQUENCY PERCENTAGE

24 48

17 34

9 18

50 100

CHART NO-17

C H A R T S H O W IN G T H E M A R K E T S T R U C T U R E
30 25 20 15 10 5 0 FRE QUE NCY A b s o lute M on o po ly P e rfe c t C o m p etition Im p erfe c t C om pe titio n

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among 50 respondents, 48 %age of online trader prefer “Absolute Monopoly”, followed by 34 % of them preferring “Perfect Competition” and remaining 18 %age go for “Imperfect Competition”.

INTERPRETATION
Online traders prefer to invest in a company which is market dominant by nature. As these companies dominate the market because of their core competence like technology or patent rights etc. thus allowing the investors to milk their investment. 35 % investors, who prefer to invest in an industry where no single company is dominating, follow them, thus they go for moderate risk involved investments with limited growth of their money. Still a percentage of investors, that is, 18 % of them, like to invest in an industry with “Imperfect Competition”, since it lies between “Absolute Monopoly” and “Perfect Competition”, thus enjoying benefits of both the form of markets.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 18 IMPORTANCE OF THE SHARE PRICE MOVEMENT BSE/NSE INDEXES ON THE INVESTMENTS
PARTICULARS FREQUENCY 14 PERCENTAGE 28 36 22 14 0 100 18 11 7 0 50 Most Very Important Un Not At All Total important Important Important Important

CHART NO-18

CHART SHOWING THE BSE/NSE SENSEX SHARE PRICE MOVEMENTS
Not At All Important Un Important Important Very Important Most important 0 5 10 FREQUENCY 14 15 20 0 7 11 FREQUENCY 18

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among 50 respondents when asked about the importance of the share price movements in BSE/NSE indexes on their decision of investing in a particular security, 28 % says its “Most Important”, 36 % says its “Very Important”, 22 % says its “Important”, 14 % says its “Un Important”, and none says its “Not At All Important”.

INTERPRETATION
Online traders prefer technical analysis of the chart pattern. Most of them take care of the movements of the share prices in the BSE/NSE indexes. Only a few of them, that is, 15 % of them take it as un-important factor, it shows their inability to analyze the chart patterns. Though this group has not rejected the importance of the movement of share prices in these indexes on their investments

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 19 ANALYSIS OF THE TERMS OF PATTERN
PARTICULARS Short term Long term Total NO OF RESPONDENTS 30 20 50 PERCENTAGE 60 40 100

CHART NO-19

C H AR T S H O W IN G T H E AN AL YS IS O F T E R M S
35 30 25 20 15 10 5 0 NO O F RE S P O NDE NTS 30

20 S hort term Long term

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among the 50 respondents 30 respondents are investing in Short term and 20 respondents in Long term investments.

INTERPRETATION
There fore Short term investors is popular because it has 60% of the investment in Online Trading of Shares. Short term investments yields probably the higher returns.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 20 ANALYSIS OF AVERAGE HOLDING PERIOD FOR INVESTORS

PARTICULARS 1 Week NO OF RESPONDENTS PERCENTAGE 18 %

1 Month to 3 Months

Within 6 Months

Within 1 Year

More than 1 Year

TOTAL

9

14

17

8

2

50 100 %

28 %

34 %

16 %

4%

CHART NO-20

CHART SHOWING THE AVERAGE HOLDING PERIOD OF INVESTORS
18 16 14 12 10 8 6 4 2 0 NO OF RESPONDENTS 2 9 8 14 1 Week 1 Month to 3 Months Within 6 Months Within 1 Year More than 1 Year 17

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among 50 respondents, the average holding period for 9 is “1 Week”, 14 is “1 Month to 3 Month”, 17 is “Within 6 Month”, 8 is “Within 1 Year”, and 2 is “More than I Year”. Their respective percentages are 18 %, 28 %, 34 %, 16 %, and 4 % respectively.

INTERPRETATION
Investors of online trading of securities like to hold their securities for a minimum period. It can be seen by the fact that 80 (18+28+34) % of the investors hold their securities for 6 or less than 6 months. But they like to watch the movements of the market for a while before going for selling their assets, as only 18 % of them hold their securities for 1 week or less than 1 week. But still investors are there who would like to hold the securities for almost one year, and a negligible of them for more than one year. The fast moving prices of securities and the updated information helps the online traders to take quick and effective decision at right time.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

TABLE NO – 21 FAMILIARITY OF ONLINE TRADING SERVICES
PARTICULARS ICICI HDFC Peninsular capital market Ltd Motilal Oswal Kotak Tata td Waterhouse TOTAL NO OF RESPONDENTS 18 12 10 4 6 0 50 PERCENTAGE 36 % 24 % 20 % 8% 12 % 0 100 %

CHART NO-21

CHART SHOWING T HE FAM ILIARIT Y OF ON LINE SERVICES
18 12

20 15 10 5 0

10 4 6 0

NO OF RESPONDENTS Peninsular capital market Ltd Motilal Oswal Kotak Tata td W aterhouse

ICICI

HDFC

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

ANALYSIS
Among the 50 respondents, 36 % are familiar with “ICICI”, 26 % with “HDFC”, 20 % with “Peninsular capital market Ltd”, 8 % with “Karvy”, 12 % with “Kotak”, and none with “Tata td Waterhouse”.

INTERPRETATION
In Bangalore, the online traders are aware of ICICI, HDFC and Peninsular capital market Ltd. As they count for 84 (36+24+20) %. An excellent service and awareness helps them to win the confidence of investors.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

CHAPTER - V SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION A) FINDINGS:
1. The Male investors 80 % are highly interested in online trading of shares and Female investors are not so much interested.
2. In the age group of 35 – 45

years (30%) are more interested

investment in Online Trading of Shares and at the age of 25 – 35 years (20%) and 45 – 55 years (20%) are equally interested, only 16% are interested above 55 years. 3. The majority of investors are post graduates (40%) because they are highly interested in share market. The next majority is Graduate (36%), and under graduates are only 24%.
4. The Business men 40% are more interested in investments of

shares because of them are having very good knowledge about share market and its dealings Salaried employee (20%) and Professional 20% are not having much knowledge about share market and retired employees and Students 24% are least interested in investment in online trading of shares.
5. In the insurance sectors 26% are majority invested because it is

more beneficial to the investors and following the next majority IT 22% and Infrastructure 20% are also benefit to the investors and 32% are much selected from other sectors.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. 6. The majority of investors 42% are investing lessthan one year

because in recent times share market is very popular to invest and have high returns and 4 – 6 years and above 6 years investors are only 20%. 7. The majority collected information through the newspapers (28%) because it is cheaper than any other sources of information and have a detailed data and following the next brokers 22% and internet 20%.
8. From the analysis of data collected we can know that 82% of

investors follow the BSE/NSE sensex chart pattern. 18% investors are not following chart pattern. 9. Risk (18%) and Return (18%) are both considered most important factors while investing in shares because they are more effective factors and capital appreciation are not at all important. 10.The growth rate of the economy 21% increases the participation in the “Online Trading of Shares”. As inflation 18% erodes the purchasing power of the investors, they prefer to have a close watch on inflation rates before investing. A low rate of interest is preferred by investors, since when cost of money is high one can not compete effectively. 11.The effect of monsoon is seemed to be less on the online traders. And the foreign exchange reserve gets the lowest concern from investors, since our country has enough of it, i.e., second highest in the world.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. 12. Financial risks 27.5% is most important while investing and it is

considered by the investors followed by business risks and investment risks. 13.Online traders give much importance to the promoters (23)of the company before investing into it. Management (23) of the company is also considered as a very vital factor; as people like to invest in a company with an efficient management. A company with a number of products (21) in its hand is also considered as a good one to invest in. 14.Investors like to study 72 % the phases of life-cycle of industries before investing into a particular industry.
15. The online traders prefer to stay as secured as possible by investing

in an industry which is growing 38% or which has grown to its maturity 24%.
16. The majority investors 60 % are getting income form shares below

Rs. 1, 00,000. And respondents who are earning income above Rs. 100,000 (20%) are only 10. 17.Online traders prefer technical analysis of the chart pattern. Most of them take care of the movements of the share prices in the BSE/NSE indexes. 18.The majority of investors 75 % the making saving below Rs. 10,000 and above 10,000 savings is only by 25 %.
19. Short term investors are more than the Long term investors because

they have fear that if they hold shares for long period then will incur the loss.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

20.Investors of online trading of shares like to hold their shares for a minimum period. The fast moving prices of the shares and the updated information helps the online traders to take quick and effective decision at right time.
21. In Bangalore, the online traders are aware of ICICI 36%, HDFC

24% and Peninsular Capital Market Ltd. services 20 %. An excellent service and awareness helps them to win the confidence of investors.
22. Online trade the awareness of “Online Trading of Shares” is less in

the traditional investors, showing the need to inform them about it, and educate them for the investments.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

B) SUGGESTIONS
1. The investors should make more investments in “Online Trading of Shares” as constructing their portfolio. This way they can get more return from their portfolio. 2. The female investors are less interested in investments so they have to be encouraged. 3. In the age group of above 55 years are invested very low they have encourage to invest in online trading shares. Because the age group includes retired employees.
4. In the shares market retired employee and professionals and

students is less knowledge about share trading they have help to increases the knowledge about online trading of shares.
5. While constructing the portfolio, the investors should stress more

on capital appreciation, as mere growth of capital without the growth of purchasing power nullify the growth of capital. 6. Online traders should also take into account the “Monsoon and Agricultural” factor before investing. Still large part of the earning of our country come from the agriculture and it ultimately depends on monsoon. So the economic condition of our country is lot more dependent on this factor. 7. People should analyze the marketing strategy of a company, before investing into it. The marketing function brings the revenue and ultimately profit to the company and its owners.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

8. Online traders should make use of Internet more while making decision on their investments in online Share market. The use of Internet can help them to get more and more accurate information, and hence increase their efficiency. 9. The government and concerned authority like SEBI should take more efforts to educate people about the “Online Trading of Shares”, and increase the awareness among them.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

C) CONCLUSION:
The investors of “Online Trading of Shares” are very sensitive to the return on their investment. They use to have a close watch on the debt financing, the promoters, the product range and the management of the company, where they want to invest. As a part of their “Economic Analysis”, they prefer to consider inflation and interest rates of the economy. While selecting a given industry to invest, these investors like to invest an industry, which is growing, or at its maturing stage. The preferred market structure of investors to invest is one, which is dominated by a single company. Online traders analyze the BSE/NSE sensitive indexes to know the demand and supply situation of shares in the market. The fast moving prices of the securities and the updated information helps the online traders to take quick and effective decision at right time. Online traders do not like to hold their assets for a long time. Preferably, they dispatch them within six month. In the century of Electronic Media, the Printed Media is still a reliable and favorite source of information for online traders. Their favorite source of information is news papers followed by e-brokers. The people who have not invested in share market earlier usually not show interest in “Online Trading of Shares”. They are interested in the traditional instruments of investments like insurance, Infrastructures, IT etc. These investors need to make aware of “Online Trading of Shares”, and educate them to make investments in this instrument. The proper mix of moderate risks and high returns are attracting the investors to Online Trading of Shares.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

Investor’s investments in Online Trading Shares, the investor in equity enjoys some unique advantages of safety, liquidity and marketability. In addition, any investment in shares is wealth of the investor, which is free from for wealth tax. There is no limit to such investments, which can be made for wealth tax purposes. Totally we have concluded that for investors if increase the awareness on online trading and investment in shares at correctly defiantly will increase his/her future income.

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”.

BIBILIOGRAPHY
1. V.A.Avadhani- Securities Analysis and Portfolio ManagementHimalayan Publication.
2. V.S.Datey- Student guide to Corporate Law-Taxmann Allied

Services Private Ltd. 3. Reddy and Appanniah- Company Law and Secretary PracticeUnited Publishers. WEBSITES
• • • •

www.nseindia.com www.bseindia.com www.google.com www.sharekhan.com

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. A STUDY ON ONLINE TRADING OF SHARES [With special reference to investors of Bangalore] I Mr. Basavaraj Bagewadi. pursuing MBA in Surana PG Centre, conducting research on above topic to submit dissertation to fulfill requirements of the award of MBA , Bangalore University . In this connection, may I request you to help by responding to this questionnaire? I assure you that the information collected will be kept highly confidential and will only be used for the academic purpose.

Signature

IDENTIFICATION DETAILS

1] Name: ……………………………………………………………………….. 2] Gender: Male { } Female { }

3] Address and Contact No: …………………………………………………… …………………………………………………… …………………………………………………… ……………………………………………………. 4] Age Group: a) Less than 25 { c) 35-45 { e) 55 and above { 5] Educational Qualification: a) Under Graduate { c) Post Graduate { 6] Occupation: a) Business { } b) Salaried Employee { } } } b) Graduate { d) Others { } } } } } b) 25-35 { d) 45-55 { } }

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. c) Retired Employee { e) Student { } } d) Professionals f) Other Specify { { } }

DATA FOR THE STUDY
1] Have you invested in Shares? Yes { } No { }

2] In which Sector have you invested? a) Banking c) Manufacturang e) Services { { { } } } b) insurance { d) infrastructure { f) other specify { } } }

3) How long have you been investing in shares? a) Less than 1 { c) 2-4 { e) 6 and above { } } } b) 1-2 { d) 4-6 { } }

4) From which source you get your required information? Rank them on their Importance? a) News Papers { } c) Family & Friends { e) Internet { } } b) TV News d) Journals { { } }

5) Do you follow the Stock Indices before investing? Yes { } No { }

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. 6) How do you consider these factors before Investing? Factors Time Liquidity Returns Safety Risk Past Performance Marketability Capital Appreciation Others 7) How do you consider the influences of the following factors on your investment in a particular share? Factors Economic growth Monsoon & Agricultural activity Inflation Interest Rate Foreign Exchange Reserves Tax Rates Political Situation International Changes in Capital Market Most Important Very Important Important Un Important Not at all Important Most Important Very Important Important Un Important Not at all Important

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. 8] Rank the Risks which you want cover accordingly in your investment? a) Market Risk { } c) Purchasing Power Risk { } e) Financial Risk { } g) Any Other …….…………… b) Interest Rate Risk { d) Business Risk { f) Insolvency Risk { } } }

9] How do you feel the importance of the following factors while selecting a particular company to invest? Factors Promoters Management Technology Product Range Marketing Any Other 10] Do you like to analyze the stage of the life-cycle of the particular industry where you invest? Yes { } No { } Most Important Very Important Important Un Important Not at all Important

If Yes in which stage of the life-cycle of the industry you will like to invest? a) Pioneering Stage c) Stagnation Stage 11) Annual income of shares a) Less than 100,000 c) 2, 00,000-3, 00,000 e) 4, 00,000 and Above 12) Annual savings a) Less than 10,000 c) 20,000-30,000 e) 40,000 and Above { { { } } } b) 10,000-20,000 d) 30,000-40,000 { { } } { { { } b) 1, 00,000-2, 00,000 { } d) 3, 00,000-4, 00,000 { } } } { { } } b) Expansion Stage { d) Declining Stage { } }

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. 13) The types of market structure you will prefer while selecting in industry to invest? a) Absolute monopoly b) Perfect competition c) Imperfect competition { { { } } }

14) The importance of past movement of share price in BSE/NSE on your investment? a) Most Important c) Important e) Not at all important { { { } } } b) Very Important { d) Un Important { } }

15) Are you a short term or long term investor? Short term { } Long term { }

16) The average time of holding your shares? a) 1 Week b) 1 Month to 3 Months c) With in 6 Months d) With in 1 year e) More than 1 Year { { { { { } } } } }

17) Among Online trading Services whom you are familiar with? a) b) c) d) e) ICICI HDFC KOTAK Motilaloswal PENENSULAR CAPITAL MARKET LTD { { { { { } } } } }

f) Any other ……………………………………………...... 18) Are you satisfied with returns from your investment? Yes { } No { }

If ‘No’ Reason ………………………………………………………………………….

Surana PG Centre, Bangalore.

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“A STUDY ON ONLINE TRADING OF SHARES”. 19) Please give your awareness of Online Trading? ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20) What are your suggestions for efficient growth of capital market, with special reference to Online Trading of Shares, in the post budget scenario?

********************************* Thank You

Surana PG Centre, Bangalore.

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