A PROJECT ON ONLINE

TRADING

Project By – Amit Shivshankar Pal

Roll No - 7118

Subject – Business Organization and System

Class – F.Y. BBA

Topic – Online Trading

Definition -
 The increasingly popular activity of buying and
selling securities over the internet, or to a lesser
extent, through a broker’s proprietary software.
Buying and selling securities using the Internet or
broker-provided proprietary software that works
trough the Internet.
 Online trading is distinguished from Wireless
Trading, a nascent area of service where brokerage
customers can trade via cell phones, pagers, and
hand-held organizers. An account similar to a
traditional bank account, holding cash and securities,
and is administered by an investment dealer.
 An account held at a financial institution and
administered by an investment dealer that the account
holder uses to employ a trading strategy rather than a
buy-and-hold investment strategy
SCOPE OF THE STUDY -
 SEBI in September 1996 has issued guidelines to the
stock exchanges to go for online trading procedure by
the end of the year 1996. Following its directions
ASIT C.MEHTA has installed the online trading
system. The major need for this study is to know the
effectiveness of the online system in comparison with
the outcry or mock trading to study its advantages
and recommend for beneficial and effective use of
the system.
OBJECTIVES OF THE STUDY -
The objective of the study includes the study of the below
mentioned aspects.

 The know more about online trading trends in India.

 To study about the backup measures with respect to
primary communications liabilities, in order to
achieve network availability & connectivity back-up
options.
 Knowing about the latest & future development
in the stock exchange trading system.
 Clearly defining each & every term of the
stock exchange trading products
Important Advantages of Online
Trading-
Listed below are some important benefits of online
trading to help you get a clear insight.
1.Convenience
First and foremost, anything that can be done online will
make your life convenient. When it comes to online
trading, you will only have to open a trading account
using the Internet and you can then start trading. There is
no need to visit the bank or call an agent for the same. As
long as you have an internet connection and an online
account, you are good to go. Online trading is super
convenient and there is no hassle, as it saves your time
and efforts.
2. Low Cost
Another top benefit of online trading is the low cost.
When you work through a stockbroker, you pay a fee or a
commission, which is charged as per the traditional
method. However, in the case of online trading, you pay a
fee, which is much lower than the one charged by the
brokers. If you trade in large volume, you can negotiate
the fees of the broker and bring down the cost.
 3.Manage Your Portfolio Easily
Through online trading, you can easily buy or sell the
shares as per your convenience. The online trading portal
has an advanced interface, which allows you to see how
your portfolio is performing and this can help evaluate the
profit or loss on the investment.
4.No Middleman
With online trading, you need not work with direct
brokers. This reduces the cost of trading and makes the
entire process hassle-free. Online trading makes the
service lucrative and convenient for you.
5.Better Control
As an investor, you seek higher control over the portfolio,
and you achieve the same through online trading. You can
trade anytime you wish to and will not have to contact a
broker to process a transaction. Online trading will help
you make instant transactions and you will be able to
review the same at your comfort. You will not have to
speak to a broker in an attempt to get the best bet on your
money. You will have complete control over the
investment and you will be able to make decisions with
regard to buying and selling the stock with minimal
interference.
 6.Immediate Transactions
One of the biggest online trading benefits is the speed and
efficiency. It is possible to transfer the funds between two
accounts and ensure that there is no delay in the same.
You can make a transaction through a single click and
buy or sell the stocks or bonds. You can make a quick
transaction and generate faster earnings.

Disadvantages of Online Trading -
The coin has two sides. Just as there are advantages to
online trading, there are also some disadvantages to
online trading.
1. Hidden Cost
Although the brokerage fee is lower, other facilities have
to pay more. It seems like a lot of rounding up. Brokerage
charges for online trading is very low but if you need call
to broker for order placement they charges 2 or 3 times
higher fees for that.
2. Technical Knowledge
Since the trading terminal runs on a computer system,
those who do not have knowledge of computer internet
have to spend a lot of time learning it.
3. System Error
Sometimes the website may run slow, the internet may
not be up to speed, the computer may not respond, the
server may go down, and the trading terminus may not be
convenient to use.
The mechanism or systems fails due to the less speed of
internet connections, its cause huge loss in trading.
4. No Control Over Decision.
Greed, Fear and Patients are the main factors for stock
market success. It is very difficult to control your
emotions at the time of heavy market fluctuations.
5. Limited Knowledge
 Elimination of a broker could be mean trouble.
 Without proper investment advice could cause big
loss.
 In bull market every decision of yours earns good
profit but once market change the gears then is ts
very hard to survive in stock market.
CONCLUSION -
In the present scenario to compete with the Broker’s
would require sound infrastructure and trading as per
international standards.

The concept of business has changed today, this is a

service oriented industry hence the survival would
require them to provide the best possible service to the
clients.
The benefits of depository system are significant.

Introduction of depositories will improve the market

efficiency, through adopting criteria for describing scrip
depositors eligible. If the company is not able to meet the
criteria , the company gels to be shifted to paper based
market.

This leads to falloff image of the company. Hence, the

company will try their best to reach the eligible criteria to
move into system.