A Project report submitted in partial fulfillment For the Award of the

Submitted By

Under the Guidance of





I A.CHINNAPA REDDY hereby declare that this Project Report titled “A STUDY OF ONLINE TRADING AND STOCK BROKING” submitted by me to the Department of Business Management, O.U., Hyderabad, is a bonafide work undertaken by me and it is not submitted to any other University or Institution for the award of any degree diploma / certificate or published any time before.

Name and Address of the Student

Signature of the Student



This is to certify that the project report title “A STUDY OF ONLINE TRADING AND STOCK BROKING” submitted in partial fulfillment for the award of M.B.A Technology Management from Department of Business Management O.U. Hyderabad was carried out by A. CHINNAPA REDDY under my guidance. This has not been submitted to any other University or Institution for the award of any degree/diploma/certificate.

Name and address of the guide

Signature of the guide



I A.CHINNAPA REDDY express my deep sense of gratitude and indebtedness to Sri. K SUBODH KUMAR, Head, CII, APTDC for his guidance and continuous support on this project without whose endeavor the project would not have been completed. I wish to express my heartful thanks to MR. ABBAS ALI project guide of UNIVERSITY COLLEGE OF COMMERCE & BUSINESS MANAGEMNET, OSMANIA UNIVERSITY for rendering his helpful hand in completion of the project.





Objectives and methodology

Company Profile


Project Analysis


Comparative Analysis


Findings and Suggestions Conclusion Bibliography


there is need to assess the performance of the capital market.CHAPTER-1 OBJECTIVES AND METHODOLOGY NEED FOR THE STUDY: The present study to review the online trading procedure a case study of ONLINE TRADING at SHAREKHAN. which would link the SHAREKHAN to individual / members. configuration to set the network. OBJECTIVES OF THE STUDY: • It is to analyze the changes in trading after the exchange shifted from outcry to online trading system. 6 . • To know the online screen based trading system adopted by The appropriate SHAREKHAN and about its communication facilities. as the exchange has changed it’s trading from the outcry mode to online trading on 20th February 1997.. • It is to study the functions of SHAREKHAN through various departments.

7 . capital market and other related topics. Secondary method: The secondary data collection method includes: The lecturers delivered by the superintendents of respective departments. The data collected from the magazines of the NSE. Problems of listing are not covered due to limited time and to keep the study in manageable limits. economic times. METHODOLOGY OF THE STUDY: The data collection methods include both primary and secondary collection methods. LIMITATIONS OF THE STUDY: The study is confined to online trading procedure only. etc.• To know about the latest and future development in the stock exchange trading system. The brochures and material provided by Sharekhan Securities limited. Various books relating to the investments. Primary method: This method includes the data collected from the personal interaction with authorized members of Sharekhan Securities limited.

CHAPTER-2 INDUSTRY PROFILE Following diagram gives the structure of Indian financial system: 8 .

FINANCIAL MARKET: Financial markets are helpful to provide liquidity in the system and for smooth functioning of the system. These markets are the centers that provide 9 .

commercial papers. The financial markets match the demands of investment with the supply of capital from various sources. Again the money market is classified in to  Inter bank call money market  Bill market and  Bank loan market Etc.  E. They are  Organized financial market  Non-organized financial market. The unorganized market is composed of indigenous bankers.g. treasury bills. CAPITAL MARKET: Capital market is a place where we can raise long-term capital.facilities for buying and selling of financial claims and services. individual professional and non-professionals. 10 . According to functional basis financial markets are classified into two types.. moneylenders. Again the capital market is classified in to two types and they are  Primary market and  Secondary market. CD's etc. bank and government (SEBI) registered/controlled activities and intermediaries. They are:  Money markets (short-term)  Capital markets (long-term) According to institutional basis again classified in to two types. The organized market comprises of official market represented by recognized institutions. MONEY MARKET: Money market is a place where we can raise short-term capital.

public offers. Registrar and transfer agent 3. Underwriter/broker to the issue 4.E. diversification and up gradation. the investing public should be protected. The principal ingredients of investors’ protection are:  Provision of all the relevant information 11 . Distribution refers to the sale of securities to the investors. and issue of debt instruments such as debentures. Debentures. further and right issues to existing shareholders. Adviser to the issue 5. underwriting. The primary market is regulated by the Securities and Exchange Board of India (SEBI a government regulated authority). Underwriting contract make the shares predictable and remove the element of uncertainty in the subscription. Origination deals with the origin of the new issue. Primary market operations include new issues of shares by new and existing companies. Function: The main services of the primary market are origination.g. etc. and distribution. bonds. and Loans etc. modernization. PRIMARY MARKET: Primary market is generally referred to the market of new issues or market for mobilization of resources by the companies and government undertakings. The following are the market intermediaries associated with the market: 1. Depository 7.: Shares. The term investor protection has a wider meaning in the primary market. Primary market is also referred to as New Issue Market. for new projects as also for expansion. Merchant banker/book building lead manager 2. addition. Depository participant Investors’ protection in the primary market: To ensure healthy growth of primary market. Banker to the issue 6.

Listing of scrip’s provides liquidity and offers an opportunity to the investors to buy or sell the scrip’s. Broker/member of stock exchange – buyers broker and sellers broker 2. STOCK MARKETS IN INDIA: 12 . SECONDARY MARKET The primary market deals with the new issues of securities. Secondary market operations involve buying and selling of securities on the stock exchange through its members. Depository 6. Trading activities in the secondary market are done through the recognized stock exchanges which are 23 in number including Over The Counter Exchange of India (OTCE). the growth of secondary market depends on the primary market. The companies hitting the primary market are mandatory to list their shares on one or more stock exchanges in India. Portfolio Manager 3. Depository participants. Share transfer agent 5. More the number of companies entering the primary market. the greater are the volume of trade at the secondary market. Investment advisor 4. Provision of accurate information and  Transparent allotment procedures without any bias. Outstanding securities are traded in the secondary market. It is a market place which provides liquidity to the scrip’s issued in the primary market. Thus. National Stock Exchange of India and Interconnected Stock Exchange of India. The following are the intermediaries in the secondary market: 1. which is commonly known as stock market or stock exchange. “The secondary market is a market where scrip’s are traded”.

Definition of a stock exchange: “Stock exchange means any body or individuals whether incorporated or not.” The securities include:  Shares of public company. constituted for the purpose of assisting. Under this act. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand. purchases and sales of shares are affected in conditions of free competition. Soon after it became a central subject. it was a state subject and the Bombay securities contracts (control) act of 1925 used to regulate trading in securities. 13 .  Government securities. These were organized as voluntary non-profit-marking associations of brokers to regulate and protect their interests. On the basis of the committee’s recommendations and public discussion. the Mumbai stock exchange was recognized in 1927 and Ahmedabad in 1937. In the stock market. the securities contract (regulation) act became law in 1956. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. regulating or controlling the business of buying.  Bonds History of Stock Exchanges: The only stock exchanges operating in the 19th century were those of Mumbai setup in 1875 and Ahmedabad set up in 1894.Gorwala went into the bill for securities regulation. a number of stock exchanges were organized.Stock exchanges are the perfect type of market for securities whether of government and semi-govt bodies or other public bodies as also for shares and debentures issued by the joint-stock companies.D. Before the control on securities under the constitution in 1950. central legislation was proposed and a committee headed by A. selling or dealing in securities. During the war boom.

Over the hundred and twenty years during which the stock exchanges have existed in this country and through their medium. Municipal corporations. organizing new ventures and completing projects of expansion. and industry. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes. public investment is increased and companies were able to raise more funds.the backbone of the country’s economy-have secured capital of crores or rupees through the issue of stocks. trust and local bodies have obtained from the public their financial requirements. Act. the central and state government have raised crores of rupees by floating public loans. By giving quotations to the listed companies. they help trading and raise funds from the market.Functions of Stock Exchanges: Stock exchanges provide liquidity to the listed companies. diversification and modernization. Coimbatore Stock Exchange Delhi Stock Exchange Association Guwahati Stock Exchange Ltd 14 . By obtaining the listing and trading facilities. 1956. shares and debentures for financing their day-to-day activities. trade and commerce. Various Stock Exchanges in India: At present there are 23 stock exchanges recognized under the securities contracts (regulation). Those are: Ahmedabad Stock Exchange Association Ltd. Bangalore Stock Exchange Bhubaneshwar Stock Exchange Association Calcutta Stock Exchange Cochin Stock Exchange Ltd.

Hyderabad Stock Exchange Ltd. On its recognition as a stock exchange under 15 . Jaipur Stock Exchange Ltd Kanara Stock Exchange Ltd Ludhiana Stock Exchange Association Ltd Madras Stock Exchange Madhya Pradesh Stock Exchange Ltd. Out of these major stock exchanges were: NSE (National Stock Exchange) The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges. Uttar Pradesh Stock Exchange Association Vadodara Stock Exchange Ltd. Mumbai Stock Exchange National Stock Exchange of India OTC Exchange of India Pune Stock Exchange Ltd. which recommended promotion of a National Stock Exchange by financial institutions (FI’s) to provide access to investors from all across the country on an equal footing. Magadh Stock Exchange Limited Meerut Stock Exchange Ltd. Based on the recommendations. Saurashtra Kutch Stock Exchange Ltd. NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country.

even older than the Tokyo Stock Exchange. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. which was established in 1878. 1956 in April 1993. The NSE was set-up with the main objectives of: • • • • • Establishing a nation-wide trading facility for equities and debt instruments. popularly known as "BSE" was established in 1875 as "The Native Share and Stock Brokers Association". NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994.the Securities Contracts (Regulation) Act. It is a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. The standards set by NSE in terms of market practices and technology. Ensuring equal access to investors all over the country through an appropriate communication network. Enabling shorter settlement cycles and book entry settlements systems. It's that force which is guiding the industry towards new horizons and greater opportunities. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000 NSE's mission is setting the agenda for change in the securities markets in India. It is the oldest one in Asia. NSE is more than a mere market facilitator. efficient and transparent securities market to investors using electronic trading systems. have become industry benchmarks and are being emulated by other market participants. Mumbai. Providing a fair. and Meeting the current international standards of securities markets. It has evolved over the years into its present status as the premier Stock Exchange in the country. BSE (Bombay Stock Exchange) The Stock Exchange. of India under the Securities Contracts (Regulation) Act 16 .

three SEBI nominees or public representatives. continuance and suspension of member-brokers. Executive Director & CEO and Chief Operating Officer has been constituted. It also strives to educate and enlighten the investors by conducting investor education programmers and making available to them necessary informative inputs. admission. which decides the policies and regulates the affairs of the Exchange.1956. 17 . matters regarding annulment of transactions. fees.126 A in its Rules. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate Authority. who are from the broking community (one third of them retire ever year by rotation). six public representatives and an Executive Director & Chief Executive Officer and a Chief Operating Officer. etc. while providing an efficient and transparent market for trading in securities.The Exchange. The Governing Board consists of 9 elected directors. A Governing Board having 20 directors is the apex body. consisting of three elected directors. procedures and other matters relating to arbitration. norms. debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. The Exchange has inserted new Rule No. Accordingly. an Executive Committee. The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of the Exchange and the Chief Operating Officer and other Heads of Department assist him. Byelaws pertaining to constitution of the Executive Committee of the Exchange. margins and other monies payable by the memberbrokers to the Exchange. declaration of a memberbroker as defaulter. three SEBI nominees. deposits.

The minimum required education is a pass in 12th standard examination. With the coming into effect of the securities and exchange board of India act. in respect of the regulation of stock exchange were transferred to the SEBI. 1956” and “Securities Exchange Board of India 1952”. He should not be convicted for fraud or dishonesty. • • SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) The securities and exchange board of India was constituted in 1988 under a resolution of government of India. It was later made statutory body by the SEBI act 1992. Three tier regulatory structure comprising  Ministry of finance  The Securities And Exchange Board of India  Governing body Members of the stock exchange: The securities contract regulation act 1956 has provided uniform regulation for the admission of members in the stock exchanges. The qualifications for becoming a member of a recognized stock exchange are given below: • • • • • The minimum age prescribed for the members is 21 years. He should be an Indian citizen.according to this act. He should not be a defaulter of any other stock exchange. He should not be engaged in any other business connected with a company. the SEBI shall constitute of a chairman and four other members appointed by the central government. 1992 some of the powers and functions exercised by the central government. He should be neither a bankrupt nor compound with the creditors.REGULATORY FRAME WORK OF STOCK EXCHANGE A comprehensive legal framework was provided by the “Securities Contract Regulation Act. OBJECTIVES AND FUNCTIONS OF SEBI 18 .

the buyer or seller gives the freedom to the broker to execute the order at the best possible rate quoted on the particular date for buying.50. Prohibiting insider trading in securities. Promoting and regulating self-regulatory organizations. ‘buy Reliance Petroleum at Rs. public representatives and government representatives to the extent of 50% of total number of members. Registering and regulating the working of intermediaries associated with securities market as well as working of mutual funds. 19 . Regulating the business in stock exchanges and any other securities market. • Capital adequacy norms have been laid down for the members of various stock factors. Regulating substantial acquisition of shares and take over of companies. It may be lowest rate for buying and highest rate for selling. E.• • To protect the interest of investors in securities. Performing such functions and exercising such powers under the provisions of capital issues (control) act. • • • • • SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES): • Board of Directors of Stock Exchange has to be reconstituted so as to include non-members.50. Best rate order: Here.g. exchanges depending upon their turnover of trade and other • All recognized stock exchanges will have to inform about transactions within 24 hrs. Limit orders: Orders are limited by a fixed price. The orders are of different types. the order has clearly indicated the price at which it has to be bought and the investor is not willing to give more than Rs.’Here. 1947and the securities to it by the central government. TYPES OF ORDERS: Buy and sell orders placed with members of the stock exchange by the investors.

Stop loss order: The orders are given to limit the loss due to unfavorable price movement in the market. Share groups: The scrips traded on the BSE have been classified into ‘A’.40”. It gives the details regarding the name of the company. The order may be of any type. E. The order stands as this “buy BRC 100 shares around Rs.24. The ‘A’ group represents those. The ‘F’ group represents the debt market segment (fixed income securities). which are in the carry forward system. The broker can use his discretion to buy within the specified limit. the broker has to give a matching instruction to his depository participant to transfer shares bought to the investors account. In the case of sale of shares on receiving payment from the purchasing broker.22. A particular limit is given for waiting.g. The stamp duty is one of the percentage considerations. price. After receiving the order the broker tries to execute the order in his computer terminal. the investor should lodge the share certificate and transfer deed to the register or transfer agent of the company. and the date of delivery of share. Sell BRC limited at Rs. the broker effects the payment to the investor.’F’ and ‘Z’ groups.Discretionary order: The investor gives the range of price for purchase and sale. stop loss at Rs. Buying and selling shares: To buy and sell the shares the investor has to locate register broker or sub broker who render prompt and efficient service to him. Generally the approximation price is fixed. the broker is authorized to sell the shares to prevent further loss.’C’.’B2’. The investor has to fill the transfer deed and stamp it. The investor should be account holder in any of the depository participant.’B1’. The broker then delivers the contract note to the investor. The order to buy or sell specifying the number of shares of the company of investors’ choice is placed with the broker. If it is bought in the DEMAT form. In this physical trading form. If the price falls below the limit. once the broker gets the share certificate through the clearing houses he delivers the share certificate along with transfer deed to the investor. the order is executed. Once matching order is found. number of shares bought. brokerage. The Z group scrips are of the blacklisted 20 .

3 or 5days) after the trading day. ‘B1’&’B2’ groups. A rolling period which offers a large number of days negates the advantages of the system. Generally longer settlement periods are shortened gradually. the settlement period is n days after the trading day.companies. After the T+3 rolling settlement experience it was further reduced to T+2 to reduce the risk in the market and to protect the interest of the investors from 1st April 2003. the settlement takes place n days (usually 1. 2001. Automated Lending and Borrowing Mechanism (ALBM) and Borrowing and lending Securities Scheme (BELSS) with effect from Dec 31. The ‘C’ group covers the odd lot securities in ‘A’. The rolling settlement system is noted by T+N i.e. SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria that they were in compulsory demat list and had daily turnover of about Rs. The exchanges/clearing house/ clearing corporation would process and download the obligation files to the broker’s terminals late by 1. Depository participants accept the instructions for pay in securities by 21 .30 p. SEBI has introduced T+5 rolling settlement in equity market from July 2001 and subsequently shortened the cycle to T+3 from April 2002. A provision of an exception window would be available for late confirmation. Share settlement is likely to be completed much sooner after the transaction than under the fixed settlement system.00 am. ROLLING SETTLEMENT SYSTEM: Under rolling settlement system. 2. Then it was extended to “A” stocks in Modified Carry Forward Scheme.1 crore or more. The shares bought and sold are paid in for n days after the trading day of the particular transaction.m on T+1. The time limit and the additional changes for the exception window are dedicated by the exchange. Activities on T+1: conformation of the institutional trades by the custodian is sent to the stock exchange by 11.

the depositories accept from other DPs till 8p. Sharekhan offers the trade execution facilities for cash as well as derivatives. The buy and sale positions in the same scrip can be settled and net quantity has to be settled.investors in physical form upto 4 p. SHAREKHAN Sharekhan.com.sharekhan. and premier online trading destination www.m on T+2 to the depositories and clearing banks.00am/on T+2.30 p. The depository processes the pay in requests and transfers the consolidated pay in files to clearing House/clearing Corporation by 11.m on T+2 from the brokers’ pool accounts.m. Sharekhan is the member of two major commodity exchanges MCX and NCDEX. Sharekhan provides the facility to trade in commodities through Sharekhan Commodities Pvt. The institutional broking division caters to domestic and foreign institutional investors.Ltd-a wholly owned subsidiary of its parent SSKI.m and in electronic form upto 6 p. an organization with over eighty years of experience in the stock market with more than 280 share shops in 120 cities and big towns.30 a. Activities on T+2: The depository permits the download of the paying in files of securities and funds till 10. commodities trading on the MCX(Multi Commodity Exchange of India Ltd) and NCDEX (National Commodity and Derivative Exchange) and most importantly. while the corporate finance division focuses 22 . The exchange/clearing house/clearing corporation executes the pay-out of securities and funds latest by 1. on BSE and NSE. the SSKI group also comprises of institutional broking and corporate finance. investment advice tempered by eighty years of broking experience. India’s leading stock broker is the retail arm of SSKI. SSKI Apart from Sharekhan. In the demat mode net basis settlement is allowed. depository services.m for same day processing.

twice by Euromoney survey and four times by Asia money survey. First Caryl and Intel Pacific.on niche areas such as infrastructure. telecom and media. CHAPTER-3 PROJECT ANALYSIS OUTCRY SYSTEM 23 . SSKI has been voted as the top domestic brokerage house in the research category. SSKI owns 56% in Sharekhan and the balance ownership is HSBC.

Basically the brokers shout while buying or selling the securities. what membership number etc. the members and their authorized assistants have to wear a badge or carry with 24 . the dealer as well as the broker makes a brief note of the particulars of the deal. quotes his own price when the quotation of the dealer suits the broker. he may turn to some other dealer.The broker has to buy or sell securities for which he has received the orders. speculation and mal practice is more. On the close of the bargain. the broker using ‘open outcry’ method makes an offer or bid price. The dealer. he may loose the bargain. Such notes are made on some pad and on it the number of shares. The floor of the stock exchange is divided into a number of markets also known as ‘post pit’ or wing based on particular securities dealt there. the name of the party. The scope of manipulation. DISADVANTAGES OF OUTCRY SYSTEM: • • • It lacks transparency. In the trading ring the space is provided for specified and non-specified sections. the price agreed upon. MANUAL TRADING Trading procedure before introduction of online trading Trading on stock exchanges is officially done in the trading ring. to whom the price is quoted. This method is called the open outcry system. For making the necessary bargain. In the post pit or wing. Due to the above disadvantages of the outcry system the SHAREKHAN has shifted from outcry system to online trading from February 29th 1997. Signal were more important in the outcry system any member who could not interpret the buy/sell signal correctly often landed himself in disaster situation. also known as offer or bid price. the broker or his authorized representatives goes to the stock exchange. he quotes his purchase or sale price. are noted. • • In audibility was another disadvantage of the outcry system.. For this. If he is not satisfied with the quote price.

Limited Discretionary Order.M on all working days Monday to Friday. Execution of order or contract: Orders are executed in the trading ring of the BSE. The stock exchanges operations are floor level are technical in nature . the contract notes are drawn up and posted to the client. Drawing Up and Bills: Both sale and purchase bills are prepared along with the contract note and it is posted on the same day or the next day.The steps involved in this method of trading have given below: Choice of broker: sell shares and transact business. This in a purchase transaction. have to act through member brokers only. Placement of order: The next step is the The prospective investor who wants to buy shares or the investors. From the sauda book. who wants to placing order for the purchase or sale of securities with a broker. The members or the authorized assistants have to wear a badge given by the exchange to enter into the trading ring. This works from 11:30 to 2. They can also appoint their bankers for this purpose as per the present regulations. They carry a sauda Block Book or conformation memos. telephone. and Open Order. The orders may take any one of the forms such as At Best Orders.them an identity card given by the exchange to enter the trading ring.Non-members are not permitted to enter in to stock market. Hence various stages have to be completed in executing a transaction at a stock exchange . fax etc or in person.30 P. which are duly authorized by the exchange when the deal is struck. and a special one-hour session on Saturday. To avoid delay. 25 . it is placed generally over the phone. Stop Loss Order. duly authorized by the exchange and carry a pen with them. both broker and jobber make a note in their sauda block books. A contract note is written agreement between the broker and his clients for the transaction executed. They carry a sauda book or confirmation memos. Immediate or Cancel Order. The order is usually placed by telegram. Limit Order. letter.

The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit. Briefly. the process ends. 26 . which is DP and submit the same along with the share certificates. Dematerialization normally takes about fifteen to thirty days. which are already registered in your name and belong to the list of securities admitted for Dematerialization at NSDL. Dematerialization can only be done to those certificates. an investor has to first open an account with a DP and then request for the Dematerialization Request Form. Most of the active scrip’s in the market including all the scrip’s of S&P CNX NIFTY and BSE SENSEX have already joined NSDL. In order to dematerialize the certificates. a bill is made out giving the total cost of purchase. DEMATERLIZATION: Dematerialization is the process by which physical certificates of an investor are converted to an equipment number of securities in electronic from and credited in the investor account with his DP. Investor’s willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. the process is as follows: after completion of transfer. These shares are fungible-which means that 100 shares of a security are the same as any other 100 shares of the security. Odd lot shares certificates can also be dematerialized. request DP for Rematerialization of the same is made. To get back dematerialized securities in the physical form. This list is steadily increasing. With this. including other expenses incurred by the broker in the price itself. The investor has to ensure that he marks “Submitted for Dematerialization” on the certificates before the shares are handed over to the DP for demat.once the shares are delivered to the client effects payment for the purchases and pays the stamp fees for transfer. the investor gets the option to dematerialize such shares. Dematerialized shares do not have any distinctive or certificate numbers.

• In case of transfer of electronic shares. You can receive your bonuses and rights issues into your DA as a You can also expect a lower interest charge for loans taken against There is no lost in transit. thus the overheads of getting a duplicate RBI has also reduced the minimum margin to 25% for loans against You avoid the cost of courier / notarization. 1) What is Internet? Internet is a worldwide. ubiquitous links to anyone anywhere and anytime to build up interactive relationships.Rematerialization is the process of converting electronic shares in to physical shares. called the Internet promises to bring unprecedented changes in our lives and business. accelerating the pace of business reforms and revolutionizing the way companies are managed. • direct credit. ONLINE TRADING Before getting in to the online trading we should know some things about the internet. Internet or net is an interconnection of computer communication networks spanning the entire globe. Benefits of Demat: • It reduces the risk of bad deliveries. this eliminating risk of loss in transit. you save 0.5% in stamp duty. • copy in such circumstances is reduced. 27 . • Demat shares as compared to loans against physical shares. in turn saving the cost and wastage of time associated with follow up for rectification. self-governed network connecting several other smaller networks and millions of computers and persons.5% by quite a few brokerage firms. to mega sources of information. A combination of time and space. This technology shrinks vast distances. It allows direct. • dematerialized securities as against 50% for loans against physical securities. e-commerce and etc. This has lead to reduction in brokerage to the extent of 0.

It not only reduces manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated. games. Internet can change the nature and capacity of stock broking business in India. enables participation by individuals in business to business and business to consumer commerce. It helps conduct traditional commerce through new way of transferring and processing of information. banking. The computers are either workstations of individual office works or serves where large databases and information reside. It offers stock trading at a lower cost. in cyber space even the information can be copied.com age. leisure. Information is electronically transferred from computer to computer in an automated way. PC’s and networking attempts to introduce banks of the tools and technologies required for electronic commerce. Net being an interactive two way medium. through various websites. The use of Internet has grown 2000 percent in last decade and is currently growing at 10 percent per month. E-commerce refers to the paperless exchange of business information using electronic data inter change. commerce and what not it is virtually changing every thing and we are living in dot. E-commerce Electronic commerce is associated with buying and selling over computer communication networks. It manages the resources of the computer system in a fair and efficient manner. etc. electronic technologies. downloaded and retransmitted. the various operating systems are the most basis program within a computer. It is expected to bring changes in every functional area of business activity including management and financial services. growth of Internet is of recent times. It has re-defined the methods of communication. 28 . Network connects both categories of computers. health. visit to shopping arcades. 2. business. trade. education. In India. work study. Now we can enter in to the concept known as online trading.crossing all geographical boundaries.

Now information has become easily accessible to both retail as well as big investor. The SEBI committees on internet based 29 . and enables the investors to take better and well considered decisions. The net brings data to the investor on-line and net broking enables him to trade on a click of mouse.” In online trading.In the past.e. • Brokers (now e-brokers) will offer value management or services like initial public offering online. tax planning. i. Orders are communicated to the stock exchange through website. etc. investors had no option but to contact their broker to get real time access to market data. insurance services. financial planning. • Brokers will offer online broking and relationship management by providing and offering analysis and information to investors during broking and non-broking hours based on their profile and needs. The net is used as a mode of trading in internet trading. to attract more investors. EVOLUTION OF BROKING IN INDIA: The evolution of a broking in India can be categorized in three phases • Stockbrokers will offer on their sites features such as live portfolio manager. etc. live quotes. on-line asset allocation. In India: Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. portfolio management. market research and news. In the real world you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax). The actual definition of “Online Trading” is as explained below: “Online trading is a service offered on the internet for purchase and sale of shares. you will access a stockbroker’s website through your internet enabled PC and place orders through the broker’s internet based trading engine. customized services. These orders are routed to the stock exchange without manual intervention and executed thereon in a matter of a few seconds.

Provide management information system. through internet trading three fundamental objectives of securities regulation can be easily achieved. Telephone connection 4. by increasing quote continuity and market depth. Registration for on-line trading with broker 5.securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. • Enhance market quality through improved liquidity. Installation of a computer with required specification 2. Objectives: Internet trading is expected to • Increase transparency in the markets. etc. Compliance with SEBI guidelines for net trading The following should be produced to get a demat account and online trading account: 30 . Installation of a modem 3. Some of the brokers offering net trading include ICICI direct. these are: • • • Investor protection Creation of a fair and efficient market. A bank account 6. so as to handle growing volumes easily and to support nationwide expansion of market activity. • Reduce settlement risks due to open trades. quantity. Under the ORS the client enters his requirements (security. Requirements for net trading: For investors: 1. and Reduction of the systematic risks. Introduce flexibility in system. price buy/sell) on broker’s site. • • Besides. Depository account 7. kotakstreet. by elimination of mismatches.

which are necessary • • First page of the bank pass book and last 6 months statement. Issue of contract notes within 24 hours of the trade execution 9. and buy/sell) in broker's site. manager registration code on photograph. Secured and reliable software system 5. Adequate back-up system 4. experienced and trained staff 6. Permission from stock exchange for net trading 2. They are checked electronically against the clients account and routed electronically to the appropriate 31 . Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. Communication of order (trade confirmation to investor by e-mail) 7. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Bank manager’s signature along with bank’s seal. 50 lac 3. Use of authentication technologies 8.As identity proof & address proof any one of the following: 1) 2) 3) 4) 5) 6) Voter ID card Driving license PAN card( in case of to trade more than 50000) Ration card Bank pass book Telephone bill Other requirements. Orders are communicated to the stock exchange through website. Adequate. quantity. Setting up a website. price. The net is used as a medium of trading in internet trading. Net worth of Rs. Under the Order Routing System the client enters his requirements (security. For stock brokers: 1.

Step 5: After the review has been satisfactory. Step 3: Actual placement of an order. series and the default quantity. a time lag of about 10 seconds is there in executing the trade. He should also have demat account and bank account. an appropriate message will appear at the bottom of the screen. The customer's portfolio and ledger accounts get updated to reflect the transaction. the investor has to review the order placed by clicking the review option. (b) Second. The client receives a confirmation on execution of the order. Step 2: After registration. fill in the symbol. He may also re-set to clear the values. An order can then be placed by using the place order window as under: (a) First by entering the symbol and series of stock and other parameters like quantity and price of the scrip on the place order window.e. Step 4: It is the process of review. The user should have the user id and password to enter into the electronic ring. Order can be placed using place order window of the website. Thus. Password and personal identification number (PIN). should approach the brokers and get them self registered with the Stock Broker. The system permits only a registered client to log in using user id and password.exchange for execution by the broker. the order has to be sent by clicking on the send option. Some brokers will take some advance payment from the investor and will fix 32 . Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit. Procedure for net trading Step 1: Those investors. who are interested in doing the trading over internet system i. for which there are different mode. Step 8: It is regarding charging payment. At present. NEAT-IXS. Step 6: The investor will receive an "Order Confirmation" message along with the order number and the value of the order. the broker will provide to them a Login name.

Internet trading provides total transparency between a broker and an investor in the secondary market. the broker will ask the investor for transfer of funds to his account. mostly within 30 seconds. Confirmation and execution of trade reaches the investor within the least possible time. only the broker knew the actually transacted price.their trading limits. 12) Confirmation is e-mailed to investor by broker 33 . Instant feedback is available about the execution. • • • • News and research report BSE and NSE movements Stock analysis IPO and mutual fund centers Step by step procedure in online trading: 2) Following steps explain the step by step approach to on-line trading: 3) Log on to the stock broker's website 4) Register as client/investor 5) Fill the application form and client broker agreement form on the requisite value stamp paper 6) Obtain user ID and pass word 7) Log on to the broker's site using secure user ID and password 8) Market watch page will show real time on-line market data 9) Trade shares directly by entering the symbol or number of the security 10) Brokers server will check your limit in the on-line account and demat account for the number of shares and execute the trade 11) Order is executed instantly (10-30 seconds) and confirmation can be obtained. In the open outcry system. Screen based trading provides more transparency. When the trade is executed. Some of the websites also offer. With online trading investors can see themselves the price at which the deal takes place. The time gap has narrowed in every stage of operation.

2) 3) 4) ADVANTAGES OF ONLINE TRADING: 1) Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any brokers' office. since you have to buy stock at the given price. 4) Online trading gives control to individuals and they can exercise it over accounts thus comprehend what is going on when they trade. Being online does not identify the size of any particular organization. Companies can establish themselves according to their gains and losses. Market orders: orders can be filled at unexpected prices. but there is an extra Charge for this leeway facility since one need to hold a price. Thus we have access to a lot more information online. 2) Online trading has let room for smaller organizations to compete with multinational organizations since it is no longer a leg it issue. this additional power to the underdogs. It is like going back to school and re-educating oneself on how to trade online.13) Contract note is printed and mailed in 24 hours 14) Settlement will take place automatically on the settlement day 15) Demat account and the bank account will get debited and credited by electronic means. but this type is much more risky. for instance where tax (sales and value added taxes) is best suited to them. 3) Online trading has allowed companies to locate themselves where they want as physical location is not an issue anymore. 34 . ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS: 1) Limit / stop orders: orders that can be go unfilled. Margin account: where orders can be placed against stocks. Cash account: where funds have to be available prior to placing the order. to increase Purchasing power. therefore.

mutual funds. Individuals can invest in a variety of products. government. Now they can invest in stocks. and even insurance. The immediate impact will be competition and benefits will accrue to the investors.5) Individuals’ benefit by saving comparatively a lot more when trading online as the cost per trade is less. 2) 3) 4) They have a reason to participate in the market and learn about it. 9) They have access to numerous tools to invest. 8) Investors will now go to place. stock and index options mutual funds. They are independent. 7) It will lead to brokerage commissions going down and brokers striving to increase business afloat. It is interesting. easy. 6) INVESTORS REASONS TO TRADE ONLINE: 1) They have control over their accounts. cheap. fast. HERE ARE THE POSSIBLE DISADVANTAGES: 35 . and stock for long-term basis and sat on them. can make their own decisions and don’t have to give reasons for their actions. A lot of information is online so they can keep up-to-date with what is happening in the trading world. unlike earlier when people bought bonds. and can create their own portfolio. which have better trading conditions and also members to offer them better facilities. 5) 6) It will give investors a greater choice and better realization. and convenient.

but that is not so. This simply means that the individual is himself / herself alone to. When the individuals click on the mouse. but the truth is that even though technology has taken over. his trade goes through a broker. especially when you are trading internationally. 2) Individuals are restricted to first-hand financial guidance. carried away online and begins to trade for too much which causes losses for him / her. the more one trades the less returns one gets. According to a study conducted by Mary Rowland. It seems that the middleman has been removed. the basic rules of trading are the same. careful investor: is online trading bad for your portfolio. meaning that an addicted trader gets.1) When network crashes. 3) A tax (sales tax and value added tax) evaluation becomes an issue. 6) Individuals think that they are trading with the market directly and know what they are doing. 7) There is a need for more effective communication links over the Internet and the ability of the server to deal with a large volume of visitors. there will be problems and delays due to a large influx of rapid online trading criteria. 4) 5) One has no idea with whom he is dealing with on the other end. The commissions online pertain to the intermediary. TRADING AND SETTLEMENT AT SHARE KHAN 36 .

negotiations. 37 . The main objective of CTS is to monitor the Stock Exchanges operations. The Central trading system (CTS) will accept these orders and send it for match. The best price achieved in buying and selling. Share Khan is provided with a computer and required software from their registered stock exchanges. These computers are connected to the server at the stock exchanges through cable. All these operations are in built. TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING Share Khan deals in buying and selling equity shares and debentures on the National Stock Exchange (NSE). The Online trading system imparted a greater level of transparency and investors preferred exchanges that offered Online trading because of the following factors: • The ease of operation from the view of the both members and the investors. Increase in the confidence of the investors because of higher level of transparency. If there is any mistake in the order. • • • All these resulted in ever-increasing volumes on the exchanges offering the online trading.. These centers are called “Broker Work Stations”. through the computer. orders. in-house deals. the Bombay Stock Exchange (BSE) and the Over-The-Counter Exchange of India (OTCEI). deals. CTS will reject the orders and send respective error message to the member concern. Facilities better monitoring of the market by the exchange. The member or broker sitting in his office can send the quotations.The NSE first introduced online trading in India. auction orders etc.

the day‘s opening price. the weighted average price and total trade value will be available continuously. as the BBO for each scrip.M. top scrip by the volume/value.Order placed by the broker will be sent for a match and if the match is found suitable. 38 . TRADING SESSION Trading timings are from 9:55 A. scrip wise net position. Trader-wise. ORDERS: Orders can be done one at a time or in a batch mode. Even if the match is not found with in the prescribed period. Otherwise. Dividend declarations. These include top gainers /losers of the day. Monday to Friday is the trading period in all the stock exchanges. the order will not cancel. the order will be deleted automatically after completion of trading time. information about liquidated companies. The carry forward transactions (Good Till cancellation) are forwarded to the next day.M. company report etc. Other information will be available on query from the BWS. resolutions in board meeting. highest and lowest prices. on all 5 days of the trading period. the transaction will be executed. to 3:30 P. SEBI has stipulated that all the stock exchanges in India must have same trading period. BROKER WORK STATION: At the broker workstation the BBO’s. previous day’s closing price. Brokers are also provided with information relating to the companies in the matter of Book closure. client wise net position. market summary etc. the last traded price.

If Accepted at the CTS it will be added to the local pending order book. At the BWS the trade is added to the local trade book. 39 . when such match is found a trade gets executed. This order is not carried forward to the next settlement period. The order will then be taken up for matching. If the match is not found then after trade time the order gets cancelled that day.The submitted order will be accepted at the CTS. after validation if it finds any invalid reason the order is return back to the BWS. If a “best bid” founds match with “best order” then the transaction gets executed. Both these traders are informed of the trade being executed at their respective BWS. broker has to select the option of GTC for the order. Each trade involves two brokers and respective traders who sent the order. if it is a buy order the system tries to find a sell order. order gets cancelled automatically and new quotation has to be placed the next day. Good till cancellation: This order is forwarded to the last trading day of that settlement period. with the appropriate error message. If the correct match is not found. which fits the requirement of the buy order. Orders sent by the brokers are two types: 1) Good for the day (GFD) 2) Good till cancellation(GTC) Good for the day: This is also called as “market order”. the order is cancelled on the last day of settlement period. If no match is found. the order is executed. Next day he has to place a new order. For an order if the member selects the deal as good for the day. If the order finds match with in the trading settlement period. For example if a member wants to purchase 1000 shares of satyam info @ 400 each through Good for Day order. the order is treated as market order. This is also called as carry forward order like GFD.

Delivery out: The buyer of shares who made pay in position will take delivery of shares from the clearing house. 40 . The buyer then fills up the certificates fills up the particulars in the transfer deed.e. The transferor (or the seller) duly signed transfer deed.For example. if a member a place purchase order of 500 shares of SBI @ 690 per share and selects the order as GTC and place an order. if Monday is trading day then Wednesday is the paying day . the securities will go for auction. DETAILS OF PROCEDURES: Delivery in : The members who are in pay-out position delivers share certificates in to clearing house within the settlement period along with the delivery Chelan filled in with the details of share certificates which has folio numbers or distinctive numbers etc. SETTLEMENT OF TRANSACTIONS: Clearing of transaction in the form of shares and cash is called settlement.basis i. the settlement is made by means of delivering the share certificates along with the transfer deeds. Buyers will take the delivery of shares through the depository participants like SHARE KHAN and others. In case on non-delivery. If the match is not found on that day it will be forwarded to the next day until trading settlement period day. It bears a stamp of the selling broker. the delivery of securities and payment for them are affected on the day of the contract itself. Rolling settlement: Under this rolling settlement the trading is on “T+2”. Settlement can be done in the following way. Finally. Spot settlement: under this method.

nonpayments. good and bad deliveries pertaining to the settlement will be settled by the settlement committee of the exchange. Payout: The cheques paid in the clearinghouse will be paid to members who are in paying position. The given flow chart clearly explains the process of online trading: 41 . All disputes arising between members regarding non-deliveries.Pay-in: The member who is in paying position shall pay for value of shares with in the trading settlement period (T+2).

L o g i n B T h e s y l i m u y t r a n w s c i l l c a t S i o e nl l T h e h de pc t r a n s c a t i o n s t e m i t s s y s t e m w i l l c h e k a c b c u o y u i nn gt q u a n t i t O r d e r s a c c e p t e d c R e j e c t e d o m m u n i c o r d e or s r dw a t e d a l o n e o r u s l d a bc e c g w i t h e p t r e a s o y o u r o r d e r i s t r a n s m i t t e d t o e p w e n d i n g b u y o no r e d x e e r c s u o u l d b e d oi s f p y l a o y u e r d o o n y o u r s c r e e n s e l l o r d t pi o e n n d i n g b e d i s p l a r w d oe ru s l d o n y o u r s c r e e n y p o u e n m d a y y o e u d i m t ay y o u d r e l e ty e o u m a y i n yg o o u r r d p e e r n d i n g o p r ed n e dr i n g e o d i t y yo r d e r p o u ur m e n d a y i n g d e l e t e o r d e r f l a s h e d o nc s c r e e n i m md o n e x e c u te i oy e b -o m no f u o r r m a tc i o n ct r o a uc ys eo n u d e i a s t e ln y d b t o e n a i l a n d o m r o h b a ni l n o t e r t o t b y ed d e l i v lt e r y w m o a CHAPTER-4 COMPARATIVE ANALYSIS 42 .

COM HDFC SECURITIES: Company Background: HDFC Securities Ltd is promoted by the HDFC Bank.COM 5) ICICIDIRECT. 1st year charges included in Account Opening Initial Margin : Rs 5000/.COM 2) 5PAISA.15%* each side + ST Delivery 0. Online Account Type: • HDFC Online Trading A/c: Plain Vanilla Account with focus on 3 in 1 advantage.COM 6) HDFCSEC. Pioneers in setting up Dial-a-share service with the largest team of Tele-brokers.for non HDFC Bank Customers (AQB) Brokerage: Trading 0.50%** each side + ST *Rs 25 Min Brokerage per transaction **Rs 8 Min Brokerage per transaction 43 .COM 3) KOTAKSTREET.THE MAJOR PLAYERS IN ONLINE TRADING 1) SHAREKHAN. Pricing of HDFC Account • • • • Account Opening: Rs 750 Demat: NIL.COM 4) INDIABULLS. HDFC and Chase Capital Partners and their associates.

10 Cr 10Cr -20 Cr > 20 Cr ---- Brokerage .70% 0.75% 0. < 10 lakhs 10 – 25 lakhs 25 – 50 lakhs 50 lakhs .10% Both Sides .035% Both Sides .04% Both Sides . 1st year charges included in Account Opening Plus a facility to open additional 4 DP’s without 1st yr AMC.M.05% Both Sides . • Delivery Vol per QTR Brokerage Square Vol P.03% Both Sides -------- INDIABULLS: Company Background: 44 . Only Rs 100 as linking charges per DP • • Initial Margin : Nil Brokerage: ICICI’s brokerage rates are inclusive of Stamp duty (0.08% Both Sides .010% for delivery while service tax (10.ICICI Direct: • • Account Opening: Rs 750 Schemes: For short periods Rs 750 is refundable against brokerage generated in a qtr.1 Cr 1 Cr – 2 Cr 2 Cr – 5 Cr > 5 Cr 0.2%) on BROKERAGE land turnover tax is EXTRA. • Demat: NIL.25% < 50 lakhs 50 lakhs – 2 Cr 2Cr-5Cr 5Cr.002%) for trading and 0.35% 0.45% 0. These schemes are introduced 3-4 times a year.55% 0.30% 0.

It offers a full range of financial services and products ranging from Equities to Insurance. low commissions and priority access to R. • Power India bulls: Account with sophisticated trading tools.India Bulls is a retail financial services company present in 70 locations covering 62 cities. Pricing of IB Accounts: Signature Account * Account Opening: Rs 250 750 * Demat: Rs 200 if POA is signed. Online Account Type: • Signature Account: Plain Vanilla Account with focus on Equity Analysis.M. The equity analysis is a paid service even for A/c holders.200 if POA No AMC for this DP * Initial Margin: NIL * Brokerage: Negotiable 45 . is signed. 450 + Relationship Managers who act as personal financial advisors. No AMC for this DP * Initial Margin: NIL * Brokerage: Negotiable PAID Research: SCHEME WebBased-1-Month-500: WebBased-1-Month-6000: PrintReport-1-Month-750: PrintReport-1-Month-9000: FACILITY View & Print on Website View & Print on Website View & Print on Website + 10 Reports Delivered View & Print on Website + 10 Reports Delivered Kotakstreet: Company Background: Power India Bulls * Account Opening: Rs * Demat: Rs.

additional 0. 0.Kotakstreet is the retail arm of Kotak Securities.f 1/4/2004 46 .e.5% charges For Kotak FastLane / Keat Lite / Keat Desktop are trading interfaces.m.03% per transaction High Trader : 6 Times Exposure Cash & Derivatives.5 p.m Initial Margin : Rs 5000(Compulsory) Min Margin Retainable : Rs 1000 Brokerage Slab wise: Higher the volume. Auto sq off 2:55 Cash Expressway : Spot payment. Even older customers (on 0. lower the brokerage.40%) have been moved to the slab wise structure w. Online Account Type • • • • Twin Advantage / Green Channel : 2 DP’s. Kotak Securities limited is a joint venture between Kotak Mahindra Bank and Goldman Sachs. Limit against shares Free Way: Flat Rs 999 Cover Charge p.25% & 0. PRICING OF KOTAK • • • • • Account Opening : Rs 500 Demat: Rs 22. Non refundable. Keat Desktop with advanced tools comes at a charge of Rs 500 p.m.

25% 0.035% Both Sides 0.01 0. GOI securities.10% Both Sides 10 lakhs – 25 lakhs 0.50% 2 Cr < 10 lakhs Brokerage 0.20 lakhs 20 lakhs – 60 lakhs 60 lakhs .30% 0.5 Cr – 10 Cr > 10 Cr Brokerage 0.Slab structure of Kotak Delivery Vol p m ** < 1 lakhs 1 lakhs – 5 lakhs 5 lakhs – 10 lakhs 10 lakhs . Company Fixed Deposits.03% Both Sides * Min Brokerage of Rs 0. It also acts as a distributor of various financial services i.e.04% Both Sides 0.40% 0.M.08% Both Sides 25 lakhs .04% Both Sides 0. 0.5 Cr 5.5.05% Both Sides 0.com. 5paisa Company Background Indiainfoline was founded in 1995 and was positioned as a research firm In 2000 e-broking was started under the brand name of 5paisa.05% Both Sides 5 Cr 0.03% Both Sides -------> 5 Cr ---do------ * Brokerage is inclusive of All Taxes * Brokerage is inclusive of All Taxes * Brokerage is inclusive of All Taxes.05 per share per share Derivatives Vol off p m < 2 Cr 2 Cr .2 Cr >2 * DP Charges Extra * Min Brokerage of Rs 0. Limited ground network. Apart from offering online trading in stock market the company offers mutual funds online.2 Cr 0. present in 20 cities • • Online Account Types Investor Terminal : Investors / Students Trader Terminal : Day Traders / HNI’s 47 . Insurance.60% 0.20% Brokerage * Square Vol P.07% Both Sides 0.65% 0.

adjustable against Brokerage Yearly Rs 8000.50% each side + ST (Negotiable to 0.10% each side + ST Delivery 0.10% each side + ST Delivery 0.PRICING FOR RETAIL CLIENTS Investor Terminal • • • • • Account Opening : Rs 500 Demat 1st Yr : Rs 250 Initial Margin : Rs 2500 (Compulsory) Min Margin Retainable : Rs 1000 Brokerage : Trading 0. adjustable against brokerage Sharekhan Company Background • Sharekhan is the retail broking arm of SSKI Securities Pvt Ltd. First Caryle. and Intel • • • Into broking since 80 years Focused on providing equity solutions to every segment Largest ground network of 210 Branded Share shops in 90 cities Online Account Types • • Classis Account / Applet : Investor in equities Speed Trade : Trader in equities & derivatives 48 .25%) • Account Access Charges Monthly Rs 800.05% each side & 0. balance ownership is HSBC. SSKI owns 56% Pacific in Sharekhan.50% each side + ST PRICING FOR HNI CLIENTS Trader Terminal • Account Opening : Rs 500 • Demat 1st Yr : Rs 250 • Initial Margin : Rs 5000(Compulsory) • Min Margin Retainable : Rs 1000 • Brokerage : Trading 0.

No access charges for gold customers (Above 1 lac brokerage p.10% each side + All Taxes Delivery 0. adjustable qtrly against brokerage of Rs 9000/.50% each side + All Taxes Sharekhan online Trading Interfaces The customer can choose the online trading interface that meets his requirement based on his trading habits and preferences CLASSIC / APPLET The website is meant for customers who Invests in Equities 49 .PRICING FOR HNI CLIENTS Speed Trade • • • • • Account Opening : Rs 1000 ( Refundable against brokerage in Month + 1) Demat 1st Yr : Incl in Account Opening Initial Margin : Nil Min Margin Retainable : NIL Brokerage : Trading 0.for qtr.a) Pricing for Retail Customers Classic / Applet • • • • • Account Opening : Rs 750 Demat 1st Yr : NIL Initial Margin : NIL Min Margin Retainable : NIL Brokerage: Trading 0.10% each side + All Taxes Delivery 0.50% each side + All Taxes (Negotiable based on volume) • Account Access Charges Monthly Rs 500.

m to 6 p.m CLASSIC/WEBSITE FEATURES • • • • • • • • • • Facility to integrate choice of 4 Banks/DP/Trading Account Instant credit for shares sold from DP Automatic pick-up of shares from linked DP for pay – in Automatic deposit of shares into linked DP after pay-out 4 Times leverage on Margin Trades Margin Trading available for entire marker session Slab wise brokerage structure for delivery and margin trades.30p.SPEEDTRADE The speed trade is meant for customers who trade in Equities DIAL-N-TRADE – Toll Free The DNT is a value added services meant for all customers who Want to transact but are not online.55 am and 3. professional advice of Tel-brokers who offer undiluted Sharekhan Research Inputs After-hours order placement facility ** Transfer of money using phone banking is available with Citibank only • • ** Between 9 a. on entry of Phone Id & TPIN. the call is transferred Trusted. shortly Free calls for order placement on Toll-Free Trusted.m to 9. DNT – TOLL FREE FERTURES • • • • • Dedicated Toll – Free number for Order placements Automatic fund transfer with phone banking* Simple and secure IVR based system for authentication No wait time. Professional advice of Tele-brokers Facility to enter After Market Orders online & via Phone CLASSIC/WEBSITE FEATURES • Daily Research newsletter (Investor Eye) Via e-mail 50 .

2. Excellent reputation among the business society. Strong credibility among investors because of its heritage. Capability of providing superior customer service. 51 . Top Losers. Quality research team. 5. and Most Active updated Live SWOT ANALYSIS Strengths 1. Easier access to the customer due to largest ground network of 280 branded share shops in 120 cities. 3. 4.• • • • • • • • Access to new IPO without any paperwork Advanced portfolio monitoring Tools Integrated DP account with trading account Option of linking additional 4 DP accounts to trading account Choice of linking 4 banks to trading a/c for online payments Cash and Derivatives trading in a single account E-mail confirmations for all transactions Choice of electronic/Physical contracts SPEEDTRADE EXE FEATURES ALL THE FEATURES OF CLASSIC *Real – time streaming quotes using 2 Marker Watches *Trade Execution in 2-3 seconds * Instant Order/trade confirmations in the same window *Hot keys similar to a Broker’s Terminal *MULTIPLE Tic-by-Tic Intra-day charts with multiple indicators * Availability of 2 ISP & 6 Servers ensuring maximum uptime * Customized alerts based on multiple parameters * Cancel All/Square Off All Facility * Window for Top Gainers.

4. Abundant information about economy and companies. 9. Highly sophisticated infrastructure. Promotional activities conducted by the company are not at par with the other firms. Opportunities 1. Limited customer appeal as the company does not have access to the BSE online space. Limited customer appeal as the company product line does not include mutual funds which is increasingly becoming a preferred customer investment option. 8. 4. Efficient research and analysis team. Ability to attract and retain superior and quality personnel. Access to the BSE online space for the retail investors creates opportunity to increase clientele base. 3. 3. 2. Awareness campaigns about online trading creates new market.6. 7. Brand awareness is low in the financial market. 5. Bullish phase of the market attracts investing public. Hyderabad covers only 2% of investors which gives huge potential for the market penetration. 52 . 2. Inadequate product awareness among the retail investors. Weaknesses 1. which by interpreting the economy and company’s performance accurately is enhancing the profitability of the clientele.

Availability of Unit Linked Insurance Policies (ULIP’s) and mutual funds in the market. Threat of entry is high in this industry as the manpower required is less and capital requirement is medium. 2. 53 .Threats 1.

CHAPTER 5 FINDINGS AND OBSERVATIONS: 1. now it changed to T+2 days and further it will be changing to T+1 day. Information plays a vital role in the secondary market. Things have changed for the better with the SHAREKHAN going on-line coupled with endeavor to stream line the whole trading system. 3. Fluctuations are more in secondary market than any other market. and have brought the countrywide market to doorstep. The number of players is increasing at a steady rate and today there are over a dozen of brokerage houses who have opted to offer net trading to their customers and prominent among them are SHARE KHAN. things have changed dramatically over the last 3 to 4 years. CONCLUSION AND RECOMMENDATIONS 1. 2. Previously rolling settlement is T+5 days. 7. ICICI direct and geojit. kotakstreet. 6. 4. 54 . 2. New and advanced technologies have breached geographical and cultural barriers. In the present scenario to compete with the Broker’s would require sound infrastructure and trading as per international standards. It was also observed that many broking houses offering internet trading allow clients to use their conventional system as well just ensure that they do not loose them and this instead of offering e-broking services they becomes service providers. There are more speculators than investors. 5. India bulls. The Bombay stock exchange sensex zoomed past the 7700 barrier for the first time in history to achieve new all time high of 7800 intra day trade and ended at a historic close of 7732 points.

It has helped the brokers handling a vast amount of transactions and this can be an efficient trading. settlement system with adequate protection to investors.3. 11. 10. I suggest to the exchange authorities to increase the investors’ confidences. Necessary steps should be taken by the exchange to deal with the situations arising due to break down in online trading. delivering. The concept of business has changed today. 5. Due to invention of online trading there has been greater benefit to the investors as they could sell / buy shares as and when required and that to with online trading. 6. 4. The speculative pressures are responsible for the wide changes in the price. I recommend the exchange authorities to take steps to educate Investors about their rights and duties. 1. not attracting the genuine investors to the greater extent towards the market. The introduction of on-line trading would influence the investors resulting in an increase in the business of the exchange. this is a service oriented industry hence the survival would require them to provide the best possible service to the clients. I recommend the exchange authorities to be vigilant to curb wide fluctuations of prices. 55 . 7. The broker’s has a greater scope than compared to the earlier times because of invention of online trading. 9. The trading of SHAREKHAN of the first day was Rs. 8. Genuine investors are not at all interested in the speculative gain as their investment is based on the future profits. therefore the authorities of the exchange should be more vigilant to curb the speculation.8 crores.

com 56 . 6. 2.bseindia.Y.K.com www.com www. 3.com www. 5. 3.sebi.Khan WEBSITES: 1.com www. 5.Bhalla Investment management -Preethi Singh Security Analysis And Portfolio Management -V.moneycontrol.A.nseindia. 4.Avadhani Indian Financial System -M. Investment management -V.com www.Avadhani Marketing of Financial Services -V.BIBILOGRAPHY: BOOKS: 1. 2.A.economictimes. 4. www.Share Khan.

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