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A Report on Online Trading
Project submitted in partial fulfillment for the award of the degree of MASTER OF
By JNTU University, Hyderabad-500
I hereby declare that this project entitle “A REPORT ON ONLINE TRADING” submitted by me to the department of business management,OU,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 of the student: the student:
We studied the online trading mechanism, functions and growth factors. Similarly the online investor likely does not have to worry that his broker is making unauthorized trades. Since there is no individual broker making a commission, the only person who is authorized to trace in an account is the actual investor. Furthermore, the internet investor can never become a victim of excessive trading (where for the broker) since the investor maintains total control over the number of transactions which take place in the account. The aim of the project is describe the features of online trading; features of internet trading may lead the unwary investor to believe that Internet trading is a way to take control of their finances and save more money in the process. We studied the risk factors on online trading, additional risks relative to performing transactions over the Internet especially on a shared computer. Those people whom investors have provided their account number and password can freely trade that account while the investor will have little, if any, resource against the brokerage firm for the breach of security.
Mr. Kamesh I wish to record my sincere and special thanks to Mrs.5 ANNEXUREIV ACKNOWLEDGEMENT It is with real pleasure that. My special thanks are due to “ support. I record my indebtedness to my academic Guide. Supriya HRAdmin). “give me great and valuable . for his counsel and guidance during the preparation of this project. I am grateful to Branch Research Head.
17 17 19-52 53-55 56-58 59-66 67-71 72 74 76 Chapter No 1 2 3 4 5 6 7 8 9 9 Content Introduction Objective and Scope Review of literature Research and Methodology Company Profile Data Analysis and Interpretation Findings and Suggestions Conclusion Bibliography Annexure .6 Contents: Page No 7 .
7 Chapter 1 INTRODUCTION .
Primary A primary offering. the investor may not like to relinquish control over their savings for a long time. You may not get par value. you could get a premium for it. usually. If rates have fallen since you bought it. Financial regulators ensure that investors are protected against fraud. If rates are up since you bought the bond. Since projects require long term finance. Thus development of efficient market system is necessary for creating conductive climate for investment and economic growth. which in turn enhance the savings and investments in the country. but by the abilities of the companies. I. the comprises of two segments – the new issue market which is commonly known as primary market and the stock market which is known as secondary market. The capital market includes the stock market and the bond market. you can sell it in the secondary market.E. and the secondary market. where companies and the government can raise long term funds. means you are buying it directly from the issuer. As a result the investors are not constrained by their individual abilities. liquidity of capital market is an important factor affecting growth. If you bought a bond last year. but on the other hand. Capital market thus plays a vital role in channelizing the savings of individuals for Investment in the economic development of the country. then you will likely have to sell it at a discount to be able to get rid of it. such as with a corporate bond. The capital markets consist of the primary market.\ Capital market Segment – Primary And Secondary Broadly . where new issues are distributed to investors. where existing securities are traded. at par value. A secondary market is where you sell or buy existing issues. Secondary . now need to get your principal. A liquid stock market ensures a quick exit without incurring heavy losses or costs.8 Introduction to the capital market The capital market is the market for securities.
To explain further. Bombay Stock Exchange (BSE).P and Delhi stock exchange . it is trading in previously issued financial instruments. enabling implementation of incentive-based management contracts. and aggregating information (via price discovery) that guides management decisions. residential mortgage loans. For the general investor. Secondary market comprises of equity markets and the debt markets. bond markets. Most trading is done in the secondary market. governmental guaranteed loans etc Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. Secondary equity markets serve as a monitoring and control conduit—by facilitating value-enhancing control activities. the secondary market provides an efficient platform for trading of his securities.9 The market where securities are traded after they are initially offered in the primary market. For the management of the company. An organized market for used securities. National Stock Exchange NSE. 18 00 18 50 18 60 18 75 18 94 Trading of shares of east India company in Kolkata And Mumbai Joint stock company came into existence Speculation and feverish dealing in securities Formulation of stock exchange of Mumbai Formulation of Ahmadabad stock exchange INDIAN CAPITAL MARKET AT GLANCE 20th century 19 08 19 39 19 40 Formulation of Calcutta stock exchange Formulation exchange of Lahore and madras stock Formulation of U. Majority of the trading is done in the secondary market. over-the-counter markets.
1992 Formation of National stock exchange HARSHAD MEHTA Scam SESA GOA Scam CRB scam BPL And Videocon Scam 21 st century 200 0 200 1 200 2 200 2 200 Depositories came into (electronic form of shares) Ketan Parekh scam Start of rolling settlement and banning of Badla trading Introduction of T+3 settlement in April Introduction of T+2 settlement in April existence .10 19 56 19 57 19 88 19 91 19 92 19 93 19 95 19 95 19 97 19 98 Securities contract and regulation act enacted Scam of Haridas Mundhra Securities and exchange board of India set up Scam of MS Shoes SEBI given power Under SEBI act.
To be able to trade a security on a certain stock exchange.408 points at the end of the session.11 3 200 5 200 6 200 7 200 8 200 8 200 8 200 9 BSE Sensex touches all time high 6954 in January BSE Sensex touches all time high 12500.from its all time high Sexsex saw its down trend & highest ever loss because of Satyam case. In other words. BRIEF ABOUT THE STOCK EXCHANGES Stock Exchange is a market like any other centralized market where both buyers and sellers come and conduct their business of purchase and sale of shares & securities. MEANING OF STOCK EXCHANGE A stock exchange. it is a market place for shares and securities where trading takes place in a controlled and protected environment. The securities traded on a stock exchange include: shares issued by companies. Sexsex saw its 15 month low. but trade is less and less linked to such a physical place. it has to be listed there. Usually there is a central location at least for recordkeeping. as modern markets are electronic networks. to trade stocks and other securities.the highest intraday fall of 1100 BSE reaches the level of BSE touches all time high in January 2008 Sensex saw its highest ever loss of 1. share market or bourse is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders. unit trusts and other pooled investment products and bonds. . Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends.
The ownership of the companies was divided into small parts and that every part was called share. Increasingly. stock exchanges are part of a global market for securities. as in all free markets. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. affect the price of stocks (see stock valuation). To solve this problem.12 which gives them advantages of speed and cost of transactions. CONCEPT OF SHARE TRADING The concept of share broking emerged after the establishment of the joint stock companies. Trade on an exchange is by members only. These persons are . a group of persons came into picture. The shares are freely transferable subject to the some certain restrictions. nor must stock be subsequently traded on the exchange. A stock exchange is often the most important component of a stock market. it was difficult to find out the buyers of the shares who want to buy the shares at the price the seller want to sell. When the need was felt to sell the shares by the owner of the shares. So. the term “Share” denominates some part in the ownership of the company. which used to bring the buyers and sellers together for the trade of the shares. Supply and demand in stock markets is driven by various factors which. At that time a need was felt to bring the buyers and sellers on a common platform. Such trading is said to be off exchange or over-the-counter. There is usually no compulsion to issue stock via the stock exchange itself. This is the usual way that bonds are traded.
and has been providing trading platform for investors situated across the country. Over the last 130 years. The whole process of finding the buyers and sellers of the securities by the brokers is called the Share Broking. modern international standards both in terms of structure and in terms of operating OPERATIONS OF NATIONAL STOCK EXCHANGE TURNOVER NATIONAL Stock Exchange is one of the leading Stock Exchanges among the national Stock Exchanges of the country. It had been generating significant amount of the business in the secondary market. The origination of the Indian securities market may be traced back to 1975. when 22 enterprise brokers under a Banyan tree established the Bombay Stock Exchange (BSE). 231 are listed as regional companies. It recorded a peak turnover of Rs. of the most dynamic.915400 crores during the year 2008-2009. but the reduction in the turnover of the Exchange .13 called the share Brokers who find the persons who wish to buy or sell their securities. At present. The structural changes that took place in the recent past in the Capital Market of the country had a negative impact on the trading volume of the Regional Stock Exchanges. There has been a significant reduction of turnover during the financial year 2008-2009. it has 7570 listed companies and among them. the Indian securities market has evolved continuously to become one efficiency.
14 has been more than adequately compensated by substantial rise in the turnover of NSE Securities Limited. post listing compliance of the companies which are already listed with NATIONAL Stock Exchange. the Company has to ensure and report compliance of the post listing requirements. Any Company incorporated under Companies Act. further listing of issues like bonus and rights issues. PRESIDENTS/ CHAIRMEN . The Listing Department of NATIONAL Stock Exchange deals with listing of securities. The Companies desirous of listing its securities on the Exchange have to sign a Listing Agreement with the Stock Exchange. a subsidiary of NATIONAL Stock Exchange. After getting the listing approval. coming out with an IPO. has to mandatorily list its shares on a Stock Exchange. The listing section of the NSE monitors the postlisting compliance of all the listed companies and follows up with the companies. LISTING Listing is one of the major functions of a Stock Exchange wherein the securities of the Companies are enlisted for trading purpose.1956.which are found deficient in compliance.
1986 28.1992 to 22.1992 30. Singal Dr.2001 25.1995 01.10.06. V. Dhodi Sh.10.10.1983 to 27.10. B. Dhiri 16.10.1998 06.12.2001 to 01. S.09.2000 31.08. B.2007 15.12.S. B.2000 to 05.07.S.N.12.Jagmohankrishan. Oswal Sh.1989 to 30.2002 Sh.10. Tandon.15 Sh.1996 to 29.1996 05. R.09.2007 to 10.12. Chairman 06.P.1993 Sh. Lall Munjal Sh.10.1995 to 30. M.1986 to 15.10.2007 to . Chairman Sh.10.C.10.07.1993 to 05.09.1989 16. Sharma.1998 to 04.M. S.P.10. Gandhi Sh. G. Chairman Sh.07. Jaspal Singh 23.
Varun chhabra.Registrar of conpanies Sh.30 am.vice chairman Sh.Thapar.Sunil Gupta. Public intrest director Sh.Padam parkash kansal. . director Sh.Jagmohankrishan. director SETTLEMENT CYCLE SCHEDULE SR. Chairman Sh.Ashok kumar. 1 2 3 DAY T T+2 T+2 DESCRIPTION OF ACTIVITY TRADE Trading Day PAY IN BY 10. director Sh.16 List of directors of NSE Sh. director Sh.Joginder kumar.Raj Singh. PAY – OUT BY 2 pm.S.T. director Sh. director Sh.Public intrest director Sh.yash paul mahajan.Sanjeeev Kumar Gupta. NO.Sarbjit garg.
ready and open market for selling and buying securities. companies can use the capital. It promotes savings and investment in the economy by attracting funds from the investors. It brings the companies and investors together so that the investors can put risk capital into companies and thus. It provides an orderly regulated market for securities.) Functions of Stock Exchange Stock exchange is established into the main purpose of providing a market place for the members to deal in securities under well laid down regulations and to protect the interest of the investors. . 5. It acts as a clearing house of business information. It provides continuous.17 4 deliveries T+3 Auction of shortage in Auction pay-in by Out by 2 5 T+5 10. It facilitates take overs by means of acquiring majority of shares traded on the stock market. 2.30 (1 am/ pay pm. 4. 6. 1. The main functions of stock exchange are. 3.
It induces the managers to improve performance for converting nonspecified shares into specified shares in the exchange. Chapter 2 OBJECTIVES . 10.It also allows the companies to float their shares in the market. 8. to retain their shares in ‘A’ group. It motivates the managers of well reputed companies.18 7. It enables the investors to evaluate the net worth of their holdings. to improve performance. 9.
3. 5. To understand the appropriate organizational structure of the NATIONAL STOCK EXCHANGE LTD and trading through online. To Analyse the online trading and its mechanism on NSE. How the investors can avail this kind of trading facility. 2. Find the differences of conventional trading and online trading. 4.19 OBJECTIVES OF THE STUDY 1. Study the pros and cons on online trading .
20 Chapter 3 .
water and now everything is available at your doorstep just at the click of the mouse. Internet investors can take as much time as they would like to take prior to . In theory. Internet trading commissions are clearly posted on the websites of the various services.21 REVIEW OF LITERATURE On Line Trading Meaning of Online Trading: “Change is the law of nature”. an Interest investor always knows what commission he is being charged on each trade. and are typically a fixed rate charge. depending upon the type of security being traded and the size of trade. When Internet has affected all sectors he could “stock markets” the most important player of the economy. therefore. has remained far behind? Like all other sectors Internet has set its feet in the stock markets also. Internet has enabled us to get every information at our doorstep. He himself had to go place to place in search of food. There were times when man was a wanderer or a normal. The growth of information technology has affected almost all sectors of life.
The advantages of Internet stock trading have also its weaknesses and these weaknesses present significant drawbacks for the average investor. this is not always the case. When was online trading introduced in INDIA? Online trading started in India in February 2000 when a couple of brokers started offering an online trading platform for their customers. perhaps among the most valuable services provided by traditional brokers. . resource against the brokerage firm for the breach of security. Similarly the online investor likely does not have to worry that his broker is making unauthorized trades. All of these positive features of internet trading may lead the unwary investor to believe that Internet trading is a way to take control of their finances and save more money in the process. There are. the average investor is not an expert in the financial markets. if any. the only person who is authorized to trace in a the account is the actual investor. Furthermore.22 placing a trade order. There is a danger for allowing the autonomy of online trading to hull you into the belief that you are an expert investor. Since there is no individual broker making a commission. Those people whom investors have provided their account number and password can freely trade that account while the investor will have little. of course. Unfortunately. An online investor sitting at home at a personal computer also foregoes proper investment advice and financial planning. additional risks relative to performing transactions over the Internet especially on a shared computer. the internet investor can never become a victim of excessive trading (where for the broker) since the investor maintains total control over the number of transactions which take place in the account. First and foremost.
The 'F' group represents the debt market (fixed income securities) segment. 'F' and 'Z' groups. Both the exchanges have switched over from the open outcry trading system to a fully automated computerized mode of trading known as BOLT (BSE On Line Trading) and NEAT (National Exchange Automated Trading) System. The scrips traded on the BSE have been classified into 'A'. automatic order matching. Orders placed at the Brokers' workstations reach the central computer and are matched by the computer based on price and time priority. The 'Z' group . which are in the carry forward system (Badla). It facilitates more efficient processing. faster execution of trades and transparency. 'B1'. The 'A' group shares represent those. 'B2'.23 ONLINE TRADING BY NSE & BSE The central computer located at the Exchange is connected to the workstations of the Brokers through satellite using Very Small Aperture Terminals (VSATs). 'C'.
3. 4. No one wants to throw their money away or stand by and watch someone eNSE throw their money away. Offline trading offers many benefits as well. Mutual Funds. there is someone there to answer any questions that may cause concerns. FIIs and other participants in Indian secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd. Depository participants. with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. It may be wise to hire a professional to assist you in making the correct investment decisions if you feel you lack the knowledge necessary. Not to mention. Brokers. Points of difference between online trading and ofline trading are as follows: . The one benefit that an investor appreciates the most is that they are not alone when making investment decisions. There are experienced and professional brokerage companies that handle their investments for them. especially. Offline trading has lost some popularity but it is still the main form of investing. key regulator governing Stock Exchanges. Depositories. Also.24 scrips are the blacklisted companies. 1. 'B1' & 'B2' groups and Rights renunciations. The 'C' group covers the odd lot securities in 'A'. 2. if they do not have the experience necessary to make the appropriate investments. with offline trading mistakes are less likely to take place. Investors are not faced with the challenge of making these vital investment decisions. DIFFERENCE BETWEEN ONLINE AND OFFLINE TRADING Nevertheless.
In the help of online trading. Online trading is very expensive as compare to manual trading or offline trading. Online trading has very helpful to finding the records easily but offline trading takes more time to finding the records. 2. 3. 5. Online trading consumes less time as compare to manual trading. With the help of online trading. Procedure for purchasing dematerialized securities .25 1. 4. we know the international market rate of share very easily. ELECTRONIC SETTLEMENT OF TRADE A. DEMATERIALISATION OF SHARES Dematerialization is the process wherein shares certificates or other securities held in physical form are converted into electronic form and credited to demat account of an investor opened with a depository participant. in offline trading there are some errors exist like barriers of communication . there is no chance of any errors while doing the trading. SEBI has made compulsory trading of shares of all the companies listed in stock exchanges in demat form with effect from 2nd January 2002.The procedure of opening a demat account with DP is similar to opening an account with a bank.
There may be one time standing instruction or separate instruction each time to receive credits. Before the pay-in-day. Broker gives instructions to DP to debit clearing account and credit client’s account.26 The procedure for purchasing dematerialized securities is also similar to the procedure for buying physical securities. Investor receives shares into his account by way of book entry. The procedure for selling dematerialized securities is given below: 1. 1. The only major difference is that instead of delivering physical securities to the broker. 4. the investor instructs his DP to debit his demat account with the number of securities sold by him and credit the brokers clearing account. 3. Broker receives credit to securities in clearing account on the payout day. 2. 5. 3. The broker receives payment from the stock exchange. Investor sells securities in any of the stock exchange linked to depository through a broker. 4. Investor purchases securities in any of the stock exchanges linked to depository through a broker. B. Broker receives payment from investor and arranges payment to clearing corporation. Procedure of selling dematerialized securities The procedure for selling dematerialized securities in stock exchanges is similar as selling physical securities. Investor instructs DP to receive credits into his account in the prescribed form. . Investor instructs his DP to debit his demat account with the number of securities sold and credit the broker’s clearing account. broker of the investor transfers the securities to clearing corporation. 2.
what began with a single click over 16 years ago has now taken the world by storm. Depository in turn initiates the registrars and transfer agent or the issuer company. when a doctor in Michigan placed the first online trade using E*TRADE technology. RTA/ Company prints the certificates and dispatches the same to the investor. The investor receives payment from the broker for sale of securities in the same manner as received in case of sale of physical securities. the investor has to fill up a remat request form (RRF) and submit it to the DP. a physicist and inventor with more than dozen of . The DP forwards the request to depository after verifying the investor’s balances. REMATERILISATION OF SHARES Rematerialization is the process of conversion of electronic holdings of securities into physical certificate form. For rematerilisation of scrips. The concept was visualized by one bill porter.27 5. Market timings: Trading on the derivatives segment takes place on all days of the week (except Saturdays and Sundays and holidays declared by the Exchange in advance). The market timings of the derivatives segment are: Normal Market / Exercise Market Open time Normal market close hours : 09:55 hours : 15:30 : till 15:30 : 16:15 Set up cut of time for Position limit/Collateral value hrs Trade modification end time / Exercise Market hours Advent of online trading The history of e-trading goes back to 1983.
Charles Schwab. And today his dream has become a reality.28 patents to his credit. . as an individual investor. he had to pay a broker hundreds of dollars for stock transactions. and quick and Reilly. with incredible foresight. This led bill to wonder why. he saw the solution at hand. who provided online quotes and trading services to fidelity. some day everyone would own computers and invest through them with unprecedented efficiency and control.
971.) 64.62 3.24 48.70 3.03.690.1(Year 2003) MONTH January Feb March April May June July August September October November December CASH TURNOVER(cr.425.59 3.2 (Year 2006) .58 1.34 1.559.76 4.41 2.88 4.02 2.923.595.981.346.50 1.21 RATIO(%) 2.88 3.885.31 54.33 5.45 3.64 ONLINE TURNOVER(cr.159.87 3.) 1.32 92.762.720.14 61.18 43.91 3.289.07 1.93 48.33 4.024.35 78.63 85.301.36 2.877.302.15.585.69 1.345.83 1.71 1.02 5.142.97 3.48 3.23 3.32 Source: NATIONAL stock exchange TABLE-1.876.372.825.10.344.29 SHARE OF ONLINE TRADING IN TOTAL CASH TURNOVER OF NATIONAL STOCK EXCHANGE Table 1.
48 4.13 7.000.05 75.08.93 84.27 7.06 1.20 5.90 7.53 1.187.84 RATIO .47 93.876.16 11.855. 1.52 Source: NATIONAL Stock Exchange MONTH January Table 1.13 9.718.15.41 6.697.34.30 MONTH January February March April May June July August September October November December CASH TURNOVER ONLINE TURNOVER 1.45 6.508.244.95 6.04.76 4.23 5.31 6.04 5.3(Year 2007222222222220 CASH TURNOVER ONLINE TURNOVER 68.82 .836.951.261.62 RATIO 4.72 1.01 4.268.358.251.72 88.24 6.32 82.015.95 1.919.10 6.330.13 5.00.490.27 9.976.31 7.27 5.88 8..01 5.035.718.192.27 1.898.819.17 98.13 86.593.170.
78 1.414.108.21 1.77 44.113.19.07 51.51 2.229.29 0.96 1.31 February March April May June July August September October November December 49.05 46.476.62 51.04 1.28 Source: NATIONAL Stock Exchange .43 1.72 2.73 1.19 3.320.04 0.5(year 2009) RA TIO 0.25.398.979.65 1.85 914.351.34 917.310.65 5.973.479.66 1.48 61.80 868.02 54.498.01 0.44 79.51 2.18 0.22 51.237.854.58 97.10.731.50 53.28 1.85 1.09 229.18 350.11 1.57 1.318.31.1 0 88.07 0.78 1.347.68 1.290.49 165.06 44.28 1.22.75 TABLE-1.056.262.84 2.42.902.915.241.43 46.79 366.563.51 1.639.16 0.09 Source: NATIONAL Stock Exchange TABLE-1.036.84 2.13 0.22 1.373.85 29.06.09 0.4(Year 2008) MONTH April May June July August September October November December CASH TURNOVER ONLINE TURNOVER 57.25 2.85 3.98 190.01 1.
23 54.62 849.226.23 60.92 238.76 1.932.58 604.329.41 0.32 MONTH CASH TURNOVER January Februmy March April May June July August September October November December 1.573.15 35.48 1.829.24 RATIO 0.454 42.467.32 1.98 453.28 1.56 1.68 388.322.326.00 27.16 1.048.82 35.17 805.48.21 35.722.214.171.124 1.79 ONLINE TURNOVER 1.9 343.92 Source: NATIONAL Stock Exchange Internet Based Trading through Order Routing Systems .84 1.91 1.35.71 0.11 42.417.76 29.81 268.76 0.47 401.49 1.63 48.227.615.71 1.
the quantity and whatever the order is a market or limit order. or allow investors to create a personal stock ticker. matching systems and crossing systems. continuously update quotes while the user visits other sites. analyst reports and trading strategies and market data on currencies. Information on commission and fees. In an Order Routing system. whatever it is to be bought or sold. Use of Internet as Alternative Trading Systems (Provision for price discovery and matching outside conventional exchanges) In foreign jurisdiction. Advertise the broker dealers’ services to potential investors.33 Internet based trading on conventional exchanges. through broker web sites. uses the Internet as a medium for communicating client orders to the exchange. These may include. Alternative trading systems have been developing outside conventional securities markets. Broker’s web sites may serve a variety of functions. mutual funds. • Provide market summaries and commentaries. market indices and news. Offer real-time or delayed quote information. Offer market information and investment tools similar to those offered by information vendor or SRO web sites. and • • • Offer investors access to portfolio management tools and analytic programs. or other organized markets. • • • • Allowing the clients to directly trade through investors. and Account information and research reports. Once the broker’s system receives this information. which provide investors with additional proprietary electronic trading facilities for securities that are traded principally on securities exchanges. a broker offering Internet trading facility provides an electronic template for the customer to enter the name of the security. options. They have price discovery functions. The systems that are currently in .
have developed computerized “alternative trading systems” by which the system centralize. for disseminating the prospects in electronics form and even for receiving share applications in public issues electronically.34 use in outside jurisdictions are closed systems and are not accessible to the general public through the Internet. The services offered by the service providers to the investors are generally the following: • • • Advertising Providing investment information and investment advice. The securities markets regulators abroad the maintained flexible and open policies designed to encourage innovation in the secondary securities markets. and for communicating with and receiving orders from potential investors. match. for presenting information on portfolio analysis and market information. SEBI has taken initiative in public offerings by the issuer companies. potential investors and analysts by disseminating corporate information. display. are using the Internet for marketing and advertising purposes. cross or otherwise execute trading interest. In foreign jurisdiction. and Disclosure and communication Issuers are using the Internet to market themselves to potential investors. Private offerings. Use of Internet for making Initial Public Offerings Issues of securities of using the Internet to communicate directly with their shareholders. research outfits etc. usually brokerdealers. Underwriting . they are also using the Internet to communicate to the public for the following: • • • Public offerings. In India. The Internet is also being used for fulfilling necessary disclosure requirements. As a result. a number of market participants. in permitting use of the network of stock exchange for collection of investor applications Investment Advisory Services Brokers as well as other service provides such as investment firms.
To look into the existing regulatory scenario and to bring out some ground rules for use of the medium of Internet. it was felt that SEBI as a regulator could strive to identify areas where use of Internet in the capital market is possible within the existing legal framework. Raval and . D. chaired by Prof. Separate reports (s) will cover the other areas related to Internet applications in the securities markets.N.K. SEBI to examine the legality of introduction of Internet trading and issue of Alternative trading systems. Security protocols and standardization of interfaces for Interest based securities trading. and Record keeping Working Groups set up by the Committee Considering the present state of capital markets in India and keeping in view the ongoing developments in Internet based securities business. Customer orders. Deepak B. is the area of Internet trading on existing electronic exchange. Pawai.35 • • • Communicating with the investors. One such area identified by the Committee. Phatak. The report of the first working group on security protocols and standardization of interfaces has since been submitted and incorporated in the report. SEBI The committee also requested Ms D N Raval. Sr. the Committee therefore constituted the following two working groups to look into the area of: i. L. ED. Mumbai Surveillance and monitoring related issues arising due to Interest based securities trading. IIT. ii. In this area. Ms.B. This report of the standing committee examines the regulatory and security requirements Internet Based Trading on Conventional Exchanges. Singhvi. The committee would like to place on record its sincere thanks to Dr. which is also the central within the existing legal framework. which is also the central theme of this report. chaired by Shri. One such area identified by the Committee. Phatak. Executive Director. through early introduction of Cyber Laws would be highly describe but their existence is not a necessary precondition. D.
The stock exchange should grant approval or reject the application as the case may be. 1998. . However. Recommendations of the Committee Application for Permission by Brokers SEBI registered Stock Brokers interested in providing Internet based trading services will be required to apply to the respective stock exchange for a formal permission. net worth. With nearly who million on-line investors. Internet service providers and other agencies involved in facilitating Internet trading. It thus becomes imperative that for developing in effective regulatory framework developments in other parts of the world should be studies and analyzed. before giving permission to brokers to start Internet based services shall ensure the fulfillment of the following minimum conditions. They were also tripped of the various initiatives taken by SEC in this regard. and communicate its decisions to the number within 30 calendar days of the date of completed application submitted to the exchange. A team comprising of members from stock exchanges and SEBI visited the United states to these development and had interactions with brokerages houses. Net worth Requirement The broker must have a minimum net worth of Rs. These inputs have been utilized while drafting this report. The stock exchange. Internet trading is being facilitated by large brokerage houses. if some brokers collectively approach a service provider for providing the interest trading facility. The global financial market is undergoing a transformation due to rapid technological developments. Internet trading in the United States is growing by leaps and bounds. criteria as stipulated by the stock exchange will apply. thus changing the total concept of securities trading. The team also discussed the developments in the emerging regulatory and supervisory framework in United States with the Securities and Exchange Commission officials. 50 lacs if the broker is providing the Internet based facility on his own. The net worth will be computed as per the SEBI circular no FITTC/DC/CIR-1/98 dated June 16.36 their team members.
.37 Operational and System Requirements: Operational Integrity: The stock Exchange must ensure that the system used by the broker has provision for security. Qualified Personnel: The stock Exchange must lay down the minimum qualification fro personnel to ensure that the broker has suitably qualified and adequate personnel to handle communication including instructions as well as other back office work which is likely to increase because of higher volumes. For this purpose is should be mandatory for participants to use certification agencies as and when notified by Government/SEBI. Signature Verification/ Authentication: It is desirable that participants use authentication technologies. This stock exchange must also ensure that records encryption technology. They should also clearly specify when manual signatures would be required. and arranged for alternative means of communications in case of Internet link failure. The stock Exchange must also ensure that the workers have adequate system capacity for handling data transfer. Written Procedures: Stock Exchange must develop uniform written procedures to handle contingency s tuations and for review of incoming and outgoing electronic correspondence. System Capacity The stock Exchange must ensure that the brokers maintain adequate backup systems and data storage capacity. The stock Exchange must also ensure the records maintained in electronic from by the broker are not susceptible to manipulation. reliability and confidentiality of data through use of encryption technology.
verifiable information about clients. which would facilitate risk evaluation of clients. This agreement should also inter alia.Client Agreement: Brokers must enter into an agreement with clients spelling out all obligations and rights. Exchange will prepare a model agreement for this purpose. Ticker/quote/order book displayed on the web-site of the broker should display the time stamp as well as source of such information against the given information. The investor should be allowed to specify the time interval on the web site itself within which he would like to receive this information through email. hyper link to the web site/page on the web site of the relevant stock exchange (s) displaying rules/ regulations/ circulars. . The broker web site providing the Internet based trading facility should also provide and display prominently. investor protection rules etc. Broker.38 Client Broker Relationship Know Your Client: The stock Exchange must ensure that brokers have sufficient. Facility for reconfirmation of orders which are larger than that specified by the member's risk management system should be provided on the internet based system. the minimum service standards to be maintained by the broker for such service specified by SEBI/Exchange for the internet based trading from time to time. The broker agreement with clients should not have any clause that is less stringent/contrary to the conditions stipulated is the model agreement. Investor Information: The broker web site providing the internet based trading facility should contain information meant for investor protection such as rules and regulations affecting client broker relationship arbitration rules. Order/Trade Confirmation: Order/Trade confirmation should also be sent to the investor through email at client’s discretion at the time specified by the client in addition to the other made of display of such confirmation of real time basis on the broker web site.
39 Handling Complaints by Investors: Exchanges should monitor complaints from investors regarding service provided by brokers to ensure a minimum level of service. all existing obligations of the broker as per current regulation will continue without changes. brokers using Internet based systems for routing client orders will also not be allowed to cross trades of their clients with each other. All orders must be offered to the market for matching. Exchanges may also like to specify more stringent standards as they may deem fit for allowing Internet based trading facilities to their brokers. the broker system may have a review and release facility to allow the order to pass through.. In case system based control rejects an order because of client having exceeded limits etc. Brokers must set predefined limits on the exposure and turnover of each client. The client should be informed of acceptance/rejection of the order within a reasonable period. . The broker systems should be capable of assessing the risk of the client as soon as the order comes in. Cross Trades: As a matter of abundant precaution. within 24 hours of the trade execution. It is emphasized that in addition to the requirements mentioned above. Contract Notes: Contract notes must be issued to clients as per existing regulations. It is desirable that exchanges should also have facility for on-line registration of complaints on their web site. Exchange should have separate cell specifically to handle Internet trading related complaints. and exposures taken by clients. the committee seeks to reiterate that as III the case of existing system. Risk Management: Exchanges must ensure that brokers have a system-based control on the trading limits of clients.
However. hope that he is in the office to place your order. When you want to buy or sell stock. For the first time in history.40 Enforcement: A separate working group has been set to look into the surveillance and enforcement related issues arising due to Internet based securities trading. The amount of investment information available online is truly astounding. FEATURES OF ONLINE TRADING: features are as follows: The Online Trading is having many features which make it most suitable for the investors to go for. any individual with an Internet connection can: • • • • • Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and the global economy Conduct extensive financial research on any company One of the great appeals of using an online trading account is the fact that the account belongs to you. and hope that the transaction is executed instantly. 1995) would apply to all transactions involving securities or financial services. you no longer need to call your broker on the phone. . Some of these The Internet can provide a new sense of control over your financial future. and is under your direct control. regardless of the medium. possibly argue with the broker about the order. general anti-fraud provisions (SEBI Fraudulent and Unfair Trade Practices Regulations. It's one of the best aspects of being a wired investor.
Online trading offers you greater transparency by providing you with an audit trail. to the execution and settlement of your bank account. . you will be able to get the best quote for your orders. Trading on the net. dedicated trading platforms and sophisticated tools for accessing the markets. Also due to the high level of transparency with regard to display of information relating to the specific stocks and company profiles. Every broker house aims at providing the investor with the best price available. gives even the smallest retail investor access to information that earlier was available only to the big traders. your trading account and your demat accounts. to clearing and settlement and finally ending with a credit into your depository account. This provides a level playing field for all investors in the securities market. This involves a complete integrated electronic chain starting from order placement. You as an Investment online customer will be able to execute the entire trading transaction. an online trading account gives you more agility in buying and selling stocks. This is through sophisticated information streams. which leads to easy and paperless trading for you.41 At the most basic level. All these stages are subject to inspection. Online trading integrates your bank account. thus bringing in transparency into the system. in a very short period of time. right from logging on to our site.
Your Bank. as in this case all short sell orders are squared off at the specified cut-off time and not allowed to be carried forward. This reduces the settlement risk for the buyer.42 This method of trading reduces the settlement risk for the investor. This avoids costly errors that would have been discovered when it is too late. From updated security technology to advanced fraud prevention measures. who is assured of the delivery of the securities and for you as a seller of the securities Every trade is confirmed immediately and you will receive an on-screen confirmation following every trade with full details for your records. they have the people and tools in place to provide a strong defense against electronic scams and fraud. . Depository and online account are integrated for your convenience. Various broking houses provide access to many of the popular banks. In the case of a demat account your demat account is checked by us before executing your sell transaction. Broking houses work hard to keep our account and personal information secure.
Due to the power of the Internet one has the privilege of becoming the clients of really large brokerages with the benefits of enjoying the low charges hithelio before enjoyed only by the big players. As the DP account has got linked to the trading account most players do not charge a minimum transaction cost thus truly allowing one to buy a single share and achieve meaningful rupee price averaging whatever be your buying power. 2) Peace of Mind: One can never have complete peace of mind but online investing does away with the hassles of filling up instruction slips. 3) Keeping Records: The site one trades on keeps a record of all transactions down to unexecuted orders and cancelled orders thus keeping one abreast of all your transactions 24 hours a day. visits to the broker for handing over these slips and consequent costs.43 BENEFITS OF ONLINE BROKING 1) Less Costly: The most significant advantage of the Online broking is the cost reduction in the brokerage. No paperwork means more time at one’s disposal for research and analysis. .
6. 5. Moreover even if somebody broke in and tampered with one’s account the money from the stocks he sold or the stock bought from the money in his account is in his account only. This reduces the settlement risk for the buyer.) Unparalleled Liquidity: The. In the case of a demat account (required for an online transaction).) Reduces the settlement risk: This method of trading reduces the settlement risk for the investor. This includes research reports. 7. when a seller wants to sell the securities. Most partner banks offer Internet banking as well. bank account linked with the trading account invariably has an A TM free. 8. who is assured of the delivery of the securities.e.) Offers greater transparency: Online trading gives greater transparency to the investors by providing them an audit trail.) Unparalleled Safety: Most sites are secure using 128-bit algorithms -highest available commercially anywhere in the world. Conversely in case he spot an opportunity in the market he can immediately allocate money from his savings account to his trading account and make profits. the seller will not be able to sell the securities unless he has their actual possession. This involves a complete integrated electronic chain starting from order placement. This results in one’s money becoming available to him whenever he like from his trading account. results. analysis and even gossip and the buzz in the market. to clearing and settlement and finally ending with a credit to the . his demat account is checked by the Depository Participant before executing the sale transaction. as in this case no Short sale is possible i.44 4) Access to Information and investment Tools: Most online investing sites have a wealth of information for their registered members.
brokers and also helps the nation to channelize the resources. with a click of mouse. Other than the above-mentioned advantages. 9. All these stages are subject to inspection.45 depository account of the investor. The entire communication between the investor. Net trading would increase competition in the market hence increase in the bargaining power of the investors. Internet trading provides some additional advantages to the investors. broker and exchange would take place within milliseconds. one can buy or sell any share that is dematerialized. . thus bringing in transparency into the system. PROBLEMS OF ONLINE BROKING There is a flip side to everything and online trading is no exception.) Ease of trade: It is the ease of doing the trade through net.
2.) Connectivity of the Broker with NSE: .46 Chart 4% 14% 21% More Costly Lack Of Know ledge 11% Loyalty to Traditional Broker Lack of Trust Slow Speed 23% Other 27% Source:. Some of the online sites are providing a telephone number for use in case their sites are overloaded or their server down.co.www. So.) "Server not found": This may appear on one’s screens when he is desperately trying to get out of an unprofitable position.in 27% Loyality is of traditional broker 23% people says that online trading is more costly than manual trading. 21% people not prefer online trading because of lack of knowledge.NSE. the main problems of online trading are as follows: 1.
5.47 Recently ICICI Direct had a connectivity problem with the NSE for two and halfhours during trading hours. And there he was leveraged to the hilt. the firm is selling off his securities at a point in time that is not the best for him. If a number of client access the server the server takes its own time sending the orders to the NSE server. allowing him to buy a large amount of securities by putting up only a small amount of money. This problem is rare but be alive to its possibility. He must check out the seamlessness of this interface before selecting an online brokerage. 3. 6. the firm has the right to liquidate his securities holdings (and it can pick and choose which ones) without any notice to one if he fail to meet the margin call.) Non-availability of a seamless interface: As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays. . These are the perils of trading on margin.) Non. many people are trading on margin.availability of personalized advice: If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. In fact. If he want advice on a particular stock in his portfolio he may not even be able to get that. He may like to choose a brokerage that has a stated security policy and contingency plan in place. That is where the brokerage firm lends you money by leveraging his account.) Cyber attack: In the event of a malicious attack on the systems of one’s broker he is protected only if the company is taking proper precautions against such attacks and if proper backup is regularly been taken. hoping to hit a home run when he discovered that he is required to make a large deposit that he cannot make. He may have forgotten what he read in the small print of his agreement. but the brokerage firm has the right to change the maintenance margin requirements without any warning or notice to him.) Margin: If Internet trading alone is not fast and furious enough. The faster the orders are processed the more seamless is the interface. The next thing one know. 4.
But with increased volumes. is all taken care of the minute your order is executed online. When you trade offline. which are there for all. ensuring a smooth transaction process. Your trading account would be linked to your demat and bank account. You can also make better decision as you have a clear record of all your previous transaction. here are few reasons why you may consider switching to trading online. So. whether wild or wise. a demat statement is normally sent to you only on a quarterly basis . The absence of manual intervention ensures that you are completely in control of all transaction. 8.keeping track of your portfolio can be a hassle in such a . where you have just two days to settle your transaction. This is especially helpful in the extent T+2 settlement system. or at least another avenue of trading. WHY PEOPLE ARE BENDING TOWARDS ONLINE TRADING Several broking houses now offer online trading facilities. an obvious advantage of online trading is that your transaction would be virtually paperless.48 7. India info line’s 5paisa. Kotakstreet. If you are already comfortable trading with your regular broker. net investors will have to do their own research and take their own decision. or arranging for a payment in case of purchaser of shares. in case of a sale. they will have to follow the international practice of charging a little more than the normal charges from a customer looking for personal advice. as your order is always confirmed before it is executed.com and HDFC securities. India bulls. Many would not like to rely on research reports.) Little use of advisory services: The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market.) Increased charges: Some of the brokers are of the view that they would have to provide advisory services to the customers. You can trade online with ebrokerages such as ICICI Direct. There is also little room for error. The normal process of issuing of delivery note.
in some cases. if don’t have time to trade during market hours . You would need to enjoy a good relationship with your broker. The inter net can provide a new sense of control over your financial future. experts commentary. the time difference.Antony. we can get the latest news. trading online is perhaps their easiest option to invest in the Indian stock markets. Your order would join the queue and be expected the next day. can work to their advantage . We also have access to considerable information online. places his order in the evening after work. What is more. For non-resident Indians (NRI). .49 case. for you to be able to reach him in the late hours.perhaps you are at work. for instance. you can log on the web-trading site and place your order offline. market information and company research. Conduct extensive financial research on any company Talk with other investors around the world At investsmart you can get real-time stock quotes. any individual with an internet connection can: • • • • • • Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and globe economy. Convenience is probably the greatest advantage online trading offers investors. Its one of the best aspect of being a wired investor for the first time in history. most e-brokerages also provide a facility to trade offline by placing our order via the phone. if our connection is maddeningly slow and we want to get your order executed immediately. daily roundups of the stock market. By just logging on to ICICI direct online. when it is day time India and the markets are open. during off market hours. and a deep community of fellow investors. The amount of investment information available online is truly astounding. an NRI-based in New York. Moreover.
.50 PROCESS OF ONLINE TRADING An investor interesting in trading through Internet shall have to. The client places order via the net by logging on to his Broker’s site. copy of residence proof are made to register himself with the e-trader. The broker accepts and executes the order and places it with the exchange The exchange accepts the order after checking the share limit for the day. the investor would be required to open a bank account with a scheduled bank and sufficient balance should be kept in the account. The broker makes the payment either directly via the client bank account or pays through its own account and recovers it later from the client. Some formalities such as filling the account opening form of the e-broker. Secondly. Thirdly he would be required to open account with a depository participant because only dematerialized shares can be traded on Internet. copies of identity proof. firstly register himself with an Internet brokerage firm.
51 The exchange receives money and completes the settlement. series and the default quantity. password and a personal identification number (PIN). should approach the brokers and register with the Stock Broker. Step-4: It is the process of review. Thus. fill in the symbol. generally following steps are followed while doing the trading through the Internet: Step-I: Those investors interested in doing the trading over Internet system. (b) Second. Step-3: Actual placement of an order. Step-5: .NEAT ISX (NSE). He may also re-set to clear the values. the broker will provide to them a login name. The client is intimated about the settlement either through the demat or via e-mail. that is. So. the investor has to review the order placed by clicking the review option. Step-2: After registration. Using the place order window as under can then place an order: (a) First by entering the symbol and series of stock and other parameters such as quantity and price of the scrip on the place order window.
the order has to be sent by clicking on the send option. Step-6: The investor will receive an "Order Confirmation" 'message along with the order number and the value of the order.52 After the review has been satisfactory. a time lag of about ten seconds is there in executing the trade. Some brokers will take some advance payment from the. At present. investors and will fix their trading limits. Step-8: It is regarding charging payment. an appropriate message will appear at the bottom of the screen. Step. When the trade is executed.7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit. the broker will ask the investor for transfer of funds by the investor to his account. . for which there are different modes.
though his owns account and receives it from the client account. Pays the broker pending physical delivery.53 THE MECHANICS OF ONLINE TRADING CLIENT BROKER STOCK EXCHANGE Places an order on the net on the broker’s website through the distinctive I.D. Checks the client’s Identity and places the order with the stock exchange Accepts the order after checking the scrip limit of the broker for the day Executes the order Pays the Exchange The client is intimated about the execution of the deal by e-mail. Receives the money and completes the settlement . code The settlement of the deal (buy/sell order) gets reflected in his Demat account. Accepts the order.
e. At NSE and BSE. Tuesday's trades settled on Thursday and so on. Your Buying Limit is Rs 50. Hence your BL is simply the amount set aside by you from your bank account and the amount realized from the sale of any shares you have made less any purchases you have made.000. Assume that you sell shares worth Rs 1. on the 2nd working day. we have introduced the concept of Buying Limit (BL).000 on the NSE on Monday.000.50.000 on NSE or BSE.000 on Tuesday on NSE your BL will naturally reduce to Rs75. Suppose you have Rs 1. Concept Of Buying Limit Suppose you have sold some shares on NSE and are trying to figure out that if you can use the money to buy shares on NSE in a different settlement cycle or say on BSE. which requires 100% of the money required to fund the purchase. which is the amount set aside by you from your Bank account for purchase . Assume that you have enrolled for a ICICI Direct account. trades in rolling settlement are settled on a T+2 basis i.00. The BL therefore for the NSE at that point of time goes upto Rs 1. If you buy shares worth Rs 75.000. This means you can buy shares upto Rs 1. To simplify things for ICICI Direct customers.000 for which you would like to make some purchase. For arriving at the settlement day all intervening holidays.000 in your Bank A/C and you set aside Rs 50. be available.54 Rolling Settlement Cycle : In a rolling settlement.00. NSE/BSE holidays.50.000. Your BL of Rs 50. Typically trades taking place on Monday are settled on Wednesday. Saturdays and Sundays are excluded. which include bank holidays. each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. Buying Limit simply tells the customer what is his limit for a given settlement for the desired exchange.
clearing and settlement etc. broking. are provided on the Internet by an intermediary. In a nutshell it can be said that we are moving towards a one-stop service center. the BL for NSE & BSE rises to 1. providing investment advisory services to the clients.. As you have made the sale of shares on NSE for Rs.55 is available for BSE and NSE.100000. This would reduce the clearing and settlement time and would also minimize the risk of all the participants involved in the transactions. with the rapid development of the technology. The amount from sale of shares in NSE will also be available for purchase on BSE. .50. We have to look forward towards achieving an ideal scenario where all the services related to securities markets including marketing of initial public offers on internet. SEBI registered brokers can offer trading on Internet through order is routing systems. However. we have to evolve fisher steps in this direction it is therefore proposed that as the next step link between the depositories and banks shall be established after the necessary regulations have been passed.000. ICICI Direct Future Agenda: Under the existing legal and regulatory framework.
56 Chapter 4 RESEARCH AND METHODOLOGY .
2.57 RESEARCH METHODOLOGY The basic task of research is to generate accurate information for use in decision making. SECONDARY DATA Secondary data was collected from NATIONAL Stock Exchange . Primary Data is gathered specifically for the project at hand through personal interviews with the accounts officers. recording and analyzing data for aid in making business decisions. There are basically two techniques adopted for obtaining information: 1. Secondary data is previously collected and assembled for some project other than the one at hand. Secondary Data. Research can be defined as the systematic and objective process of gathering. It is less expensive than the primary data. Primary Data. It is gathered and recorded by someone eNSE prior to current needs of the researcher.
Research is simply the pursuit of truth with the help of the study. Chapter 5 .com For the successful research the manipulation of certain things. concepts.com 4) www. Sources of data collection are: 1) NATIONAL Stock Exchange 2) www.com 3) www.58 Scope of study: The study is limited to NATIONAL Stock Exchange Data Collection: Data is collected from secondary sources. and Symbols for the purpose of generalization is inevitable.on-linetrading.nseindia.bseindia.
59 COMPANY PROFILE .
base Metals. It also provides training on trade and research for non-finance and non-trading professionals from other domains. It’s like having your own personal commodity trading advisor. • • • • Limited but quality calls. An accuracy of 85-90% maintained on all our intraday calls.CommodityFresh. incorporated in 2009. It will also help you to avoid overtrading the prime reason for failure in commodity market trading. • To provide you with informed commodity trading advice and specific trade recommendations that include well-defined risk parameters And to assist you with money management advice plus tips on developing an effective.60 About Company: CommodityFresh (www. As a commodity trading advisory service. Complete support through SMS and chat room • . is a Hyderabad-based commodity Research and Consultancy firm. CommodityFresh also conducts training programs for NCFM certifications. an information research and analysis base on commodities and Equities. Technical analysis and Projects for MBA students. personalized trade management system • Trading Calls Our analysis is highly accurate and deemed to be reliable by most trade houses. 3-4 calls on a daily basis. at Commodity Fresh we see our job as being two-fold.com) is owned by True Infotec. CommodityFresh serves its clients with consultancy services using mobile SMS format on trading. Recommendations are given in Bullion. SMS service is very fast and takes not more than few seconds to reach you. advisory for trading desk setup and procurement related activities. Energy and Agri Commodities. Our service helps you make the most out of each specific trade action so that you can make decisions based on facts not feelings. Services Personal Advisory Our commodity trading advisory service will teach you to cut your losses and let your profits run. True Infotec.
We provide live projects to the students of Osmania University. NCFM is mandatory for the employees of stock markets/commodities markets. The service is aimed to cater research analysis and pricing needs of the trading/ procurement departments of a company. Spot traders and Export houses for hedging and jobbing with well researched outputs to the trading desk along with our decision enabled pricing. . students need to submit project in their final year. Kakatiya University. We train on various modules in NCFM and NISM stream. We also provide commodity wise research for manufacture industries and export houses to hedge with unfinished commodity and arbitrage with spot against future parity. As per SEBI guideline. NCFM Training Our team comprises of well experienced industry experts to train the MBA students/freshers on financial markets. Krishna Universitiy and JNTU. this is best career option to start career with financial services industry or KPOs.61 Trading Desk Setup As a ‘Consultancy’ we support with the ‘Trading Desk set up’ for manufacturing units. NCFM: NSE’s Certified Financial Markets is a certification issued by National stock exchange. We have vast experience of over three years and delivered more than 400 projects to the students. MBA Projects As part of the MBA course curriculum. We provide live market watch to get knowledge on Trading and Research. Our expertise in the form of ‘Trading Desk set up’ would enable our clients to take reliable decisions on the ‘timing of purchase’ or ‘timing of buy / sell’ in their trades. The service delivery is primarily through decision enabling market mentor reports and through the telephonic interaction with our research team. As a fresher. We provide result oriented certification training program with live practice on trading and research.
62 Chapter 6 DATA ANALYSIS AND INTERPRETTAION Analysis and Interpretation .
How will you describe your experience with on-line trading till date? (a) very easy to operate (b) very difficult to operate (c) not secure (d) Any other Sample size 100 .63 1. so we can say that now online trading is very popular in the modern market. 2. For how long you have been trading with on line-trading? (a)1 year (c) 3 year Sample size 100 (b) 2 year (d) 4 year 5 0 4 0 3 0 2 0 1 0 0 Y R EA 1year 2year 3year 4year According to this survey we find that 44% people says that we are investing the money online from one year and 26% people says that we are investing the money online from 2 years and 19% to 11% people says that we are investing money online from 3 to 4 year.
what amount of money you invest normally ? (a) 50000 (c) 150000 to 2000000 Sample size 100 35 30 25 20 15 10 5 0 Money 50000 100000to150000 150000to200000 Any Other (b) 100000 to 150000 (d) Any other amount According to this survey we find that 35% of people invest money normally 50000 and 28% of people invest money 100000to150000 and .64 60 50 40 30 20 10 0 Ex perience I find it very easy to operate I find it very difficult to operate I feel it is not secure A other ny According to this survey we find that 60% of people find very easy to operate and 15% people find diffcuilt two operate and 10% and 15% people find no secure and any other. 3. so we can say that online trading is very simple to operate and easy to understand.
So we can say that people are generally invest in stock market weekly basis. 4 .65 23% and 14% of people invest money between 150000to200000 and any other. . So we can say that the people are not invest more money in the share market because there is a great risk involved while doing the trading. How often do you trade? (a)Daily (c) Monthly Sample Size 100 40 35 30 25 20 15 10 5 0 Tim e daily weekly m onthly m than 1 m ore onth (b) Weekly (d) More than one month According to this survey we find that 10% of people do trade Daily and 40% people do trade weekly and 32% and 18% people do trade month and more than month.
Whether online trading settled in Indian investor psyche (a) Yes Sample Size 100 (b) No . On line trading Offline trading Both 6. which trading you prefer? (a) On line trading (c) Both (b) Manual trading Sample Size 100 50 40 30 20 10 0 Relationship According to this survey we find that 20% people prefer online trading and 32% people prefer offline trading rest of 48% people prefers both. So we can say that mostly people are awareness about the on line trading and because of this reason the mostly people are optimizing offline trading.66 5.
Yes No 7.67 70 60 50 40 30 20 10 0 Settleled According to this survey we find that 30% people says yes and 70% people says no. What shortcomings do you feel in Indian On-Line trading ? (a) Lack of awareness the investors about on-line trading (b) Shortage of domestic technical expertise (c) Shortage Of Infra structure (c) any other Sample Size 100 . so we can find that on line trading is not settled in the Indian psyche because some people are not experience towards online trading.
68 50 40 30 20 10 0 Shortcomings According to this survey we find that 15% of people says lack of awareness 49% says Shortage of expertise and 14% people says Shortage Of Infra structure and 22% says any other. Which media would you prefer the most for investment? (a) T.V (c) Magazines 60 50 40 30 20 10 0 Media T. So we can say that mostly people are shortage of experience about the Indian derivatives market or share market.V Newspaper Magazines Journals (b) Newspaper (D) Journals . Lack of awareness Shortage of expertise Shortage Of Infra structure any other 8.
V. So we can suggest that mostly people are very easily grapped the knowledge through T. .V and 25% people prefer newspaper and 10% people prefer magazines and 10% people prefer journals.69 According to this survey we find that 55% people Prefer T.
70 Chapter 7 FINDINGS AND SUGGESTIONS .
5. so we can say that online trading is very simple to operate and easy to understand 3.71 FINDINGS 1. 14% of people invest money between 150000to200000. Whether online trading settled in Indian investor psyche . 11% people says that we are investing money online from 4 year. and15% people find no secure. 2. which trading you prefer? According to this survey we find that 20% people prefer online trading and 32% people prefer offline trading. what amount of money you invest normally ? According to this survey we find that 35% of people invest money normally 50000. 6. So we can say that mostly people are awareness about the on line trading and because of this reason the mostly people are optimizing offline trading. So we can say that people are generally invest in stock market weekly basis. 4. so we can say that now online trading is very popular in the modern market. How often do you trade? According to this survey we find that 10% of people do trade Daily. 18% people do trade more than month. How will you describe your experience with on-line trading till date? According to this survey we find that 60% of people find very easy to operate. For how long you have been trading with on line-trading? According to this survey we find that 44% people says that we are investing the money online from one year. So we can say that the people are not invest more money in the share market because there is a great risk involved while doing the trading.
72 According to this survey we find that 30% people says yes and 70% people says no. so we can find that on line trading is not settled in the Indian psyche because some people are not experience towards online trading.
7. What shortcomings do you feel in Indian derivatives market?
According to this survey we find that 37% of people says lack of awareness 49% says Shortage of expertise and 14% people says any other. So we can say that mostly people are shortage of experience about the Indian derivatives market or share market.
8. Which media would you prefer the most for investment?
According to this survey we find that 41% people Prefer T.V and 39% people prefer newspaper and 20% people prefer magazines. So we can suggest that mostly people are very easily grapped the knowledge through T.V.
The introduction of the Internet has surprisingly changed our way of life as a society. It has defined the way we do business and the way we correspond. The Internet has opened many opportunities for online trading. The financial industry revolves around the Internet. Every thing is just a few clicks away. This makes online trading most convenient. But there are still investors who prefer the old fashion way of offline trading and they mainly prefer offline trading for security reasons. Internet has introduced a way for consumers to manage their money online. Not to mention, Internet has transformed the way investment companies operate their business and has made it easy for private investors to gain straight access to a range of different markets and online tools that were at one point only reserved by the use of investment professionals. Consumer investing and online trading has dramatically changed over the last decade. Online trading dynamically continues to be redefined. Services have expanded to include integrated management of additional financial accounts. Not to mention, it has subsequently expanded in conjunction with groundbreaking improvements to the traditional trading interface, such as telephone interface systems. Of course, online trading has many pros. There are several wonderful reasons to invest online and consider online trading. 1. Money saving opportunities The amount of money you save depends primarily on the online brokerage firm that you choose. No two firms are the same. There may be different regulations, similar to bank regulations. There are minimum deposits required that must be maintained. As mentioned above, this will depend on the online brokerage firm. 2. Instant online access You can gain instant access to your account, the value of your portfolio updates immediately before your eyes. 3. Enter online trades at anytime You can enter online trades at anytime and from anywhere. This is very convenient if you live in a different time zone than the country you are trading in. Not to mention, it is especially fit for investors with busy schedules. 4. With online trading you are in charge You are in control of your investments. No sales pitches and no hassle. You decide where to invest your money.
Despite of the training my level best, there were still some limitation which I think remains there to draw fruitful conclusion. There were some practical problem which come across and could not be properly death with
The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market.
As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays
If one like to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. If he want advice on a particular stock in his portfolio he may not even be able to get that.
They find it difficult to trade themselves.76 Online trading is the new concept in the stock market. Another major problem is that the people don't have full knowledge regarding online trading. . There are some problems while doing the trade through the internet. they rely upon the suggestions given by their brokers. Nevertheless to say that online trading has the bright future as the percentage of the trade done through online trading is increasing day by day. Major problem faced by online trader is that the investors are loyal to their traditional brokers. as a wrong entry made by them. Now stock market is easily accessible by the people. In India. Online trading has made it easy to trade in the stock market as now people can trade while sitting at their home. can bring them huge losses. online trading is still at its infancy stage.
77 Chapter 9 BIBLOGRAPH Y .
Vishwa Prakshan MAGAZINES • • Business World NSE’s Magazine INTERNET SITES • • • • • www. Research Methodology.nseindia.com Chapter 10 .on-linetrading. R.com www.in www.gov.com www.com www.nseindia.bseindia.78 BIBLIOGRAPHY BOOKS • C.sebi. Kothri.
79 QUESTIONNAI RE Questionnaire .
80 Dear respondent. How often do you trade? (a)Daily (c) Monthly (b) Weekly (d) More than one month . 1. Name………………………. what amount of money you are invested normally ? (a) 50000 (c) 150000 to 2000000 (b) 100000 to 150000 (d) Any other amount 4.How will you describe your experience with on-line trading till date? (a) very easy to operate (b) very difficult to operate (c) not secure (d) Any other 3. For how long you have been trading with on line-trading? (a)1 year (c) 3 year (b) 2 year (d) 4 year 2 . You are requested to fill the questionnaire to enable. I am student of MBA. Occupation……………… Address …………………… Phone no…………………. I am working on the project of “On-Line trading”. to undertake the study on the said Project.
In which trading you will prefer? (a) Online trading (c) Both (b) offline trading 6. According to you online trading setteled in Indian investor psyche (a) Yes (b) No 7.81 5. Which media would you prefer the most for investor? (a) T.V (c) Magazines (b) Newspaper (d) Journals . What shortcomings do you feel in Indian On-line Trading ? (a) Lack of awareness the investors about on-line trading (b) Shortage of domestic technical expertise (c) Shortage Of Infra structure (d) If any other 8.
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