ON-LINE TRADING

A PROJECT REPORT ON ONLINE TRADING IN INDIA

A Project Submitted to Osmania University In Partial Fulfillment of

MASTER OF BUSINESS ADMINISTRATION (FINANCE MANAGEMENT)

Submitted by P.VEENA (H.T.No.004-08-114) (2008-2010) Under the guidance of Mr.CH.RAM MOHAN

O.U.P.G COLLEGE (Affiliated Osmania University, Hyderabad) SIDDIPET, MEDAK DISTRICT.

ON-LINE TRADING

DECLARATION
I P.VEENA bearing Hall Ticket No.004-08-114 student of O.U.P.G College, Siddipet, here by declare that the project work entitled ONLINE TRADING Administration for the academic year 2008 2010. I further declare that this project work is a result of my own effort and has not been submitted to any other university or institute for the award of any degree or diploma. IN INDIA is a bonafide work done by me in partial fulfillment of the award of degree of Master of Business

ON-LINE TRADING

ACKNOWLEDGEMENT

First of all, I think almighty god who has blessed me all through my life. I wish to express my sincere indebtedness to our beloved principal Prof. POLUMARU RAJU, O.U.P.G COLEGE SIDDIPET, MEDAK DISTRICT.

My profound thanks and deep sense of gratitude of Prof. BARNALI BARMAH, Head of the Department. For her valuable support and encouragement.

I express my sincere thanks to our entire guide CH.RAMMOHAN, FINANCE Department. For his guidance encouragement through out my project work.

Prof. and

I am very much thankful to my company guide Mr. PRAVEEN for his immeasurable patience in extending their help in bringing shape to my project work.

I will remain always indebted to my parents for their moral support and have been the most caring and the best critics during the course of my project.

(P.VEENA)

ON-LINE TRADING

Phone : 08457224723(O) : 08457-228756(O)

OSMANIA UNIVERSITY

POST GRADUATE COLLEGE

SIDDIPET 502 103, MEDAK DIST.

CERTIFICATE
This is to certify hat this entitled ONLINE TRADING IN INDIA is a bonafied work of Miss. P.VEENA, with Hall Ticket No. 004-08-114 submitted in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION by Osmania University Hyderabad.

ON-LINE TRADING

External Principle Examiner Department

Head of the

Index
CONTENTS CHAPTER 1 INTRODUCTION Need for the study Objectives of the study Scope of the study Limitations of the study Research Methodology CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7 CHAPTER 8 APPENDICES LITERATURE REVIEW COMPANY PROFILE DATA ANALYSIS & INTERPRETATION FINDINGS SUGGESTION & RECOMMANDATIONS CONCLUSION BIBILIOGRAPHY QUESTIONNAIRE

ON-LINE TRADING

EXECUTIVE SUMMARY Subject of the Project: This project is about the latest trend in trading through online networking that is taking the business world by storm. Online trading networking or simply put networking on the net is fast becoming the easiest, fastest, very focused and a most effective means of growing your chain of contract to help you climb the success ladder of investment faster than any other route can take you. Scope:

This project study covers the different genres of networking, be they the traditional trading through online or more relaxed. Methodology: This project provides a clear objective insight into the phenomenon of online trading. This project has been a primary data based project right since it conception.

ON-LINE TRADING

Besides a minuscule number of statistics and research data which was found on research online, all the inferences and conclusions have been made on the basis of real time usage of networking websites by people through extensive surveys and research done for users of icicidirect.com and sharekhan.com. Objective: The objective of this project is to bring in to focus the most innovative upcoming technology trading or investing. So that more and more people are connected each and every day as the world comes closer in a closely knit networking.

Recommendations: Going through the traditional meet and greet routines for extending and enriching our networks can be quite perfunctory and ineffective. Online trading has held the helm for many ship on the brink of capsizing, many success story has been written on the pages of online trading networking. A budding entrepreneur needs networking more than anything else; his ship is then assured of smooth sailing even in the rough seas.

ON-LINE TRADING

ABOUT TRADING & INVESTOR'S

ON-LINE TRADING

Trading
A trading is the process in which someone who buys and sells financial instruments such as stocks, bonds and derivatives. Traders are professionals, casual investors or speculators in financial instruments traded in the stock markets, derivatives markets and commodity markets, comprising the stock exchanges, derivatives exchanges and the commodities exchanges.

Why Investor's do Trading

ON-LINE TRADING

Investors can deal with stock exchange securities either for a genuine trading purpose or for the purpose of speculative trading. Genuine investors generally give/take delivery of shares with no intention to postpone the settlement to the next period. Their primary motive is to get long term gains. On the other hand, speculators do not take/give delivery of shares. They deal in differences in the purchase and sale prices. Their main intention is to carry forward the transactions and get short-term gains due to price differences.

INTRODUCTION OF ON-LINE TRADING, HISTORY OF ON-LINE TRADING OBJECTIVES, MERITS & DEMERIT'S OF ON-LINE TRADING

ON-LINE TRADING

DEMATERIALISATION & REMATERIALISATION

On Line Trading
The Information Technology has brought out revolutionary change in the operations of stock exchanges in India. The traditional method trading without the use of technology was time consuming and inefficient further, it imposed limits on trading volumes and efficiency. To overcome those defects and to provide efficient and transparent services, the NSE has introduced a national-wide ON-LINE fully automated Screen Based Trading System (SBTS). Now, other stock exchanges have been forced to adopt SBTS and today India can boast that almost 100% trading take place electronic order matching. Under SBTS, a member can punch into the computers quantities of securities and the prices at which he likes to transact the transaction. It is executed as soon as it finds a matching sale

ON-LINE TRADING

or buy order from a counter party. Thus, technology is used to carry the trading hall of the exchanges to the premises of the brokers. NSE has carried the trading the internet and the hand held devices through WAP for the convenience of the mobile investors. Small beginning Compared to the Western countries, ON-LINE trading is still in its infancy in India. With trading turnover at around Rs. 10 crores per day from ON-LINE trading compared to a combined gross turnover of around Rs. 9000-10,000 crores handled by the BSE and NSE together, ON-LINE trading has a long way to go. With some ten dotcom players, such as icicidirect.com, investsmart, 5paisa.com, India bulls, and a host of brokers, such as kotakstreet, sharekhan, motilaloswal, Geojit Securities and duttstock, entering the ON-LINE ring promises exciting times ahead.

History of On Line Trading ON-LINE stock trading is very old concept for big institutions who trade thru private networks owned by Reuter's "Instinet" and a system called "Posit" since 1969. But it becomes internet based for lay men only in late 90s. Funny, that actually idea was first time used by a company making Beer called "WIT beer" to help its shareholders trade its shares. Thats how "WIT Capital" was born which is considered pioneer of this concept. It was made mainstream and household name by a offshoot of Charles Schwab & Co called eSchwab which is used by millions of people in USA. Lot of NRI's i know play

ON-LINE TRADING

in US stock market even when they come to India for holidays via website of eSchwabe. There are other serious players like E*trade, DATEK ON-LINE etc. All this companies ask you to start account with US $5000 and you can buy and sell stock using these funds. They also issue you a check book which you can use to make payments from this account. Or use their ATM card to withdraw cash from your stock trading account. Today practically every big name brokerage firm offers ON-LINE stock trading as it reduces their costs. Earlier they had army of brokers on phone with clients executing trade, which is done by computers accepting orders from clients directly. This firm now offers human access to high net worth accounts, and to rest at charge per trade.

Objectives of Internet trading: Increase transparency in the markets. Enhance market quality through improved liquidity, by increasing quote continuity and market depth. Reduce settlement risks due to open trades, by elimination of mismatches. Provide management information system (MIS).

ON-LINE TRADING

Introduce flexibility in system, to handle growing volumes easily and to support nationwide expansion of market activity. Besides, through Internet trading three fundamental objectives of securities regulation can be easily achieved, these are: Investor protection, creation of a fair and efficient market and, reduction of the systematic risks.

NEED FOR THE STUDY:

Indian capital markets are the oldest capital markets in Asia acquired roots in the year 1860 itself. Indian government granted approval to Bombay stock exchange (BSE) in the year 1956 under the provisions of securities contract regulatory ACT 1956. Ever since such approval is granted to equity trading in Indian market has been acquiring new dimension from time to time to promote equity trading. The sophisticated technology and statutory provisions governing equity trading lead to many changes in Indian market. Therefore it is strongly felt necessary that a through scrutiny and assessment of trading pattern is indispensable. After the review of literature it is also felt necessary to understand the changes that were incorporated from time to time in equity segment and their impact on trading patterns. Every trading pattern and its respective influence on volume of trading have both positive and negative side. For instance banning of BADALA system (reverse system) helped small investor reduced their risk through rollover settlement which is a positive side. But at the same side it reduces the liquidity in market which is a negative side. Therefore this project work finds it necessary to track all such influences.

RESEARCH METHODOLOGY
This report is based on primary as well secondary data, however primary data collection was given more importance since it is overhearing factor in attitude studies. One of the most important users

ON-LINE TRADING of research methodology is that it helps in identifying the problem, collecting, analyzing the required information data and providing an alternative solution to the problem .It also helps in collecting the vital information that is required by the top management to assist them for the better decision making both day to day decision and critical ones.

Data sources:
Research is totally based on primary data. Secondary data can be used only for the reference. Research has been done by primary data collection, and primary data has been collected by interacting with various people. The secondary data has been collected through various journals and websites.

Sampling procedure:

The sample was selected of them who are the customers/visitors of ShriramInsight Hyderabad Branch, irrespective of them being investors or not or availing the services or not. It was also collected through personal visits to persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.

ON-LINE TRADING Sample size:

The sample size of my project is limited to 200 people only. Out of which only 120 people had invested in stock market.

Sample design:

Data has been presented with the help of bar graph, pie charts, line graphs etc.

Limitation:

Some of the persons were not so responsive.

Possibility of error in data collection because many of investors may have not given actual answers of my questionnaire.

Sample size is limited to 200 visitors of ShriramInsight , Hyderabad

Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

The research is confined to a certain part of Hyderabad.

ON-LINE TRADING

CHAPTER 2 LITERATURE REVIEW

ON-LINE TRADING

Merits Of On-Line Trading

The Merit of On-line Trading are as follows: Faster Trading Technology driven trading is faster than manual trading. Once the order is matched, it is executed immediately. Accessible to All It provides full anonymity by accepting order from members irrespective of the size of the order whether big or small without disclosing their identity. Thus, it provides equal access to all.

Faster Incorporation of Price Sensitive Information The SBTS allows faster incorporation of price sensitive information into the prevailing prices and thus, it increases the information efficiency of the markets. Widening the Market It also widen the market by enabling the market participants to trade with one another simultaneously irrespective of their geographical locations. Thus, it improves the depth and liquidity of the market. Saving of Time and Cost The SBTS electronically matches order on strict price condition as well as on time priority basis. Hence, it cuts down cost as well as time in executing orders.

ON-LINE TRADING

Fully Transparent ON-LINE trading is fully automated and screen-based. Everything is transparent on the screen and hence, there is no possibility to play any hide and seek game. No Errors and Frauds The price conditions, quantity conditions etc. are puched into the computers by the members themselves. So, the risk of error is very less moreover, the trading is fully automated and screen-based and hence frauds can not enter into the system Perfect audit trail It also provides perfects audit trail which helps to resolve disputes by logging in the trade execution on entirety. Thus, on-line trading measures efficiency, liquidity and transparency in the trading on stock exchanges.

Demerits of On-Line Trading (Website based): Website performance - sometime the website is too slow or not enough user friendly. internet. Brokerages are little high. Dematerialisation: Dematerialisation is the process by which a client can get physical certificates converted into electronic balances maintained in its account with the DP. Features:

Little long learning curve especially for people who doesn't know much about computer and

ON-LINE TRADING

Holdings in only those securities that are admitted for dematerialisation by NSDL can be dematerialised. Structure of holding in the securities should match with the account structure of the depository account If the shares are in the name of X and Y it cannot be dematerialised in to the account of either X or Y alone. Further, if the shares are in the name of X first and Y second and the account is in the name of Y first and X second, then these shares cannot be dematerialized in this account. The dematerialisation process can be initiated only by X first and Y second and for this a depository account will have to be opened in the name of X first and Y second. Only those holdings that are registered in the name of the account holder can be dematerialised.

Rematerialisation: Rematerialisation is the process by which a client can get his electronic holdings converted into physical certificates. The client has to submit the rematerialisation request to the DP with whom he has an account. The DP enters the request in its system which blocks the client's holdings to that extent automatically. The DP releases the request to NSDL and sends the request form to the Issuer/ R&T agent. The Issuer/ R&T agent then prints the certificates, despatches the same to the client and simultaneously electronically confirms the acceptance of the request to NSDL. Thereafter, the client's blocked balances are debited.

Features: A client can rematerialise his dematerialised holdings at any point of time. The rematerialisation process is completed within 30 days. The securities sent for rematerialisation cannot be traded.

ON-LINE TRADING

Online Equity Trading:

Generally, online trading refers to buying and selling securities via the Internet or other electronic means such a wireless access, touch-tone telephones, and other new technologies.With online trading, in most cases customers access a brokerage firms website through their regular internet services provider. Once there , customers may consult information provided on the website and log into their account to place orders and monitor account activity. Through the internet, investors can quickly find affordable market research Stock information ,and economic news .They often can have their broker/dealers execute trades almost instantaneously, while generally incurring lower Commissions. These facilities for online investing can thus provide significant benefits to many investors. At the same time ,investors should recognized that online trading might present Special risks. For example ,investors should understand that execution of their orders might be delayed during times of high market trading volume. Investors should appreciate the usefulness of limit orders, and they should treat bulletin boards and monetary with skepticism.

ON-LINE TRADING E-broking or trading of stock market shares on the internet has captured the minds of individual investor worldwide. Report says more than seven Investors have gone online in the last 5-7years , and this number is in the next million American likely to double

two years in many other countries including India , individual investors have come out in open support of this new trading investing world system. The Internet has democratized the

by giving every web-enabled individual access to a rich reservoir of data and analyses on the stock market. In India , exchanges have been waiting. They very proactive, rather than

have chosen to be the harbingers of change by allowing members who fulfill the

criteria to take advantage of the internet by facilitating a computer-tocomputer trading link. Using internet, a broker can set up a NSE trading facility in a remote town at a far lower cost, which makes penetration of capital markets easier in rural areas. BSE has already embarked on a campaign of investor education and awareness about the benefits of online trading and the security features built into The internet trading system to be effected via the exchange trading plaza. there is A tremendous potential for growth in the online trading market as going online. more and more Brokers are

Both BSE and NSE are trying to provide a cost-effective solution for their Members to provide a standards-based internet trading facility to their clients at a Fraction of the cost ,

ON-LINE TRADING of what it would cost the broker if he went alone . The typical Cost of setting up a decent sized internet trading solution is between Rs 10 to 15Crores, which a large number of brokers are unlikely to be affordable .The BSE Therefore plans to offer an based system exchange

that leverages the economies of scale to offer routing via a centralized engine with the additions of content of Companies, available with the exchange .BSE has introduced an application Service provider model, which has widely been accepted. NSE has formed a 50-50 joint venture with i-flex solutions to offer the Exchange trading solutions . The joint venture christened dotex international in addition to providing access to the exchanges order matching system will also allow access to fundamental analysis , balance sheet analysis and any other relevant company information. The BSE too is offering tools like technical analysis and scrip related information etc on the site at a cost ,which is 10 to 20%of the cost of the broker going solo. In India quite a number of websites today ,offer online trading and e-Broking over the internet. These are either wholly specialized services or are being offered as an extension to an already existing offline business model . investmartindia.com, popular Websites like ICICI direct.com

Geojitsecurities.com,5paosa.com,kotakstreet.com,sharekhan.com,offer basic online buying and selling of shares through major stock exchanges like the regional stock NSE , BSE and other

exchanges .Although, in principle it is very much like how it is done traditionally and physically

ON-LINE TRADING through a broker or broking firm ,it differs from the way built into the that the automation is transaction till

system ,with the individual maintaining control of the path of the stage of

execution .Only Demat (Dematerialization) shares can be traded on the internet. Following are the sailent features and benefits offered to individuals who desire to trade online trading through various e-broking firms: Convenience Liquidity advantages Tracking Technology benefits

In order to stay ahead in the competition e-broking firms have to members with

provide

their

innovative schemes and clearly visible advantages in terms of Hassle-free transacting and more obviously low brokerage rates. Online trading is bottle for the Indian investors purse. The entry of competitive price online broking services has brought the excitement back in a rather lack luster market. It has exposed the investors to the dynamics of day trading. Online trading also has a role to play in economic factors such as the mobilization of savings. From a macro economic perspective in the us, about 15% of savings were invested is eminently inequities in 1996. The concept of online trading

flexible due to scalability of infrastructure and other evolving product offerings. Consequently the many benefits of online trading will continue to investors , which attract

ON-LINE TRADING in turn in economics of massive scale from the going mass of transaction. In turn,this will enable web managers of online trading sites to constantly upgrade their product offering can enhance the quality of online trading experience, on a continuous basis.

Safety of Transaction On The Internet

The safety of transaction on the internet depends on encryption system used. The better the transaction system , the more difficult it is for any person to Hack the site .Internationally ,the best system available today ,it Encryption , a system, which even the pentagon uses. Since in the placed have pass online is the the 128-Bit order

business,

through the network of public carriers, there exists a risk of data being intercepted or modified by a hacker or anyone with malicious intentions. According experts , in future to industry

when the quantum of funds Manage by the online brokers reach significant levels a security related issues Would take the center stage .However, most of the domestic player use some kind of securities features to enable safe .Encryption , build on the transaction on the net

Secured socked layer (SSL) protocol developed by Netscape ,provides sufficient amount of security to the customers. Although , a majority of players offer 40-Bits Encryption method , ICICI Encryption and investment have already graduated to 128-Bit

ON-LINE TRADING technology .Though the data transmitted in the form of plain text is Quite vulnerable , encrypted data has a much better level of protection. It is true that pricing is still the unique selling proposition at the moment, But security could be the trump card for tomorrow. security and trust are the two Important parameters ,which will be crucial in determining a clients long term Relation with the broker. Mr.Anup Bagchi.COO at ICICI Direct, Brokerages are practically a nonissue,going by the US experience. What matters more are things like trust and especially because the service involves dealing with peoples cash as well as stocks. security

The customer is also responsible for ensuring safety of online transactions. He normally gets a secured user ID and password ,the secrecy of which is to be maintained entirely by him. If the transaction system requires no manual intervention, it safer. becomes

Among the Indian sites,ICICI Direct.com,Investsmart India Ltd., Sharekhan, Indiabulls.com are among the few fully integrated online trading sites.It enables The elimination of the possibility of any manual intervention.Thus,orders can be Directly sent to the exchange, ensuring that the investor gets the best and right Price.

ON-LINE TRADING

Advantages Of Online Trading:

Many customers, who have chosen to trade shares online today , had at one Point of time been trading through offline brokers .After realizing the advantages of trading shares online, they have switched over to online trading now .However, before choosing an online trading site ,all the sites should be compared in order to form a decision. 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 when to brokers office .Thus, we have access to a lot more information online to self teach ourselves. It eliminates the risk of bad deliveries, which in turn eliminates all costs and wastage of time associated with follow up for rectification. This reduction in risk associated with bad delivery has lead to reduction in Brokerage to the extent of 0.5% by quite a few brokerage firms.

Screen-based trading facilitates the investor to keep a track of the transaction from the source to the end .He can punch in the orders and see the results at the bottom of the screen .Thus,one can get instant trade confirmation. Online trading has left room for smaller organizations to compete with Multinational organizations ,since is no longer a legit issue. Being online does not identify the size of any particular organization.

ON-LINE TRADING Online trading has allowed companies to locate themselves were they want, as physical location is not an issue anymore. Companies can establish themselves according to their gains and losses, for instance, where tax(sales and value-added taxes) is best suited to them. Online trading gives control to individuals and they can exercise it over their accounts thus comprehend what is going on the trade. It is like going back to school and re-educating oneself on how to trade online. Individuals benefit by saving comparatively a lot more when trading online as the cost per trade is less. Individuals can invest in a variety of products, unlike earlier when people bought bonds, mutual funds, and stocks for long-term basis. Now they can invest in stocks, and index options, mutual funds, individuals, government, Corporate, municipal bonds, various types of IRA account ,mortgages and even insurance. Online trading has it possible for one to find investment options that were not available on a regular basis, like off-beat net stocks ,eccentric unique things and trading in global market.

Internet has brought the market at the desktop of an investor does

and he

not have to take the pain of going the stock exchange or to his brokers office .He can also do away with the need of calling up his broker frequently only to enquire about the prices of various scripts, Internet trading connects the stock exchanges directly of the investor ,who should make sure that the online trading site ,he selects provides him the trading screen ,which uses the

ON-LINE TRADING push technology to display prices . Using the push technology the trading screen display the real time prices of 10 to 15 script s at a glance ,unlike pull technology where in one needs to type the quote every time one needs the price. Internet has made it possible for broking firms to transmit key market information to all clients at one go. Market watch screen gives live tick update on the desktop ,where by the investor can set a number of scripts of his choice, which will keep ticking through streaming quotes without manual intervention . Clients find it easier and convenient to interact with their broker in a webenable environment. In the past there were instances of brokers misleading the information given to them by their clients , because of communication lags. This led in effect ruined several investors. The internet ensures speedy and correct flow of information between all users. Online trading sites provide professional advice to investors . Many investors are not knowledgeable about the stock markets their investment decisions. and need advice about

Some of them (investors)also need some hand-holding especially when the market are falling and enmeshed in rocky times .The investor can also send e-mail with his queries and can expect a timely response . Many people derive a substantial portion of their income from trading in the stock markets . For an be a experienced trader internet broking can prove to

ON-LINE TRADING land of plenty .Besides information research and professional advice, online trading can also offer technical advice that can help all who engaged in trading. In the past situation . there are instances that small investors encountered a

When he desperately wanted to place an order, but his brokers line were constantly engaged . When he finally managed to get through his broker , he could not get the best price .Online trading can eliminate his problem . All he has to do is log on to the a site and place the order. Also , on the internet

customer can trade from his home or from any other place, it is convenient for him . Thus brokers who would not otherwise entertain outstation clients. Even if one person is at Ludhiana and the client is at Cochin , trade can be put though easily. For example , Geojit Securities, which does 10% of its business through the net, has a lot of non-resident Indians from Gulf as its clients and nearly 50% of the internet volume comes from the NRI clients. Even when the market is closed , an online investor can make trade . his

Although, his trades will not be executed at that time but atleast he can act immediately. Many times his next morning not permit him to go brokers to the

office or even phone him for placing the order .Then there are always the hassles of calling up the broker a couple of times for confirmation .Rather , he can now

ON-LINE TRADING place his order the previous evening ,knowing that it will automatically first thing in the morning.

through

Online trading also helps in portfolio management .An investor can control the whole process, from research to order entry, at his own convenienc.He can track performance of the portfolio, as to how it is faring vis--vis market. If it is not performing well, he can also get advice on restructuring it.

Other services that one gets by trading shares online:

Internet has brought to the retail what was till sometime ago the sole prerogative of large brokerage houses and high net worth individuals .At the online trading sites one can access a multimedia of resources to arrive at his stock picks. reliable research with an enviable track record is available free of cost . Most of the e-broking sites offer research reports on most of the top companies and have data like balance sheets and profit and loss accounts. An investor can now access there web sites and do his fundamental and technical analysis, by getting an access to real time quotes ,knowing what other leading brokers think about a company and whether particular scrip is a buy or a sell. Indianinfoline.com Managing Director Mt.Nirmal Jain Notes, sites like ours also offer investors technical analysis tools which enable even relatively detailed analysis like an intra day share price charting, using the tools developed in association with Singapore based Asian bourses. The investor can also access live news from international news agencies

ON-LINE TRADING Such as reuters ,CNBC ,read about what the leading CEOs think about the state Of the economy and the capital market .Thus ,the internet helps the investors in shaping their investment decisions. Sites like sharekhan.com and Investmartindia.com allows the facility to receive updates on mobile phones and via e-mail ,for stocks bought through their sites . The clients can get price automatic update on any news development,

targets met ,any news up dates on the stocks posted by the site or any circuit limit reached the stock via mobile and e-mail for free.

Indiabulls.com also offer similar facilities like short messaging services(SMS) On mobile phones of their clients and thus keep them updated. Using the net, Investors now access to latest news from diverse sources and online market Commentary for free . Earlier ,even something like beyond reuters news feed was

The reach of most small investors due to its prohibitively high cost. The democratization of information has empowered investors to choose and adopt a trading and investing style best suited to their risk returns aspirations and Skill levels.

Disadvantages Of Online Trading

The ease and speed of sense of online trading can give the investor a false

security and encourage him to trade more frequently without paying any heed to market basics like, researching a company or knowing the risk he is going to assume.

ON-LINE TRADING The concept of chat rooms, which has become very investors ,may

popular with the

provide them with misleading information . chat room participants are often paid to highlight certain stocks.

Online trading is not always instantaneous . In a rapidly changing market, orders may not get executed at the price on the computer screen .This is because even a nano seconds delay can put one out of the race for that particular stock at that particular price. Delays in execution usually arise due to various technological choke -points like the internet slowing down to heavy traffic or if computer or internet service provider (ISP) is mal dose not functioning .If the modems , the investor

factor in these technological lags while entering into a volatile market ,he may suffer heavy losses. The investor the software should familiarize himself with order entry screen and

provided to him. Any mistake made while inputing an order can cause him significant financial loss. Moreover, he will be responsible for any losses caused by lack of knowledge and/or experience .when an order is placed and executed, he becomes liable for payment of the securities.

ON-LINE TRADING Active trading is dependent upon a number of specialized software systems. Disruptions or failure of any electronic systems utilized may lead the investor with an open position at which time losses can occur. Customers trading on-line may have difficulty accessing their account due to high internet traffic or because of systems capacity limitations .Customers trading through representatives of on- line firms ,when on-line trading has been disabled or in not available because of system limitation, may have difficulty telephone during periods of high volume. reaching account representatives on the

ON-LINE TRADING

DEPOSITARY SYSTEM ABOUT NSDL & CDSL OBJECTIVE, ACTIVE, BENEFITS OF DEPOSITARY
DEPOSITARY SYSTEM A depository is an organisation which holds securities of investors in electronic form at the request of the investors through a registered Depository Participant. It also provides services related to transactions in securities. It can be compared with a bank, which holds the funds for depositors. A Bank Depository Analogy is given in the following table: BANK-DEPOSITORY AN ANALOGY BANK Holds funds in an account Transfers funds between accounts on the instruction of the account holder Facilitates transfer without having to handle money Facilitates safekeeping of money DEPOSITORY Hold securities in an account Transfers securities between accounts on the instruction of the account holder Facilitates transfer of ownership without having to handle securities Facilitates safekeeping of securities

At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (I) Limited (CDSL) are registered with SEBI. NSDL

ON-LINE TRADING

Although India had a vibrant capital market which is more than a century old, the paperbased settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in dematerialised form in the Indian capital market. Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimise risk and reduce costs. At NSDL, we play a quiet but central role in developing products and services that will continue to nurture the growing needs of the financial services industry. In the depository system, securities are held in depository accounts, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost of transacting in a depository environment is considerably lower as compared to transacting in certificates. CSDL The CDSL has been set up by Bombay Stock Exchange and co-sponsored by SBI, Bank of India, Bank of Baroda and HDFC Bank. It commenced its operation on March 22, 1999. Upto March 2000, 680 companies made available their shares for demat. The market value of dematerialised securities amounted to Rs. 8,188 crore. The number of beneficial owners stood at 28,545. Objectives of Depository A depository enables the capital market to achieve the following objectives: 1. Reduce the time for transfer of securities.

ON-LINE TRADING

2. Avoid the risk of settlement of securities. 3. Enhance liquidity and efficiency. 4. Reduce cost of transaction for the investor. 5. Create a system for the central handling of all secuirites. 6. Promote the county's competitiveness by complying with global standards. 7. Provide service infrastructure in a capital market. Activities of the Depository The main activities of the depository are as follows: 1. Accepting deposit of securities for custody. 2. Making computerised book entry pledges of securities in its custody. 4. Providing for withdrawal of securities. 5. Undertaking corporate actions like distribution of dividend and interest. 6. Redemption of securities on maturity. Benefits of Depositories Services: o A safe and convenient way to hold securities; o Immediate transfer of securities; o No stamp duty on transfer of securities; o Elimination of risks associated with physical certificates such as fake securities, delays, thefts etc.; o Reduction in paperwork involved in transfer of securities; o Reduction in transaction cost; o No odd lot problem, even one share can be sold; bad delivery,

ON-LINE TRADING

o Nomination facility; o Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately;

CHAPTER 3 COMPANY PROFILE

ON-LINE TRADING

INDUSTRY PROFILE
HISTORY OF STOCK EXCHANGE The only stock exchanges operating in the 19th century were those of Bombay set up in 1875 and Ahmedabad set up in 1894. These were organized as voluntary non profit-making association of brokers to regulate and protect their interests. Before the control on securities trading became central subject under the constitution in 1950, it was a state subject and the Bombay securities contracts (control) Act of 1925 used to regulate trading in securities. Under this act, the Bombay stock exchange was recognized in 1927 and Ahmedbad in 1937. During the war boom, a number of stock exchanges were organized in Bombay, Ahmedbad and other centers, but they were not recognized. Soon after it became a central subject, central legislation was proposed and a committee headed by A.D. Gorwala went into the bill for securities regulation. On the basis of the committees recommendations and public discussion, the securities contracts (regulation) Act became law in 1956. DEFINITION OF STOCK EXCHANGE Stock exchange means any body or individuals whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities. It is an association of member brokers for the purpose of self-regulation and protecting the interests of its members.

ON-LINE TRADING It can operate only if it is recognized by the Government under the securities contracts (regulation) Act, 1956. The recognition is granted under section 3 of the Act by the central government, Ministry of Finance.

ON-LINE TRADING BYLAWS Besides the above act, the securities contracts (regulation) rules were also made in 1975 to regulative certain matters of trading on the stock exchanges. There are also bylaws of the exchanges, which are concerned with the following subjects. Opening / closing of the stock exchanges, timing of trading, regulation of blank transfers, regulation of Badla or carryover business, control of the settlement and other activities of the stock exchange, fixating of margin, fixation of market prices or making up prices, regulation of taravani business (jobbing), etc., regulation of brokers trading, brokerage chargers, trading rules on the exchange, arbitrage and settlement of disputes, settlement and clearing of the trading etc. REGULATION OF STOCK EXCHANGES The securities contracts (regulation) act is the basis for operations of the stock exchanges in India. No exchange can operate legally without the government permission or recognition. Stock exchanges are given monopoly in certain areas under section 19 of the above Act to ensure that the control and regulation are facilitated. Recognition can be granted to a stock exchange provided certain conditions are satisfied and the necessary information is supplied to the government. Recognition can also be withdrawn, if necessary. Where there are no stock exchanges, the government licenses some of the brokers to perform the functions of a stock exchange in its absence. SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). SEBI was set up as an autonomous regulatory authority by the government of India in 1988 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matter connected therewith or incidental thereto. It is empowered by two acts namely the SEBI Act, 1992 and the securities contract (regulation) Act, 1956 to perform the function of protecting investors rights and regulating the capital markets. BOMBAY STOCK EXCHANGE This stock exchange, Mumbai, popularly known as BSE was established in 1875 as The Native share and stock brokers association, as a voluntary non-profit making association. It has an evolved over the years into its present status as the premiere stock exchange in the

ON-LINE TRADING country. It may be noted that the stock exchanges the oldest one in Asia, even older than the Tokyo stock exchange, which was founded in 1878. The exchange, while providing an efficient and transparent market for trading in securities, upholds the interests of the investors and ensures redressed of their grievances, whether against the companies or its own member brokers. It also strives to educate and enlighten the investors by making available necessary informative inputs and conducting investor education programs. A governing board comprising of 9 elected directors, 2 SEBI nominees, 7 public representatives and an executive director is the apex body, which decides is the apex body, which decides the policies and regulates the affairs of the exchange. The Exchange director as the chief executive offices is responsible for the daily today administration of the exchange. BSE INDICES : In order to enable the market participants, analysts etc., to track the various ups and downs in the Indian stock market, the Exchange has introduced in 1986 an equity stock index called BSE-SENSEX that subsequently became the barometer of the moments of the share prices in the Indian stock market. It is a Market capitalization weighted index of 30 component stocks representing a sample of large, well-established and leading companies. The base year of sensex 1978-79. The Sensex is widely reported in both domestic and international markets through print as well as electronic media. Sensex is calculated using a market capitalization weighted method. As per this methodology the level of the index reflects the total market value of all 30-component stocks from different industries related to particular base period. The total market value of a company is determined by multiplying the price of its stock by the nu7mber of shared outstanding. Statisticians call index of a set of combined variables (such as price and number of shares) a composite Index. An indexed number is used to represent the results of this calcution in order to make the value easier to go work with and track over a time. It is much easier to graph a chart based on Indexed values than on based on actual valued world over majority of the well-known Indices are constructed using Market capitalization weighted method.

ON-LINE TRADING In practice, the daily calculation of SENSEX is done by dividing the aggregate market value of the 30 companies in the index by a number called the Index Divisor. The divisor is the only link to the original base period value of the SENSEX. The Devisor keeps the Index comparable over a period value of time and if the references point for the entire Index maintenance adjustments. SENSEX is widely used to describe the mood in the Indian stock markets. Base year average is changed as per the formula new base year average = old base year average*(new market value / old market value).

NATIONAL STOCK EXCHANGE The NSE was incorporated in Nov, 1992 with an equity capital of Rs.25 crs. The international securities consultancy (ISC) of Hong Kong has helped in setting up NSE. ISC has prepared the detailed business plans and initialization of hardware and software systems. The promotions for NSE were financial institutions, insurances, companies, banks and SEBI capital market ltd, Infrastructure leasing and financial services ltd and stock holding corporations ltd. It has been set up to strengthen the move towards professionalisation of the capital market as well as provide nation wide securities trading facilities to investors. NSE is not an exchange in the traditional sense where brokers own and manage the exchange. A two tier administrative set up involving a company board and a governing aboard of the exchange is envisaged. NSE is a national market for shares PSU bonds, debentures and government securities since infrastructure and trading facilities are provided. NSE-NIFTY: The NSE on Apr22, 1996 launched a new equity Index. The NSE-50. The new Index which replaces the existing NSE-100 Index is expected to serve as an appropriate Index for the new segment of future and option. NIFTY mean National Index for fifty stocks. The NSE-50 comprises fifty companies that represent 20 board industry groups with an aggregate market capitalization of around Rs 1, 70,000 crs. All companies included in the Index have a market capitalization in excess of Rs. 500 crs each and should have trade for 85% of trading days at an impact cost of less than 1.5%.

ON-LINE TRADING The base period for the index is the close of price on Nov 3 1995, which makes one year of completion of operation of NSEs capital market segment. The base value of the index has been set at 1000.

NSE-MIDCAP INDEX The NSE madcap index or the junior nifty comprises 50 stocks that represent 21st board industry groups and will provide proper representation of the midcap segment of the Indian capital market. All stocks in the Index should have market capitalization of grate than Rs.200 crs and should have traded 85% of the trading days at an impact cost of less than 2.5%. The base period for the index is Nov 4 1996, which signifies 2 years for completion of operations of the capital market segment of the operations. The base value of the Index has been set at 1000. Average daily turn over of the present scenario 258212 (Laces) and number of average daily trades 2160(Laces). At present there are 24 stock exchanges recognized under the securities contract (regulation Act, 1956. They are Ahmedbad Stock Exchange Bangalore Stock Exchange Bhubaneswar Stock Exchange Calcutta Stock Exchange Cochin Stock Exchange Coimbatore Stock Exchange Delhi Stock Exchange Guwahati Stock Exchange Hyderabad Stock Exchange Indore Stock Exchange Jaipur Stock Exchange Kanpur Stock Exchange Ludhiana Sock Exchange Madras Stock Exchange Magadh Stock Exchange Mangalore Stock Exchange Pune Stock Exchange Uttar Pradesh Exchange Assoc ltd Saurashtra Sock Exchange Vadodhara Stock Exchange NSE OTCEI Inter connected Stock Exchange

Company Profile

ON-LINE TRADING Stock Broking business of the group was started in 1995, promoted by professional entrepreneurs and incubated by the Shriram Group through its entity, Shriram Insight Share Brokers Ltd. Stock Broking business commenced operations with a corporate membership in NSE in the cash segment in 1996. Membership in the derivatives segment in the NSE was acquired in 2003. The Business has expanded into the commodities market with a trading-cumclearing membership in the Multi Commodity Exchange (MCX) and the National Commodities and Derivatives Exchange (NCDEX) through a 100% subsidiary.Stock Broking business is firmly focused in the rapidly growing High Networth Individual (HNI) and Retail space. Member: National Stock NSE SEBI Reg. No. : NSE-CM [INB 230947033] | BSE-CM [INB 010947035] || NSE-F&O [INF 230947033] ,DP [IN-DPCDSL-293-2005] ,MCX [Membership No: 10115] |The business has an active client base of over 1,50,000.The business operates through 1000 branches with equal no. of trading terminals. The business model of Stock Broking largely focused on owned branches in the initial years and has now graduated into the franchisee mode of expansion that will cater to PAN India target market. Rapid expansion has been made possible in this two-pronged strategy of owned and franchised outlets and is expected to have an end-state distribution, networking over 3000 branches. As the business starts targeting the next level of mass affluent customers, expanding into wealth management and advisory space, same would also become a key thrust area that can potentially enhance profitability and shareholder value in the medium term.

SHIRAM INSIGHT LOGO:

SHIRAM INSIGHT SLOGAN

ABOUT SHIRAM INSIGHT

The Group has also made investments in Manufacturing, Value Added Services, Project Development, Engineering Services, Pharmaceuticals, Machined & Auto Components, Press Dies & Sheet Metal Stamping, Packaging, Information Technology, Property Development etc.

GENESIS OF THE SHRIRAM PHENOMENON

The 30,000 Cr Shriram Group had its humble beginnings in the Chit Fund business over three decadesago. R Thyagarajan, AVS Raja and T Jayaraman were the three musketeers who

ON-LINE TRADING

ventured into these businesses. Not many in the financial services industry thought at that time, this small Chit Funds business in Chennai would indeed be the foundation for the financial conglomerate that Shriram is today.
THE SHRIRAM WAY!
Shriram Groups businesses strive to serve the largest number of common people. Consider these: Commercial Vehicle Financing, Consumer & Enterprise Finance, Retail Stock Broking, Life Insurance, Chit Funds and Distribution of Investment & Insurance Products. Our foray into Non-Life (General) Insurance is again a strong expression of this commitment.

MILESTONES
Year Milestone 1974 Commencement of Business - Shriram Chits 1979 Commencement of Business - Shriram Transport Finance Co (STFC) 1982 Commencement of Business - Shriram Investments Ltd 1984 IPO of STFC 1986 Commencement of Business - Shriram City Union Finance Co (SCUF) 1988 IPO of SCUF 1989 Commencement of Business - Shriram Overseas Finance Ltd 1995 Commencement of Business- Shriram Properties Pvt Ltd 1999 Commencement of Business - Shriram Insight Share Brokers Ltd 1999 Citicorp CV financing tie up with STFC 2000 Commencement of Business - Shriram EPC Ltd 2000 Commencement of Business - TAKE Solutions Ltd 2004 Commencement of Business - Shriram Capital Ltd 2005 Entry of Chryscapital as Partner with STFC & EPC 2005 Entry of Sanlam as Life Insurance business partner and commencement of business- Shriram Life Insurance Co 2006 Merger of Shriram Investments Ltd & Shriram Overseas Finance Ltd with STFC 2006 Commencement of Business - Shriram Fortune Solutions Ltd 2006 Commencement of Business - Shriram Value Services 2006 Entry of TPG as STFC's partner 2007 Shriram EPC's JV with Leitner Technologies for Manufacture of wind turbines 2007 EPC's foray into Air Pollution Control with Hamon through JV 2007 Orient Green Power was founded by Shriram EPC 2007 IPO of TAKE Solutions Ltd 2008 Commencement of Business - Shriram General Insurance Ltd 2008 IPO of Shriram EPC Ltd 2009 NCD Placement of Rs 10 Bn by STFC 2010 IPO of Orient Green power

INDUSTRIAL INVESTMENTS
The Group has also made investments in Manufacturing, Value Added Services, Project Development, Engineering Services, Pharmaceuticals, Machined & Auto

ON-LINE TRADING Components, Press Dies & Sheet Metal Technology, Property Development etc.

Stamping,

Packaging,

Information

NON-FINANICAL SERVICE:Shriram Group has always encouraged entrepreneurship by continuous apetite for investing in start-up manufacturing business. demonstrating

OUR INVESTMENT
The Group has also made investments in Manufacturing, Value Added Services, Project Development, Engineering Services, Pharmaceuticals, Machined & Auto Components, Press Dies & Sheet Metal Stamping, Packaging, Information Technology, Property Development etc.

ABOUT FOUNDER
MR.R THYAGARAJAN, FOUNDER

Chairman of the Shriram Group of Companies - Promoted the Shriram Group Companies in 1974. Today the group has over 15, 000 employees and operating through 700 locations and manage funds of over 15,000 Crores in the business of financial services including life insurance and general insurance. Masters in Mathematics Masters in Mathematical Statistics from Indian Statistical Institute Associate of Chartered Insurance Institute (A.C.I.1), London Visiting faculty of Asian Institute of Insurance, Philippines on Consequential Loss Insurance. By inculcating the philosophy of putting people first, he has transformed the Shriram Group into Indias Premier Networked Financial Services Supermarket Chain. The Network Shriram comprises over 650 Branches and Service Centers, served by more than 6000 employees and 60,000 agents committed to ensuring world-class customer service. The Groups aggregate turnover exceeds Rs. 5000 crores.

ON-LINE TRADING SHIRAM GROUP SERVICES

FINA NCIAL SERVICES :Helping Create Wealth. Empowering people through prosperity. Resulting in inclusive growth. The relentless pursuit of this mission, since our inception in 1974 has given the Shriram Group our raison d'tre and our distinct identity. The Groups reputation for effectiveness, transparency and integrity has helped it to become one of Indias largest Financial Services Network.The Groups Financial Services Businesses manage assets exceeding Rs.40,000 crores, has 6.5 million clients, served by 1,00,000 Agents and 36,000 employees, through 2700 Branches across India.Our core financial services businesses are housed under the holding company Shriram Capital Ltd: Commercial Vehicle Finance

Life Insurance General Insurance Consumer & Enterprise Finance Financial Product Distribution Retail Stock Broking Chit Funds

ON-LINE TRADING

NON-FINANCIAL SERVICES:Shriram Group has always encouraged entrepreneurship by continuous apetite for investing in start-up manufacturing business. demonstrating

OUR INVESTMENT
The Group has also made investments in Manufacturing, Value Added Services, Project Development, Engineering Services, Pharmaceuticals, Machined & Auto Components, Press Dies & Sheet Metal Stamping, Packaging, Information Technology, Property Development etc.

CORPORATE MANAGEMENT :BOARD OF DIRECTORS

Arun Duggal Mr. Arun Duggal is an experienced international banker and has advised companies on financial strategy, M&A and capital raising. He is Chairman of Board of Directors of Shriram, Shriram Properties Limited, Shriram City Union Finance Limited and Shriram EPC Limited. He is the Vice Chairman of International Asset Reconstruction Company. He is on the Board of Directors of Jubilant Energy NV., Patni Computers (Chairman - Audit Committee), Fidelity Fund Management, LNG Petronet (Nominee Director of Asian Development Bank), Manipal Acunova, Zuari Industries, Info Edge (India), Dish TV India , Mundra Port & SEZ, and Hertz (India). Mr. Duggal is Advisor to IMA (formerly Economist Intelligence Unit, India). He is a member of the Investment Committee of Axis Private Equity. He was on the Board of Governors of the National Institute of Bank Management. He is a Board Member and erstwhile Chairman of the American Chamber of Commerce, India. Mr. Duggal is involved in several initiatives in social sector. He is a founder Director of Bellwether Microfinance Fund which provides equity capital to promising Micro Finance organizations and helps them in capacity building. He is a Trustee of Centre for Civil Society. New Delhi, which focuses on improving the quality and access of education to students especially for the poor. He is Senior Advisor (Asia Pacific ) to Transparency International Berlin, which is undertaking a number of initiatives to combat corruption problem around the world. Mr. Duggal had a 26 years career with Bank of America, mostly in the U.S. Hong Kong and Japan. His last assignment was as Chief Executive of Bank of America in India from 1998 to 2001. He spent ten years (1981-1990) with the New York Corporate Office of Bank of America handling multinational relationships. From 1991-1994 as Chief Executive of Bank of America Asia Limited, Hong Kong he looked after Investment Banking activities for the Bank in Asia. In 1995 he moved to Tokyo as the Regional Executive, managing Bank of America 's business in Japan, Australia and Korea. From 2001 to 2003 he was Chief Financial Officer of HCL Technologies, India. A Mechanical Engineer from the prestigious Indian Institute of Technology, Delhi, Mr. Duggal holds an MBA from the Indian Institute of Management, Ahmedabad. He teaches Banking & Finance at the Indian Institute of Management, Ahmedabad as a visiting Professor.

ON-LINE TRADING

R.Sridhar (Managing Director) Adit Jain S.Venkatakrishnan Maya Shanker Verma Mukund Manohar Chitale Puneet Bhatia Ranvir Dewan Sumatiprasad M. Bafna S.Lakshminarayanan

SERVICES OFFERED FROM SHIRAM INSIGHT

ON-LINE TRADING

CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

1. Are you aware of online trading?

ON-LINE TRADING

Particulars Investors response % of the sample

Yes 27 90

No 3 10

response no 10% yes no yes 90%

INTERPRETATION: From the above graph we can say that 90% of the people are aware of online trading and 10% of them are not aware of it.

2.Do you actively participate in the share market?

ON-LINE TRADING

Particulars Investors response % of the sample

Yes 19 63

No 11 37

response

no 37% yes 63%

yes no

INTERPRETATION: From the above graph we can say that 63% people actively participate in share market and 37% of do not participate.

3. Which online investor category you belong to?

ON-LINE TRADING

Particulars Investors response % of the sample

Uncertain newcomer 10 33

Moderate active Active trader trader 8 8 27 27

day Hands in every pot 4 13

category
hands in every pot 13% active day trader 27%

uncertain newcomer 33%

uncertain newcomer moderate active trader active day trader hands in every pot

moderate active trader 27%

INTERPRETATION:

The above graph depicts that 33% of them are uncertain newcomer, 27% of them belong to moderate active trader category and active day trader and 13% of them belongs to hand in every pot category.

4. Do you have a Demat account?

ON-LINE TRADING

Particulars Investors response % of the sample

yes 20 67

no 10 33

responses

no 33% yes 67%

yes no

INTERPRETATION: From the above graph we can say that 67% of the investors have Demat account and 33% of them doesnt have Demat account.

5. Which depository do you take into consideration for accessing Demat account?

ON-LINE TRADING

Particulars Investors response % of the sample

NSDL 23 77

CDSL 7 23

response

CDSL 23% NSDL CDSL NSDL 77%

INTERPRETATION: From the above graph we can say that 77%of the people are in favour of NSDL depository and 23% are in favour of CDSL depository.

6. Are you in favour of Demat account? Particulars Investors response Yes 23 No 7

ON-LINE TRADING

% of the sample

77

23

response

NO 23% YES NO YES 77%

INTERPRETATION: From the above graph we can say that 77% of the people are in favour of demat account and 20% of them are not in favour of it.

7. Which is the most preferable attribute while investing? Comment

ON-LINE TRADING

Particulars Investors response % of the sample

Rate of return 12 40

Liquidity 13 43

Convenience 2 7

Regulation 3 10

response Regulation 10% Convinienc e 7% Liquidity 43% Rate of return 40% Rate of return Liquidity Convinience Regulation

INTERPRETATION: From the above graph we can say that Liquidity(43%) is most preferable among all the attributes.

8. Are you aware the nature of risk involved in online trading?

ON-LINE TRADING

Particulars Investors response % of the sample

Yes 25 83

No 5 17

response

17%

yes no

83%

INTERPRETATION: From the above graph we can say that (83%)majority of the people are aware of risk involved in online trading.

9.Do you check brokers activity involved in online trading?

ON-LINE TRADING

Particulars Investors response % of the sample

yes 15 50

no 15 50

Brokers activity

50%

50%

yes no

INTERPRETATION: From the above graph we can say that 50% of the investors check brokers activities and 50% do not check.

10. Do you feel any changes in earlier trading and at present trading?

ON-LINE TRADING

Particulars Investors response % of the sample

yes 30 100

No 0 0

changes 0%

yes no

100%

INTERPRETATION: From the above graph we can say that 90% of the people are aware of online trading and 10% of them are not aware of it.

11. Which system do you feel more convenient in trading?

ON-LINE TRADING

Particulars Investors response % of the sample

Yes 6 20

No 24 80

convinience

20%

outcry screen based

80%

INTERPRETATION: From the above graph we can say that 80% of the people are in favour of screen based trading and 20% of them in favour of outcry system.

NOTE: In the above analysis the sample size is 30 i.e N=30 .

FINDINGS
From the above analysis we have come to this conclusion that most of the

ON-LINE TRADING

people are aware of online trading and very much interested in screen based trading. . After this study we can come to this conclusion as below i.e 90% of investors are aware of online trading. 63.3% of investors participate in share market . 33.3% of investors are willing to go for option (A),26.7% of investors are willing to go for option (B)& (C) and 13.3% of investors are willing for option (D) where (A)uncertain newcomer(B) moderate active trader (C)active day trader(D)hand in every pot. 66.7% of investors have Demat account. 76.6% of investors consider accessing of Demat account through National securities depository limited(NSDL). And 23.3% of investor go with central depository services limited(CDSL). 76.7% of investors are in favour of Demat account . And 23.3% of investors are not in favour of Demat account. 40% of investors prefer (A)rate of returns, 43.3% of investors prefer (B) liquidity, 6% of investors go for(C) convenience and 10% of investors prefer (D) Regulation. 83.3% of investors are aware of risk involved in online trading .and 16.7% of investors are not aware of risk involved in online trading. 50% of investor check brokers activity and 50% does not check. 100% of investors feel the changes in trading. 80% of investors feel screen-based system more convenient and 20% of investors feel outcry system more-convenient.

ON-LINE TRADING

SUGGESTIONS
The suggestion to exchange authorities is to take steps to educate investors about their rights and obligation , try to increase investors confidence. I suggest the exchange authorities to be vigilant to curb wide fluctuations of prices on the exchanges in the prices ,not attracting to the genuine investors to the greater extents towards the market .Try to explain them how fraud will take place so that they will be alert and they can take necessary steps to avoid the frauds. Genuine investors are not at all interested in the speculative gain as their investment is based on the future profits , therefore the authorities of exchange should be more vigilant in imposing heavy
margin to curb the speculative of securities.

ON-LINE TRADING

CONCLUSION

Online trading is the new concept in the stock market. In India, online trading is still at its infancy stage. Online trading has made it easy to trade in the stock market as now people can trade while sitting at their home. Now stock market is easily accessible by the people. There are some problems while doing the trade through the internet. Major problem faced by online trader is that the investors are loyal to their traditional brokers, they rely upon the suggestions given by their brokers. Another major problem is that the people don't have full knowledge regarding online trading. They find it difficult to trade themselves, as a wrong entry made by them, can bring them huge losses. 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.

ON-LINE TRADING

Bibliography
Books Referred :
Financial Markets and Services -------- E Gordan, K Natrajan by Himalaya Publication Financial Management ------------------- M.Y.Khan & P.K. Jain

Websites :
1.

www.icicidirect.com

2. www.sharekhan.com 3. www.internet news.co.in

Questionnaire

ON-LINE TRADING

Dear respondent, I am student of MBA. I am working on the project of On-Line trading. You are requested to fill the questionnaire to enable, to undertake the study on the said Project.

Name. Occupation Address Phone no.

1. For how long you have been trading with on line-trading? (a)1 year (c) 3 year (b) 2 year (d) 4 year

2 .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. what amount of money you are invested normally ? (a) 50000 (c) 150000 to 2000000 4. How often do you trade? (a)Daily (c) Monthly 5. In which trading you will prefer? (a) Online trading (b) offline trading (b) Weekly (d) More than one month (b) 100000 to 150000 (d) Any other amount

ON-LINE TRADING

(c) Both 6. According to you online trading setteled in Indian investor psyche (a) Yes (b) No

7. 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. Which media would you prefer the most for investor? (a) T.V (c) Magazines (b) Newspaper (d) Journals

9) Which is the Most preferable Sector For Stock market trading

A)Banking Sector C)Oil&Gass B)FMCG Sector D)IT