online trading bhse
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INTRODUCTION TO THE STUDY
In stock market the trading of already listed companies stock aretaken place during the time period of 9.15 am to 3.30 pm on every
working day. These securities are issued by the government semi!
government bodies public sector undertakings and companies for
borrowing funds and raising resources. "ecurities are defined as any
monetary claims #promissory notes or I.$.%& and also include shares
debentures bonds and etc. if these securities are marketable as in the
case of the government stock they are transferable by endorsement andalike movable property. They are tradable on the stock e'change. "o is
the case shares of companies.
%nder the "ecurities (ontract )egulation *ct of 195+ securities,
trading is regulated by the (entral -overnment and such trading can take
place only in stock e'changes recognied by the government under this
*ct. *s referred to earlier there are at present such recognied stocke'changes in India. /ombay "tock 'change #/"& ational "tock
'change #"& are national and /hubaneswar 2elhi (hennai
yderabad madras and /angalore etc. are some of the regional
recognied stock e'changes of India . The above act has also laid down
that trading in approved contract should be done through registered
members of the e'change.
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OBJECTIVES OF THE STUDY
The ob4ectives of the study are as follows
To know the on!line screen based trading system
To know about the software used for online trading purpose .
To know the investors awareness label and perception towards
mutual fund investment.
To know the online trading mechanism
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SCOPE OF STUDY:
The scope of the project is to study and know about Online Trading and investors
perception towards online trading.By studying the Online Trading and Clearing & Settleents! a clear option of
dealing in stock e"change is been understood. #nlike olden days the concept of trading
anually is been replaced for fast interaction of shares of shareholder. By this we can access
anywhere and know the present dealings in shares.
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RESEARCH METHODOLOGY :
DATA COLLECTION METHODS
The data collection methods include both the primary and
secondary collection methods.
Primary Colle!io" Me!#o$% :This method includes the data
collection from the personal discussion with the authoried clerks
and members of the broking house my company guide and theinvestors those are coming to the branch for trading purpose .
Seo"$ary Colle!io" Me!#o$%: The secondary collection
methods includes the lectures of the superintend of the department
of market operations and also the data has been collected from
the news magaines various books and websites.
First Phase:
Secondary inforation review & desk study of e"isting literature are conducted. $
fle"ible! creative! open and dynaic social dialogue with the staff and the project
functionaries is carried out.
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Second Phase:
%reliinary visits to the field! observation! interactive group interviews! and
nvestors 'iew are also conducted.
Third Phase:
Stakeholders consultation involving the project tea for consensus building on a
sensitive fraework to guide field work.
Fourth Phase:
(ata collection through )uestionnaire round.
2.1. Sampling:
Sample Size:
$ saple of *++ individual nvestors was selected.
Sampling Technique,
Both stratified as well as convenient rando sapling techni)ues were used for
the study.
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2.2. Data Collection:
Saple survey was conducted using a closed )uestionnaire.
-ocused group discussions were conducted aong the ebers to cross verify
the certain critical inforation such as individual investors savings! investent !
etc. provided by the individual investors
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FINDINGS
6ost of the investors are investing in stock market
Investors are preferring more to online trading than offline
The investors are facing some problems while operating in
computer
Investors are also facing some problems on online software
SUGGESTION
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The broking firms and stock e'changes should conduct
more awareness programs for the investors
The broking companies should conduct some training
program for the investor to make them familiar with the
software .
The broking companies should concentrate on their
software while preparing it taking into consideration the
computer illiterate investors.
LIMITATIONS OF THE STUDY
The study on investor,s perception is not an easy task to come outas it is believed. The main limitations of my study are!
1. It is the s7ueeed time boundary
8. It is not possible to obtain responses to all 7uestionswhich could have enable to capture the total perception
of investors due to structured 7uestionnaire.
3. "ome important 7uestions which could have yieldedmore valuable information were deleted intentionally to
increase the response rate.
. The secondary data was insufficient.
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(*:T) ! 8
ORGANI&ATION PROFILE
/hubaneswar "tock 'change #/h"& was initially incorporated on
the 1;th *pril19
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of $rissa. "ubse7uently /hubaneswar "tock 'change was
incorporated on 1;th *pril 19
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3. "hri E.. )avindra )epresentative of the "hareholder of the /h"
ational *luminium (ompany Atd. #*A($&
. "hri 2eelip Eumar (houdhury "hareholder of the /h" 5. "hri *nil
Eumar :atro "hareholder of the /h"
+. "hri Tarun Eumar *grawalla "hareholder of the /h"Trading 6ember 2irectors
;. "hri Thomas 6athew Trading 6ember of the /h"
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OPERATIONAL INFRASTRUCTURE
%pon automation of the trading activities Trading all of the "tock
'change has been modernised with the latest capital market
infrastructures.SETTLEMENT SYSTEM
The "ettlement system of the 'change is carried out on B2aily
)olling /asisC #TF1& as per the "/I -uidelines issued from time to
time. :ay!inGpay!out in terms of "ettlement (alender are effected
well in time through the (entralied /anking "ystem of the "tock
'change. (anara /ank has established a /ranch to facilitate the
pay!inGpay!out operation as well as the banking transactions of the"tock 'change and its trading members.
(A*)I- $%"
/hubaneswar "tock 'change has its own (learing ouse. The
transactions entered among the trading members of the 'change
are settled by delivery and payment obligations through the (learing
ouse of the "tock 'change in accordance with the prescribed
settlement program under a (entralied 2elivery and :ayment
"ystem.
IT)!($(TIDIT?
/hubaneswar "tock 'change has played an instrumental role
among others in mooting the idea of establishing of an Inter!
connected 6arket "ystem #I(6"&. This effort was resulted in
establishing BInter!connected "tock 'change of India of Atd.C to
providea nationwide e7uity market through the trading members of
participating "tock 'changes. It has also facilitated the trading
members of participating "tock 'changes including /hubaneswar
"tock 'change to trade on the ational "tock 'change segment.
AI"T2 "T$(E"2espite introduction of "/I 2elisting
-uidelines8003 /hubaneswar "tock 'change continued to have
listing of securities of several companies having aggregate paid!up
capital of around )s.8800 crores.
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PRIMARY MAR)ET
/hubaneswar "tock 'change has been playing an active role for the
growth of primary market activities with the support of its trading
members. The "tock 'change ensures promotional steps for
participation of investing public at a large scale in the public offers
of several companies.
CUSTOMERS* PROTECTION FUNDInvestors, protection is the cornerstone of a vibrant market.
/hubaneswar "tock 'change has established a "tatutory =und
namely B/hubaneswar "tock 'change (ustomers, :rotection =undC
with an ob4ect to protect the customers from the risk of defaulting
trading members. *t present as per the )ules of the said =und a
customer is entitled to be indemnified to a ma'imum of )s.85000G!
towards his claim against a defaulter trading member of the "tock
'change.
INVESTORS* SERVICE CELL
/hubaneswar "tock 'change has an BInvestors, "ervice (ellC which
also ensures protection of the investors. It promptly attends the
complaints of various nature lodged by the investors against
companies as well as the trading members of the "tock 'change
and plays an important role in a friendly approach to redress the
investors, grievances The Investors, "ervice (ell undertakes due
care to build up confidence of the common investors on the capital
market.
LIBRARY
/hubaneswar "tock 'change has a good library. It has a list of
several books and guidelines relating to capital market. It also
subscribes :eriodicals and =inancial ews 2ailies for readers. In
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addition to this prime magaines for new issues annual reports of
several listed companies are available with it. The library of the "tock
'change is thus playing a promotional role for enrichment of
knowledge of the staff trading members investors and researchscholars at large. The "tock 'change with the support of its library
also helps the management students to prepare their pro4ect reports.
EMPLOYMENT/hubaneswar "tock 'change has also been instrumental in
generating various nature of employment both directly and
indirectly in the "tate of $rissa. *s a result apart from direct
employment for its own purpose it has created opportunity for
generation of a number of indirect appointments in various
capacities such as sub!brokers authorised assistants authorised
representatives and other staff in the stock!broking firms.
FUTURE UNDERTA)INGS
/hubaneswar "tock 'change has undertaken a number of measures
to activate business in securities and to spread the message of
goodwill among the investing public. "uch measures are H To provide 2epository "ervice so that the trading in securities and
supporting depository operation connected to it shall be carried out
under an umbrella.
To upgrade the infrastructural facilities to facilitate e'pansion of
trading activities.
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To host Training :rogram for trading member as well as employees
of the "tock 'change.
To introduce provide and conduct a (ourse for imparting education
on Indian "tock 6arket to the aspirants. To construct a modern hi!tech building of the "tock 'change.
LITERATURE REVIE+
STOC) MAR)ET :
* stock market or e7uity market is a public market #a loose
network of economic transactions not a physical facility or discrete
entity& for the trading of company stock and derivatives at an agreed
priceJ these are securities listed on a stock e'change as well as those
only traded privately.
STOC) E,CHANGES
The stock e'changes are the e'clusive centres for trading of
securities. Aisting of companies on a "tock 'change is mandatory to
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provide an opportunity to investors to invest in the securities of local
companies. The trading volumes on e'changes have been witnessing
phenomenal growth for last few years. "ince the advent of screen
based trading system in 199!95 it has been growing by leaps andbounds and reported a total turnover of )s.5130
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into picture which used to bring the buyers and sellers together for
the trade of the shares. These persons are called the share /rokers
who find the persons who wish to buy or sell their securities. The
whole process of finding the buyers and sellers of the securities bythe brokers is called the "hare trading.
De.i"i!io"% :
* transaction of a security or commodity.
/uying and selling securities or commodities on a short!term
basis hoping to make 7uick profits.
6ore generally any buying and selling of securities
commodities goods or services.
Ty(e% o. !ra$i"/:
Two types 1. $nline trading
8. $ffline trading
MEANING OF ONLINE TRADING :B(hange is the law of natureC. There were times when man
was a wanderer or a normal. e himself had to go place to place in
search of food water and now everything is available at your
doorstep 4ust at the click of the mouse. The growth of information
technology has affected almost all sectors of life. Internet has
enabled us to get every information at our doorstep. Lhen Internet
has affectedall sectors he could Bstock marketsC the most importantplayer of the economy has remained far behindM Aike all other
sectors Internet has set its feet in the stock markets also.
Internet trading commissions are clearly posted on the
websites of the various services and are typically a fi'ed rate
charge depending upon the type of security being traded and the
sie of trade. In theory therefore an Interest investor always knows
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what commission he is being charged on each trade. Internet
investors can take as much time as they would like to take prior to
placing a trade order. "imilarly the online investor likely does not
have to worry that his broker is making unauthoried trades. "incethere is no individual broker making a commission the only person
who is authoried to trace in the account is the actual investor.
=urthermore the internet investor can never become a victim of
e'cessive trading #where for the broker& since the investor maintains
total control over the number of transactions which take place in the
account.
*ll of these positive features of internet trading may lead theunwary investor to believe that Internet trading is a way to take
control of their finances and save more money in the process.
%nfortunately this is not always the case. The advantages of Internet
stock trading have also its weaknesses and these weaknesses
present significant drawbacks for the average investor.
=irst and foremost the average investor is not an e'pert in the
financial markets. There is a danger for allowing the autonomy of
online trading to hull you into the belief that you are an e'pert
investor. *n online investor sitting at home at a personal computer
also foregoes proper investment advice and financial planning
perhaps among the most valuable services provided by traditional
brokers.
There are of course 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.
+#e" 0a% o"li"e !ra$i"/ i"!ro$'e$ i" I"$ia 1
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$nline trading started in India in =ebruary 8000 when a couple
of brokers started offering an online trading platform for their
customers.
+#y o"li"e !ra$i"/ e"!ere$ la!e i" I"$ia 1
The Indian e'changes and brokering houses have been very
slow in moving their transactions online and the ma4or reason has
been the lots of government regulations. The initial delay was due to
laying down the specifications for creating (losed %ser -roups
#(%-s&. This issue was resolved between the 2epartment of
Telecommunications #2oT& and the =inance 6inistry around 199< and
after that soon came the online trading portals like IA @ =" invest
smart I(I(I 2irect.com motilaloswal.com sharekhan.com etc.
(onnectivity related issue was perhaps the most important
technological factor. )/I made regulation that it is mandatory for
company to store at least ;year financial and transactional data.
In the non!stop 8 hours a day seven days a week world of
investing we are able to $btain investment news around the clock.
(heck 7uotes on e'changes all over the world ! day or night.
asily compare one investment to another via numerous ratios
charts graphs and tables.
"creen for the best ur individual goals and re7uirements.
Trade stocks as easily and 7uickly as professiona
linvestmentsto fit o traders.
(alculate retirement needs based on various scenarios.
)egularly monitor portfolios and make necessary changes
7uickly and almost effortlessly.
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(ontrol the routing of individual trades for the be ven many
years after the launch of the first online brokerage firm there
remain a large contingent of individual investors who still pick
up the phone and call their stock broker to buy and sellinvestments. owever every year a growing number of
investors are placing their trades using online brokers.
PROCESS OF ONLINE TRADING :
*n investor interesting in trading through Internet shall have
to firstly register himself with an Internet brokerage firm. "ome
formalities such as filling the account opening form of the e!broker
copies of identity proof copy of residence proof are made to register
himself with the e!trader. "econdly the investor would be re7uired to
open a bank account with a scheduled bankand sufficient balance
should be kept in the account.
S!e(23 :
Those investors interested in doing the trading over Internet
system that is *T!I"N #"& should approach the brokers andregister with the "tock /roker.
S!e(24 :
*fter registration the broker will provide to them a login name
password and a personal identification number #:I&.
S!e(25 :
*ctual placement of an order %sing the place order window as
under can then place an order
a& =irst by entering the symbol and series of stock and other
parameters such as 7uantity and price of the scrip on the
place order window.
b& "econd fill in the symbol series and the default 7uantity.
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S!e(26 :
It is the process of review. Thus the investor has to review the
order placed by clicking the review option. e may also re!set to
clear the values.S!e(27 :
*fter the review has been satisfactoryJ the order has to be sent
by clicking on the send option.
S!e(28 :
The investor will receive an B$rder (onfirmationC message
along with the order number and the value of the order.
S!e(29 :
In case the order is re4ected by the /roker or the "tock
'change for certain reasons such as invalid price limit an
appropriate message will appear at the bottom of the screen. *t
present a time lag of about ten seconds is there in e'ecuting the
trade.
S!e(2 :
It is regarding charging payment for which there are different
modes. "ome brokers will take some advance payment from the
investors and will fi' their trading limits. Lhen the trade is e'ecuted
the broker will ask the investor for transfer of funds by the investor
to his account.
Me#a"i%m o. o"li"e !ra$i"/ :
:lace an order onthe net on the
broker,s websitethrough the
distinctive I.2.
(lient
*ccept the orderchecks the ideaand place theorder with the
stock e'change.
/roker
*ccept the orderafter checking thescript limit of the
broker for the day.
'ecute the order.
"tock 'change
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DIFFERENCE BET+EEN
ON2LINE AND OFF2LINE
TRADING :
evertheless with all the convenience of online trading there
are still investors who prefer the old fashion way of offline trading.$ffline trading has lost some popularity but it is still the main form of
investing. $ffline trading offers many benefits as well.
1. The one benefit that an investor appreciates the most is that
they are not alone when making investment decisions.
8. There are e'perienced and professional brokerage companies
that handle their investments for them.
3. Investors are not faced with the challenge of making these vital
investment decision especially if they do not have the
e'perience necessary to make the appropriate investments.
. *lso there is someone there to answer any 7uestions that may
cause concerns not to mention with offline trading mistakes
are less likely to take place. o one wants to throw their money
The settlement of
the deal #buy andsell order& getsreflected in thedemat account.
The client isintimated about the
e'ecution of thedelay by e!mailpays the broker
pending physical
:ays the e'changethrough his account
and received itsfrom the client,s
account.
)eceive the moneycomplete thesettlement.
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away or stand by and watch someone else throw their money
away. 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.
DEFINITIONS AND E,PLANATIONS OF SOME TERMS RELATED
TO ONLINE TRADING :
3; S#are% :
In everyday language when we talk of shares we normally
refer to e7uity shares or ordinary shares of a company. The terms
shares and stock essentially means the same things the letter being
a more common *merican usage.
*n e7uity share is evidence of ownership in a company. The
physical evidence of this ownership of this document is called the
"hare (ertificate. ow days shares are usually kept in electronic or
dematerialied form with a depository participant #/anks brokers
financial institutions& of the ational "ecurities 2epository Aimited
#"2A&. owever if one wants one can still hold the share in the
physical form which has your name endorsed on it and is proved
that you are a part owner of the company. ?our ownership rights are
proportionate to the number of share you own. (ompanies issue
shares of a certain fi'ed denomination called face value or par value
of that share which is clearly indicated on a share certificate in the
physical form.
4; I"
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constantly going down as a result of inflation. #The value of money is
4udged by the 7uantity of goods and services you can buy with it&.
Therefore if you want to maintain or increase the value of your
savings you have to keep them in forms other than cash. This iswhat investment is all about deployment of your saving with the
intentions of preserving or increasing their value. This deployment
can be done by using your savings to buy land residential properties
commercial properties gold 4ewelry works of art fi'ed deposits in
banks and companies shares bonds in fact anything whose value is
likely to either remain constant or appreciate with time. Investment
also refer to using one,s savings with the intention of earning anincome.
5; Dema! A= :
$n doing an online business ever customer has to open and
demat account in any bank whichever he likes. 2emat account is the
account in which the trading done by the customer is mentioned. If
the customer sales or purchases any share the details of this sale
and purchasing are in demat account. This account contents the
name of the shares and also the number of shares held or sold and
also the rate of the share with this demat account. It is also
compulsory for every customer to open a saving account in the bank
because the amount which is to be received when the customers
sales the shares are transferred from the demat account to thesaving account.
It is the responsibility of the customers that the share which he
purchased or sales are properly transferred in demat account from
the stock e'change whichever he deals. The amount of dividend
whichever to be received on the shares when held for one or more
year are also transferred in this demat account. It is compulsory for
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every customer to have a :* no. =or opening an demat account. If
:* no. Is not there is no chance for the customer to do any trading
on line. There is no limit of amount to deal in this account.
6; Tra$i"/ Ao'"! :
*n account similar to a traditional bank account holding cash
and securities and is administered by an investment dealer. Though
trading accounts are traditionally thought to hold only stocks a
trading account can hold cash foreign cash securities and a number
of other types of investments.
2ifference between trading account and demat account istrading account is only for a specific branch @ demat account is
global means in all branch.
7; Se"%e> :
Lhen the shares are issued to the public the stock e'change
gives a particular group to the company. =or e'. The )eliance -roup
is given the group B*C like this there are several companies which fall
in B*C -roup. The weightage mean is calculated according to its
e7uity when all the companies of -roup B*C has calculated this
weightage mean they are added all together when this addition is
done the result which comes down is known as B"ense'C.
The trading of shares of B*C group is totally depended on this
sense' value. The price of the share rises this sense' value also rises
and when the price of thisshare comes down the sense' value also
comes down with the sense'.
8; Sri(!% :
The company which has more than one working area it has to
issue the share separately than that company is the company which
has the script of its name. =or '. The )eliance this company has its
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several working area amely )eliance (apital )eliance Infocom
)eliance nergy )eliance Industry. "o reliance company issues
separate share for separate working area but the bold name which is
given to the working area is B)elianceC. "o in this case )eliance hasits own scripts. $ther e'ample *mbu4a /irla etc.
9; Gro'(% :
Lhen the shares are issued by the company they are given the
particular group by the "tock e'change according to its demand in
the market. There are mainly ; groups.
#i& -roup B*C
#ii& -roup B/C
#iii& -roup B(C
#iv& -roup BEC
#v& -roup BTC
#vi& -roup BT"C
#vii& -roup BOC
The companies which are in great demand is given as -roup
B*C company. *nd the companies which are not in so demand are
given in other group. This means that the companies are given the
group according to its demand.
; Co"!ra! "o!e :
(ontract note is a confirmation of trades done on a particular
day on behalf of the client. It establishes a legally enforceable
relationship between the client and the trading member with respect
to the settlement of the trades. It also helps to settle
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disputesGclaimGdifferences in terms of the contract note. It is a
prere7uisite for filling a complaint or arbitration proceeding against
the trading memberGsub!broker in case of a dispute. * valid contract
note should be in the prescribed form contains the details of tradesstamped with re7uisites value and duly signed by the authoried
signatory.
(ontract notes are made in duplicate the trading members
and the client should keep one copy each. *fter verifying the details
contained therein the client keeps the one copy and returns the 8nd
copy to the trading member duly acknowledge by him. 2o not accept
unsignedGduplicate contract note confirmation memo or contract notconfirmation memo signed by any authoried person.
ADVANTAGES OF ONLINE TRADING :
3; Pro
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e may also consult with other investors online present around
the world.
"ome online stock broking companies provide real!time stock
7uotes daily roundups of the stock market e'pert commentary and
a deep community of fellow investors.
4; Pro
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account of the investor. *ll these stages are inspected which brings
the transparency into the system.
8; Proe'!io" :
$nline transactions helps in the 7uick e'ecution of the entire
trading transaction right from logging to the traders site and to the
settlement of the bank account in a very short period of time.
; I! (ro
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"ome companies provide online help desk an investor cancan
contact the Tele Trading 'ecutives from the Tele Trading team
during and after market hours and can clarify 7uestions.
34; I"%!a"! or$er !ra$e o".irma!io"% :Through online trading every trade is confirmed immediately
and investor receives an on!screen confirmation following every
trade with full details for the investors records which avoids costly
errors that would have been discovered when it is too late.
35; )ee(% I".orma!io" Se're :
*s per the guideline provided by "/I every effort has to be
made to keep the investors account and personal information secureby use of encryption technology and updated security technology to
advanced fraud prevention measures.
DISADVANTAGES OF ONLINE TRADING :
1. In online terminal investor canPt get customied e'pert advice
whereas in offline the broker gives suggestions according to
investors strategy #i.e. short term or long!term&.
8. /rokerage is highly comprises to off!line.
3. :rivacy is less due to hacking scandals.
. Transactional errors due to technical problems.
TYPES OF ONLINE TRADING :
1. 7uity market trading.
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8. =G$ trading #future and option&.
1. 7uity market trading
This type trading is done in both " and /".
7uity market trading include trading of stocks of all the
companies listed in /" and ".
In the e7uity market trading there is two modes of trading.
1. Intraday Trading.
8. 2elivery /ased Trading.
3; I"!ra$ay Tra$i"/ :
Intraday Trading is the most popular Trading that many
Traders use this type Trading to cash their money soon. If you buy
and sell shares in a single day then the type of Trading is called as
Intraday Trading. In Intraday Trading you can sell shares within
seconds minutes and hours after you buy whenever you want and
when your you feel that your profit Target has been reached. /ut all
the shares you bought with the intraday option should be sold 80
minutes prior to the closing time. The general closing time of "tock
6arket is 330 pm. "o you should sell all your shares those you
bought with intraday option should be sold before 3.10pm.
)emember if you sell the shares which bought on previous Trading
day then it will not be considered a Intraday Trading. In Intraday
Trading if you buy shares on 88ndyou should sell them on 88nditself.
Intraday Trading gives you high profits when you analye and trade
perfectly and also makes you big loss if you donPt trade perfectly.
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The great advantage of Intraday Trading is that in Intraday
Trading brokerage is very less. Intraday /rokerage is 4ust about
0.08K to 0.0K depending on the broker you choose. *nd the
disadvantage of Intraday Trading is that In Intraday Trading fear ofloss of money is more compared to other types of trading. "o you
may also book more losses in Intraday trading if you do wrong
analysis. *s we cannot guarantee returns on our Investment in
Intraday Trading you should be ready for loses that may occur when
you Trade. ?ou should know all the current news and issues about
share market and analye the shares that you buy with more care if
you want to Trade in Intraday Trading.4; Deli
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Lhen you are making a long term investment with delivery
based trading you can also benefit from other things like
dividends split of stocks bonus shares and so on. These are
benefits that the companies offer to their share holders fromtime to time and you can make significant profit from these
offers if you are holding the stocks for long periods.
Di%a$
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circuit limit. This circuit limit is generally fi'ed on the percentage
basis. This circuit limit is applied to both the ends of the share. That
is to the upper limit also and also to the lower limit actually circuit
limit is of two types 1& %pper limit.
8& Aower limit.
It is compulsory for every company to fi' the circuit limit. This
limit is beneficial to both. The customer and also to the company
generally every company fi' below l0K of the rate of per share.
U((er Limi! :
Lhile issuing the shares to the public the company has to fi'
the upper limit this limit is also calculated in percentage the limit is
also beyond which the rate of the shares cannot e'ceed nor that the
customer doing the trading can sell above the level. =or e'.
(ustomer wants to sell a share which is of )s. 10 and its upper limit
is fi'ed at 10K so in this case the person will have to sell it at )s. 11or the rate whichever he wants but the person cannot sell it beyond
this )s. 11 because by addition of upper limit to the rate of share the
ma'imum amount of the shares is )s. 11 only and not above.
Lo0er Limi! :
*t the time of issuing share the company has to fi' the lower
limit also. This lower limit is calculated on the basis of the rate of the
shares. This limit bears the same percentage which is mentioned for
the upper limit of the share. Aike upper limit in this limit also the
share minimum rate of the share is fi'ed the customer who wants to
seeJ the holding shares has to first consider the upper@ lower limit of
the share he cannot sell the share below the lower limit and not
above the upper limit like the upper limit :ercentage generally in this
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limit also the percentage is below 10K of the face value of the
shares the percentage is below 10K of the face value of the shares
the percentage of the upper @ lower limit is e7ual to every type of
share. =or e'. "uppose the person wants to sell the shares and therate of the share is )s. 10G! and the lower limit percentage is 10K of
the rate. "o in this case the person cannot sell the share at below )s.
9G!. e will have to sell at above )s. 9G! or up to the upper limit of the
share.
Pay2I" :
:ay!in day is the day when the securities sold are delivered to
the e'change by the sellers and funds for the securities purchasedare made available to the e'change by the buyers.
Pay2O'! :
:ay!out day is the day the securities purchased are delivered
to the buyers and the funds for the securities sold are given to the
sellers by the e'change.
*t present the pay!in and pay!out happens on the 8nd working
day after the trade is e'ecuted on the stock e'change.
A'!io" :
$n account of non delivery of securities by the trading
member the securities are put for auction by the e'change. This
ensures that he buying trading member receives the securities on
time. on!delivery by the selling trading member can arise on
account of short delivery and deliveries not rectified. The e'change
purchases the re7uisites 7uantity in the auction market and gives
them to the buying trading member.
Rolli"/ Se!!leme"! :
%nder rolling settlement all open positions at the end of the
day mandatorily result in paymentQ delivery Rn, days later. (urrently
trades in rolling settlement are settled on TF8 basis where T is the
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trade day. =or e'ample a trade e'ecuted on 6onday is mandatorily
settled by Lednesday #considering two working days from the trade
day&. The funds and securities pay!in and pay!out are carried out on
TF8 days.
Se!!leme"! yle %#e$'le :
T Trading 2ay
TFl :ay!in by 10.30 *.6
TF8 :ay!out by 8 :.6
TF3 *uction of shortage in delivery
TF5 *uction :ay!in by 10.30 *.6
4;F=O MAR)ET:
=G$ market is future @ option market.
FUTURES MAR)ET:
It is different from e7uity market.
%nlike the e7uity market here an investor can buy stocks value
more than the money available in his account by giving the
margin money.
=or eg! suppose the price of "/I stock in nifty future is 8300G!
today an investor wants to buy this the lot sie of "/I is 185
so total amount is 8300S18508
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*fter buying the stocks the investors has to sell within a
specified date.
ifty future is closed last Thursday of every month.
If the investor will not sell the contract will be broken.
*n investor can also carry forward the contract to ne't month.
It is 4ust like commodity trading which is discussed later in this
report.
It is a standardied contract with standard underlying
instrument a standard 7uantity and 7uality of the underlying
instrument that can be delivered #or which can be used for
reference purposes in settlement& and a standard timing of
such settlement.
The standardied items in a futures contract are
Uuantity of the underlying.
Uuality of the underlying.
The date and the month of delivery.
The units of price 7uotation and minimum price change.
Aocation of settlement
Co"!ra! %(ei.ia!io": S!o? .'!'re% :
Trading cycle The futures contracts will have a ma'imum of
three month trading cycle ! the near month
#one& the ne't month #two& and the far
month #three&. ew contract will be
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introduced on the ne't trading day following
the e'piry of near month contract.
'piry day The last Thursday of the e'piry month or the
previous trading day if the last Thursday is atrading holiday.
"ettlement In (ash on TFl /asis.
"ettlement price 2aily settlement price will be the closing
price of the futures contracts on the trading
day and final settlement price will be the
closing price of the underlying on the last
trading day of the options contract.F'!'re% !ermi"olo/y :
S(o! (rie :The price at which an asset trades in the spot
market.
F'!'re% (rie : The price at which the futures contract
trades in the futures market.
Co"!ra! yle :The period over which a contract trades.
The inde' futures contracts on the " have one month two!
month and three month e'piry cycles which e'pire on the last
Thursday of the month. Thus a >anuary e'piration contract
e'pires on the last Thursday of >anuary and a =ebruary
e'piration contract ceases trading on the last Thursday of
=ebruary. $n the =riday following the last Thursday a new
contract having a three month e'piry is introduced for trading.
E>(iry $a!e :It is the date specified in the futures contract.
This is the last day on which the contract will be traded at the
end of which it will cease to e'ist.
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Co"!ra! %ie : The amount of asset that has to be
delivered under one contract. *lso called as lot sie.
I"i!ial mar/i":The amount that must be deposited in the
margin account at the time a futures contract is first entered
into is known as initial margin.
OPTIONS :
$ptions are fundamentally different from forward and futures
contracts. *n option gives the holder of the option the right to do
something. The holder does not have to e'ercise this right. In
contrast in a forward or futures contract the two parties have
committed themselves to doing something. Lhereas it costs nothing
#e'cept margin re7uirements& to enter into a futures contract the
purchase of an option re7uires an upfront payment.
Two types of option 1. call option.
8. put option.
3; Call o(!io" :
* call option gives the holder the right but not the obligation to
buy an asset by a certain date for a certain price.
4; P'! o(!io" :
* put option gives the holder the right but not the obligation to
sell an asset by a certain date for a certain price.
*ll stock trading depends on 8 terms. ither you could be
bullish or bearish. 2epending on whether you are bullish or bearish
on the underlying stock you could purchase either a call option or a
put option.
B'yi"/ a all O(!io" :
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Lhen you buy a call option you hold the right to buy a
specified 7uantity of the underlying stock at the strike price on or
before the e'piration date.
If you are bullish on a stock you could purchase a call option ata predetermine #(alled it as the strike price& that is lower than the
appreciation you e'pect then if all goes well and the stock price
does rise beyond the strike price F the premium you have paid on or
before the e'piration of the contract you can e'ercise your option to
buy the stock at the strike price and simultaneously sell it in the spot
market i.e. the cash market to book your profit.
If on the other hand the price of the stock in the cash marketdoes not rise beyond the strike price F premium you can let the
contract lapse i.e. you do not buy the underline stock at the strike
price. ?our loss in such a case would be premium you have paid.
owever in India e7uity options and futures are currently cash
settled and are not settled by delivery.
E>am(le
(urrent spot price per share )s. 100.:remium payable per share )s. 10.
*/( company has a lot sie 50 shares.
If the spot prices rises to )s 180 per share before the contract
e'pires you could e'ercise your option to buy the shares at )s 100
and then sell them in the market for )s 180. ?our profit in this
transaction would be )s. 500 #"ale price of )s 180 ' 50 ! purchase of
100 ' 50&! premium of 10 ' 50&.If on the other hand if the price does not go beyond )s 100
until the e'piry date you could 4ust let the contract lapse. In this
case your loss would be e7ual the premium that you have paid i.e.
)s 500.
B'yi"/ a ('! O(!io" :
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Lhen you buy a put option you hold the right to sell a
specified 7uantity of the underlying stock at the strike price on or
before the e'piration date.
If you are bearish on a stock you could purchase a put optionat a pre!determine #strike price& that is higher than the fall you
e'pect in the price of the stock.
If all goes well and the stock price does fall beyond the strike
priceFthe premium you have paid on or before the e'piration of the
contract you can e'ercise your option to sell the stock at the strike
price and simultaneously buy it in the spot market i.e. the cash
market to book your profit.If on the other hand the price of the stock in the cash market
does not fall to the strike price F premium you can let the contract
lapse i.e. you do not sell the underlying stock at the strike price.
?our loss in such a case would be premium you have paid.
-oing with the above e'ample if the spot prices depreciate to
)s
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option lapse the option writerPs income is the premium you have
paid to buy the option.
)emember the $ption writer Breturn is limitedC and Brisk is un!
limitedC.
DATA ANALYSIS INTERPRETATION
GRAPHICAL ANALYSIS
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*ge group known about share market
/ellow 80 80!30 30!0 0!50 *bove 508 ;0 1 + +
3
4
5
6
7
8
9
Bello0 4 425 526 627 A@o
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7
3
37
4
47
5
57
6
Ba"? i"%'ra"e M'!'al .'"$ S!o? mar?e!
*bove figure shows the investment of money in different sectors.6ost of the people are interested to invest in the mutual fundfollowed by bank stock market and insurance #0K30K1+K and1K& accordingly.
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6onthly income group are investing
/elow 5000 5000!10000 10000!80000 *bove 800005 80 0 35
7
3
37
4
47
5
57
6
Belo0 7 723 324 A@o
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:eople know about share market.
?es o++ 3
3
4
5
6
7
8
9
Ye% No
In the above figure we come to know that ++K people know aboutshare market and 3K people have no idea. *ccording to =igurema'imum number of people aware about share market.
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=rom which sources people know about share market.
=riends *gent *dvertisement88 1< 8+
This figure indicates from which sources people get the informationabout share market. It shows that most of the people get informationabout share market from the advertisement
SOURCE
33K
8;K
90K
FRIENDS AGENTS ADVERTISE
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In which sector people wants to invest more
:rivate :ublic3; 13
0 10 20 30 40
PRIVATE
PUBLIC
SECTOR OF INVESTMENT
Series1
*ccording to servey of 50 persons 3; number of people are
interested to invest private companies and 13 people are interested
in the public sector.
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Lhich type of people are interested to invest
"ervice /usiness :rofessional33 8+ 1
33%
26%
41%
SERVICE BUSINESS PROFESSIONAL
*ccording to servey of 100 people 1 number of professionals 33
service holder and 8+ businessmen invest their money in the share
market.
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FINDINGS
6ost of the investors are investing in stock market
Investors are preferring more to online trading than offline
The investors are facing some problems while operating in
computer
Investors are also facing some problems on online software
SUGGESTION
The broking firms and stock e'changes should conduct
more awareness programs for the investors
The broking companies should conduct some training
program for the investor to make them familiar with the
software.
The broking companies should concentrate on their
software while preparing it taking into consideration the
computer illiterate investors.
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CONCLUSION
*fter having the practical knowledge of online trading and the
work of /hubaneswar stock e'change towards investor,s awareness I
am very glad that I got a chance to work in such a wonderful
organiation. I am sincerely grateful to all members of /hubaneswar
stock e'change for allowing me to do summer pro4ect in their
organiation.
/efore concluding I will suggest the investors that whenever you are
going for stock market investment 4ust gain the detail knowledge
about the software of the broking company and the company you are
going to invest.
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BIBILOGRAPHY
1. V.E. Dallah!Investment management! :ublished by
(hand and (ompany AT2. :ublished house ew 2elhi!
13thdition.
+e@%i!e%
000;@%ei"$ia;om
000;"%ei"$ia;om
000;@#%eio"$ioa;om
000;%e@i;/o
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U%"TI$*I)
*6
2.$./
*2)""
($T*(T $6*IA I2
1.Lhich age group of people knows about share
marketM
*. /ellow 80 /. 80!30(. 30!0 2. 0!50
. *bove 50
8. Lhere people want to investM
*. /ank /. Insurance
(. 6utual fund 2. "hare market
3.ow much the monthly income group are investingM
*. /ellow 5000 /. 5000!10000
(. 10000!80000 2. *bove 80000
. ave you any idea about share marketM
*. ?es /. o
5. =rom which source people know about share marketM
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*. =riends /. *gent
(. *dvertisement
+. Lhat is the perception about online tradingM
*. /ad /. *verage
(. -ood 2. 'cellent
;. 2o you like to trade online M
*. ?es
/. o
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