online brokerage

8/4/2019 Online Brokerage

http://slidepdf.com/reader/full/online-brokerage 1/45

PRESENTED BY;

RIGZIN ANGMO

RIYA BISWAS



Traditionally stock trading is done through

stock brokers, personally or through

telephones.

As number of people trading in stock marketincrease enormously in last few years, some

issues like location constrains, busy phone

lines, miss communication etc start growing

in stock broker offices. Information technology (Stock Market

Software) helps stock brokers in solving these

problems with Online Stock Trading.



Stocks (Shares, equity) are traded in stock

exchange. India has two big stock exchanges

(Bombay Stock Exchange - BSE and National

Stock Exchange - NSE) and few smallexchanges like Jaipur Stock Exchange etc.

Investor can trade stocks in any of the stock

exchange in India.



The Bombay Stock Exchange, founded in the1870s, is the oldest stock exchange in Asia.With 6,000 companies listed from everyimaginable industry.

Most Foreign Companies have startedinvesting heavily in the Indian stock marketsand with most industries giving healthyreturns on investments, indications are thatthe markets will continue to

perform above expectations.

India boasts of the third highest

investor base in the world,

unthinkable till a few years ago.



The Bombay Stock Exchange switched to anelectronic trading system in 1995.

It took the exchange only fifty days to make thistransition.

This automated, screen-based trading platformcalled BSE On-line trading (BOLT) currently has acapacity of 8 million orders per day.

The BSE has also introduced the world's firstcentralized exchange-based internet tradingsystem, BSEWEBx.co.in to enable investorsanywhere in the world to trade on the BSEplatform.



•The National Stock Exchange (NSE) is the

world’s third largest stock exchange in

terms of transaction volumes. The NSE is

based out of Mumbai.

•NSE is the largest stock exchange in India in

terms of daily turnover and number of

trades, for both equities and derivative

trading.

National Stock Exchange (NSE) waspromoted by leading financial institutions,

banks, insurance companies and other

financial intermediaries in India.



NSE was set up with the objectives of:

Establishing nationwide trading facility for all

types of securities

Ensuring equal access to investors all over thecountry through an appropriate

telecommunication network

Providing fair, efficient & transparent securities

market using electronic trading system

Enabling shorter settlement cycles and book

entry settlements

Meeting International benchmarks and standards



Electronic trading, sometimes calledetrading, is a method of trading securities (such as stocks, and bonds), foreign currency,

and exchange traded derivatives electronically. It uses information technology to bring together buyers and sellers throughelectronic media to create a virtual market

place.

http://en.wikipedia.org/wiki/Security_(finance)

http://en.wikipedia.org/wiki/Stock

http://en.wikipedia.org/wiki/Bond_(finance)

http://en.wikipedia.org/wiki/Currency

http://en.wikipedia.org/wiki/Derivative_(finance)

http://en.wikipedia.org/wiki/Information_technology

http://en.wikipedia.org/wiki/Information_technology

http://en.wikipedia.org/wiki/Derivative_(finance)

http://en.wikipedia.org/wiki/Currency

http://en.wikipedia.org/wiki/Bond_(finance)

http://en.wikipedia.org/wiki/Stock

http://en.wikipedia.org/wiki/Security_(finance)



Online Stock Market Trading is an internet

based stock trading facility. Investor can

trade shares through a website without any

manual intervention from Stock Broker. In this case these Online Stock Trading

companies are stock broker for the investor .

They are registered with one or more Stock

Exchanges. Mostly Online Trading Websites inIndia trades in BSE and NSE.



The major financial products and services ofthe Online trading in India are like

equities

mutual funds life insurance

general insurance

loans

share trading commodities trading

portfolio management

financial planning.



1. To register with an online trading portal and getinto an agreement with the firm to trade indifferent securities.

2. The order processing is done in correct timingsas the servers of the online trading portal areconnected to the stock exchanges.

3. They can also get updates on the trading andcheck the current status of their orders either

through e-mail or through the interface.

4. Brokerages also provides research content ontheir websites, such that the clients can taketheir own decisions on stocks before investing.



Reduced cost of transactions

Greater liquidity

Greater competitionTighter spreads

Increased transparency



Number of years % practicing e-Trading

1-2 years 68

3-4 years 25

5-6 years 7



METHOD %

Online trading 20

Manual trading 66

Both 14



a) Benefits to the users

b) Benefits to the brokers



1. Lower transaction cost

2. Transparency

3. Convenience

4. Procedural benefits



1. Business potential

2. Easier risk management

3. Lower staff cost



E- broking in India has become increasinglypopular as people from all walks of the society can

easily be a part of the stock market and look aftertheir investments on their own and with a fewsimple clicks of a button.

Those who are in the corporate fields or run a

business of their own and yet want to earn a fewmore extra bucks gladly turn to E- broking in Indiawhich is fast and gives you all the informationrequired irrespective of where you are in the world.



Login on to an electronic communication

network through the internet.

Then user access his e trading account with

the help of secure customer password. After that the user can connected directly

with one or more exchanges and any

transaction would be instantenous or

irrevocable.



Scalabilityof trading

system

E tradingsystem

Integration

with thirdpartysystem

Securitymodel



There are two different type of trading

environments available for online equity

trading

A. Installable software based Stock TradingTerminals

B. Web (Internet) based trading application



These trading environment requires software

to be installed on investors computer. These

software are provided by the stock broker. These software's require high speed internet

connection. This kind of trading terminals

are used by high volume intra day equity

traders.



Orders directly send to stock exchanges

rather then stock broker. This makes order

execution very fast.

It provides almost each and everyinformation which is required to a trader on

a single screen including stock market

charts, live data, alerts, stock market news

etc.



Location constrain - You cannot trade if you

are not on the computer where you have

installed trading terminal software.

It requires high speed internet connection. These trading terminals are not easily

available for low volume share traders.



These kind of trading environment doesn't

require any additional software installation.

They are like other internet websites which

investor can access from around the world

through normal internet connection.



Real time stock trading without calling or visitingbroker's office.

Display real time market watch, historical datas,graphs etc.

Check the trading history; demat accountbalance and bank account balance at any time.

Provide online tools like market watch, graphsand recommendations to do analysis of stocks.

Place offline orders for buying or selling stocks.

Set alert to inform you certain activity on thestock through email or sms.

Customer service through Email or Chat.

Secure transactions.



Website performance - sometime the website

is too slow or not enough user friendly.

Little long learning curve especially for

people who doesn't know much aboutcomputer and internet.

Brokerages are little high.



Internet stock-trading in India is a recentphenomenon and began as recently asJanuary 2000.

Although there are more than 40 e-brokers,the industry is still in a nascent stage asonline trades account for merely Rs.700million, which is a negligible percentage of the

total stock trade.The leading e-brokers in the Indian markets

are ICICIDirect, india bulls, motilalOswal, 5PAISA, etc.



1. ICICIDirect

2. Sharekhan

3. Indiabulls

4. 5PaisaMotilal

5. Oswal Securities6. HDFC SecuritiesReliance

7. IDBIPaisaBuilder

8. Religare

9. Geojit

10. Networth Stock Broking11. Kotak Securities

12. Standard Chartered-STCI Capital Markets Ltd

13. Angel Trade

14. HSBC InvestDirect



1. Ask for Demo: Contact the broker who

provide online trading service and ask him

to give you a demo of product.

2. Check if the broker trades in multiple stockexchanges. Usually most of the Online

Trading Websites trade in NSE and BSE in

India.

3. Check the integration of Brokerageaccount, Demat account and Bank account.

4. Compare brokerages with other peer

companies.



1. Proof of residence (Address proof)Driving license Voter's ID

Passport

Photo credit card

Photo ration card Utility Bill (Telephone, Electricity etc)

Bank Statement

2. Proof of identity

Driving license

Voter's ID Passport

Photo ration card

3. PAN Card

4. Two photographs



The magic trading which is supposedlypossible through the mechanism of E-Tradingis a long way to materialize. It is has notspread its wing on the Indian soils. In fact,

there are lots of practical limitations for the*E-Trading* to gain momentum.

1. Rupee Not Ready In fact the basicrequirements for the working of E-Trading is

the full convertibility of rupee.Unfortunately, the Indian rupees is yet tobecome fully convertible. This is a singlemost crucial handicap facing the globalelectronic trading by companies in India.



2. In India, although electronic funds

transfer take place, this is done within the

frontiers of the country. Banking System Not

Ready Banking system is not prepared to

facilitate the working of global trading. Since

banks occupy a pivotal role in the mechanism

of international trade.



3. It is important that they must be

position to facilitate the electronic and

paperless trade at the global level. Laws of

land is Not Ready The existing legislations

governing the e- banking operations require

the recording and presentation of evidence

of payments in physical form. These laws

such as laws of evidence, criminal laws, the

central excise and direct tax laws do not

recognize completely the electronic funds

especially at global level.



4. Infrastructure Not Ready Although,

Reserve Bank of India is committed in

providing excellence in banking services by

way of adopting e-banking or e-commerce

facilities but adequate step have not yet

been taken to create, maintain and

strengthen the infrastructure like

international communication facilities.



5. The low density of telephones, low Internetpenetration, and low installed base of computers are responsible for the poor availability of theInternet.

6. Very few online payment gateways are available,hindering the smooth growth of the industry.

7. Fifth, the concept of trading on computers throughthe Internet requires a change in the habits ofpeople; enhancing trust in these techniques may

take more time.



Barriers %

Lack of Security 21

Lack of Privacy 11

Inadequate E-Payment facilities 10

Lack of Computer literacy 8

Lack of IT infrastructure 14

Lack of IT-skilled personnel 4.5

Lack of appropriate laws relatedto ecommerce

11.5

Preference for face-to-facetransaction

20



Current Web-based electronic commerce

systems are lacking in efficient electronic

brokerage.

However, brokerage plays an important rolein many electronic commerce transactions.

Over the past few years significant research

has been done in the area of electronic

commerce, based on distributed objecttechnology.

online brokerage

Documents