Trading in Stock (SHIKHAR)

PROJECT REPORT
ON
COMPARATIVE STUDY BETWEEN

ONLINE SHARE TRADING AND
OFFLINE SHARE TRADING
Towards partial fulfillment of
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
DEPARTMENT OF FINANCE AND CONTROL

SUBMITTED TO:
SUBMITTED BY:
ANKITA AGARWAL
SHIKHAR GUPTA
Roll No. 121201010053
ARYAKUL COLLEGE OF EDUCATION

LUCKNOW
COMPARATIVE STUDY BETWEEN ONLINE SHARE TRADING AND OFFLINE SHARE TRADING
ACKNOWLEDGEMENT
Every work constitutes great deal of assistance and guidance from the people concerned and
this particular project is of no exception.
A project of the nature is surely a result of tremendous support, guidance, encouragement and
help.
Wish to place on record my sincere gratitude to _____________ and the entire faculty of our
department. I thank them for their constructive help and encouragement throughout the
project. Without their support and guidance taking this would not have been possible.
Also, wish to acknowledge enthusiastic encouragement and support extended to me by my
family members. At last, I would like to thank all the faculty of business management to help
me completing this project.
I am also thankful to my friends who provided me their constant support and assistance.
SHIKHAR GUPTA
Roll No.: 121201010053
SHIKHAR GUPTA, Roll No.: 121201010053
DECLARATION
I do hereby declare that the research report titled COMPARATIVE
COMPARATIVE STUDY BETWEEN
ONLINE SHARE TRADING AND OFFLINE SHARE TRADING
TRADING submitted by me in
partial fulfillment of the requirement of Bachelor of Business Administration, exclusively
prepared and conceptualized by me and is not submitted to any other Institution or University
or published anywhere before for the reward of any Degree/Diploma/Certificate. It is the
Original work of mine and has not been obtained from any other part.
SHIKHAR GUPTA
Roll No.: 121201010053
TABLE OF CONTENT
ACKNOWLEDGEMENT
DECLARATION
EXECUTIVE SUMMARY
INTRODUCTION
STOCK EXCHANGES
STOCK BROKER
STOCK TRADING
COMPANY PROFILE
OBJETIVE OF THE STUDY
RESEARCH METHODOLOGY
DATA ANALYSIS
FINDINGS
CONCLUSION
RECOMMENDATIONS
LIMITATION
ANNEXURE
o
QUETIONNAIRE
BIBLIOGRAPHY
EXECUTIVE SUMMARY
The methodological approach to this study is descriptive, because we attempt to identify and
explain variables that exist in a given situation and to describe the relationship that exists
between these variables in order to provide a picture of a particular phenomenon, but not to
ferret out cause-effect relationship. The primary data was collected through questionnaire
filling and by conducting telephonic interviews. The secondary data was collected from
journals, texts written by renowned marketing gurus of reputed institutes around the world
and the internet.
India has a large chunk of population which is at lower income level and at middle income
level. There is a need of creating awareness among them for share trading and the tremendous
potential it has. They are doing trading on the old methods which were used in the past. Now
with the advent of technology there are many options available to the traders which they can
use without any fear. The trend is moving towards the online share trading but still it has a lot
to cover. The traders are more of young age and middle age and dont fear from risk taking
but the lack of knowledge doesnt allows them to do so. So the stock broking companies
should take measures to empower the normal investors so that they can trade with the latest
technologies available.
Target the youth as they are most potential customers of the stock market as their interest
towards stock trading is increasing. The stock broking companies should educate the
investors by giving them timely help in the form of reports and tips. The companies should
try to work in more transparent way. People want good services and are ready for paying
extra penny. People prefer Ease of transactions and security. So, brokerage companies should
focus on security and making transactions as simple as possible with simple usage of
technology. The stock broking companies should also go for tie-ups with the leading banks.
INTRODUCTION
INTRODUCTION
A STOCK MARKET is a private or public market for the trading of company stock and
derivatives of company stock at an agreed price; both of these are securities listed on a stock
exchange as well as those only traded privately.
Participants in the stock market range from small individual stock investors to large hedge
fund traders, who can be based anywhere. Their orders usually end up with a professional at a
stock exchange, who executes the order.
Some exchanges are physical locations where transactions are carried out on a trading floor,
by a method known as open outcry. This type of auction is used in stock exchanges and
commodity exchanges where traders may enter "verbal" bids and offers simultaneously. The
other type of exchange is a virtual kind, composed of a network of computers where trades
are made electronically via traders.
Actual trades are based on an auction market paradigm where a potential buyer bids a
specific price for a stock and a potential seller asks a specific price for the stock. (Buying or
selling at market means you will accept any ask price or bid price for the stock, respectively.)
When the bid and ask prices match, a sale takes place on a first come first served basis if
there are multiple bidders or askers at a given price.
In India there are many stock exchange are working. But out those many two are the most
important and carries the maximum amount of the business these are two stock exchanges are
NSE and BSE.
STOCK MARKET
Stock exchange or bourse is a corporation or mutual organization which provides facilities
for stock brokers and traders, to trade company stocks and other securities. Stock exchanges
also provide facilities for the issue and redemption of securities, as well as, other financial
instruments and capital events including the payment of income and dividends.
The securities traded on a stock exchange include: shares issued by companies, unit trusts and
other pooled investment products and Bonds. To be able to trade a security on a certain stock
exchange, it has to be listed there.
Usually there is a central location at least for recordkeeping, but trade is less and less linked
to such a physical place, as modern markets are electronic networks, which gives them
advantages of speed and cost of transactions. Trade on an exchange is by members only.
A stock exchange is often the most important component of a stock market. There is usually
no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently
traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is
the usual way that Bonds are traded.
The initial offering of stocks and bonds to investors is by definition done in the primary
market and subsequent trading is done in the secondary market.
Increasingly more and more stock exchanges are part of a global market for securities.
Supply and demand in stock a market is driven by various factors which, as in all free
markets, affect the price of stocks (see stock valuation). Although common, the term 'the
stock market' is a somewhat abstract concept for the mechanism that enables the trading of
company stocks. It is also used to describe the totality of all stocks and sometimes other
securities, with the exception of bonds, commodities, and derivatives. The term is used
especially to apply within one country as, for example, in the phrase "the stock market was
up today", or in the term "stock market bubble". Bonds are still traditionally traded in an
informal, over-the-counter) market known as the bond market. Commodities are traded in
commodities markets, and derivatives are traded in a variety of markets (but, like bonds,
mostly 'over-the-counter').
The stock market is distinct from a stock exchange, which is an entity (a corporation or
mutual organization) in the business of bringing buyers and sellers of stocks and securities
together. For example, 'the stock market' in the United States includes the trading of all
securities listed on the NYSE, the NASDAQ, the Amex, as well as on the many regional
exchanges, the OTCBB, and Pink Sheets. European examples of stock exchanges include the
Paris Bourse (now part of Euro next), the London Stock Exchange and the Deutsche Brse.
STOCK EXCHANGE:The stock exchange is the important segment of its capital market. If the stock exchange is
well-regulated function smoothly, then it is an indicator of healthy capital market. If the
state of the stock exchange is good, the overall capital market will grow and otherwise it
can suffer a great set back which is not good for the country. The government at various
stages controls the stock market and the capitals market.
A capital market deals in financial assets, excluding coin and currency. Banking accounts
compromises the majority of financial assets. Pension and provident funds insurance policies
shares and securities. Financial assets are claim of holders over issuer (business firms and
governments). They enter low different segment of financial market. Those having short
maturities that are non transferable like bank savings and current accounts set the
identification of the monetary financial assets. This market is known as money market,
Equity, Preferential shares and bonds and debentures issued by companies and securities
issued by the government constitute the financial assets, which are traded in the capital
market.
MONEY MARKET AND CAPITAL MARKET:Both money market and capital market constitute the financial market. Capital market
generally known as stock exchange. This is a institution around which every activity of
national capital market revolves. Through the medium stock exchange the investor gets on
impetus and motivations to invest in securities without which they would not be able to
liquidate the securities. If there would have been no stock exchange many of the savers would
have hold their saving either in cash i.e. idle or in bank with low interest rate or low returns.
The stock exchange provides the opportunity to investors for the continuous trading in
securities. It is continuously engaged in the capital mobilization process.
Another consequence of non-existence of stock exchange would have been low saving of the
community, which means low investment and lower development of the country.
S
Securities provide for investor.
Tax Benefits planning and exemption.
Optimum return on investment.
Cautious Approach.
Knowledge of Market.
Ex
Exchange of Securities Transacted.
Cyclopedia of Listed Companies.
High Yield.
Authentic Information
New Entrepreneur encouraged.
Guidance of Investor & Company.
Equity
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HISTORY OF THE STOCK MARKET

In 12th century France the courratiers de change were concerned with managing and
regulating the debts of agricultural communities on behalf of the banks. As these men also
traded in debts, they could be called the first brokers. Some stories suggest that the origins of
the term "bourse" come from the Latin bursa meaning a bag because, in 13c. Bruges, the sign
of a purse (or perhaps three purses), hung on the front of the house where merchants met.
However, it is more likely that in the late 13th century commodity traders in Bruges gathered
inside the house of a man called Van der Burse, and in 1309 they institutionalized this until
now informal meeting and became the "Bruges Bourse". The idea spread quickly around
Flanders and neighboring counties and "Bourses" soon opened in Ghent and Amsterdam.
In the middle of the 13th century Venetian bankers began to trade in government securities. In
1351 the Venetian Government outlawed spreading rumors intended to lower the price of
government funds. There were people in Pisa, Verona, Genoa and Florence who also began
trading in government securities during the 14th century.
This was only possible because these were independent city states not ruled by a duke but a
council of influential citizens. The Dutch later started joint stock companies, which let
shareholders invest in business ventures and get a share of their profits - or losses. In 1602,
the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. It
was the first company to issue stocks and bonds.
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PREDOMINANT FUNCTION OF STOCK MARKET

RAISING CAPITAL FOR BUSINESSES
The Stock Exchange provides companies with the facility to raise capital for expansion
through selling shares to the investing public.
MOBILIZING SAVINGS FOR INVESTMENT
When people draw their savings and invest in shares, it leads to a more rational allocation of
resources because funds, which could have been consumed, or kept in idle deposits with
banks, are mobilized and redirected to promote business activity with benefits for several
economic sectors such as agriculture, commerce and industry, resulting in a stronger
economic growth and higher productivity levels.
FACILITATE COMPANY GROWTH
Companies view acquisitions as an opportunity to expand product lines, increase distribution
channels, hedge against volatility, increase its market share, or acquire other necessary
business assets. A takeover bid or a merger agreement through the stock market is the
simplest and most common way to company growing by acquisition or fusion.
REDISTRIBUTION OF WEALTH
By giving a wide spectrum of people a chance to buy shares and therefore become partowners (shareholders) of profitable enterprises, the stock market helps to reduce large income
inequalities. Both casual and professional stock investors through stock price rise and
dividends get a chance to share in the profits of promising business that were set up by other
people.
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CORPORATE GOVERNANCE
By having a wide and varied scope of owners, companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders
and the more stringent rules for public corporations by public stock exchanges and the
government. Consequently, it is alleged that public companies (companies that are owned by
shareholders who are members of the general public and trade shares on public exchanges)
tend to have better management records than privately-held companies (those companies
where shares are not publicly traded, often owned by the company founders and/or their
families and heirs, or otherwise by a small group of investors). However, some welldocumented cases are known where it is alleged that there has been considerable slippage in
corporate governance on the part of some public companies
CREATES INVESTMENT OPPORTUNITIES FOR SMALL INVESTORS
As opposed to other businesses that require huge capital outlay, investing in shares is open to
both the large and small stock investors because a person buys the number of shares they can
afford. Therefore the Stock Exchange provides an extra source of income to small savers.
GOVERNMENT RAISES CAPITAL FOR DEVELOPMENT PROJECTS
The Government and even local authorities like municipalities may decide to borrow money
in order to finance huge infrastructure projects such as sewerage and water treatment works
or housing estates by selling another category of securities known as bonds. These bonds can
be raised through the Stock Exchange whereby members of the public buy them. When the
Government or Municipal Council gets this alternative source of funds, it no longer has the
need to overtax the people in order to finance development.
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IMPORTANCE OF STOCK MARKETS

FUNCTION AND PURPOSE:
Just as it is important that networks for transport, electricity and telecommunications function
properly, so is it essential that, for example, payments can be transacted, capital can be saved
and channeled to the most profitable investment projects and that both households and firms
get help in handling financial uncertainty and risk as well as possibilities of spreading
consumption over time. Financial markets constitute an important part of the total
infrastructure for every society that has passed the stage of largely domestic economies.
The financial system performs three main tasks: firstly, it handles transfer of payments;
secondly, it channels savings to investments with a good return for future consumption; and
thirdly, it spreads and reduces (local enterprise) economic risks in relation to the players'
targeted returns (but note that systemic risk is not thereby reduced it merely becomes less
concentrated and uneven). Moreover, unforeseen risks, or catastrophic risks (such as the
complete collapse of the financial system or government institutions), may not be capable of
being spread, or insured against.
The smooth functioning of all these activities facilitates economic growth in that lower costs
and enterprise risks promote the production of goods and services as well as employment. In
this way the financial system contributes to increased prosperity.
The stock market is one of the most important sources for companies to raise money.
Experience has shown that the price of shares and other assets is an important part of the
dynamics of economic growth. Rising share prices, for instance, tend to be associated with
increased business investment and vice versa. Share prices also affect the wealth of
households and their consumption. Therefore, central banks tend to keep an Argus eye on the
control and behavior of the stock market and, in general, on the smooth operation financial
system functions. Financial stability is the raison d'tre of central banks.
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WELL KNOWN STOCK EXCHANGES

This is a list of stock exchanges that offers trading in securities besides trading in future
contracts are :
New York Stock Exchange
Tokyo Stock Exchange
NASDAQ
London stock Exchange
Euro next
Toronto Stock Exchange
Frankfurt Stock Exchange
Hong Kong Stock Exchange
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16
STOCK EXCHANGES
17
BOMBAY STOCK EXCHANGE
Bombay Stock Exchange, commonly referred to as the BSE, (Bombay hare Bzar) is
a stock exchange located on Dalal Street, Mumbai, Maharashtra, India. It is the 10th largest
stock exchange in the world by market capitalization. Established in 1875, BSE Ltd.
(formerly known as Bombay Stock Exchange Ltd.), is Asias first Stock Exchange and one of
Indias leading exchange groups. Over the past 137 years, BSE has facilitated the growth of
the Indian corporate sector by providing it an efficient capital-raising platform. Popularly
known as BSE, the bourse was established as "The Native Share & Stock Brokers'
Association" in 1875.
BSE is a corporatized and demutualised entity, with a broad shareholder-base which includes
two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic
partners. BSE provides an efficient and transparent market for trading in equity, debt
instruments, derivatives, mutual funds. It also has a platform for trading in equities of smalland-medium enterprises (SME). Around 5000 companies are listed on BSE making it world's
No. 1 exchange in terms of listed members. The companies listed on BSE Ltd command a
total market capitalization of USD Trillion 1.2 as of October 31, 2012. BSE Ltd is world's
fifth most active exchange in terms of number of transactions handled through its electronic
trading system. It is also one of the worlds leading exchanges (3rd largest in July 2012) for
Index options trading.
BSE also provides a host of other services to capital market participants including risk
management, clearing, settlement, market data services and education. It has a global reach
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with customers around the world and a nation-wide presence. BSE systems and processes are
designed to safeguard market integrity, drive the growth of the Indian capital market and
stimulate innovation and competition across all market segments. BSE is the first exchange in
India and second in the world to obtain an ISO 9001:2000 certifications. It is also the first
Exchange in the country and second in the world to receive Information Security
Management System Standard BS 7799-2-2002 certification for its On-Line trading System
(BOLT).
It operates one of the most respected capital market educational institutes in the country (the
BSE Institute Ltd.). BSE also provides depository services through its Central Depository
Services Ltd. (CDSL) arm.
BSEs popular equity index - the S&P BSE SENSEX [Formerly SENSEX] - is India's most
widely tracked stock market benchmark index. It is traded internationally on the EUREX as
well as leading exchanges of the BRCS nations (Brazil, Russia, China and South Africa). On
Tuesday, 19 February 2013 BSE has entered into Strategic Partnership with S&P DOW
JONES INDICES and the SENSEX has been renamed as "S&P BSE SENSEX".
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HISTORY OF BSE
For the premier stock exchange that pioneered the securities transaction business in India,
over a century of experience is a proud achievement. A lot has changed since 1875 when 318
persons by paying a then princely amount of Re. 1, became members of what today is called
Bombay Stock Exchange Limited (BSE).
Over the decades, the stock market in the country has passed through good and bad periods.
The journey in the 20th century has not been an easy one. Till the decade of eighties, there
was no measure or scale that could precisely measure the various ups and downs in the Indian
stock market. BSE, in 1986, came out with a Stock Index-SENSEX- that subsequently
became the barometer of the Indian stock market.
The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of
BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major stock
exchanges in India - Mumbai, Calcutta, Delhi, Ahmadabad and Madras. The BSE National
Index was renamed BSE-100 Index from October 14, 1996 and since then, it is being
calculated taking into consideration only the prices of stocks listed at BSE. BSE launched the
dollar-linked version of BSE-100 index on May 22, 2006.
With a view to provide a better representation of the increasing number of listed companies,
larger market capitalization and the new industry sectors, BSE launched on 27th May, 1994
two new index series viz., the 'BSE-200' and the 'DOLLEX-200'. Since then, BSE has come a
long way in attuning itself to the varied needs of investors and market participants. In order to
fulfill the need for still broader, segment-specific and sector-specific indices, BSE has
continuously been increasing the range of its indices. BSE-500 Index and 5 sect oral indices
were launched in 1999. In 2001, BSE launched BSE-PSU Index, DOLLEX-30 and the
country's first free-float based index - the BSE TECk Index. Over the years, BSE shifted all
its indices to the free-float methodology.
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Some Risk management are also taken by BSE they are as follows
1.
Know your client scheme
Under the procedure the member brokers of the exchange are compulsory required to obtain
detailed information of clients prior to commencement of any transactions with new clients.
A similar procedure is also to be followed for existing clients. This information is to be made
available to the exchange authorities whenever called for. In case the member broker fails to
furnish the same it is viewed seriously.
2.
Verification of shares at members office
The exchange has outlined the process i.e. in case the transaction in a script with one
particular client in a settlement exceeds Rs 10 laks then the member are to send the
photocopies of the transfer deeds and the share certificates to the company/ registrar for
verification of the material particulars. The basic idea behind the introduction of this
procedure is to prevent fake/forged/stolen shares from being introduced in the market.
3.
Inspection
The department is carrying out inspection of the member brokers records as regards
compliance of the risk management procedures
4.
Insurance
The exchange presently has in place insurance policies to protect itself in the event of losses
on account of fire, damage to computer systems and a comprehensive policy that covers risks
faced by the exchange, its member brokers and the clearinghouse.
The risks covered under the basic cover of the policy are detailed as below.
-
Loss to members on account of infidelity of employees.
Loss of member on account of fake/forged/ stolen shares being introduced by his
clients.
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Direct financial losses suffered by the member broker on account of physical loss,
destruction, theft or damage to securities and cash.

-
Loss on account of securities lost in transit.
Loss suffered on account of incomplete transaction.
Loss sustained as final receiving member on exchange on account of default of the
introducing member.
-
Loss on account of errors and omission.
Directors and officials liability cover.
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NATIONAL STOCK EXCHANGE OF INDIA
The National Stock Exchange (NSE) is stock exchange located at Mumbai, India. It is
the 11th largest stock exchange in the world by market capitalization and largest in India by
daily turnover and number of trades, for both equities and derivative trading. NSE has a
market capitalization of around US$1 trillion and over 1,652 listings as of July 2012. Though
a number of other exchanges exist, NSE and the Bombay Stock Exchange are the two most
significant stock exchanges in India, and between them are responsible for the vast majority
of share transactions. The NSE's key index is the S&P CNX Nifty, known as the
NSE NIFTY (National Stock Exchange Fifty), an index of fifty major stocks weighted by
market capitalisation.
NSE is mutually owned by a set of leading financial institutions, banks, insurance companies
and other financial intermediaries in India but its ownership and management operate as
separate entities.[4] There are at least 2 foreign investors NYSE Euronext and Goldman
Sachs who have taken a stake in the NSE. [5] As of 2006, the NSE VSAT terminals, 2799 in
total, cover more than 1500 cities across India. In 2011, NSE was the third largest stock
exchange in the world in terms of the number of contracts (1221 million) traded in equity
derivatives. It is the second fastest growing stock exchange in the world with a recorded
growth of 16.6%.
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ORIGINS
The National Stock Exchange of India was set up by Government of India on the
recommendation
of Pherwani
Committee
in 1991.Promoted
by leading Financial
institutions essentially led by IDBI at the behest of the Government of India, it was
incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as
a stock exchange under the Securities Contracts (Regulation) Act, 1956. NSE commenced
operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital
market (Equities) segment of the NSE commenced operations in November 1994, while
operations in the Derivatives segment commenced in June 2000.
OBJECTIVES
Establishing nationwide trading facilities for all types of securities.
Ensuring equal access to investors all-over the country through an appropriate

communication network.
Meeting international benchmarks and standards.
Enabling shorter settlement cycles and book entry settlements.
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MARKETS
Currently, NSE has the following major segments of the capital market:
EQUITIES
Equities
Indices
Mutual Funds
Exchange Traded Funds
Initial Public Offerings
Security Lending and Borrowing Scheme
DERIVATIVES
Equity Derivatives (including Global Indices like S&P 500, Dow Jones and FTSE )
Currency Derivatives
Interest Rate Futures
DEBT
Retail Debt Market
Wholesale Debt Market
Corporate Bonds
Equity Derivatives The National Stock Exchange of India Limited (NSE) commenced trading
in derivatives with the launch of index futures on June 12, 2000. The futures and options
segment of NSE has made a mark for itself globally. In the Futures and Options segment,
trading in S&P CNX Nifty Index, CNX IT index, Bank Nifty Index, Nifty Midcap 50 index
and single stocks are available. Trading in Mini Nifty Futures & Options and Long term
25
Options on S&P CNX Nifty are also available. The average daily turnover in the F&O
Segment of the Exchange during 2009-10 was ` 72,392 crore (US $ 16,097 million)
On August 29, 2011, National Stock exchange launced derivative contracts on the worlds
most followed equity indices, the S&P 500 and the Dow Jones Industrial Average. This was
the first time that derivative contracts on global indices are available in India. This is the also
the first time in the world that futures contracts on the S&P 500 index were introduced and
listed on an exchange outside of their home country, USA. The new contracts include futures
on both the DJIA and the S&P 500, and options on the S&P 500. The first day volumes at the
close of trading on August 29, 2011 at 3.30 pm, on the 2 indices in futures and options
contracts was nearly Rs 122 crores (1220 million).
On May 3, 2012,The National Stock exchange launched derivative contracts (futures and
options) on FTSE 100, the widely tracked index of the UK equity stock market. This was the
first of its kind for an index of the UK equity stock market to be launched in India. FTSE 100
includes 100 largest UK listed blue chip companies and has given returns of 17.8 per cent on
investment over three years. The index constitutes 85.6 per cent of UKs equity market cap.
NSE recorded a volume of 500 crores (5000 million) on the 1st day of trading.
Currency Derivatives In August 2008 currency derivatives were introduced in India with the
launch of Currency Futures in USD INR by NSE. It also added currency futures in euros,
pounds and yen. Interest Rate Futures were introduced for the first time in India by NSE on
31 August 2009, exactly one year after the launch of Currency Futures.
Debt Market NSE became the first stock exchange to get approval for interest rate futures, As
recommended by SEBI-RBI committee, on 31 August 2009, a futures contract based on 7%
10 Year Government of India (Notional) was launched with quarterly maturities.
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S&P CNX NIFTY

The CNX Nifty, also called the Nifty 50 or simply the Nifty, is a stock market index and
benchmark index for Indian equity market. Nifty is owned and managed by India Index
Services and Products Ltd. (IISL), which is a joint venture between NSE and CRISIL (Credit
Rating and Information Services of India Ltd). IISL is India's first specialized company
focused upon the index as a core product. IISL has a marketing and licensing agreement
with Standard & Poor's for co-branding equity indices. 'CNX' in its name stands for 'CRISIL
NSE Index'.
CNX Nifty has shaped up as the largest single financial product in India, with an ecosystem
comprising: exchange traded funds (onshore and offshore), exchange-traded futures and
options (atNSE in India and at SGX and CME abroad), other index funds and OTC
derivatives (mostly offshore).
The CNX Nifty covers 22 sectors of the Indian economy and offers investment managers
exposure to the Indian market in one portfolio. The CNX Nifty stocks represents about
67.27% of the free float market capitalization of the stocks listed at National Stock
Exchange (NSE) as on September 30, 2012.
The CNX Nifty index is a free float market capitalisation weighted index. The index was
initially calculated on full market capitalisation methodology. From June 26, 2009, the
computation was changed to free float methodology. The base period for the CNX Nifty
index is November 3, 1995, which marked the completion of one year of operations of NSE's
Capital Market Segment. The base value of the index has been set at 1000, and a base capital
of Rs 2.06 trillion. The CNX Nifty Index was developed by Ajay Shah and Susan Thomas.
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SENSEX & THE NIFTY

The SENSEX is an "index". What is an index? An index is basically an indicator. It gives you
a general idea about whether most of the stocks have gone up or most of the stocks have gone
down.
The SENSEX is an indicator of all the major companies of the BSE.
The Nifty is an indicator of all the major companies of the NSE.
If the SENSEX goes up, it means that the prices of the stocks of most of the major companies
on the BSE have gone up. If the SENSEX goes down, this tells you that the stock price of
most of the major stocks on the BSE have gone down.
Just like the SENSEX represents the top stocks of the BSE, the Nifty represents the top
stocks of the NSE.
Just in case you are confused, the BSE is the Bombay Stock Exchange and the NSE is the
National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi.
These are the major stock exchanges in the country. There are other stock exchanges like the
Calcutta Stock Exchange etc. but they are not as popular as the BSE and the NSE.Most of the
stock trading in the country is done though the BSE & the NSE.
Besides SENSEX and the Nifty there are many other indexes. There is an index that gives
you an idea about whether the mid-cap stocks go up and down. This is called the BSE Midcap Index.
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ROLE OF STOCK EXCHANGES

Stock exchanges have multiple roles in the economy, this may include the following:
1. Raising capital for businesses
The Stock Exchange provides companies with the facility to raise capital for expansion
through selling shares to the investing public.
2. Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational allocation of
resources because funds, which could have been consumed, or kept in idle deposits with
banks, are mobilized and redirected to promote business activity with benefits for several
economic sectors such as agriculture, commerce and industry, resulting in stronger economic
growth and higher productivity levels and firms.
3. Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution
channels, hedge against volatility, increase its market share, or acquire other necessary
business assets. A takeover bid or a merger agreement through the stock market is one of the
simplest and most common ways for a company to grow by acquisition or fusion.
4. Redistribution of wealth
Stock exchanges do not exist to redistribute wealth. However, both casual and professional
stock investors, through dividends and stock price increases that may result in capital gains,
will share in the wealth of profitable businesses.
5. Corporate governance
By having a wide and varied scope of owners, companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders
and the more stringent rules for public corporations imposed by public stock exchanges and
29
the government. Consequently, it is alleged that public companies (companies that are owned
by shareholders who are members of the general public and trade shares on public exchanges)
tend to have better management records than privately-held companies (those companies
where shares are not publicly traded, often owned by the company founders and/or their
families and heirs, or otherwise by a small group of investors). However, some welldocumented cases are known where it is alleged that there has been considerable slippage in
corporate governance on the part of some public companies. The dot-com bubble in the early
2000s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate
mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel
(2001), Sunbeam (2001), Web van (2001), Adelphia (2002), MCI WorldCom (2002),
Parmalat (2003), American International Group (2008), Lehman Brothers (2008), and Satyam
Computer Services (2009) were among the most widely scrutinized by the media.
7. Creating investment opportunities for small investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to
both the large and small stock investors because a person buys the number of shares they can
afford. Therefore the Stock Exchange provides the opportunity for small investors to own
shares of the same companies as large investors.
8. Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to finance infrastructure
projects such as sewage and water treatment works or housing estates by selling another
category of securities known as bonds. These bonds can be raised through the Stock
Exchange whereby members of the public buy them, thus loaning money to the government.
The issuance of such bonds can obviate the need to directly tax the citizens in order to
finance development, although by securing such bonds with the full faith and credit of the
government instead of with collateral, the result is that the government must tax the citizens
30
or otherwise raise additional funds to make any regular coupon payments and refund the
principal when the bonds mature.
9. Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share
prices tend to rise or remain stable when companies and the economy in general show signs
of stability and growth. An economic recession, depression, or financial crisis could
eventually lead to a stock market crash. Therefore the movement of share prices and in
general of the stock indexes can be an indicator of the general trend in the economy.
31
MANAGEMENT OF STOCK EXCHANGE

Management of stock exchange is done an elected body of members. These bodies are
known by different names in different stock exchange for example, the BOMBAY, INDORE
and AHEMDABAD stock exchange are managed by a governing board. Council of
management governs the MADRAS stock exchange. A committee manages the CALCUTTA
stock exchange while the board of director manages stock exchange.
These governing bodies are powerful bodies enjoying extensive administrative power of
management and control over their respective stock exchange the day-to-day function of the
stock exchanges are executed by the sub-committee like the defaulters committee listing
committee, settlement committee etc.
32
SEBI: SECURITIES AND EXCHANGE BOARD OF INDIA
SEBI Bhavan, Mumbai Headquarters of SEBI

ORGANIZATION DETAILS
Headquarters
Mumbai, Maharashtra, India
Established
1992
Jurisdiction
India
Head
Chairman
Chairman
Upendra Kumar Sinha
Term
February 18, 2011 -
Total Staff[1] 525

OFFICIAL WEBSITE
Website
www.sebi.gov.in
SEBI is the Regulator for the Securities Market in India. Originally set up by the Government
of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the
Indian Parliament. Chaired by Upendra Kumar Sinha, SEBI is headquartered in the popular
business district of Bandra-Kurla complex in Mumbai, and has Northern, Eastern, Southern
and Western regional offices in New Delhi, Kolkata, Chennai and Ahmadabad.
33
FUNCTIONS AND RESPONSIBILITIES OF SEBI:

SEBI has to be responsive to the needs of three groups, which constitute the market:
The issuers of securities
The investors
The market intermediaries.
SEBI has three functions rolled into one body quasi-legislative, quasi-judicial and quasiexecutive. It drafts regulations in its legislative capacity, it conducts investigation and
enforcement action in its executive function and it passes rulings and orders in its judicial
capacity. Though this makes it very powerful, there is an appeals process to create
accountability. There is a Securities Appellate Tribunal which is a three member tribunal and
is presently headed by a former Chief Justice of a High court - Mr. Justice NK Sodhi. A
second appeal lies directly to the Supreme Court.
SEBI has enjoyed success as a regulator by pushing systemic reforms aggressively and
successively (e.g. the quick movement towards making the markets electronic and paperless
rolling settlement on T+2 bases). SEBI has been active in setting up the regulations as
required under law.
34
STOCK BROKERS
35
STOCK BROKERS
SEBI registered stock - brokers interested in providing Internet based trading services will be
required to apply to the respective stock exchange for a formal permission. The stock
exchange should grant approval or reject the application as the case may be, and
communicate its decision to the member within thirty calendar days of the date of completed
application submitted to the exchange.
The Exchange closely monitors outstanding position of top buying member-brokers and top
selling member-brokers on a daily basis. For this purpose, it has developed various market
monitoring reports based on certain pre-set parameters. These reports are scrutinized by
officials of the Surveillance Dept. to ascertain whether a member-broker has built up
excessive purchase or sale position compared to his normal level of business. Further, it is
examined whether purchases or sales are concentrated in one or more scrips, whether the
margin cover is adequate, whether transactions have been entered into on behalf of
institutional clients and even the quality of scrips, i.e., liquid or illiquid is looked into in order
to assess the quality of exposure. The Exchange also scrutinizes the pay-in position of the
member-brokers and the member-brokers having larger funds pay-in positions are at times, at
the discretion of the Exchange, required to make advance pay-in on T+1 day instead of on
T+2 day.
BASIC REQUIREMENTS FOR STOCK BROKERS
Trading will be on existing stock exchanges through order routing system for execution of
trades. Therefore, stockbrokers are to comply with the following before the start of trade on
Internet.
1.
The broker must have a net worth of Rs. 50 lakh if he wants to avail the facility of
Internet for his own.
36
2.
Provision for maintenance of adequate back up system.
3.
The software system to be used by him should be secured and reliable.
4.
To employ the qualified staff for this purpose.
5.
To send order/trade confirmation to the client also through e-mail.
6.
The contract notes must be issued to the clients as per existing regulation within 24
hours of the execution of trades.
7.
The broker and his client should use authentication technologies.
The above are some of the important pre-requisites for the stockbroker should intend to take
benefits of trading on Internet. However, detailed guidelines issued by the SEBI for the stock
exchange
37
KINDS OF STOCK BROKERS

1. Commission Broker:Near about all the brokers buy and sell securities for earning a commission for investor point
of view he is the most important person and responsibility is to buy and sell stoke for his
customer. It means that he acts as an agent of investor and earns commission for his services
rendered. The broker is also an independent dealer in securities. He purchases and sells
securities in his own name but he is not allowed to deal with non-member.
2. Jobber:He is a professional speculator who works for a profit called turn he makes a continuous
auction in the market in the stoke in which he specialized. He trades in the market evens for
small difference in the prices and helps to maintain liquidity in the stoke exchange.
3. Floor Broker:The floor broker buys and sells shares for the other broker on the floor of the exchange. He is
an individual member owns his seat and receives his own commission on the orders he
execute. He helps other brokers when they are buy and as compensation receives a portion
the broker.
4. Odd lit dealer:For trading in stock exchange there a certain number of share a fixed to be transacted in a lot,
this is known as round lat which is usually a, 100 share a. Any thing less than the round lot
are add lot. If a person is in possession of add lot of share i.e. 10, 20, 30, 40 etc. They he will
has to look for the add lot dealer.
38
5. Budliwala:He is the person who finance or provide credit facilities to the market for this service he
charges a fees called contango or backwardation charges. The budliwala gives a fully secured
loan for period of 2 to 3 weeks.
6. Arbitrageur:A person who is specialist in dealing with securities in different stoke exchange centers at the
same time. He makes a profit by the difference in the piece prevailing in different centers of
the market activity. For example the rte of a certain scrip is higher in some stoke exchange
than other on. In this case the broker will buy the scrip from the marked lower price and will
sell the scrip in the market at higher price. The profit of the arbitrageur depends on the ability
to get the prices from different centers before trading in other stoke exchanges.
RISK MANAGEMENT IN A BROKING FIRM
Risk management in a Broking Industry is a new concept in India, since it poses maximum
risk in the financial market, managing it was felt most essential by the regulatory bodies and
exchanges. Therefore NSE introduced for the first time in India, risk containment measures
that were common internationally but were absent from the Indian Securities Market. NSCCL
has put in place a comprehensive risk management system, which is constantly upgraded to
pre-empt market failures. These measures were taken to reduce the brokers risks. Whereas
SEBI has given some guidelines under Investors Protection to protect investors risks. NSE
has given the following risk management measures
39
STOCK TRADING
40
STOCK TRADING
OVERVIEW
The marketing of the securities on the stock exchange can be done through member of the
stock exchange. These members can be either individuals or corporate bodies.
For the process of trading in stock exchange there is the basic need for a transaction between
an individual and the broker execute customers order to buy or sell on the stock exchange
trading ring. The exchange of scrip between the member of the exchange in from of buying
or selling is called trading
Broker is the member of recognized stock exchange and helps the customers in buying or
selling the securities for the brokerage that he receives.
PROCEDURE OF TRADING
1. SELECTION OF BROKER
The first step is buying or selling of share is to select a broker for transaction business on
behalf of the investor. The trading of securities on the stock exchange can be done through
members of the exchange.
An investor prefers to select a broker who shall.
Act with due skill. Care and diligence in the conduct of all his business.
Not create false market either singly or in concert with other.
2. OPENING AN ACCOUNT WITH THE BROKER

The next step is to open account with the broker. It helps the investor to provide his credit
worthiness, if the clients were not to do margin money with the broker.
3. SELECTION OF SECURITIES
41
This is application for buying securities. The investor may be consulted with broker and take
advise for selection of securities.
4. SELECTION OF TIME FOR TRADING
This is important to get the best advantage from buying or selling the securities.
5. PLACING AN ORDER
Various method of placing an order with the broker has been evolved to give the broker
leverage when he is on the floor of the stock exchange.
6. PREPARATION OF CONTRACT NOTE
SEBI circular of 4th Feb. 1991 requires that all member of the recognized stock exchange
issue contract note to the investors on the execution of trade. Brokers, therefore issue contract
note to the client, which gives the name of the company, price of trade, brokerage, time of
execution, provision regarding arbitration etc. in term of the bye-laws of stock exchange, this
is statutory requirement and mandatory.
7. SETTLEMENT
The settlement is the process where by payment is made by brokers who have made purchase
and share delivery by those brokers who have made sales.
42
ONLINE SHARE TRADING

Online share trading is done with the help of computer, internet connection and with trading
or de-mat account is called online share trading, or we can say that online trading is the
trading of securities via the internet. If you would like to do online share trading then you
should have a computer, internet connection and online trading account. It is done via internet
means that all the transaction are settled electronically.
ADVANTAGES:
1. The first and main benefit of this is that in online trading the member does not need to go
to the share market for checking, which consumes a lot of time. All the information about
shares, stock market is just one click away and it has made trading much simple, easy and
attractive.
2. Dependence on broker or anybody else is nil for placing or squaring off the order. In short
one is his/her own boss for trading of shares.
3. Its not possible or viable for a broker to update customers about each and every news of
the market or any news which can have any influence on the share market. So if someone is
doing online trading himself, then a disaster can be averted. People can get news and updates
on various websites and also on their online trading system and most of the information will
be free of cost.
4. All the transactions and related documents can be seen online and can also be downloaded
to the PC without depending on any broker. Status of the amount can also be checked on
daily basis through online trading system.
43
DISADVANTAGES
1. One may face a problem of disconnection from internet and hence will not be able to loginin and do share trading.
2. One may also face problem like electricity cut-off and at that time one has to call his
broker and place the order for execution.
Due to all of the above advantages it is clear that the trading in India is spreading like fire and
is surely going to increase in the future.
44
OFFLINE SHARE TRADING

In offline trading the transactions are done through the phone and when to buy or sell is
directed through phone. In other words trading will be done by another person on ones
behalf based on the instructions given by one, and then the other person can be a broker. The
broker will do buying and selling of shares on ones behalf depending on the instructions
given by one. This type of trading was done in the past but nowadays most of the trading is
done through computers i.e. online. E.g. Suppose that if Mr. X wants to sell n number of
shares when the share price reaches Rs. 100, then X will tell his broker to sell the share at Rs
100 (i.e. when the price of Rs. 100 is reached).
Nevertheless, with all the convenience of online trading there are still investors who prefer
the old fashion way of offline trading. Offline trading has lost some popularity but it is still
the main form of investing. Offline trading offers many benefits as well.
ADVANTAGES:
1. The one benefit that an investor appreciates the most is that they are not alone when
making investment decisions.
2. There are experienced and professional brokerage companies that handle their investments
for them.
3. Investors are not faced with the challenge of making these vital investment decisions;
especially, if they do not have the experience necessary to make the appropriate investments.
4. Also, there is someone there to answer any questions that may cause concerns.
Not to mention, with offline trading mistakes are less likely to take place. No one wants to
throw their money 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.
45
The reason why online trading has emerged is due to the emergence of IT. Doing transactions
online is always advantageous and easy plus less time is taken by doing transactions online.
DISADVANTAGES:
Also following are the disadvantages of doing transactions offline:
1. Not the cheapest fees available.
2. Lost some of its competitiveness in attracting new customers with higher commission
rates.
3. Time consuming process.
4. Slow process than online trading. A delay of even a second can change the value of a
particular stock greatly.
46
DIFFERENCE BETWEEN ONLINE AND OFFLINE TRADING

Type of competitive pricing for trade fees has not only encouraged investors to trade online,
but it has also changed the way in which people trade. For instance, investors are now more
likely to make quick trades and attempt to profit from short-term ownership of stock, since
they do not give away hundreds of dollars each time they make a trade.
Another of the differences between offline and online stock trading has to do with the role of
the stock broker his or herself. Whereas a traditional stock broker provided a certain amount
of management assistance in terms of a trader's investments, online brokers are decidedly less
hands-on, and online investors have pretty much total control over what they do and when.
Part of this has to do with not being able to provide the individual attention that comes with
the steep commissions that traditional brokers charge traders, and this is another reason why
online traders have to be very informed and up-to-date.
Online stock trading is not going anywhere, and many investors absolutely love the
convenience and value of managing their own investments from the comfort of their homes.
While it is obvious that online trading was an attractive option for many investors, what was
unexpected is how much online trading has changed the strategies investors use.
Major advantage one has is offline trading is the help and stock tips / guide received by the
dealer. Whereas in online though they get stock tips, but end of it the client is on his own.
Incase of any major ups and downs, the dealer would call and give some personal attention to
the offline client which is not possible for an online client
47
COMPANY PROFILE
48
FAIRWEALTH SECURITIES PRIVATE LIMITED

Fairwealth Group established in 2005, is an
investment
solutions
firm
providing
comprehensive investment services in all asset

classes by keeping Client's interest foremost, having its corporate office at Mumbai and head
quarters at Delhi NCR. Its a leading stock broking firm who started spreading its network
across India starting initially from Delhi NCR in the year 2005.
Fairwealth Group offers an extensive suite of investment solutions including Retail Broking,
Institutional Broking, Online Trading, Mobile Trading, Depository, Distribution, Insurance,
Wealth Management, Real Estate, Advisory, Loans & Research. Fairwealth follows tailor
made approach to cater to various customer Segment including Retail, HNI's, Corporate
Houses, and Domestic & Foreign Institutions. Devising appropriate Investment strategies that
suits Investors Profile & Appetite backed by valuable research is Fairwealth's main forte.
PHILOSOPHY
Grow with Intelligence
At Fairwealth, we believe in growth which is backed by the detailed analysis and research
which makes us competent advisors to advise our customers over the investments and thus
enhance their wealth. Customer's interest is taken as the foremost thing while making any
transaction at Fairwealth. Making the decisions with intelligence is the key factor which we
follow and create the desired results. Dr. Stock is an unique initiative by Fairwealth in this
direction which provides an interactive interface to our clients to guide them about their
investment and the ups and down of the financial market.
49
KEY MANAGEMENT
MR. DHIRENDER GABA
Founder & MD, Fairwealth Securities Ltd.
A law graduate and MBA, Finance, Mr. Dhirender Gaba has been associated with the stock
market and its operations since 1995. He is since grown to become a reputed figure in the
financial services domain. Having closely worked with the unpredictable nature of trading for
15 years, Mr. Gaba could foresee the possible opportunities in the sector and thus gave shape
to Fairwealth Securities Ltd. in 2005.
Mr. Gaba is valued by clients, competitors and market observers alike for his deep
understanding of the stock market, his analyses and advice to companies, as also his research
in stocks and investments. He is a crafty mind when it comes to long-term investments and
has a profound knowledge of macro and microeconomics. Much like legends of the field as
Warren Buffet, Mr. Gaba buys into the business model of a company and expertly judges the
longevity and growth potential. Among his top priorities are competitive ability, scalability
and management quality of the enterprise.
Under his experienced leadership, Fairwealth Securities has rapidly expanded and made a
widespread presence felt all over India, seamlessly growing into a financial services company
par excellence.
50
MR. NAVEEN GABA

Director, Fairwealth
He is a Co-promoter of the Company with an Art Graduate, having a wide experience of 17
years. He joined the business as a Director of Fairwealth and took charge of the entire Sales
marketing and customer support division of the company. His prime area of focus is
institutional business and maintaining investor relations & also responsible for retail business
development. Mr. Naveen Gaba has been instrumental in encouraging professional marketing
in the organization and has immense experience in the marketing of financial products and
services. Under his dynamic leadership and experience, Fairwealth has opened 40+ branches
all over India.
MR. ANIL DIXIT

Director, Fairwealth
He has the long experience of 13 years in Financial Market and has been looking after the
Credit Control Division for Fairwealth for last 10 years. Mr. Dixit has been proven as an asset
for the company with time and has become the part of senior management with his sheer hard
work and excellent abilities to outperform in his working areas.
MS. ATIMA MANKOTIA

Director Human Resources, Corporate Planning and Communications
An alumni of St Stephens College, Atima Mankotia has completed her MBA in Human
Resource Management from XLRI, Jamshedpur. With over 20 years of experience in various
industries and organizations, she has travelled the world extensively gathering exposure to
international best practices. At the Fairwealth Group she is gearing to add positive new
dimensions to the organization ensuring that it is at par with some of the best in the world.
51
She brings to the table her vast experience in communication, human resources, people and
organizations and has been widely recognized for her professional abilities.
MR. PRAKASH THAKKAR

CEO
Mr. Prakash Thakkar is a well know name in financial industry and has more than 23 years of
vast experience. In his past experience he has served with leading broking houses as Director
and CEO. He has good analytical skills and specially in commodity and currency products.
He has the ability to understand business dynamics and to take prompt decisions, coupled
with his strong leadership background has enabled him to run the entire business.
MR. RAKESH GUPTA

Professional Advisor, Fairwealth
Mr. Rakesh Gupta is a fellow member of the Institute of Chartered Accountants of India
(ICAI) and has a wide experience of more than 16 years in the Capital Market. He has served
as Director at SMC, He has an in-depth knowledge and strong understanding of various
intricacies of Financial Market. His ability to understand the business dynamics, coupled with
his sound financial & accounting background and knowledge of marketing channels has
enabled him to manage the entire Broking Operations and Business Development activity of
Fairwealth
52
MR. VIVEK ANAND

Vice President - Sales
Vivek Raj Anand is a recognized and awarded realty leader with over 17 years of work
experience in NRI, Corporate and Channel Sales. He has worked as Head of HNI Sales with
Investors Clinic and India Homes for over 4 years and has 9 years of financial market
experience with Aditya Birla Group, Apollo Group and financial domain of Wipro.
Spearheading Fairwealths Housing foray from scratch, he aims to make the housing domain
the most profitable vertical of the family group
53
CORPORATE ETHOS
Vision
To be admired as a financial services enterprise having worldwide presence with global
processes and technology to help accomplish the goals of aspiring investors.
Mission
To be known to protect and enhance client's wealth with inimitable research
& valuable knowledge.
Values
RESEARCH-DRIVEN
Decisions backed up with facts.
ACCESSIBLE & APPROACHABLE
Always available for our clients & associates
CLIENT-CENTRIC
Clients drive our growth.
ETHICAL CONDUCT
Honesty in every transaction
54
OUR REGISTRATIONS
Exchange Registration No. FMC Unique Membership Code (UMC)
MCX
12505
MCX / TCM / CORP/0446
NCDEX
00902
NCDEX / TCM / CORP / 0877
NMCE
Cl0205
NMCE / TCM / CORP / 0119
NSE INB/F 231272338 | BSE INB011272334 | MCX-SX INE261272338 (Fairwealth
Securities
Ltd.)
MCX/TCM/CORP/0446,
NCDEX,
TCM/CORP/0877
(Fairwealth
Commodity Broking Pvt. Ltd.) | PMS Regn. No. INP000002817
OUR MEMBERSHIPS
National Stock Exchange of India Ltd.
Bombay Stock Exchange Ltd.
Multi Commodity Exchange of India Ltd.
National Commodity & Derivatives Exchange Ltd.
MCX Stock Exchange Ltd.
United Stock Exchange of India
National Multi Commodity Exchange India Ltd.
National Spot Exchange Ltd.
Central Depository Services India Ltd.
55
PRODUCT & SERVICES
Retail Broking
Institutional Broking
Online Trading
Distribution
Insurance
Wealth Management
Depository Services
56
OBJECTIVE OF THE
STUDY
57
OBJECTIVE OF THE STUDY

The objectives of the proposed study are:
1) Identify the specific factors that affect investors attitudes towards share trading.
a) Identify the specific factors that affect consumer attitudes towards on line and offline
share trading.
b) Identify the specific problems and challenges faced by Investors in online and offline
share trading.
2) Comparison between online and offline share trading methods.
58
RESEARCH
METHODOLOGY
59
RESEARCH METHODOLOGY
Research design is an arrangement of conditions for collections and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure.
The design includes an outline of what the researcher will do from writing the hypothesis and
its operational implications to the final analysis the data.
Data Collection Method
Data collection is a basic step and of vital importance. On which success or failure of the
study depends. All researchers can tap into two sources of data.
Primary Data
Secondary Data
Primary Data
Primary data are obtained by a study specifically designed to fulfill the data needs of the
problem at hand. Such data are original in character. These data are raw material. They are
the measurement observed and recorded as a part of original study. They are original in
character. The investigator or researcher directly collects this data. The basic form of
obtaining this data is by observing and questioning.
The Primary data was a detailed interview schedule with the help of a detailed questionnaire.
The samples were drawn purposively from various areas for the relevance of study. The
primary data was collected by using the questioner method.
Secondary Data
Data which are not originally collected but rather obtained from published or unpublished
sources are known as secondary data.
60
They are not originally drawn by the researcher as fresh data. These are collected by some
other person for this purpose and published. These types of data can be collected through
various sources.
In this present study we have used primary and secondary data source.
QUESTIONNAIRE
Questionnaire are formal set of questions prepare to collect the required information. This is
one of the most effective and popular technique used in surveys. However, one has to be
careful while drawing up questionnaire. Before deciding on the questions, it is important to
understand the exact nature of the information required and who should be interviewed.
A questionnaire was prepared to identify the factors affecting the employees and also to
obtain an open feedback from the employees over different issues in the organization.
SAMPLING TECHNIQUE
Sampling is the process of learning about the population on the basis of a sample drawn from
it. In the sampling techniques instead of every unit of the universe only a part of universe is
studied and the conclusion is drawn on that basis for the entire universe. The process of
sampling involves three elements.
Selecting the sample,
Collecting the information,
Making an Inference about the population.
In order to collect the data from the respondent, the Judgment convenience technique was
used. The respondents who were asked to fill the questionnaire are called Sampling units.
Sample Size
Size of sample means the number of sampling units selected from the population for
investigation.
The sample size which we choose was 100
61
DATA ANALYSIS
62
DATA ANALYSIS AND INTERPREATATION

Q1. How old you are in Stock Trading?
Investment decision
0-2 Years
2-4 Years
4-6 Years
More than 6 years
Percentage of respondents
26%
32%
24%
18%
Analysis and interpretation

From the survey it was found that most of the investors are trading since more than 2 years.
63
Q2.At which rates do you want your investment to grow?

Investments growth rate
Steadily
At an average
At fast rate
Total
12%
26%
62%
100%
Analysis & Interpretation: From the survey it was found that 62% respondents wants their
investment grow at fast rate whereas only 26% respondents were in the favour of investment
growth at average rate.
Q3. How frequently do you invest?
64
Frequency of investments
Daily
Weekly
Monthly
Yearly
Total
12%
20%
36%
32%
100%
Analysis & Interpretation:

From the above table & chart it was found that 36% respondents invest monthly, 32% invest
yearly and there were 20% respondents who invest weekly. Thus, it can be stated that
majority of the investors invest monthly in stock market.
Q4. What percentage of your annual income do you invest in share market?
Annual income invested

Up to 10%
10-15%
15-20%
More than 20%
14%
22%
40%
24%
65
Total
100%

From the above table & chart, it was found that 40% respondents invest 15-20% of their
annual income, 24 respondents invest more than 20% of their annual income, 22 respondents
invest up to 10-15% of their income and 14% respondents invest up to 10% of their income
in different investment avenues. Thus, it can be concluded that majority of investors invest
10% to 20% of their monthly income.
Q5. In which exchanges do you trade?

NSE
28%
BSE
26%
BOTH
45%
Any Other
1%
66

Most of the respondents trade in NSE & BSE both exchanges after that among single
exchange traders 1st choice is National Stock Exchange (NSE). Bombay Stock Exchange is
second preference for trade.
67
Q6. Which type of trading you use for investment?

Online
28%
Offline
72%

Most of the respondents use offline trading.
68
Q7. Which mode of trading, you feel is safer?

Online
34%
Offline
66%

Most of the respondents think that Offline trading is safer than the online trading.
69
Q8. Do you confirm from your broker after the order is executed?
Yes
97%
No
3%

Most of the respondents confirm from the broker after the order is executed.
70
Q9. Have you faced any issue while trading offline?

Yes
59%
No
41%

Most of the respondents have faced some issue while trading offline.
71
Q10. If, Yes, what kind of issue you have faced?

Share price difference
42%
Busy telephone line
36%
Others
22%

Most of the respondents have found price difference issue while placing the order offline.
72
Q11. Would you ever like to switch into Online Trading due to these issues?
Yes
69%
No
31%

Most of the respondents said that they may think to switch in Online trading after such issues
in trading.
73
FINDINGS
74
FINDINGS
Investors have full confidence in stock market and they are ready to adopt new
features of stock market.
Investors adopt partial investment strategy and they put some amount of earning in
stock market as part of investment.
Mostly investors still prefer to sit in brokers office and trade.
Offline trading is still preference for old investors.
New age investors love to adopt new technologies and they prefer online trading.
Though some investors has faced issues while trading offline i.e. late order execution.
Some investors shown interest in online trading to issues in offline trading.
Some Investors think that Online trading is cheaper and comfortable.
Investors still have security concern in online trading.
Investors think that offline trading is quite safe and reliable as it keep them in tough
broker and they get more ideas about investment.
75
CONCLUSION
76
CONCLUSION
The retail brokerage industry has experienced a number of changes in recent times,
particularly due to the shift in consumer behavior from using traditional full service
brokerages to discount firms.
By doing this survey it is found that the consumer attitude towards share trading is very much
positive. They are willing to adopt new technology provided they are given proper knowledge
about it. And, brokerage companies which can quickly adopt new technologies into the
system with reliable and ease in transactions will succeed and can tap greater pie of the
market.
There are various factors which affect the attitudes of customers towards share trading:
People having more income are ready to take more risks and thus schemes should
introduce for them separately.
People of age more than 50 years are more willing to put their money into bank
deposits. They should be targeted basically for the PMS as they want more security
and PMS till date has given good results.
Mostly old traders still prefer the Offline trading and they dont want to rely on online
trading.
Youth and middle age dont hesitate while taking risk. They want to earn money very
fast. Middle aged people are moderate risk takers as they are at an age where they
have to keep many things in their mind and hence they dont take much risk. Old age
people are low risk takers as they dont want to lose their money and also they want to
accrue their wealth instead of losing it.
77
RECOMMENDATIONS
78
RECOMMENDATIONS
1. As its been observed that around most of the respondents are using offline trading, so there
is a greater scope to target people, who are not doing stock trading, by aggressive advertising
campaign and creating awareness about the brokerage company highlighting all the benefits
of technology and Reliability factor.
2. Another thing thats been found out during this survey is that people value services more
than cost. People want good services and are ready for paying extra penny.
3. People prefer Ease of transactions and security. So, brokerage companies should focus on
security and making transactions as simple as possible with simple usage of technology.
4. There are some companies which dont have tie ups with many banks, so that trading
account can be linked with the savings account of the brokerage company. So, a focus to go
for tie ups with major nationalized bank should be there.
5. Companies should provide knowledge to the customers regarding stock market. Aim
should not be making maximum profit at once. The advantage of this will be that the
customer will trust broker and will recommend to the other people also.
6. The company should provide a manual to their clients to ease them through the process of
trading.
79
LIMITATIONS
80
LIMITATION OF STUDY
Most of the respondents were least interested in questionnaire.

All the respondents are of Lucknow city only.
It was difficult to get correct information from some of the people.
Study is limited to those traders who trade offline.
Their response might be bias.
Study is limited to Fairwealth Securities Private Limited only.
81
BIBLIOGRAPHY
1. Webliography
www.moneycontrol.com
www.timesofindia.com
www.economictimes.com
www.yahoofinance.com
www.fairwealth.in
2. Books and journals
A theory of buyer behaviour, John A Howard, Jagdish N. Sheth, marketing classics.
Training kit provided by sharekhan Ltd.
The 21st century consumer- A new model of thinking, International journal of

Marketing Research; Valentine,Virginia & Gordon; spring 2000.
Marketing Research-5th edition by Naresh K Malhotra.
For factor analysis- Field,A.P. (2005). Discovering statistics using SPSS(second

edition).London: sage
Tutorials given in the SPSS v15.
Alternative Economic Survey, 2001-02.
82
ANNEXURE
83
QUESTIONNAIRE
Name:
Age:
Occupation:
Q1. How old you are in Stock Trading?
0-2 Years
2-4 Years
4-6 Years
More than 6 Years
Q2.At which rates do you want your investment to grow?

Steadily
At an average
At fast rate
Q3. How frequently do you invest?

Daily
Weekly
Monthly
Yearly
84
Q4. What percentage of your annual income do you invest in share market?
Upto 10%
10-15%
15-20%
More than 20%
Q5. In which exchanges do you trade?

NSE
BSE
BOTH
Any Other
Q6. Which type of trading you use for investment?

Online
Offline
Q7. Which mode of trading, you feel is safer?

Online
Offline
Q8. Do you confirm from your broker after the order is executed?
Yes
No
85
Q9. Have you faced any issue while trading offline?

Yes
No
Q10. If, Yes, what kind of issue you have faced?

Share price difference
Busy telephone line
Others
Q11. Would you ever like to switch into Online Trading due to these issues?
Yes
No
86

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PROJECT REPORT

COMPARATIVE STUDY BETWEEN

DEPARTMENT OF FINANCE AND CONTROL

ARYAKUL COLLEGE OF EDUCATION

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

Securities provide for investor.

Tax Benefits planning and exemption.

Optimum return on investment.

Exchange of Securities Transacted.

Cyclopedia of Listed Companies.

New Entrepreneur encouraged.

Guidance of Investor & Company.

SHIKHAR GUPTA, Roll No.: 121201010053

HISTORY OF THE STOCK MARKET

SHIKHAR GUPTA, Roll No.: 121201010053

PREDOMINANT FUNCTION OF STOCK MARKET

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

IMPORTANCE OF STOCK MARKETS

WELL KNOWN STOCK EXCHANGES

New York Stock Exchange

Tokyo Stock Exchange

London stock Exchange

Toronto Stock Exchange

Frankfurt Stock Exchange

Hong Kong Stock Exchange

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053

BOMBAY STOCK EXCHANGE

SHIKHAR GUPTA, Roll No.: 121201010053

Know your client scheme

Verification of shares at members office

Loss to members on account of infidelity of employees.

Loss of member on account of fake/forged/ stolen shares being introduced by his

SHIKHAR GUPTA, Roll No.: 121201010053

destruction, theft or damage to securities and cash.

Loss on account of securities lost in transit.

Loss suffered on account of incomplete transaction.

Loss sustained as final receiving member on exchange on account of default of the

Loss on account of errors and omission.

Directors and officials liability cover.

SHIKHAR GUPTA, Roll No.: 121201010053

NATIONAL STOCK EXCHANGE OF INDIA

SHIKHAR GUPTA, Roll No.: 121201010053

Establishing nationwide trading facilities for all types of securities.

Ensuring equal access to investors all-over the country through an appropriate

Meeting international benchmarks and standards.

Enabling shorter settlement cycles and book entry settlements.

SHIKHAR GUPTA, Roll No.: 121201010053

Exchange Traded Funds

Initial Public Offerings

Security Lending and Borrowing Scheme

Interest Rate Futures

Retail Debt Market

Wholesale Debt Market

SHIKHAR GUPTA, Roll No.: 121201010053

SHIKHAR GUPTA, Roll No.: 121201010053