SUMMER TRAINING PROJECT REPORT

ON
Study of Stock Exchange At TATA SECURITIES

FOR THE PARTIAL FULFILMENT OF THE DEGREE

BACHLOUR OF BUSINESS ADMINISTRATION

(TWO YEAR FULL TIME MANAGEMENT COURSE)
Batch (2013-2015)

SUBMITTED BY

KAMLESH SINGH RAWAT

BBA YEAR - 3rd
RTU Roll no. 6500079

UNDER THE GUIDANCE OF:

MISS MUKESH

SUBMITTED TO:

Faculty of management studies

SHEKHAWATI GROUP OF INSTITUTION

(affiliated to PANDIT DINDYAL university)

 DECLARATION BY THE STUDENT

I KAMLESH SINGH RAWAT S/O MR. BALAM SINGH RAWAT student of BBA YEAR-3
(2017-18) Hereby declare that I have completed a project as Summer trainee on the topic Study of Stock
Exchange At TATA SECURITIES for the partial fulfilment of the degree of BBA course ,it is my
original work and it has not been copied from others.

Place;-
Date; SIGNATURE –
KAMLESH SINGH
RAWAT

TABLE OF CONTENTS
 S.
TOPICS Page no.
NO.
• EXECUTIVE SUMMARY 4
• INTRODUCTION TO TOPIC 5
• BOMBAY STOCK EXCHANGE 6
• NATIONAL STOCK EXCHANGE 7
• STOCK EXCHANGE 8
• TATA SECURITIES 9
• DEMAT SERVICES 14
• CLIENT FOCUS 16
• WIDE OPTION WHILE TRADING 21
• TRADING DERIVATIVES 25
• STOCK MARKET 32
• HISTORY 33
• IMPORTANCE OF STOCK MARKET 34
• BEHAVIOUR OF STOCK MARKET 37
• MARGIN BUYING 43
• BASIC RISK IN TRADING 47
• FINDING AND RECOMMONITION 51
• CONCLUSION 53
• BIBLIOGRAPHY

ACKNOWLEDGEMENT

I would like to express my heartfelt thanks to many people. This dissertation is an effort to contribute
towards achieving the desired objectives. In doing so, I have optimized all available resources and
made use of some external resources, the interplay of which, over a period of time, led to the
attainment of the set goals.
I take here a great opportunity to express my sincere and deep sense of gratitude to my esteemed
faculty MR. MUKESH for giving me an opportunity to work on this project. The support & guidance
from sir, was of great help & it was extremely valuable.
I also express my sincere thanks to all the people who, directly or indirectly, contributed in time, energy
and knowledge to this effort.

KAMLESH SINGH RAWAT

PREFACE

The microstructure of the stock market in which brokers work is highly Dynamic and volatile. Many
stocks are available to be bought and sold, each exhibiting its own patterns and characteristics that are
highly unpredictable. With so many options and considerations that need to be taken into account, it is
an extremely difficult task for a broker to investigate aspects of the stock market and consistently
provide effective Advice to their clients.
Thus, brokers perform their day-to-day tasks with the aid of a broker system. Such a system should
provide tools for interacting with Exchanges and performing analysis. As a consequence, these broker
Systems are quite large and complicated by themselves. This research aims to analysis Stock broker on
the basis of their Services, products, growth, and their competitiveness. Because Stockbrokers are one
of the main participants in stock exchanges Worldwide, they often act as an agent for their clients,
making trades on their behalf. They also act as advisors, providing suggestions to their Clients on what
stocks to buy and sell.

EXECUTIVE SUMMARY

STUDY OF STOCK EXCHANGE AT “TATA SECURITIES LIMITED”

There is growing competition between brokerage firms in post reform India. For investor it is always
difficult to decide which brokerage firm to Choose.
Research was carried out to find which brokerage house people prefer and to figure out what people
prefer while investing in stock market. This study suggests that people are reluctant while investing in
stock and Commodity market due to lack of knowledge.
Main purpose of investment is returns and liquidity, commodity market is less preferred by investors
due to lack of awareness. The major findings of this study is that people are interested to invest in stock
market but them Lack knowledge. Through this report we were also able to understand, what our
Company’s (Tata securities) positive are and strong points, on the basis of which we come to know
what can be the basis of pitching to a potential Client.
At the end of the report limitations, SWOT analysis, conclusion of the research and Appendix which
includes questionnaire and the list of the city where the Argent capital are running. Last there is
Bibliography, FAQ, and Glossary that has the technical terms of the report.

3
INTRODUCTION TO TOPIC

In most industrialized countries, a substantial part of financial wealth is not managed directly by savers,
but through a financial intermediary, which implies the existence of an agency contract between the
investor (the principal) and a broker or portfolio manager (the agent). Therefore, delegated brokerage
management is arguably one of the most important agency relationships intervening in the economy,
with a possible impact on financial market and economic developments at a macro level. In most of the
metros, people like to put their money in stock options instead of dumping it in the bank-lockers. Now,
this trend pick pace in small but fast developing cities like Chandigarh, Gurgaon, Jaipur, Ambala etc.
My research is based on the residents of jaipur and its nearby areas. As the per-capita-income of the
city is on the higher side, so it is quite obvious that they want to invest their money in profitable
ventures. On the other hand, a number of brokerage houses make sure the hassle free investment in
stocks. Asset management firms allow investors to estimate both the expected risks and returns, as
measured statistically.

There are mainly two types of Portfolio management strategies.

1. Passive Portfolio Strategy
2. Active Portfolio Strategy

1. Passive Portfolio Strategy: A strategy that involves minimal expectation

Input, and instead relies on diversification to match the performance of
Some market index. A passive strategy assumes that the marketplace will
Reflect all available information in the price paid for securities

2. Active Portfolio Strategy: A strategy that uses available information and

Forecasting techniques to seek a better performance than a portfolio that is

.
 5

BOMBAY STOCK EXCHANGES:

This stock exchanges, Mumbai, popularity known as “BSE” was established in 1875 as “The native
share and stock brokers associations”, as a voluntary non-profit making association.

It has an evolved over the years into its status as the premiere stock exchanges in the country. It may be
noted that the stock exchanges the oldest one in Asia, even older than the Tokyo Stock Exchanges,
which was founded in 1878.
The exchanges, while providing an efficient and transparent market for trading in securities, upholds
the interests of the investors and ensures redressed of their grievances, whether against the companies
or its own members brokers.

It also strives to educate and enlighten the investors by making available necessary informative inputs
and conducting investor’s education programmers.

A governing board comprises of elected directors, 2SEBI nominees, 7 public representatives and an
executive director is the apex body, which decides the policies and regulates the affairs of the
exchanges.

The executive director as the chief executive officer is responsible for the day today administration of
the exchanges. The average daily turnover of the exchange during the year 2000-01 (April-March) was
Rs 3984.19 crores and average numbers of daily trades 5.69 Lakhs

However the averages daily turnover of the exchanges during the year 2001-2002 has declined to Rs.
1224.10 crores and number of average daily trades 5.69 Lakhs.

The average daily turnover of the exchanges during the year 2001-2003 has declined and number of
average daily trades during the period is also decreased.The Ban on all deferral products like BLESS
AND ALBM in the Indian capital markets by SEBI with effect from July 2, 2001, abolition of account
period settlements, introduction of compulsory rolling settlements in all scripts trades on the
exchanges.With effect from dec31, 2001 etc. have adversely impacted the liquidity and consequently
there is a considerable decline in the daily turnover at the exchanges. The average daily turnover of the
exchanges present scenario is 110363 (Laces) and number of average daily trades 1057(laces)
7
 8
NATIONAL STOCK EXCHANGES:

The NSE was incorporated is now 1992 with an equity capital of Rs 25 crores. The international
securities consultancy (ISC) of Hong Kong has helped in setting up NSE.

ISE has prepared the details business plans and installation of hardware and software system. The
promotion for NSE were financial institutions, insurances companies, banks and SEBI capital markets
Ltd, infrastructure leasing and financial services Ltd and stock holding corporation Ltd.

It has been set up to strengthen the move towards professionalization of the capital market as well as
provide nation wide securities trading facilities to investors. NSE is not an exchange in the traditional
sense where broker own and manage the exchanges.

A two tier administrative set up involving a company board and a governing aboard of the exchanges is
envisaged. NSE is a national market for shares PSU bonds, debentures and government securities since
infrastructure and trading facilities are provided.
 9

Stock Exchange
What is the role of a Stock Exchange in buying and selling shares?
The stock exchanges in India, under the overall supervision of the regulatory
authority, the Securities and Exchange Board of India (SEBI), provide a trading
platform, where buyers and sellers can meet to transact in securities. The
trading platform provided by NSE is an electronic one and there is no need for
buyers and sellers to meet at a physical location to trade. They can trade
through the computerized trading screens available with the NSE trading
members or the internet based trading facility provided by the trading members
of NSE.
What is Demutualisation of stock exchanges?
Demutualisation refers to the legal structure of an exchange whereby the
ownership, the management and the trading rights at the exchange are
segregated from one another.
How is a demutualised exchange different from a mutual exchange?
In a mutual exchange, the three functions of ownership, management and
trading are concentrated into a single Group. Here, the broker members of the
exchange are both the owners and the traders on the exchange and they
further manage the exchange as well. This at times can lead to conflicts of
interest in decision making. A demutualised exchange, on the other hand, has
all these three functions clearly segregated, i.e. the ownership, management
and trading are in separate hands.
 10

COMPANY PROFILE

The securities and trading business is brought to you by Tata securities limited, a wholly owned
subsidiary of Tata capital limited. A Tata security limited is engaged in the business of providing
broking and distribution services to both retail and institutional customers.

Tata securities limited distributes third party investment products and offer stock broking services in its
capacity as a member of the Bombay stock exchange limited (BSE), the national stock exchange of
India limited (NSEIL) and association of mutual funds of India (AMFI). Tata securities limited is also a
depository participant with the central depository services (India) limited (CDSL) and national
securities Depository limited (NSD)
 11

TATA CAPITAL
Tata Capital is a finance company that fulfills the financial needs of retail and institutional customers
in India. It was established in 2007 as a wholly owned subsidiary of Tata Sons and is registered with
the Reserve Bank of India as a systemically important non-deposit taking non-banking financial
company (NBFC).
The company is focused on providing multiple financial services through an extensive network of over
1,000 customer touch-points covering tier I, tier II and tier III cities.

Areas of business
Tata Capital has financial products and services in the following seven sectors:

• Distribution and broking: Third-party investment products, equity and commodity trading for retail
and institutional customers.

• Retail finance: Passenger and commercial vehicle loans, used car loans, personal loans, home loans,
credit cards and consumer durable loans for retail customers.

• Commercial finance: Financial products for small and medium enterprises and project finance for
capital equipment and infrastructure.

• Investment banking: Advisory and debt and equity market products for corporate and small and
medium enterprises.

• Private equity: Investments in India and other countries.

• Wealth management: Suite of advisory and investment offerings for high net worth individuals.

• Rural finance: Relevant financial products for rural customers, including financing of farm
equipment, agricultural inputs and agricultural enterprises.
 The company has entered into an understanding with Japan-based Mizuho Securities Co to promote an
alliance in private equity, investment banking including cross border merger and acquisition, securities
business including broking and distribution, structured finance and other business areas such as wealth
management. It has also entered into an understanding with Equifax Inc and CRISIL to develop plans
to create a credit information company in India.

12

Joint ventures, subsidiaries, associates

• Tata Securities (TSL): A wholly owned subsidiary of Tata Capital Limited engaged in retail and
institutional distribution and broking. TSL distributes third-party investment products and offers
stock broking services of buying, selling or dealing in securities, including futures and options, in
its capacity as a member of the Bombay Stock Exchange and the National Stock Exchange. TSL is
also a depository participant.

• Tata Capital Markets (TCML): A wholly owned subsidiary of Tata Capital engaged in debt and
equity capital markets and M&A advisory. TCML has a category I merchant banking license from
the Securities and Exchange Board of India.

• E-Next: A KPO unit specializing in the area of financial services; owned by Tata Capital, Tata Sons
and others.

• Tata Capital also owns around 4 per cent of equity capital of Development Credit Bank, a growing
private sector bank.

Location
The company is headquartered in Mumbai, India.
 13

MANADATORY DOCUMENT:-

• PROOF FO IDENTITY (For individual /Karta / Sole proprietor / Authorized person (s) for
Partnership, corporate and Trust)

Photocopy of PAN card

• PROOF OF ADDRESS (For individual / Karta / Sole proprietor / Authorized person (s) for
Partnerships, Corporate and Trust)

Photocopy of any one of the following:

Passport, Voter ID Card, Driving license, Bank Passbook, Rent Agreement, Ration Card, Current
Telephone Bill, Current Electric Bill, Flat Maintenance Bill, and Certificate Issued by employer
registered under MAPIN, Insurance Policy.

• BANK AND DP PROOF:

• Letter from client’s banker certifying the account number and the period from which the
accounts in operation as per prescribed format.

• Copy of a pas book / bank statement containing name of the client

• Copy of current transaction statement / holding statement / certification by DP containing

the name of DP and client

4. PROOF OF INCOME AND ASSETS:

 • Copy of the salary of the constituent for the last month

• Income tax statement for the last 2 financial years

• Assets liability statement

• Copy of the values certificate in case of immovable property

5.FOR MINORS:

In additional to the abovementioned documents, the following documents would also be required for
minors.

1.Birth certificate of Minor.

14

• ADDITIONAL DOCUMENTS FOR NON-INDIVIUALS:

• Copy of the balance sheet for the last 2 financial years (copies of annual balance sheet to be
submitted every years)

• Copy of latest share holding pattern including list of all those holding more than 5% in the share
capital of the company, duly certified by the company secretary/ whole time Director/MD. (copy
of updated shareholding patterns to be submitted every year)

• Copies of the memorandum and articles of association in case of a company / body corporate or
partnership deed in case of a partnership firm

• Copy of the Resolution of Board of Directors’ approving participation in equity / derivatives/ debts
trading and naming authorized persons for dealing in securities.

• Photographs of partners/whole time directors, individual promoters holding 5% or more, either

directly or indirectly, in the shareholding of the company and of persons authorized to deal in
securities.
• Net worth certified by Chartered accountant.

• Declaration on letterhead of firm as per prescribed format for sole proprietorship and partnership
Firms.

15

TATA SECUIRITIES LTD.

World class services that we offer for you:

• DEMAT A/C opening is free and after 1 year annual maintenance charge (AMC) Rs/- 200 only.

• Trading software provided to its costumers is made by TATA CONSULTANCY SERVICES (TCS).

• Calls made by TATA dealer hit’s 85% to 90%

• Online Pay In-Pay out by self if you have trading software.

• All market info. Regarding shares will notify you by calls, messages and email.

• Providing one stock dealer.

Our Brokerage rates:

INTRADAY DELIVERY

.03 paisa (Flexible) .30 paisa (Flexible)

Limits 4-6 times Limits 4-6 times

Documents needed for opening DEMAT A/C are:-

• PAN card.

• Address proof (voter ID, driving license, aadhar card)

• One Photograph passport size.

• 6 months bank statement.

• Cheque with margin.

16

DEMAT SERVICES

A Tata securities is a registered member (Depository participant) of CDSL.

In this system, physical security holding are converted into electronic (or in other words,
dematerialized) holdings.

Why Tata securities Demat Account?

• Demat A/C free open.

• Demat access through internet and phone.

• Portfolio valuation on the account statements.

• Online execution of transactions at branches.

• Special rates for stock market intermediaries and sub brokers.

• Transaction update from back-office four times a day.

Transfer of shares and settlements

Transfer and settlements have never been easy as it under the depository system. All that is required is
an instruction slip from you. If you are selling securities then it has to be a delivery instruction slip. If
you are purchasing securities it has to be a receipt instruction slip or standing instruction for credit.

Receipt of Corporate Benefits

Even securities establishment like bonus and right can be credit to your Demat account electronically.
All you have to do is choose the right option in the share application from. Crash benefits like dividend
and interest will, however be forward to you directly and not through the depository.

17

Holding & Transaction Statements

We provide statements of holding cum transaction every month at Zero cost.

Dematerialization of shares

At you request we arrange to convert your physical holding into electronic from. To do this would
require opening an account with CDSL through us called “Beneficiary Account” in the name and style
in which the shares are held and lodge the share certificates with us accompanied by a dematerialized
request from, separate for each scrip.

You are required to only make sure that CDSL has admitted that scrip for dematerialization. An up to
date list will be provided to you who will be constantly updated.
Dematerialization

You have the option to convert your electronic shares back to physical shares.

Pledge-Hypothecation

You can also avail against your electronic shares. This process is also much faster than in the case of
physical shares

18

WHY CHOOSE US?

CLIENT FOCUS

• Client relationship from the core of our business. We value each client, no matter what size, as a
long-term relationship. And we seek to provide unmatched services to each client and place him
as a partner at the center of everything we do.
• From the very beginning of the relationship, we work closely with every client to identify his
financial goals and risk tolerance levels and leverage our strength of the product offering,
research and financial strength to help achieve his goals. In the process, we become a
professional partners, creating opportunity, and adding value and transform vision into reality.

Diverse services offering

• In addition to traditional broking services, we are also equipped to handle commodity trading
facility as well as currency derivatives and have access to a wide range of financial services like
IPOs, mutual funds and insurance.

Timely services

• In an increasingly competitive environment, clients today require personalized solution and greater
flexibility and responsiveness than ever before. Our professionals are always ‘on call’. We
provide them services throughout the year and not just at the end of the year. We believe
such service is essentials for delivering solution and constructive relationship.

19

Able team

• We have developed a strong and enduring team by recruiting from leading graduate and
postgraduate universities and promoting from within. Our team work together to provide
superior results to our client. At the same time, each of our clients is assigned a specific team
member who ‘owner’ the relationship, providing continuity, responsiveness and a point of easy
access to the firm.

Culture
• We strive to maintain standards at all times and lay emphasis on honesty, integrity and
confidentiality. We speak and act to ensure transparency at all levels and in everything we do.

Financial strength

• The strength of our balance sheet is such that it gives greater confidence to all our retail and
institutional clients in detail with us. The financial strength of the group helps in future building
the network and infrastructure to cater to the larger market.

Back office:

For back office operations, we use the lidha Didha system of Apex Soft cell Pvt. Ltd. This is one of the
top most back office software in the industry. It has the capacity to process over one lakh traders in a
five minute frame. Our operation teams has an easy-to-navigate client login system, which is used to
generate activity reports, short-terms and long-term tax reports, holding and portfolio valuation reports
as well as trading to delivery activity reports. We also have the requisite infrastructure needed to
handles STP, upload and download and download information to or from exchanges, bank and
depositories, support units to ensure delivery notes, bills and ledgers of trading accounts and cash
management services for efficient and effective fund management within the group. 20

Client interface: We have trading terminal (both direct and indirect), online monitoring, control
terminal (administration terminals) and back office support terminal (settlement terminal) across all
location and centers.

We have India’s best single screen Multi Exchanges Trading Software platform. Our entire centers
across the country are connected through our own network, leased ISDN lines and LAN network, MPLS
and internet.

The high-end IBM serves with sophisticated security features that we use caters to trading points across
the country. This also gives u rte advantage of scalability in terms of location and size of our planned
operations. We provide telephonic and chat support for technical and functional issues of branches,
franchises and all our clients. Our websites www.Tata securities.com is comprehensive and provides
online feeds, net trading and provides online feed, net trading portfolio tracking tool. Investors also have
access to a wide range of financial news, information and various research reports facilitating quick
decision-making.

Our online trading portal at www.Tata securities.com is equipped with facilities like all segment
broadcasts, multi-features graphs, online payment gateways and automatic password mailer utility for
better security. It user-friendly navigation allows easy viewing of trading accounts, depository accounts
and research reports, which are linked to the trading platform.

The website also has a provision for creating portfolios and monitoring them on a regular basis. Our
‘wealth trackers’ module helps investors in getting ready updates n their investment so that they can
know the changing trends of the markets and the impact of the same on their portfolio.

21

Internal control:

Compliance and internal control play a major role in determining business strategies as well as day-to-
day operation of the group. A well-equipped risk management department ensures that the delinquency
rates are minimal, while efficient risk management software provides online MTM margin data to
branches and franchisees. Our efficient back-up system and software have been developed specially for
branches and channel partners with a capacity to handle numerous transactions. Our online position
monitoring system ensures better risk management and surveillance from our head office as well as
branches and franchises
Experienced professional:

Our teams of professional consist of individual with significant experience in securities trading, market
structure, trading technology and portfolio management. They have a strong experience in trade
execution and understanding of order flow dynamics. This combined with technical analysis of market
momentum, help our clients to determine the price at which they buy and /or sell. We believe, we are
the first choice for our clients because we among the very best at trade executive solution and assets
management services. At Tata securities, each and every professional is focused on turning the initial
trade or investment into a collaborative, person-to-person relationship that keeps delivering true added
value.

Human Resources:

Human resources are the key to any services sectors industry. We have a strong and vibrant workforce
in every field or our activity, be it research, system, accounts, marketing or networking. With the
manpower strength of over 1100 employees, the Company is managed by a highly motivated, qualified
& talented team of professional qualified CA’s, MBA, s, Engineers, etc with proven track records.

22

Technology:

Stock-broking being a process intensive activity, issues such as speed, accuracy, round-the-clock
system availability and system securities are of paramount importance and technology forms the
backbones of the business.

This is why Tata securities are technology driven. We boast of state-of-the-art technology and an in-
house team of highly competent software and networking engineers who constantly review system and
procedures to ensure operational efficiency.

All our branches are connected through Wide Area Network (WAN) and are served by a centralized
back office processing system, which enables clients to obtain up to date information online at the click
of a button.

Customer Focus:

Despite a rapidly expanding client base and a dizzying increase in transaction volumes, each client at
Tata securities is special. We specialize in building long term relationship with our customers by
providing them with the four things they desire most, viz., speed, convenience, reliability and
personalized services.

Our continuous strive to provide best services to our clients, results in receipt of not a single Arbitration
Award against the company since its inception.

23

WIDE OPTION WHILE TRADING:

A product for every need:

• A Tata security is the most comprehensive website, which allows you to invest in shares, mutual
funds, derivatives (Future and Option) and other financial products. Simply put, we offer you
products for every investment need of yours.

Trading in shares:

• A Tata security offers you various options while trading in shares.

Cash trading:

• This is a delivery based system, which is generally done with the information of taking delivery of
shares or monies.
Margin Trading:

You can also do an intra-settlement trading up to 3 to 4 times your available funds, where in you take
long buy/short sell position in stocks with in the intention of squaring off the position within the same
day settlement cycle.

In margin trading, you take buy/sell position in stocks(s) with the intention of acquiring off the position
within the same settlement cycle. If, during the course of the settlement cycle, he price moves in your
favor (rises in case you have a buy position or falls in case you have a sell position), you make profit.
In case you have the option to take/give delivery of buy/sell position respectively if you have sufficient
cash/securities to do so. Normally to buy shares, you have to place (ensure availability of limit) 100%
of the order value, while to sell shares, you need to have shares in your Demat account. However,
margins are blocked only to safeguard any adverse price movement.
24

Margin PLUS Trading:

• Through Margin PLUS you can do an intra-settlement trading up to 10 times your available funds,
where in you take long buy/sell position in stock with the intention of squaring off the position
within the same day’s settlement cycle. Margin PLUS will give a much higher leverage in your
limits.

• Margin PLUS is an order placement feature where you can take a position at market price and also
place a cover order for the position specifying the SLTP and the limit price. This will minimize
the loss cover at the time of taking the position itself. There by it gives a clear view of
maximum downside involved in a particular position at a particular price, Tata securities won’t
levy a normal margin ranging from 21% to 50%. It would block he maximum loss which
customer can suffer.

Spot Trading:

• This facility can be used only for selling you is demitting stocks which already exist in your Demat
account. When you are looking at an immediate liquidity option, ‘cash on spot’ may work the
best for you, on selling shares through “cash on spot”, money is certified to your bank a/c the
 same evening & not on the exchange payout date.

BTST:

• Buy today sell tomorrow (BTST) is a facility that allows you sell shares even on 1 st and 2nd day
after the buying order date, without you having to Waite for the receipt of shares into your
Demat account.

Call N Trade:

• Call N Trade allow you call on a local number in your city & trade on the telephone through our
customer services Executive.

• Trading in NSE/BSE: through Tata securities you can trade on NSE and BSE.

25

Market order:

• This is an order to buy sell securities at the best price obtainable in the market at the time it is
matched by the exchange. Therefore, change of its getting executed are better. In case of market
order for NSE, all market order placed which are not executive fully; it becomes a limit order
for the balance quantity at the last traded price.

Market Order in BSE: Explanation:

Market order can be placed only during market hours (i.e., when the Exchanges is open for
trading).You could trade by placing market orders during market hours that allows you to trade at the
best obtainable price in the market at the time of execution of the order.

Limit Order:

Limit Order is an order to buy or sell securities in which you specify the maximum price per unit in
case of a buy order and the minimum price per unit in case of sell order. The actual transaction can be
at a price more favorable than the price specified.
Allow you to place a buy/sell order at a price defined by you. The execution can happen at a price more
favorable than the price, which is defined by you, limit orders can be placed by you during holidays &
non market hours too.

Online confirmation of Order and trade:

You get online confirmation of orders and trades- the status of any order is updated on real-time basis
in the Order Book. As soon as you place your order they are validated by the system and sent to the
exchange for execution. The entire process is fully automation and there are no manual interventions.

26

GTC, GTD and IOC Order:

A Good Till cancelled (GTC) order remains in the system until the trading members cancels it.
However, the system cancels this order if it is not trade within a number of days parameterized by the
Exchanges. A Good Till Days/Date (GTD) order allows the user to specify the number of days/date till
which the order should stay in the system if not executed. The maximum number of days for which the
GTC/GTD order can remain in the system is notified by the exchange from time to time after which the
day/date on which the order is placed and inclusive of holidays. An immediate or cancel (IOC) order
allows the user to buy or sell a security as soon as the order is released into the system, falling which
the order is cancelled from the system. Partial match is possible for the order and the unmatched
portion of the order is cancelled immediately.

Disclose Quantity (DQ) Order:

Normally, the order quantity is disclosed in full to the market. An order with a disclosed quantity (DQ)
condition/attribute allows the trading members to disclose only a part of the order quantity to the
market. For example, an order of 1000 with a disclosed quantity condition of 200 will mean that 200 is
displaced to the market at a time. After this traded, another 200 is automatically released soon till the
full order is executed. DQ (Disclosed Quantity) should not be less that 10% of the order quantity and at
the same time should not be greater than or equal to the order quantity.

Stop Loss Order:

A stop loss order allows the client to place an order which gets activated only when the market price of
the relevant securities reached or crosses a threshold price specified by the investors in the form of
‘stock loss trigger price’. When a stop loss trigger price (SLTP) is specified in a limit order, the order
becomes one which is conditional on the market price of the stock crossing the specified SLTP. The
order remains passive (i.e. not eligible for execution) till the condition is satisfied. Once the last traded
price of the stock reached or surpasses the SLTP, the order becomes activated and then on behaves like
a normal limit order. It is used as a tool to limit the maximum loss on a position.

27

Stop Loss by Order:

‘A’ short sell reliance shares at Rs. 325 in experience that the price will fall. However, in the event the
price rises above his buy price ‘A’ would like to limit sell order specifying a stock loss trigger price Rs.
305 and a limit price of Rs. 300.

Trade in derivatives:

Future:

Through Tata securities you can now trade in index and stock futures on the NSE in future trading, you
take buy/sell position in index or stock (S) contract having a longer contract period of up to 3 month.

Trading in FUTURE is simple if, during the course of the contract life, the price moves in favor (i.e.
rises in case you have a bye position or sell in case you have a sell position), you make a perfect.
Presently only selected stock, which meet the certain liquidity and volume, have been enabled for
future trading. Calculate index and now your margin are tools to help you in calculating your margin
requirement and also the index & stock price movement.

Option:

An option is a contract, which gives buyer the right to buy or sell shares at a specific prices, on a before
a specific date. For this, the buyer has to pay to the seller some money, which is called premium. There
is now obligation on the buyer to complete the transaction if the price is not favorable to him. To take
the buy/sell position on index/stock option, you have to place certain % of order value as margin. With
option trading, you can leverage on your trading limit buy taken buy/sell position much more that what
you could have taken in cash segment.

28

The buyer of a call option has the right but not the obligation to purchase the underlying asset at the
specified strike price buy paying a premium whereas the seller of the call has the obligation of selling
the underlying asset at the specified strike price.

The buyer of a put option as the right but not the obligation to sell the underlying asset at the specified
strike price paying a premium whereas the seller of the put has the obligation of buying the underlying
the asset at the specified price. Buy paying lesser amount of premium, you can create position order
option and take advantage of more trading opportunities.

Switch:
To suit your changing needs you may wish to shift monies between different schemes. You can switch
your monies online form one schemes to another in the some fund family without any hassles.

Systematic investment plans (SIP)

SIP allows you to invest a certain some of money over a period of time periodically. Just fill in
investment amount, the period of investment and the frequency of investing and submit. We will do the
rest for you automatically investing periodically for you.

Systematic withdrawal plan:

This allows you to withdraw or certain some money over up period of time periodically.
Transfer-in: we can convert to existing mutual funds into electronic more through a transfer-in request.

29

IPOS and BONDS Online:

You can also invest in initial public offers (IPO’s) and bonds online without going through the hassles
of filling any application form/paperwork.

Get –in-depth analysis for new IPO’s issue (initial public offering) which are about to hit the market
and analysis on these. IPO calendar, recent IPO listing, prospectus/offer document, and IPO analysis
are few of the features, which help you, keep

You can also invest in initial public offers (IPO’s) and bonds online without going through the hassles
of filling any application form/paperwork. Get –in-depth analysis for new IPO’s issue (initial public
offering) which are about to hit the market and analysis on these. IPO calendar, recent IPO listing, keep
on talk of the IPO markets

30
 Issue of Shares
Why do companies need to issue shares to the public?
Most companies are usually started privately by their promoter(s). However, the
promoters' capital and the borrowings from banks and financial institutions may
not be sufficient for setting up or running the business over a long term. So
companies invite the public to contribute towards the equity and issue shares to
individual investors. The way to invite share capital from the public is through a
'Public Issue'. Simply stated, a public issue is an offer to the public to subscribe
To the share capital of a company. Once this is done, the company allots shares
to the applicants as per the prescribed rules and regulations laid down by SEBI.
What are the different kinds of issues?
Primarily, issues can be classified as a Public, Rights or Preferential issues
(also known as private placements). While public and rights issues involve a
detailed procedure, private placements or preferential issues are relatively
simpler. The classification of issues is illustrated below:
Initial Public Offering (IPO) is when an unlisted company makes either a fresh
issue of securities or an offer for sale of its existing securities or both for the first
time to the public. This paves way for listing and trading of the issuer's
securities.
A follow on public offering (Further Issue) is when an already listed
company makes either a fresh issue of securities to the public or an offer for
sale to the public, through an offer document.
Rights Issue is when a listed company which proposes to issue fresh
securities to its existing shareholders as on a record date. The rights are
normally offered in a particular ratio to the number of securities held prior to the
issue. This route is best suited for companies who would like to raise capital
without diluting stake of its existing shareholders.
 31
A Preferential issue is an issue of shares or of convertible securities by listed
companies to a select group of persons under Section 81 of the Companies
Act, 1956 which is neither a rights issue nor a public issue. This is a faster way
for a company to raise equity capital. The issuer company has to comply with
the Companies Act and the requirements contained in
the Chapter pertaining to preferential allotment in SEBI guidelines which interalia
include pricing, disclosures in notice etc.
Classification of Issues
What is meant by Issue price?
The price at which a company's shares are offered initially in the primary
market is called as the Issue price. When they begin to be traded, the
market price may be above or below the issue price.
What is meant by Market Capitalisation?
The market value of a quoted company, which is calculated by multiplying
its current share price (market price) by the number of shares in issue is
called as market capitalization. E.g. Company A has 120 million shares in
issue. The current market price is Rs. 100. The market capitalisation of
company A is Rs. 12000 million.

What is the difference between public issue and private placement?

When an issue is not made to only a select set of people but is open to the
general public and any other investor at large, it is a public issue. But if the
issue is made to a select set of people, it is called private placement. As per
Companies Act, 1956, an issue becomes public if it results in allotment to 50
persons or more. This means an issue can be privately placed where an
allotment is made to less than 50 persons.

32
What is an Initial Public Offer (IPO)?
An Initial Public Offer (IPO) is the selling of securities to the public in the
primary market. It is when an unlisted company makes either a fresh issue of
securities or an offer for sale of its existing securities or both for the first time to
the public. This paves way for listing and trading of the issuer's securities. The
sale of securities can be either through book building or through normal public
issue.
Who decides the price of an issue?
Indian primary market ushered in an era of free pricing in 1992. Following this,
the guidelines have provided that the issuer in consultation with Merchant
Banker shall decide the price. There is no price formula stipulated by SEBI.
SEBI does not play any role in price fixation. The company and merchant
banker are however required to give full disclosures of the parameters which
they had considered while deciding the issue price. There are two types of
issues, one where company and Lead Merchant Banker fix a price (called fixed
price) and other, where the company and the Lead Manager (LM) stipulate a
floor price or a price band and leave it to market forces to determine the final
price (price discovery through book building process).
What does 'price discovery through Book Building Process' mean?
Book Building is basically a process used in IPOs for efficient price discovery. It
is a mechanism where, during the period for which the IPO is open, bids are
collected from investors at various prices, which are above or equal to the floor
price. The offer price is determined after the bid closing date.

33

Importance Of Stock Market:

Function and purpose

The stock market is one of the most important sources for companies to raise money. This allows
businesses to be publically traded or raised additionally capital for expansion by selling share of
ownership of the company in a public market.

The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities.
This is an attractive feature of investing in stocks, compared to other less liquid investment such as real
estates.

History has shown that the price of shares and other assets is an important part of the dynamic of
economies activity, and can influence or be an indicator of social mood.

An economy where the stock market is on the rise is considered to be an up and coming economy.

In fact, the stock market is often considered the primary indicators of a country’s economics strength
and development. Rising share prices, for instance, tend to be associated with increased business
investment and vice versa.
Share prices also affect the wealth of household and their consumption.

Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in
general, on the smooth operation of financial system functions. Financial stability is the raison d’être of
central banks.

34

Exchanges also act as the clearinghouses for each transaction, meeting that they collect and deliver the
shares, and guarantee payment to the seller of a securities. This eliminates the risk to an individual
buyers or seller that the counterparty could default on the transaction.
The smooth functioning of all these activities facilities economies growth in that lower costs enterprise
risks promote the production of goods and services as well as employment.

In this way the financial system contribution to increased prosperity. An important aspect of modern
markets, however, including the stock markets, is absolute discretion.

For example, in the USA stock we see more unrestrained acceptance of any firm than in similar
markets. Such as, Chinese firms with no significant value to American society to just name one
segment.

This profit USA banker on Wall Street, as they reap large commissions from the placement, and the
Chinese company which yields funds to invest in china.

Yet accrues no intrinsic value to the long-term stability of the American economy, rather just short-term
profits to American business man and the Chinese; although, when foreign company has a presence in
the new market, there can be benefits to the market’s citizens.

Conversely, there are very few large foreign corporation listed on the Toronto Stock exchange TSX,
Canada’s largest stock exchange. This discretion has insulated Canada to some degree to worldwide
financial condition.

In order for the stock markets to truly facilitate economy’s growth via lower costs and better
employment, great attention must be given to the foreign participants being allowed in. Relation of the
stock market to the modern financial system.

The financial system in most western countries has undergone a remarkable transformation. One
features of this development is disintermediation. A portion of the funds involved in saving and
financing bank lending and deposit operation.
35
The general public’s heightened interest in investing in the stock market, either directly or through
mutual funds, has been an important component of this process. Statistics show that in recent decades
share have made up an increasingly large proportion of household’s financial assets in many countries.
In the 1970’s, in Sweden, deposit account and other very liquid assets with little risk made up almost 60
percent of households’ financial wealth, compared to less than 20 percent in the 2000s.

The major part of this adjustment in financial portfolio has directly to shares but a good deal now take
the form of various kinds of institutional investment for groups of individuals, e.g., pension funds,
mutual funds, hedge funds, insurance investment of premiums, etc.
The trend towards form of saving with a higher risk has been accentuated by new rules for most funds
and insurance, permitting a higher proportion of shares to bonds.

Similar tendencies are to be found in other industrialized countries. In all developed economies system,
such as the European Union, the United State, Japan and other developed nations, the trend has been
the same: saving has moved away from traditional (government insured) bank deposits to more risky
securities of one sort or another.

36

The Stock Market, Individual Investors, and Financial Risk:

Riskier long-term saving required that an individual possess the ability to manage the associated
increased risks. Stock prices fluctuated widely, in marked contrast to the stability of (government
insured) bank deposits or bonds.

This something that could affect not only the individual investors or households, but also the economy
on a large scale. The following deals with some of the risks of the financial sectors in general and the
stock market in particular.

This is certainly more important now that so many newcomers have entered the stock market, or have
acquired other ‘risky’ investment (such as ‘investment’ property, i.e., real estate and collectables.)
With each passing year, the noise level in the stock market rises. Television commentators, financial
writers, analysis, and market strategies are all over taking each other to get investors ‘attention’.

At the same time, individual investors, immersed in chat rooms and message boards, are exchanging
questionable and often misleading tips.

Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices
skyrocket with little reasons, then plummet just as quickly.

And people who have turned to investing for their children’s education and their own retirement
become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly.

This is a quote from the prefaces to a published biography about the long-terms value oriented stock
investors warren Buffett.

37

The behavior of the stock market:

From experiences we know that investors may ‘temporarily’ move financial prices away from their
long terms aggregate price ‘trend’ (positive or up trends are referred to as bull markets: negative or
down trends are referred to as bear markets.)

Over-reaction may occur so that excessive optimism (euphoria) may drive prices unduly high or
excessive pessimism may drive unduly low. New theoretical an empirical arguments have since been
put forward against the notion that financial markets are ‘generally’ efficient (i.e., in the sense that
prices in the aggregate tends to follow a Gaussian distribution.)

(But this largely theoretic academic viewpoint- knows as ‘hard’ EMH- also predicts that little or no
trading should take place, contrary to fact, since prices are already at or near equilibrium, having priced
in all public knowledge.) The ‘hard’ efficient-market hypothesis is sorely tested by such events as the
stock market crash in 1987, when the Dow Jones index plummeted 22.6 percent—the largest-ever one-
day fall in the United States.
This events demonstrated that share prices can fall dramatically even though, to this day, it is
impossible to fix a generally agreed upon definite cause: a thorough search failed to detect any
‘reasonable’ development that might have accounted for the crash. (But note that such events are
predicted to occur strictly by chance, although very rarely.)

It seems also to be the case more generally that many price movements (beyond that which are
predicted to occur ‘randomly’) are not occasioned by new information: a study of the fifty largest one-
day share prices movements in the United States in the post-war period seems to confirm this.

However, a ‘soft’ EMH has emerged which does not required that prices remain at or near equilibrium,
but only that market participants not be able to systematically profits from any momentary market
‘inefficiencies’.

38
Various explanation for such large and apparently non-random prices movement have been
promulgated. For instance, some research has shown that change in estimated risks, and the use of
certain strategies, such as stop-loss limit and value at Risk limits, theoretically could cause financial
markets to overcorrect.

But the best explanation seems to be that the distribution of stock market prices is non-Gaussian (in
which case EMH, in any of its current forms, would not be strictly applicable.)

Other research has shown that psychological factors may result in exaggerated (statically anomalous)
stock prices movement (contrary to EMH which assumes such behaviors’ cancel out’).

Psychological research has demonstrated that peoples are predisposed to ‘seeing’ patterns, and often
will perceive a pattern in what is, in fact, just noise, (something like seeing familiar shapes in clouds or
ink blots.)

In the present context this means that a succession of good new items about a company may lead
investors to overreact positively (unjustifiably driving the prices up). A period of good returns also
boosts the investor’s self-confidence, reducing his (psychological) risk threshold.

Another phenomenon—also from psychology—that works against an objective assessment is group

thinking. As social animal, it is now easy to stick to an opinion that differs markedly from that of a
majority of the group.
An example with which one may be familiar is the reluctance to enter a restaurant that is empty; people
generally prefer to have their opinion validated by those of other in the group.

In one paper the authors draw an analogy with gambling. In normal times the market behaves like a
game of roulette; the probabilities are known and largely independent of the investment decision of the
different players.

39
In times of market stress, however, the game becomes more like poker (herding behavior takes over).
The players now must give heavy weight to the psychology of other investors and how they are likely
to react psychology.
The stock market, as any other business, is quite unforgiving of amateurs. Inexperienced investors
rarely get the assistance and support they need.

In the period running up to 1987 crash, less than 1 percent of the analysis recommendation had been to
sell (and even during the 2000-2002 bear market, the average did not above 5%).

In the run up to 2000, the media amplified the general euphoria, with reports of rapidly rising share
prices and the notion that large sums of money could be quickly earned in the so called In the run up to
2000, the media amplified the general euphoria, with reports of rapidly rising share prices and the
notion that large sums of money could be quickly earned in the so called new economy stock market.

(And later amplified the glom which descended during the 2000-2002 bear market, so that by summer
of 2002, prediction of a DOW average below 5000 were quite common).

Irrational behavior:
Sometimes the market seems to react irrationally to economic or financial news, even if that news is
likely to have no real effect on the technical value of securities itself.

But this may be more apparent than real, since often such has been anticipated, and a counter reaction
may occurs if the news is better (or worse) than expected.

Therefore, the stock market may be swayed in either by press releases, rumors euphoria and mass
panic; but generally only briefly, as more experienced investors (especially the hedge funds quickly
rally to take advantage of even the slightest, momentary hysteria.
Over the short-term, stock and other securities can be battered or buoyed by any number of fast market-
changing events, making the stock market behavior difficult to predict. Emotion can drive prices up
and down, people are generally not as rational as they think, and the reasons for buying and selling are
generally obscure.

40
Behaviorists argue that investors often behave ‘irrationally’ when making investment decision thereby
incorrectly pricing securities. This causes market inefficiencies, which, in turn, are opportunities, to
make money.
However, the whole notion of EMH is that these non-rational reactions to information cancel out,
leaving the prices of stock determined. The Dow Jones industrial Average biggest gain in one day was
936.42 points or 11 percent, this occurred on October 12, 2008.

Crashes:
Robert shiller’s plot of the S&P composite Real prices, Earning, Dividends, and interest Rates, from
irrational exuberance, 2nd. In the prefaces to this edition, Shiller warns, “The stock market has not come
down to historical levels: the prices-earnings ratio as I defined it in his book is still, at this writing
[2005], in this mid-20s, far higher than the historical average…..people still place too much confidence
in the market and have too strong a belief that paying attention to the gyration in their investment will
someday make them rich, and so they do not make conservative preparation for possible bad
outcomes.”
Price-Earnings ratios as predictors of twenty-year returns based upto the plot by Robert shiller. The
horizontal axis shows the real price-earnings ratio of the S&P composite stock price index as computed
in Irrational Exuberance (inflation adjusted price divided by the prior ten-year mean of inflation-
adjusted earning).
The vertical axis shows the geometric average real annual return on investing in the S&P composite
stock prices index, reinvesting dividends, and selling twenty years-did do well when prices were low
relative to earnings at the beginning of the ten years.
Long-term investors would be well advised, individually, to lower their exposer to the stock market
when it is high, as it has been recently, and get into the market when it is low.”

Stock market crash:

A stock market crash is often defined as a sharp dip in share prices of equities listed on the stock
exchanges. In parallel with various economics factors, a reason for stock market crashes is also due to
panic and investing public’s loss of confidence. Often, stock market crashes end speculative economics
bubbles.
There have been famous stock market crashes that have ended in the loss of billions of dollars and
wealth destruction on a massive scale. An increasing number of people are involved in the stock
market, especially since the social security and retirement plans are being increasingly privatized and
linked to stocks and bonds and other elements of the market.
 41
There have been a number of famous stock market crashes like the Wall Street crashes of 1929, the
stock market crash of 1973-4, the Black Monday of 1987, the Dot-com bubble of 2000, and the stock
market crashes 2008.
One of the most famous stock market crashes started October 24,1929 on Black Thursday. The Dow
Jones industrial lost 50% during this stock market crash. It was the beginning of the Great depression.
Another famous crash took place on October 19, 1987 --- Black Monday. On Black Monday itself, the
Dow Jones fell by 22.6% after completing a 5 year continuous roses in share prices. This event not only
shook the USA, but quickly spread across the world.
Thus, by the end of October, stock exchanges in Australia lost 41.8%, in Canada lost 22.5%,, in Hong
Kong lost 45.8%, and in Great Britain lost 26.4%. The names, “Black Monday” and “Black Tuesday”
are also used for October 28-29, 1929.
This followed terrible Thursday –the starting day of the stock market crash in 1929. The crash in 1987
raised some puzzles—main news and events did not predict the catastrophe and visible reasons for the
collapse were not identified.
This event raised question about many important assumptions of modern economics, namely, the
theory of rational human conduct, the theory of market equilibrium and the hypothesis of market
efficiency.
For some time after the crash, trading in stock exchanges worldwide was halted, since the exchanges
computers did not perform well owing to enormous quantity of trades being received at one time.
This halt in trading allowed the Federal Reserve System and central banks of other countries to take
measures to control the spreading of worldwide financial crisis.
In the United State the SEC introduction several new measures of control into the stock market in an
attempt to prevent a re-occurrence of the events of Black Monday.
Computer systems were upgrades in the stock exchanges to handle larger trading volumes in a more
accurate and controlled manner. The SEC modified the margin requirement in an attempt to lower the
volatility of common stocks, stock option and the futures markets.
The New York Stock Exchanges and the Chicago Mercantile Exchange introduction the concept of a
circuit breaker. The circuit breaker halts trading if the Dow declines a prescribed number of points for a
prescribed amount of time.

• New York Stock Exchange (NYSE) circuit breakers.

42

Stock market index

• The movement of the prices in a market or sections of a market are captured in price indices
called stock market indices, of which there are many, e.g., S&P, the FTSE and the Euro next
indices.

• Such indices are usually market capitalization weighted, with the weight reflecting the
contribution of the stock of the index are reviewed frequently to include/exclude stocks in order
to reflects to reflects the changing business environment.

Leveraged strategies

• Stock that a traders does not actually own may be traded suing short selling; margin buying may
be used to purchase stock with borrowed funds; or, derivatives may be used to control large
blocks of stock for a much smaller of amount of money than would be required by outright
purchases or sale.

Short selling

• In short selling, the traders borrow stock (usually from his brokerage which holds it’s client’s
shares or its own share on account to lend to short sellers) then sells it on the market, hoping for
the price to all.

• The trader eventually buys back the stock, making money if the price fell in the meantime or
losing money if it rose; exiting a short position by buying back the stock is called “covering a
short position”.

• This strategy may also be used by unscrupulous traders to artificially lower the price of a stock.
Hence most markets either prevent short selling or place restriction on when and how a short
sale can occur.
• The practice of naked shorting is illegal in most (but not all) stock markets.\

43
Margin buying:

• In margin buying, trader borrows money (at interest)to buy a stock and hopes for it to rise. Most
industrialized countries have regulation that requires that if the borrowing is based on collateral
from other stock the trader owns outright, it can be a maximum of a certain percentage of those
other stocks’ value.

• In the United State, the margin requirements have been 50% for many years (that is, if you want
to make a $100 investment, you need to put up$500, and there is often a maintenance margin
below the $500).

• A margin call is made if the total value of the investor’s account cannot support the loss of the
trade.

• (Upon a decline in the value of the margined securities additional funds may be requires to
maintain the account’s equity, and with or wit out the margined securities or any others within
the account may be sold by the brokers to protect its loan position. This investors is responsible
for any shortfall following such forced sale).

• Regulation of margin requirement (by the Federal Reserve) was implemented after the crash of
1929. Before that, speculators typically only needed to put up a little as 10% (or even less) of
the total investment represented by the stocks purchased.

• Other rules may include the prohibition of free-riding: putting in an order to buy stocks without
paying initially (there is normally a three-day grace period for delivery of the stock.)

• But then selling them (before the three-days are up) and using part of the proceeds to make the
original payment (assuming that the value of the stocks has not declined in the interim).
 44

New issuance:

• Global issuance of equity and equity-related instrument totaled $505 billion in 2004, a 29.8%
increase over the $389 billion raised in 2003. Initial public offer (IPOs) by US issuers increased
221% with 233offering that raised $45 billion, and IPOs in Europe, Middle East and Africa
(EMEA) increased by 333% from $9 billion to $39 billion.

Investment strategies:

• One of the many thing people always want to know about the stock market is, “How do I know
money investing?” There are many different approaches; two basic methods are classified as
either fundamental analysis or technical analysis.

• Fundamental analysis refers to analyzing companies by their financial statements founds in SEC
Filing, business trends, general economic conditions, etc.

• Technical analysis studies prices action in market through the use of charts and quantitative
techniques to attempt to forecast prices trends regardless of the company’s financial prospects.

• One examples of a technical strategy is the Trend following method, used by John W Henry and
risk control and diversification.
• Additional, many choose to invent via the index method. One holds a weight or unweight
portfolio consisting of the entire stock market or some segment of the stock market (such as the
S&P 500 or Wilshire 5000).

• The principle aim of this strategy is to maximize diversification, minimize taxes from too
frequent trading and ride the general trend of the stock market (which, in the U.S, has averaged
nearly 10% year, compounded annually, since World War II).

45

Taxation:

• According to much national or state legislation, large arrays of fiscal obligation are taxed for
capital gains. Taxes are charged by the state over the transactions, dividends and capital gains
on the stock market, in particular in the stock market.

• However, these fiscal obligations may vary from jurisdiction to jurisdiction because, among
other reasons, it could be assumed that taxation is already incorporated into the stock prices
through the different taxes companies pay to the state, or that tax free stock market operations
are useful to boost economic growth.
 46

Objectives of study:

• To understand & analyze the marketing strategies and analyze online

• Trading of Tata Securities ltd.

• To improve the format of daily sales report (DSR)

• To get the Demat account opened of potential customers in favor of Tata Securities.
Analysis of need and satisfaction of distribution of financial services.
 • To give a brief idea about the benefits available from Mutual Funds investment and idea of
types of schemes available.

• To discuss about the market trends of Mutual Funds investment.

• To study some of the mutual funds schemes and analyze them observe the funds
management process of mutual funds.

• Explore the recent developments in the Mutual Funds in India. To give an idea about the regulations
of Mutual Funds.

47

FINDING AND RECOMMENDATION:

During my project analysis I was very keen to find some key areas which need to be taken care
seriously in the future because these are causing dissatisfaction among distributors.

Most of distribution felt dissatisfaction with their brokers but some of disappointing areas are-

• More exposure: Most of distributors want some more exposure for them clients from their share
 broking companies. A Tata security is now providing super exposure p to 15 of the margin (cash
segment) the step like this really creates satisfaction for the distributors.

• Brokerage problem: Some companies have very high brokerage chares which create differences of
market share of different companies and also dissatisfaction among distributors.

• Fewer offers: Most of companies lag behind in giving time to time offers in order to attract new
customers.

LIMITATIONS:

• The time constraint was one of the major problems.

• The study of limited to the different schemes available under the mutual funds selected.

• The study is limited to selected mutual fund schemes

• The lack of information sources for the analysis part.

48

Recommendation for the concerned companies:

• Mass reach- The new and different offers should be communicated to the large value of potential
inventors so that the offers can hit the target.

• Full information- The companies should reveal all the information regarding any scheme so
that investors can feel free to invest.
• All risks should be communicated by distributors of financial services- It is very
important for distributors to make the customers aware about all the risks involved and he could
not blame for any loss to the company.

• Misconceptions- There are many misconceptions in the mind of common people that Mutual
funds, online share trading etc. are only for ‘big ones’ & they can’t enter in this field and if they
will enter they will suffer losses so, by giving example of active investors various
misconceptions should be removed.

• Simple procedure-many potential investors are computer illiterate so they never try their hand
free.

• Target rural areas also- many potential investors are also trust in rural areas. They come to
cities (like in Jaipur) for various works. There should some special offers to attract them in
share trading.

• Employees should be trained- It is very necessary for the employees to give an effective
demo to the client about the use of various services of share broking etc. many times they fail to
make the offer understandable to the client, this is the drawback to be overcome.

• Some offers for women should be introduced to get a new share of market.

49

CONCLUSION
The expectations of the customers are regularly increasing because of the increasing competition and
emergence of global market. In such conditions it becomes very necessary for a company to fulfill all
the expectations of the customers and give them a delightful experience.
A Tata securities aims to provide better services by consistently improvement. The study concluded: -
Tata securities Ltd. has better Portfolio Management services than
Other Companies Tata securities Ltd. keeps its process more transparent. Tata securities Ltd. is giving
more returns to its investors. Tata securities charges are less than other stock brokers.
Tata securities are providing daily updates about the stocks information. Investors are looking for
those investment options where they get Maximum returns with less costs. Market is becoming
complex & it means that the individual investor will not have the time to play stock game on his own.
People are less aware about the Services provided by Tata securities

50

BIBLIOGRAPHY:
• Www. HYPERLINK "http://www.nirmalbang.com/" Tata securities HYPERLINK
"http://www.nirmalbang.com/".com

• www.hseindia.com

• www.tatacapital.com

• www.google.com

• From Wikipedia, the free encyclopedia

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