CHAPTER I

INTRODUCTION

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 INTRODUCTION

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

The introduction of the Internet has surprisingly changed our way of life as
a society. It has defined the way we do business and the way we correspond. The
Internet has opened many opportunities for online trading. The financial industry
revolves around the Internet. Every thing is just a few clicks away. This makes
online trading most convenient. But there are still investors who prefer the old
fashion way of offline trading and they mainly prefer offline trading for security
reasons.

Internet has introduced a way for consumers to manage their money

online. Not to mention, Internet has transformed the way investment companies
operate their business and has made it easy for private investors to gain straight
access to a range of different markets and online tools that were at one point only
reserved by the use of investment professionals. Consumer investing and online
trading has dramatically changed over the last decade. Online trading dynamically
continues to be redefined. Services have expanded to include integrated
management of additional financial accounts. Not to mention, it has subsequently
expanded in conjunction with ground-breaking improvements to the traditional
trading interface, such as telephone interface systems.

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 NEED OF THE STUDY

 Capital Markets play a vital role in the development of the economy

and stock exchanges are the integral part of the capital market.
 With the advance in Information Technology, age-old methods of stock
trading are gradually fading out.
 They are replaced by the easier and hassle-free method of trading On-
line through Internet.
 This study is carried out to explore the changes occurring in stock
exchange with the advancements in the information technology.
 The major need for this study is to know the effectiveness of online
system in comparison with the outcry system.

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 SCOPE OF THE STUDY

 The study covers Online Trading features in detail.

 The study attempts to study the advantages and disadvantages of online
trading.
 The study collects most of the information from different secondary
resources apart from primary information by discussing with different
managers and customers who do online trading.

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 OBJECTIVES OF THE STUDY

 To understand the appropriate organizational structure of the Angel

Broking Limited.
 To study the different products of Angel Broking Ltd.
 To Study the Growth of Online Trading.
 To analyze the online trading and its process.
 To give an in-depth knowledge about Securities, Derivatives: Future, Options,
Capital market: Primary Market, Secondary Market, NSE and BSE.

 To study the software used by the company for trading.

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 RESEARCH METHODOLOGY

Descriptive research is used in this project report in order to know

about cash management services to clients and determining their level
of satisfaction. This is the most popular type of research technique,
generally used in survey research design and most useful in describing
the characteristics of consumer behavior.

Data Collection

The data collected was mainly secondary in nature and the sources were website
and text books. Some primary data was also collected by interacting with guide
and other personalities.

Data Analysis

The collected data was grouped under relevant headings. The various topics
were then so arranged those give logical studies of the topics.

Conclusion
The suggestions and conclusions were made mainly based on the observations
from the data collected.

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 LIMITATIONS

 The study was carried out for a period of 45 days and due to paucity of
time an in-depth study was not possible.
 Technology is dynamic in nature. Therefore, this report may be relevant
only till there are no changes in the technology.
 Secondary information may not be authentic.

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 CHAPTER II
INDUSTRY PROFILE

Page 8 of 79
INTRODUCTION TO THE CAPITAL MARKET

The capital market is the market for securities, where companies and the
government can raise long term funds. The capital market includes the stock
market and the bond market. Financial regulators ensure that investors are
protected against fraud. The capital markets consist of the primary market, where
new issues are distributed to investors, and the secondary market, where existing
securities are traded.

Capital market thus plays a vital role in channelizing the savings of individuals for
Investment in the economic development of the country. As a result the investors
are not constrained by their individual abilities, but by the abilities of the
companies, which in turn enhance the savings and investments in the country,
liquidity of capital market is an important factor affecting growth.

Since projects require long term finance, but on the other hand, the investor may
not like to relinquish control over their savings for a long time. A liquid stock
market ensures a quick exit without incurring heavy losses or costs. Thus
development of efficient market system is necessary for creating conductive
climate for investment and economic growth.

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Capital Market Segment – Primary and Secondary

Broadly, the comprises of two segments – the new issue market which is
commonly known as primary market and the stock market which is known as
secondary market.

Primary
A primary offering, such as with a corporate bond, means you are buying
it directly from the issuer, at par value, usually. A secondary market is where you
sell or buy existing issues. I.E. If you bought a bond last year, now need to get
your principal, you can sell it in the secondary market. You may not get par value.
If rates are up since you bought the bond, then you will likely have to sell it at a
discount to be able to get rid of it. If rates have fallen since you bought it, you
could get a premium for it.

Secondary
The market where securities are traded after they are initially offered in the
primary market. Most trading is done in the secondary market. To explain further,
it is trading in previously issued financial instruments. An organized market for
used securities. Bombay Stock Exchange (BSE), National Stock Exchange NSE,
bond markets, over-the-counter markets, residential mortgage loans, governmental
guaranteed loans etc

Secondary Market refers to a market where securities are traded after

being initially offered to the public in the primary market and/or listed on the
Stock Exchange. Majority of the trading is done in the secondary market.
Secondary market comprises of equity markets and the debt markets. For the
general investor, the secondary market provides an efficient platform for trading
of his securities.
For the management of the company, Secondary equity markets serve as a
monitoring and control conduit—by facilitating value-enhancing control activities,
enabling implementation of incentive-based management contracts, and
aggregating information (via price discovery) that guides management decisions.

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MEANING OF STOCK EXCHANGE

A stock exchange, share market or bourse is a corporation or mutual

organization which provides "trading" facilities for stock brokers and traders, to
trade 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. 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. A stock exchange
is often the most important component of a stock market. Supply and demand in
stock markets is driven by various factors which, as in all free markets, affect the
price of stocks (see stock valuation).
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.
Increasingly, stock exchanges are part of a global market for securities.

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CONCEPT OF SHARE TRADING

The concept of share broking emerged after the establishment of the joint
stock companies. The ownership of the companies was divided into small parts
and that every part was called share. So, the term “Share” denominates some part
in the ownership of the company. The shares are freely transferable subject to the
some certain restrictions. When the need was felt to sell the shares by the owner of
the shares, it was difficult to find out the buyers of the shares who want to buy the
shares at the price the seller want to sell. At that time a need was felt to bring the
buyers and sellers on a common platform. To solve this problem, a group of
persons came into picture, which used to bring the buyers and sellers together for
the trade of the shares. These persons are called the share Brokers who find the
persons who wish to buy or sell their securities. The whole process of finding the
buyers and sellers of the securities by the brokers is called the Share Broking. The
origination of the Indian securities market may be traced back to 1975, when 22
enterprise brokers under a Banyan tree established the Bombay Stock Exchange
(BSE). Over the last 130 years, the Indian securities market has evolved
continuously to become one of the most dynamic, modern international standards
both in terms of structure and in terms of operating efficiency.

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Functions of Stock Exchange

Stock exchange is established into the main purpose of providing a market

place for the members to deal in securities under well laid down regulations and to
protect the interest of the investors. The main functions of stock exchange are

 It brings the companies and investors together so that the investors can put
risk capital into companies and thus, companies can use the capital.
 It provides an orderly regulated market for securities.
 It provides continuous, ready and open market for selling and buying
securities.
 It promotes savings and investment in the economy by attracting funds from
the investors.
 It facilitates take overs by means of acquiring majority of shares traded on the
stock market.
 It acts as a clearing house of business information.
 It motivates the managers of well reputed companies, to retain their shares in
‘A’ group, to improve performance.
 It induces the managers to improve performance for converting non-specified
shares into specified shares in the exchange.
 It enables the investors to evaluate the net worth of their holdings.
 It also allows the companies to float their shares in the market.

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ONLINE TRADING INFRASTRUCTURE

The emergence of online exchanges has facilitated faster transactions by

providing online trading portals and brokerage houses ease and flexibility. The
Internet has indeed opened up new opportunities for conducting the business. The
worldwide stock exchanges has made a major shift from the traditional method of
trading and now conduct a bulk of its business online through its brokers and
partners.
In the developed countries majorly all the exchange transactions are
conducted online. The trend took off slowly in India and the National Stock
Exchange (NSE) and the Bombay Stock Exchange (BSE) two of the largest
exchanges in India have been conducting online trade successfully for some time.

WHY ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and brokering houses have been very slow in moving
their transactions online and the major reason has been the lot government
regulations. The initial delay was due to laying down the specifications for
creating Closed User Groups (CUGs). This issue was resolved between the
Department of Telecommunications (DoT) and the Finance Ministry around 1998
and after that soon came the online trading portals like IL&FS investment,
ICICIDirect.com, motilaloswal.com, sharekhan.com etc. Connectivity related
issue was perhaps the most important technological factor. RBI made regulation
that it is mandatory for company to store at least 7 year financial and transactional
data.
In the non-stop, 24 hours a day, seven days a week world of investing, we are able
to

 Obtain investment news around the clock

 Check quotes on exchanges all over the world – day or night
 Easily compare one investment to another via numerous ratios,
charts, graphs, and tables

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  Screen for the best investments to fit our individual goals and
requirements
 Trade stocks as easily and quickly as professional traders
 Calculate retirement needs based on various scenarios
 Regularly monitor portfolios and make necessary changes quickly
and almost effortlessly
 Control the routing of individual trades for the best possible price
and execution

Even many years after the launch of the first online brokerage firm, there remain a
large contingent of individual investors who still pick up the phone and call their
stock broker to buy and sell investments. However, every year a growing number
of investors are placing their trades using online brokers.

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 CHAPTER III
COMPANY
PROFILE

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 About the Company
Angel Booking’s tryst with excellence in customer relations began more than 20
years ago. Angel Group has emerged as one of the top 10 retail broking houses in
India and incorporated in 1987. Today, Angel has emerged as a premium Indian
stock-broking and wealth management house, with an absolute focus on retail
business and a commitment to provide "Real Value for Money" to all its clients.

It has memberships on BSE, NSE and the leading commodity exchanges in India
NCDEX & MCX. Angel is also registered as a depository participant with CDSL.

Angel Group Companies

Member on the BSE and Depository

Angel Broking Ltd.
Participant with CDSL

Angel Capital & Debt Membership on the NSE Cash and Futures &
Market Ltd. Options Segment

Angel Commodities Broking

Member on the NCDEX & MCX
Ltd.

Angel Securities Ltd. Member on the BSE

 Incorporated 1987

 BSE Membership 1997

 NSE membership 1998

 Member of NCDEX and MCX

 Depository Participants with CDSL

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 Angel’s presence-

 Nation- wide network of 21 regional hubs

 Presence 124 cities

 6800 + sub brokers & business associates

 5.9 lakh +clients

Management
S.No Name Designation & Department
1. Mr. Dinesh Thakkar Founder Chairman & Managing Director
2. Mr. Lalit Thakkar Director – Research
3. Mr. Amit Majumdar Executive Director – Strategy and Finance
4. Mr. Rajiv Phadke Executive Director – HR & Corp
5. Mr. Vinay Agrawal Executive Director – Equity Broking
6. Mr. Nikhil Daxini Executive Director - Sales and Marketing
Executive Director - Distribution & Wealth
7 Mr.Hitungshu Debnath
Management
8. Mr.Mudit Kulshreshtha Executive Director – Operations

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Vision of the Company

To provide best value for money to investors through innovative products,

trading / investment strategies, state-of-the-art technology and personalized
service

Philosophy of the Company

Ethical practices & transparency in all our dealings customer interest above our
own always deliver what we promise effective cost management.

Quality Assurance Policy

We are committed to being the leader in providing World Class Product &
Services which exceed the expectations of our customers Achieved by teamwork
and a process of continuous improvement

CRM Policy

A Customer is the most important visitor on our premises. He is not dependent

on us but we are dependent on him. He is not interruption in our work, but is the
Purpose of it. We are not doing him a favor by serving. He is doing us a favor by
giving us an opportunity to do so

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Logo of the company

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 ORGANIZATIONAL STRUCTURE

CSO (Central
Support Office)

Regional Office Regional Office Regional Office

Branches & Franchise Branches & Franchise Branches & Franchise

Branches Branches Branches

Angel Clients Business Associates

Angel Clients

Products of Angel Broking

● Online Trading

● Commodities

● DP Services

● PMS (Portfolio Management Services)

● Insurance

● IPO Advisory

● Mutual Fund

● Personal loans

● Quality Assurance

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E-Broking

Angle has different products and voila trading on BSC, NSC, F&O, MCX &
NCDEX. It provides four softwares to customers for online trading.
Angel Investor
 User-friendly browser for investors
 Easy online trading platform
 Works in proxy and firewall system set up
 Integrated Back office: Access account information – anytime, anywhere
 Streaming quotes
 Refresh static rates when required
 Multiple exchanges on single screen
 Online fund transfer facility

Investment Advisory Services

To derive optimum returns from equity as an asset class requires professional

guidance and advice. Professional assistance will always be beneficial in wealth
creation. Investment decisions without expert advice would be like treating
ailment without the help of a doctor.

● Expert Advice: Their expert investment advisors are based at various

branches across India to provide assistance in designing and monitoring
portfolios.

● Timely Entry & Exit: Their advisors will regularly monitor customers’
investments and guide customers to book timely profits. They will also guide
them in adopting switching techniques from one stock to another during
various market conditions.

● De-Risking Portfolio: A diversified portfolio of stocks is always better than

concentration in a single stock. Based on their research, They diversify the

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 portfolio in growth oriented sectors and stocks to minimize the risk and
optimize the returns.

Commodities

A commodity is a basic good representing a monetary value. Commodities are

most often used as inputs in the production of other goods or services. With the
advent of new online exchange, commodities can now be traded in futures
markets. When they are traded on an exchange, Commodities must also meet
specified minimum standards known as basic grade.

Types of Commodities
● Precious Metals: Gold and Silver
● Base Metals : Copper, Zinc, Steel and Aluminum
● Energy : Crude Oil, Brent Crude and Natural Gas
● Pulses : Chana, Urad and Tur
● Spices : Black Pepper, Jeera, Turmeric, Red Chili
● Others : Guar Complex, Soy Complex, Wheat and Sugar

Benefits at Angel
● Three different online products tailored for traders & investors.
● Single Screen customized market-watch for MCX / NCDEX with BSE /
NSE.
● Streaming Quotes and real time Rates. Intra-day trading calls.
● Research on 25 Agro Commodities, Precious and Base Metals, Energy
products and Polymers.
● An array of daily, weekly and special research reports.
● Highly skilled analysts with professional industry experience.
● Active relationship management desk.
● Seminars, workshops and investment camps for investors

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Depositary Participant Services
Angel Broking Ltd. is a DP services provider though CDSL. We offer depository
services to create a seamless transaction platform to execute trades through Angel
group of companies and settle these transactions through Angel Depository
services.
● Wide branch coverage
● Personalized/attentive services of trained a dedicated staff
● Centralized billing & accounting
● Acceptance & execution of instruction on fax
● Daily statement of transaction & holdings statement on e-mail
● No charges for extra transaction statement & holdings statement

Portfolio Management Services

Successful investing in Capital Markets demands ever more time and expertise.
Investment Management is an art and a science in itself. Portfolio Management
Services (PMS) is one such service that is fast gaining eminence as an investment
avenue of choice for High Net worth Investors (HNI). PMS is a sophisticated
investment vehicle that offers a range of specialized investment strategies to
capitalize on opportunities in the market. The Portfolio Management Service
combined with competent fund management, dedicated research and technology,
ensures a rewarding experience for its clients.

Mutual Fund
To enable clients to diversify their investment in the right direction. Angel
Broking has added another product in its range with mutual funds.
● Access to in-depth research & proper selection from diversified funds
based on your preferred criteria
● Rating and rankings of all mutual funds from our in house expert analysts
● News and alert for your Mutual fund Portfolio and performance tracking
with watch lists
● Current and historical performance of different funds enabling
comparisons

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Benefits

● No risk of loss, wrong transfer, mutilation or theft of share certificates.

● Hassle free automated pay-in of your sell obligations by your clearing
members
● Reduced paper work.
● Speedier settlement process. Because of faster transfer and registration of
securities in your account, increased liquidity of your securities.
● Instant disbursement of non-cash benefits like bonus and rights into your
account.
● Efficient pledge mechanism.

FUNDAMENTAL SERVICES

The Sunday Weekly Report

This weekly report is ace of all th reports. It offers a comprehensive market

overview and likely trends in the week ahead. It also presents top picks based on
an in-depth analysis of technical and fundamental factors. It gives short term and
long-term outlook on these scripts, their price targets and advice trading strategies.
Another unique feature of this report is that it provides an updated view of about
70 prominent stocks on an ongoing basis.
Stock Analysis
Angel’s stock research has performed very well over the past few years and angel
model portfolio has consistently outperformed the benchmark indices. The
fundamentals of select scripts are thoroughly analyzed and actionable advice is
provided along with investment rationale for each scrip.

Flash News
Key developments and significant news announcement that are likely to have an
impact on market / scripts are flashed live on trading terminals. Flash news keeps
the market men updated on an online basis and helps them to reshuffle their
holdings

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TECHNICAL SERVICES

Intra-Day Calls

For day trader’s angel provides intraday calls with entry, exit and stop loss levels
during the market hours and our calls are flashed on our terminals. Our analysts
continuously track the calls and provide the recommendations according to the
market movements. Past performance of these calls in terms of profit/loss is also
available to our associates to enable them to judge the success rate.

Posting Trading Calls

Angels “Position Trading Calls” are based on a through analysis of the price
movements in selected scripts and provides calls for taking positions with a 10 -
15 days time span with stop losses and targets. These calls are also flashed on our
terminals during market hours.

Derivative Strategies
Our analyst take a view on the NIFTY and selected scripts based on derivatives
and technical tools and devise suitable “Derivative Strategies” , which are flashed
on our terminals and published in our derivative reports.

Future Calls
A customized product for HNIs to help them trade with leveraged positions
wherein clients are advised on stocks with entry, exit and stop loss levels for
short-term benefits. Over and above this, financial status of the calls is mentioned
at all times.

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 CHAPTER IV
THEORETICAL
FRAMEWORK

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Meaning of Online Trading

“Change is the law of nature”. There were times when man was a
wanderer or a normal. He himself had to go place to place in search of food, water
and now everything is available at your doorstep just at the click of the mouse.
The growth of information technology has affected almost all sectors of life.
Internet has enabled us to get every information at our doorstep. When Internet
has affected all sectors he could “stock markets” the most important player of the
economy, has remained far behind? Like all other sectors Internet has set its feet
in the stock markets also.

Internet trading commissions are clearly posted on the websites of the

various services, and are typically a fixed rate charge, depending upon the type of
security being traded and the size of trade. In theory, therefore, an Interest investor
always knows what commission he is being charged on each trade. Internet
investors can take as much time as they would like to take prior to placing a trade
order. Similarly the online investor likely does not have to worry that his broker is
making unauthorized trades. Since there is no individual broker making a
commission, the only person who is authorized to trace in a the account is the
actual investor. Furthermore, the internet investor can never become a victim of
excessive trading (where for the broker) since the investor maintains total control
over the number of transactions which take place in the account.

All of these positive features of internet trading may lead the unwary
investor to believe that Internet trading is a way to take control of their finances
and save more money in the process. Unfortunately, this is not always the case.
The advantages of Internet stock trading have also its weaknesses and these
weaknesses present significant drawbacks for the average investor.

First and foremost, the average investor is not an expert in the financial
markets. There is a danger for allowing the autonomy of online trading to hull you
into the belief that you are an expert investor. An online investor sitting at home at
a personal computer also foregoes proper investment advice and financial

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planning, perhaps among the most valuable services provided by traditional
brokers.

There are, of course, additional risks relative to performing transactions

over the Internet especially on a shared computer. Those people whom investors
have provided their account number and password can freely trade that account
while the investor will have little, if any, resource against the brokerage firm for
the breach of security.
When was online trading introduced in INDIA?

Online trading started in India in February 2000 when a couple of brokers

started offering an online trading platform for their customers.

ONLINE TRADING BY NSE & BSE

The central computer located at the Exchange is connected to the

workstations of the Brokers through satellite using Very Small Aperture
Terminals (VSATs). Orders placed at the Brokers' workstations reach the central
computer and are matched by the computer based on price and time priority.

Both the exchanges have switched over from the open outcry trading
system to a fully automated computerized mode of trading known as BOLT (BSE
Online Trading) and NEAT (National Exchange Automated Trading) System. It
facilitates more efficient processing, automatic order matching, faster execution of
trades and transparency. The scrips traded on the BSE have been classified into
'A', 'B1', 'B2', 'C', 'F' and 'Z' groups. The 'A' group shares represent those, which
are in the carry forward system (Badla). The 'F' group represents the debt market
(fixed income securities) segment. The 'Z' group scrips are the blacklisted
companies. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups
and Rights renunciation.

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PROCESS OF ONLINE TRADING

An investor interesting in trading through Internet shall have to, firstly

register himself with an Internet brokerage firm. Some formalities such as filling
the account opening form of the e-broker, copies of identity proof, copy of
residence proof are made to register himself with the e-trader. Secondly, the
investor would be required to open a bank account with a scheduled bank and
sufficient balance should be kept in the account. Thirdly he would be required to
open account with a depository participant because only Dematerialised shares
can be traded on Internet.

The client places order via the net by logging on to his

Broker’s site.

The broker accepts and executes the order and places it with
the exchange

The broker makes the payment either directly via the client bank account
or pays through its own account and recovers it later from the client.

The exchange accepts the order after checking the share limit for the day.

The exchange receives money and completes the settlement.

The client is intimated about the settlement either through the

demat or via e-mail.

So, generally following steps are followed while doing the trading through the
Internet:

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Step-I:
Those investors interested in doing the trading over Internet system, that is,NEAT
- ISX (NSE), should approach the brokers and register with the Stock Broker.

Step-2:
After registration, the broker will provide to them a login name, password and a
personal identification number (PIN).

Step-3:
Actual placement of an order, using the place order window as under can then
place an order:
(a) First by entering the symbol and series of stock and other parameters such as
quantity and price of the scrip on the place order window.
(b) Second, fill in the symbol, series and the default quantity.

Step-4:
It is the process of review. Thus, the investor has to review the order placed by
clicking the review option. He may also re-set to clear the values.

Step-5:
After the review has been satisfactory; the order has to be sent by clicking on the
send option.

Step-6:
The investor will receive an "Order Confirmation" 'message along with the order
number and the value of the order.

Step- 7:
In case the order is rejected by the Broker or the Stock Exchange for certain
reasons such as invalid price limit, an appropriate message will appear at the

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 bottom of the screen. At present, a time lag of about ten seconds is there in
executing the trade.

Step-8:
It is regarding charging payment, for which there are different modes. Some
brokers will take some advance payment from the, investors and will fix their
trading limits. When the trade is executed, the broker will ask the investor for
transfer of funds by the investor to his account.

THE MECHANICS OF ONLINE TRADING

CLIENT BROKER STOCK EXCHANGE

Places an order on the
net on the broker’s
website through the
distinctive I.D. code
Accepts the order,
Checks the client’s
Identity and places
the order with the
stock exchange
Accepts the order after
checking the scrip limit
of the broker for the
day
Executes the order

The settlement of the

deal (buy/sell order)
gets reflected in his
Demat account.
Pays the
The client is intimated
Exchange
about the execution of
though his
the deal by e-mail.
owns account
Pays the broker
and Receives the
pending physical
receives it from money and
delivery.
the client account. completes the
settlement

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DEFINITIONS AND EXPLANATIONS

1. Shares:

In everyday language, when we talk of shares we normally refer to equity

shares or ordinary shares of a company. The terms shares and stock essentially
means the same things, the letter being a more common American usage. An
equity share is evidence of ownership in a company. The physical evidence of this
ownership of this document is called the Share Certificate. Now days, shares are
usually kept in electronic, or Dematerialised, form with a depository participant
(Banks, brokers, financial institutions) of the National Securities Depository
Limited (NSDL). However, if one wants one can still hold the share in the
physical form which has your name endorsed on it, and is proved that you are a
part owner of the company. Your ownership rights are proportionate to the
number of share you own.

Companies issue shares of a certain fixed denomination, called face value or par
value of that share, which is clearly indicated on a share certificate in the physical
form.

2. Investment:
Investment essentially refers to what you do with your savings in order to
preserve them and make them grow or yield an income. If you keep your savings
in the form of cash, they are certainly going to diminish in value because the
purchasing power of money is constantly going down as a result of inflation. (The
value of money is judged by the quantity of goods and services you can buy with
it). Therefore, if you want to maintain or increase the value of your savings, you
have to keep them in forms other than cash. This is what investment is all about,
deployment of your saving with the intentions of preserving or increasing their
value. This deployment can be done by using your savings to buy land, residential
properties, commercial properties, gold, jewelry, works of art, fixed deposits in
banks and companies, shares, bonds, infact, anything whose value is likely to
either remain constant or appreciate with time.

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3. Demat A/c:
On doing an online business ever customer has to open and DEMAT
account in any bank whichever he likes. DEMAT account is the account in which
the trading done by the customer is mentioned. If the customer sales or purchases
any share the details of this sale and purchasing are in DEMAT account. This
account contents the name of the shares and also the number of shares held or sold
and also the rate of the share with this DEMAT account. It is also compulsory for
every customer to open a saving account in the bank because the amount which is
to be received when the customers sales the shares are transferred from the
DEMAT account to the saving account.It is the responsibility of the customers
that the share which he purchased or sales are properly transferred in DEMAT
account from the stock exchange whichever he deals. The amount of dividend
whichever to be received on the shares when held for one or more year are also
transferred in this DEMAT account. It is compulsory for every customer to have a
PAN no. For opening an DEMAT account. If PAN no. Is not there is no chance
for the customer to do any trading on line. There is no limit of amount to deal in
this account.

4. Circuit Limit:
While issuing the shares to the public the company has to fix a particular
limit of the rate of the per share this limit is called as circuit limit. This circuit
limit is generally fixed on the percentage basis. This circuit limit is applied to
both the ends of the share. That is to the upper limit also and also to the lower
limit actually circuit limit is of two types

1) Upper limit
2) Lower limit
It is compulsory for every company to fix the circuit limit. This limit is beneficial
to both. The customer and also to the company generally every company fix
below 10%of the rate of per share.

5. Upper Limit:
While issuing the shares to the public the company has to fix the upper

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limit this limit is also calculated in percentage the limit is also beyond which the
rate of the shares cannot exceed nor that the customer doing the trading can sell
above the level.
For ex. Customer wants to sell a share which is of Rs10 and its upper
limit is fixed at 10% so in this case the person will have to sell it at Rs11 or the
rate which ever he wants but the person cannot sell it beyond this Rs 11 because
by addition of upper limit to the rate of share the maximum amount of the shares
is Rs 11 only and not above.

6. Lower Limit:
At the time of issuing share the company has to fix the lower limit also.
This lower limit is calculated on the basis of the rate of the shares. This limit bears
the same percentage, which is mentioned for the upper limit of the share. Like
upper limit in this limit also the share minimum rate of the share is fixed the
customer who wants to see; the holding shares has to first consider the upper&
lower limit of the share he cannot sell the share below the lower limit and not
above the upper limit like the upper limit Percentage generally in this limit also
the percentage is below 10% of the face value of the shares the percentage is
below 10% of the face value of the shares the percentage of the upper &lower
limit is equal to every type of share
For ex. Suppose the person wants to sell the shares and the rate of the
share is Rs. 10/- and the lower limit percentage is 10% of the rate. So in this case
the person cannot sell the share at below Rs. 9/-. He will have to sell at above Rs.
9/- or up to the upper limit of the share.

7. SENSEX:
When the shares are issued to the public the stock exchange gives a
particular group to the company. For ex. The Reliance Group is given the group
“A” like this there are several companies which fall in “A” Group. The weightage
mean is calculated according to its equity when all the companies of Group “A”
has calculated this weightage mean they are added all together when this addition
is done the result which comes down is known as “Sensex”.The trading of shares
of “A” group is totally depended on this sensex value. The price of the share rises

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this sensex value also rises and when the price of this share comes down the
sensex value also comes down With the sensex

8. Scripts:

The company, which has more than one working area, it has to issue the
share separately than that company is the company which has the script of its
name.

For Ex. The Reliance this company has its several working area Namely
Reliance, Capital Reliance, Infocom Reliance Energy, Reliance Industry. So
reliance company issues separate share for separate working area but the bold
name which is given to the working area is “Reliance”. So in this case Reliance
has its own scripts. Other example Ambuja, Birla, Etc.

9. Groups:
When the shares are issued by the company they are given the particular
group by the Stock exchange according to its demand in the market. There are
mainly 7 groups.

BUYING AND SELLING

The first step is to open a demat account with your selected Depository
Participants (DP). All transactions on both the BSE and NSE are done in DEMAT
securities.
When you buy shares, you are required to pay money to your broker or sub-broker
immediately upon getting the contract note/confirmation memo for the purchase
of shares. The broker issue as contract note, whereas sub-broker issues a
confirmation memo. Similarly, when you sale shares you are required to give
delivery of your shares by transferring them to the DEMAT account of your
broker/sub-broker immediately upon getting the contract note or confirmation
memo. When you buy the shares then the share you have purchased will come
first to DEMAT account of your broker/sub-broker. Once this happens, you can
instruct your broker/sub-broker to transfer those shares to your DEMAT account

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for receiving shares in your DEMAT account you will have to give your broker or
sub-broker the details regarding your DEMAT account.

When you sale shares you are required to give delivery of share from your
DEMAT account by instructing your DP to transfer the number of shares that you
have sold from your account to the DEMAT account of your broker. In this
regard, you will be required to include the details of the DEMAT account of your
broker in the instruction slip that you give to your DP. Your broker or sub-broker
will help you to fill in the delivery instructions. These instructions are of a
technical nature and the delivery instruction forms and procedures differ from DP
to DP.

Points of difference between online trading and off line trading are
as follows:

1. Online trading is very expensive as compare to manual trading or offline

trading.

2. Online trading consumes less time as compare to manual trading.

3. Online trading has very helpful to finding the records easily but offline trading
takes more time to finding the records.

4. In the help of online trading, there is no chance of any errors while doing the
trading. in offline trading there are some errors exist like barriers of
communication.

5. With the help of online trading, we know the international market rate of share
very easily.

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DEMATRIALISATION OF SHARES

Dematerialization is the process wherein shares certificates or other

securities held in physical form are converted into electronic form and credited to
demat account of an investor opened with a depository participant. SEBI has made
compulsory trading of shares of all the companies listed in stock exchanges in
demat form with effect from 2 nd January 2002.The procedure of opening a demat
account with DP is similar to opening an account with a bank.s

ELECTRONIC SETTLEMENT OF TRADE

A. Procedure for purchasing Dematerialized securities

The procedure for purchasing Dematerialized securities is also similar to

the procedure for buying physical securities.
1. Investor instructs DP to receive credits into his account in the prescribed form.
There may be one time standing instruction or separate instruction each time to
receive credits.
2. Investor purchases securities in any of the stock exchanges linked to depository
through a broker.
3. Broker receives payment from investor and arranges payment to clearing
corporation.
4. Broker receives credit to securities in clearing account on the payout day.
5. Broker gives instructions to DP to debit clearing account and credit client’s
account. Investor receives shares into his account by way of book entry.

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B. Procedure of selling Dematerialized securities

The procedure for selling Dematerialized securities in stock exchanges is

similar as selling physical securities. The only major difference is that instead of
delivering physical securities to the broker, the investor instructs his DP to debit
his demat account with the number of securities sold by him and credit the brokers
clearing account. The procedure for selling Dematerialized securities is given
below:

1. Investor sells securities in any of the stock exchange linked to depository

through a broker.
2. Investor instructs his DP to debit his demat account with the number of
securities sold and credit the broker’s clearing account.
3. Before the pay-in-day, broker of the investor transfers the securities to
clearing corporation.
4. The broker receives payment from the stock exchange.
5. The investor receives payment from the broker for sale of securities in the
same manner as received in case of sale of physical securities.

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REMATERILISATION OF SHARES

Rematerialization is the process of conversion of electronic holdings of

securities into physical certificate form. For rematerilisation of scrip’s, the
investor has to fill up a remat request form (RRF) and submit it to the DP. The DP
forwards the request to depository after verifying the investor’s balances.
Depository in turn initiates the registrars and transfer agent or the issuer company.
RTA/ Company prints the certificates and dispatches the same to the investor.

Market timings:

Normal Market / Exercise Market Open time : 09:00 hours

Normal market close : 15:30 hours
Set up cut of time for Position limit/Collateral value : till 15:30
hours Trade modification end time / Exercise Market : 16:15 hours

Internet Based Trading through Order Routing Systems

Internet based trading on conventional exchanges, uses the Internet as a

medium for communicating client orders to the exchange, through broker web
sites. Broker’s web sites may serve a variety of functions. These may include;
 Allowing the clients to directly trade through investors;
 Advertise the broker dealers’ services to potential investors;
 Offer market information and investment tools similar to those offered by
information vendor or SRO web sites;
 Offer real-time or delayed quote information, continuously update quotes
while the user visits other sites, or allow investors to create a personal
stock ticker;
 Provide market summaries and commentaries, analyst reports and trading
strategies and market data on currencies, mutual funds, options, market
indices and news; and
 Offer investors access to portfolio management tools and analytic
programs;

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  Information on commission and fees; and
 Account information and research reports.

In an Order Routing system, a broker offering Internet trading facility

provides an electronic template for the customer to enter the name of the security,
whatever it is to be bought or sold, the quantity and whatever the order is a market
or limit order.

Use of Internet for making Initial Public Offerings

Issues of securities of using the Internet to communicate directly with their

shareholders, potential investors and analysts by disseminating corporate
information. In foreign jurisdiction, they are also using the Internet to
communicate to the public for the following:
 Public offerings;
 Private offerings; and
 Disclosure and communication

Issuers are using the Internet to market themselves to potential investors. The
Internet is also being used for fulfilling necessary disclosure requirements, for
disseminating the prospects in electronics form and even for receiving share
applications in public issues electronically. In India, SEBI has taken initiative in
permitting use of the network of stock exchange for collection of investor
applications in public offerings by the issuer companies

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 Working Groups Set Up By The Committee

Considering the present state of capital markets in India and keeping in

view the ongoing developments in Internet based securities business, it was felt
that SEBI as a regulator could strive to identify areas where use of Internet in the
capital market is possible within the existing legal framework. One such area
identified by the Committee, which is also the central within the existing legal
framework. One such area identified by the Committee, which is also the central
theme of this report, is the area of Internet trading on existing electronic exchange.
In this area, through early introduction of Cyber Laws would be highly describe
but their existence is not a necessary precondition. To look into the existing
regulatory scenario and to bring out some ground rules for use of the medium of
Internet, the Committee therefore constituted the following two working groups to
look into the area of:

i. Security protocols and standardization of interfaces for Interest based

securities trading, chaired by Prof. Deepak B. Phatak, IIT, Pawai,
Mumbai
ii. Surveillance and monitoring related issues arising due to Interest
based securities trading, chaired by Shri. L.K. Singhvi, Sr. ED,
SEBI

The report of the first working group on security protocols and

standardization of interfaces has since been submitted and incorporated in the
report. The committee would like to place on record its sincere thanks to Dr. D.B.
Phatak, Ms. D.N. Raval and their team members. The global financial market is
undergoing a transformation due to rapid technological developments. It thus
becomes imperative that for developing in effective regulatory framework
developments in other parts of the world should be studies and analyzed.

With nearly who million on-line investors, Internet trading in the United
States is growing by leaps and bounds. Internet trading is being facilitated by large
brokerage houses, thus changing the total concept of securities trading. A team
comprising of members from stock exchanges and SEBI visited the United states

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to these development and had interactions with brokerages houses, Internet
service providers and other agencies involved in facilitating Internet trading. The
team also discussed the developments in the emerging regulatory and supervisory
framework in United States with the Securities and Exchange Commission
officials. They were also tripped of the various initiatives taken by SEC in this
regard. These inputs have been utilized while drafting this report.

Recommendations of the Committee

Application for Permission by 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 decisions to the number
within 30 calendar days of the date of completed application submitted to the
exchange. The stock

Exchange, before giving permission to brokers to start Internet based

services shall ensure the fulfillment of the following minimum conditions.

Net worth Requirement

The broker must have a minimum net worth of Rs. 50 lacs if the broker is
providing the Internet based facility on his own. However, if some brokers
collectively approach a service provider for providing the interest trading facility,
net worth, criteria as stipulated by the stock exchange will apply. The net worth
will be computed as per the SEBI circular no FITTC/DC/CIR-1/98 dated June 16,
1998.

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Operational and System Requirements

Operational Integrity:
The stock Exchange must ensure that the system used by the broker has
provision for security, reliability and confidentiality of data through use of
encryption technology. This stock exchange must also ensure that records
encryption technology. The stock Exchange must also ensure the records
maintained in electronic from by the broker are not susceptible to manipulation.

System Capacity:
The stock Exchange must ensure that the brokers maintain adequate
backup systems and data storage capacity. The stock Exchange must also ensure
that the workers have adequate system capacity for handling data transfer, and
arranged for alternative means of communications in case of Internet link failure.

Qualified Personnel:
The stock Exchange must lay down the minimum qualification fro
personnel to ensure that the broker has suitably qualified and adequate personnel
to handle communication including instructions as well as other back office work
which is likely to increase because of higher volumes.

Written Procedures:
Stock Exchange must develop uniform written procedures to handle
contingency tuitions and for review of incoming and outgoing electronic
correspondence.

Signature Verification/ Authentication:

It is desirable that participants use authentication technologies. For this
purpose is should be mandatory for participants to use certification agencies as
and when notified by Government/SEBI. They should also clearly specify when
manual signatures would be required.

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Client Broker Relationship

Know Your Client:

The stock Exchange must ensure that brokers have sufficient, verifiable
information about clients, which would facilitate risk evaluation of clients.

Broker- Client Agreement:

Brokers must enter into an agreement with clients spelling out all
obligations and rights. This agreement should also inter alia, the minimum service
standards to be maintained by the broker for such service specified by
SEBI/Exchange for the internet based trading from time to time. Exchange will
prepare a model agreement for this purpose. The broker agreement with clients
should not have

Investor Information:
The broker web site providing the internet based trading facility should
contain information meant for investor protection such as rules and regulations
affecting client broker relationship arbitration rules, investor protection rules etc.
The broker web site providing the Internet based trading facility should also
provide and display prominently, hyper link to the web site/page on the web site
of the relevant stock exchange (s) displaying rules/ regulations/ circulars.
Ticker/quote/order book displayed on the web-site of the broker should display
the time stamp as well as source of such information against the given
information.

Order/Trade Confirmation:
Order/Trade confirmation should also be sent to the investor through email
at client’s discretion at the time specified by the client in addition to the other
made of display of such confirmation of real time basis on the broker web site.
The investor should be allowed to specify the time interval on the web site itself
within which he would like to receive this information through email. Facility for
reconfirmation of orders which are larger than that specified by the member's risk
management system should be provided on the internet based system.

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Handling Complaints by Investors:
Exchanges should monitor complaints from investors regarding service
provided by brokers to ensure a minimum level of service. Exchange should have
separate cell specifically to handle Internet trading related complaints. It is
desirable that exchanges should also have facility for on-line registration of
complaints on their web site.

Risk Management:
Exchanges must ensure that brokers have a system-based control on the
trading limits of clients, and exposures taken by clients. Brokers must set pre-
defined limits on the exposure and turnover of each client. The broker systems
should be capable of assessing the risk of the client as soon as the order comes in.
The client should be informed of acceptance/rejection of the order within a
reasonable period. In case system based control rejects an order because of client
having exceeded limits etc., the broker system may have a review and release
facility to allow the order to pass through.

Contract Notes:
Contract notes must be issued to clients as per existing regulations, within
24 hours of the trade execution.

Cross Trades:
As a matter of abundant precaution, the committee seeks to reiterate that as
III the case of existing system, brokers using Internet based systems for routing
client orders will also not be allowed to cross trades of their clients with each
other. All orders must be offered to the market for matching.
It is emphasized that in addition to the requirements mentioned above, all
existing obligations of the broker as per current regulation will continue without
changes. Exchanges may also like to specify more stringent standards as they may
deem fit for allowing Internet based trading facilities to their brokers.

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Enforcement:
A separate working group has been set to look into the surveillance and
enforcement related issues arising due to Internet based securities trading.
However, general anti-fraud provisions (SEBI Fraudulent and Unfair Trade
Practices Regulations, 1995) would apply to all transactions involving securities
or financial services, regardless of the medium.

FEATURES OF ONLINE TRADING:

The Online Trading is having many features which make it most suitable for the
investors to go for. Some of these features are as follows:
 Freedom of information
The Internet can provide a new sense of control over your financial
future. The amount of investment information available online is truly
astounding. It's one of the best aspects of being a wired investor. For the
first time in history, any individual with an Internet connection can:
 Know the price of any stock at any time
 Review the price history of any stock in chart format
 Follow market events in-depth
 Receive a wealth of free commentary and analysis about stock markets
and the global economy
 Conduct extensive financial research on any company

 Control of money
One of the great appeals of using an online trading account is the fact that
the account belongs to you, and is under your direct control. When you want to
buy or sell stock, you no longer need to call your broker on the phone; hope that
he is in the office to place your order; possibly argue with the broker about the
order; and hope that the transaction is executed instantly.

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  Access to the market
At the most basic level, an online trading account gives you more agility in
buying and selling stocks. This is through sophisticated information streams,
dedicated trading platforms and sophisticated tools for accessing the markets.

 Ensures the best price for investors

Every broker house aims at providing the investor with the best price
available. Also due to the high level of transparency with regard to display of
information relating to the specific stocks and company profiles, you will be able
to get the best quote for your orders.

 Offers greater transparency

Online trading offers you greater transparency by providing you with an
audit trail. This involves a complete integrated electronic chain starting from order
placement, to clearing and settlement and finally ending with a credit into your
depository account. All these stages are subject to inspection, thus bringing in
transparency into the system.

 Enables hassle free trading

Online trading integrates your bank account, your trading account and
your demat accounts, which leads to easy and paperless trading for you.

 Allow instant trade execution

You as an Investment online customer will be able to execute the entire
trading transaction, right from logging on to our site, to the execution and
settlement of your bank account, in a very short period of time.

 Provides a level playing field

Trading on the net, gives even the smallest retail investor access to
information that earlier was available only to the big traders. This provides a level
playing field for all investors in the securities market.

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BENEFITS OF ON LINE BROKING

1) Less Costly:
The most significant advantage of the Online broking is the cost reduction
in the brokerage. Due to the power of the Internet one has the privilege of
becoming the clients of really large brokerages with the benefits of enjoying the
low charges hithelio before enjoyed only by the big players. As the DP account
has got linked to the trading account most players do not charge a minimum
transaction cost thus truly allowing one to buy a single share and achieve
meaningful rupee price averaging whatever be your buying power.

2) Peace of Mind:
One can never have complete peace of mind but online investing does
away with the hassles of filling up instruction slips, visits to the broker for
handing over these slips and consequent costs.

3) Keeping Records:
The site one trades on keeps a record of all transactions down to
unexecuted orders and cancelled orders thus keeping one abreast of all your
transactions 24 hours a day. No paperwork means more time at one’s disposal for
research and analysis.

4) Access to Information and investment Tools:

Most online investing sites have a wealth of information for their
registered members. This includes research reports, results, analysis and even
gossip and the buzz in the market.
5.) Unparalleled Liquidity:
The. bank account linked with the trading account invariably has an A TM
free. Most partner banks offer Internet banking as well. This results in one’s
money becoming available to him whenever he like from his trading account.
Conversely in case he spot an opportunity in the market he can immediately
allocate money from his savings account to his trading account and make profits.

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PROBLEMS OF ONLINE BROKING

There is a flip side to everything and online trading is no exception.

Chart

Source: www.lse.co.in

27% Loyalty is of traditional broker

23% people says that online trading is more costly than manual trading.
21% people not prefer online trading because of lack of knowledge.
So, the main problems of online trading are as follows:

1.) "Server not found":

This may appear on one’s screens when he is desperately trying to get out
of an unprofitable position. Some of the online sites are providing a telephone
number for use in case their sites are overloaded or their server down.

2.) Connectivity of the Broker with NSE:

Recently ICICI Direct had a connectivity problem with the NSE for two
and half hours during trading hours. This problem is rare but be alive to its
possibility.

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3.) Cyber attack:
In the event of a malicious attack on the systems of one’s broker he is
protected only if the company is taking proper precautions against such attacks
and if proper backup is regularly been taken. He may like to choose a brokerage
that has a stated security policy and contingency plan in place.

4.) Non-availability of a seamless interface:

As a client one will access the NSE through a server of the online
brokerage and this may involve queuing delays. If a number of client access the
server the server takes its own time sending the orders to the NSE server. He must
check out the seamlessness of this interface before selecting an online brokerage.
The faster the orders are processed the more seamless is the interface.

5.) Little use of advisory services:

The advisory services being promised by the brokers would be of little use
to investors looking for an insight into the market. Many would not like to rely on
research reports, which are there for all. So, net investors will have to do their own
research and take their own decision, whether wild or wise.

6.) Increased charges:

Some of the brokers are of the view that they would have to provide
advisory services to the customers. But with increased volumes, they will have to
follow the international practice of charging a little more than the normal charges
from a customer looking for personal advice.

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 WHY PEOPLE ARE BENDING TOWARDS ONLINE TRADING

Several broking houses now offer online trading facilities. You can trade
online with e-brokerages such as ICICI Direct, Kotakstreet, India bulls, India info
line’s 5paisa.com and HDFC securities.

If you are already comfortable trading with your regular broker, here are
few reasons why you may consider switching to trading online, or at least another
avenue of trading. an obvious advantage of online trading is that your transaction
would be virtually paperless. Your trading account would be linked to your demat
and bank account, ensuring a smooth transaction process. This is especially
helpful in the extent T+2 settlement system, where you have just two days to settle
your transaction.

The normal process of issuing of delivery note, in case of a sale, or

arranging for a payment in case of purchaser of shares, is all taken care of the
minute your order is executed online. The absence of manual intervention ensures
that you are completely in control of all transaction. There is also little room for
error, as your order is always confirmed before it is executed. You can also make
better decision as you have a clear record of all your previous transaction. When
you trade offline, a demat statement is normally sent to you only on a quarterly
basis keeping track of your portfolio can be a hassle in such a case. The inter net
can provide a new sense of control over your financial future. The amount of
investment information available online is truly astounding. Its one of the best
aspect of being a wired investor for the first time in history, any individual with an
internet connection can:

 Know the price of any stock at any time

 Review the price history of any stock in chart format
 Follow market events in-depth
 Receive a wealth of free commentary and analysis about stock markets
and globe economy.

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 Conduct extensive financial research on any company
 Talk with other investors around the world

At invest smart you can get real-time stock quotes, daily roundups of the stock
market, experts commentary, and a deep community of fellow investors.
Convenience is probably the greatest advantage online trading offers investors. if
don’t have time to trade during market hours, perhaps you are at work, you can
log on the web-trading site and place your order offline, during off market hours.
Your order would join the queue and be expected the next day. You would need to
enjoy a good relationship with your broker, for you to be able to reach him in the
late hours. For non-resident Indians (NRI), trading online is perhaps their easiest
option to invest in the Indian stock markets.
What is more, the time difference, in some cases, can work to their
advantage .Antony, an NRI-based in New York, places his order in the evening
after work, when it is day time India and the markets are open. We also have
access to considerable information online. By just logging on to ICICI direct
online, for instance, we can get the latest news, market information and company
research.
Moreover, if our connection is maddeningly slow and we want to get your
order executed immediately, most e-brokerages also provide a facility to trade
offline by placing our order via the phone

Rolling Settlement Cycle

In a rolling settlement, each trading day is considered as a trading period

and trades executed during the day are settled based on the net obligations for the
day. At NSE and BSE, trades in rolling settlement are settled on a T+2 basis i.e.
on the 2nd working day. For arriving at the settlement day all intervening
holidays, which include bank holidays, NSE/BSE holidays, Saturdays and
Sundays are excluded. Typically trades taking place on Monday are settled on
Wednesday, Tuesday's trades settled on Thursday and so on.

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Future Agenda
Under the existing legal and regulatory framework, SEBI registered
brokers can offer trading on Internet through order is routing systems. However,
with the rapid development of the technology, we have to evolve fisher steps in
this direction it is therefore proposed that as the next step link between the
depositories and banks shall be established after the necessary regulations have
been passed. This would reduce the clearing and settlement time and would also
minimize the risk of all the participants involved in the transactions. We have to
look forward towards achieving an ideal scenario where all the services related to
securities markets including marketing of initial public offers on internet,
providing investment advisory services to the clients, broking, clearing.

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 CHAPTER V

DATAANALYSIS & INTERPRETATIONS

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www.angelbroking.com

Besides high quality investment advice from an experienced research team, the
site offers real time stock quotes, market news and multiple tools for technical
analysis.

Trade In: BSE and NSE

Trading Terminals:

Angel Broking Ltd offers 2 different online trading terminals to its customers:

1. Investor Terminal (IT)

Investor Terminal is equity trading terminal for low volume trader. This is
web based terminal and could access from anywhere. This product provides
limited features in comparison of Trader Terminal, which is another product
provided by Angel Broking.

2. Trader Terminal (TT)

Trader Terminal is design for high volume equity traders or day traders.
Trader Terminal provides high volume trading with powerful interface and fast
order execution.

1. Few popular features of trader terminal are:

o Fast trade execution with instant trade confirmation.

o Live streaming quotes and price watch on any number of stocks.

o Intra day charts, updated live, tick-by-tick.

o Live margin, position, marked to market profit & loss report.

o Set any number of price alerts on any number of scrips.

o Flexibility to customize screen layout and setting.

o Facility to customize any number of portfolios & watch lists.

o Facility to cancel all pending orders at one click.

o Facility to square off all transactions at one click.

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 o Top Gainers, Top Losers, Most Active, updated live.

o Index information; index chart, index stock information live.

o Online access to both accounts and DP to check live updated

Order and Trade Book.

o Facility to place after market orders.

o Online fund transfer facility from leading Banks including

ICICI, HDFC, CITI and UTI banks.

o Online intra-day technical calls.

o Historical charts and technical analysis tools.

Brokerage and Account opening fees:

1. Account opening fees: Rs 500/- one time non refundable.

2. Angel Broking offer competitive rates. They charge only 2 paisa for Rs
100 of trade done, which is 0.02%. brokerage. In case of trade that result
in delivery, they charge 20 paise for back office and securities handling.

Advantages of Angel Broking

1. Very fast execution speed.

2. Rates are very competitive then other providers.

3. Easy online fund transfer facility from leading Banks including

ICICI, HDFC, CITI and UTI banks.

4. Free facility of subscribing to mutual funds, equity IPOs and

other investment products.

Disadvantages of Angel Broking

1. No intra-day tick by tick charts in Investor Terminal (IT).

2. Investing in IPO and Mutual Funds is not so easy like in ICICI Direct.

3. Learning Angel Broking Trading Terminal is little hard.

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IPO / Mutual Funds investment through Angel Broking:

1. 5Paisa provides free facility of subscribing to mutual funds, equity

IPOs and other investment products using internet banking account of
ICICI, HDFC, CITI and UTI banks.

2. Registered users with www.angelbroking.com can logon to the website

to apply in an IPO.

3. While applying for IPO shares online through Angel Broking, Investor
are taken to there corresponding banks homepage. Investors can use
there net banking user id & password & transfer funds directly using any
of these banks.

4. Angel Broking members can use the similar steps to invest in

Mutual Funds online.

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LOGIN SCREEN

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 MARKET WATCH SCREEN

Interpretation: The market watch screen is used to view the stock prices of selected stocks. Every user can add the stocks of his
choice and the stock prices get updated dynamically during the trading hours from Monday to Friday.

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 SCREEN FOR PLACING A BUY ORDER

Interpretation: The above screen is used to buy stocks. Clients will have to enter the Stock Symbol, Price, Quantity and Order
Type to buy the stocks from this screen. Best five Bid prices and Ask Prices are displayed on the right side of this screen.

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 SCREEN FOR PLACING A SELL ORDER

Interpretation: The above screen is used to sell stocks. Clients will have to enter the Stock Symbol, Price, Quantity and Order
Type to sell the stocks from this screen. Best five Bid prices and Ask Prices are displayed on the right side of this screen.

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 ORDER BOOK

Interpretation: The above screen is used to know the status of the orders placed during the day. The price and the quantity of the
orders placed and the status is displayed in the screen.

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 TRADE BOOK

Interpretation: The above screen is used to know the executed orders placed during the day. The price and the quantity of the
orders executed is displayed in the screen.

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 NET POSITION

Interpretation: Net Position screen tracks the complete position details of all market segments. Equity net position is tracked for
the current day, while Futures/Commodities contracts are tracked till the end of the contract period.

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 HOLDINGS SCREEN

Interpretation: The above screen is used to know the position of stock holdings of the client. The screen gives the present value
of the stocks held by the client.

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Analysis of Automobile Companies in SENSEX

Net Profit Total Book Div.

Sales (in (in Assets (in Value (in EPS P/E Yield
Company Name Crores) Crores) Crores) Rs) (in Rs) Ratio (%)
Bajaj Auto 20,768.74 3,043.57 9,300.35 273.08 105.18 17.05 2.35%
Hero MotoCorp 23,768.11 2,118.18 5,308.40 250.70 106.07 19.23 2.98%
Mah and Mah 40,441.16 3,352.82 17,885.99 238.75 54.61 14.62 1.50%
Maruti Suzuki 43,587.90 2,392.10 19,968.10 615.03 79.19 16.89 0.47%
Tata Motors 44,765.72 301.81 33,403.53 59.98 0.95 81.04 0.58%

Interpretation:

All the automobile companies have registered a good growth in sales over the last
five years. Bajaj Auto and Mahindra & Mahindra have registered a very good net
profit margin. Bajaj Auto and Hero MotoCorp have registered a very good Earnings
per share. Going by the P/E ratio, Tata Motors is highly over valued at 81.04 times its
earnings. Hero MotoCorp is also in a good position in terms of sales and profits.
Maruti Suzuki and Tata Motors have not been performing up to the expectations in
therecent past because of entry of foreign players and increase in fuel prices. Overall,
performance of two-wheeler companies is good while the four wheeler companies are
under pressure.

Fundamentals of Banking Companies in SENSEX

Net Profit Book Div.

Sales (in (in Total Assets Value EPS P/E Yield
Company Name Crores) Crores) (in Crores) (in (in Rs) Ratio (%)
Rs)
ICICI Bank 40,075.60 8,325.47 536,794.69 578.21 72.17 12.71 1.98%
1,445.60 206.20
SBI 119,657.10 14,104.98 1,566,261.03 9.00 2.60%
152.20 28.27
HDFC BANK 35,064.87 6,726.28 400,331.90 19.35 0.85%

Interpretation:

All the banking companies have been performing consistently over the last 5 years.
All the companies have registered a good net profit margin and earning per share. P/E
ratio of SBI is very low (9.00) which means the company is undervalued while the

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P/E ratio of HDFC Bank is (19.35) which means the company is overvalued. Given
the increasing interest rates, all the banks are performing well and expected to
continue their performance soon.

Fundamentals of Technology Companies in SENSEX

Net Profit Total Book Div.

Sales (in (in Assets (in Value EPS P/E Yield
Company Name Crores) Crores) Crores) (in Rs) (in Rs) Ratio (%)
627.95 158.75
Infosys 36,765.00 9,116.00 36,059.00 22.29 1.13%
TCS 48,426.96 12,786.34 32,725.37 165.86 65.23 26.16 0.99%

Wipro 33,226.50 5,650.20 28,275.50 98.38 22.94 21.81 1.23%

Interpretation:

All the three major companies have been performing closely in terms of sales. But
TCS has a very good profit margin and Wipro has the least net profit margin. P/E
ratios of the companies have been in the range of 21 to 26. Though still in the profits,
the industry has witnessed a slowdown in the last few years.

Fundamentals of Infrastructure Companies in SENSEX

Net Profit Book EPS Div.

Sales (in (in Total Assets Value (in P/E Yield
Company Name Crores) Crores) (in Crores) (in Rs) Ratio (%)
Rs)
HDFC 21,112.50 4,848.34 133,791.70 161.67 31.35 24.62 1.50%
BHEL 48,424.65 6,614.73 31,859.30 124.38 27.03 7.45 3.32%
Larsen 60,873.26 4,910.65 37,148.28 473.57 79.80 19.06 1.89%

Interpretation:

Infrastructure companies have witnessed a slowdown over the last few years. Larsen
has the maximum sales while BHEL has the maximum net profit among the
companies. BHEL with a P/E ratio of 7.45 is undervalued while Larsen with a P/E
ratio of 17.38 is overvalued in the sector.

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Fundamentals of Metals & Steel Companies in SENSEX

Net Profit Book EPS Div.

Sales (in (in Total Assets Value (in P/E Yield
Company Name Crores) Crores) (in Crores) (in Rs) Rs) Ratio (%)
Hindalco 26,056.93 1,699.20 58,117.16 174.61 8.88 13.13 1.26%
Sterlite Ind 18,921.03 1,577.27 35,365.89 76.05 4.69 - -
Coal India 352.25 9,794.32 21,430.55 32.48 15.51 17.91 5.62%
Tata Steel 38,199.43 5,062.97 81,121.19 568.46 52.13 6.52 2.26%
Jindal Steel 14,954.70 1,592.55 31,849.01 132.09 17.04 15.88 0.63%

Interpretation:

Metals and Steel majors have recovered sharply after a steep fall in 2009. But, of late
the performance of the companies has been on a downtrend again. Tata steel is very
much undervalued with a P/E ratio of just 6.64 while Sterlite and Coal India have a
very high P/E ratio of 23 times.

Fundamentals of Energy & Utility Companies in SENSEX

Net Profit Book EPS Div.

Sales (in (in Total Assets Value (in P/E Yield
Company Name Crores) Crores) (in Crores) (in Rs) Rs) Ratio (%)

GAIL 47,522.69 4,022.20 32,592.32 191.00 31.71 12.07 2.78%

ONGC 83,005.33 20,925.70 124,453.22 145.47 24.46 12.45 3.43%
NTPC 66,200.24 12,619.39 133,641.17 97.49 15.30 8.90 4.44%
Tata Power 9,567.28 1,024.69 23,814.55 51.67 4.32 16.65 1.58%
Reliance 371,119.00 21,003.00 234,543.00 557.49 65.05 12.41 1.07%

Interpretation:

Oil & Gas companies have put a good performance in the last few ears because of the
liberalization of fuel prices. All the companies have been performing consistently. All
the companies have a consistent P/E ratio of around 11 times with the only exception
of Tata Power with a P/E ratio of 24.5 times.

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Fundamentals of Consumer & Personal Care Companies in SENSEX

Net Profit Book EPS Div.

Sales (in (in Total Assets Value (in P/E Yield
Company Name Crores) Crores) (in Crores) (in Rs) Ratio (%)
Rs)
ITC 29,901.27 7,418.39 22,354.25 28.21 9.39 30.52 1.62%
HUL 25,810.21 3,796.67 2,674.02 12.37 17.56 32.91 3.21%

Interpretation:

Consumer and Personal Care companies have been performing exceptionally well in
the last five years. Both the companies have a very high P/E ratio of around 27 – 32.
ITC has a very good net profit margin and total assets compared to HUL.

Fundamentals of Pharma Companies in SENSEX

Net Profit Total Book EPS Div.

Sales (in (in Assets (in Value (in P/E Yield
Company Name Crores) Crores) Crores) (in Rs) Rs) Ratio (%)
Cipla 8,202.42 1,507.11 9,835.33 110.47 18.77 22.87 0.48%
Dr Reddys Labs 8,434.00 1,265.50 9,372.50 458.29 74.51 28.68 0.57%

Sun Pharma 2,432.14 516.55 7,832.01 75.21 4.99 673.03 0.42%

Interpretation:

Among the pharma companies, Cipla has the maximum sales while Sun Pharma has
the best net profit margin. Sun Pharma is very much over valued at a P/E ratio of
58.53 times compared to the other two majors.

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Fundamentals of Telecom Companies in SENSEX

Net Profit Total Book EPS Div.

Sales (in (in Assets (in Value (in P/E Yield
Company Name Crores) Crores) Crores) (in Rs) Rs) Ratio (%)
Bharti Airtel 45,350.90 5,096.30 67,126.00 142.58 13.42 26.93 0.32%

Interpretation:

Only Bharti Airtel has got a place in the SENSEX companies. Of late, the company
has been seeing ups and downs in the market with heavy competition from too many
players.

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 CHAPTER VI

FINDINGS, SUGGESTIONS & CONCLUSION

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FINDINGS

Following are the findings of the study:

 It is found that people are investing the money online and simple to operate
and easy to understand.
 It is found that people invest money normally between 50000 to 200000. So
that the people do not invest more money in the share market because there is
a great risk involved while doing the trading.
 It is found that people are generally invested in stock market Daily/weekly
basis and prefer online trading. Therefore, the awareness of online-Trading
among investor is very high.
 It is found that investors Prefer T.V to grape the knowledge before investing.
 It is found that online trading helps to attract new Investors thus helps in
increasing the trading volumes at Stock Market.

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SUGGESTIONS

Online trading has many pros. There are several wonderful reasons to invest
online and consider online trading.

1. Money saving opportunities: The amount of money you save depends

primarily on the online brokerage firm that you choose. No two firms are the
same. There may be different regulations, similar to bank regulations. There
are minimum deposits required that must be maintained. As mentioned above,
this will depend on the online brokerage firm

2. Instant online access: You can gain instant access to your account, the value
of your portfolio updates immediately before your eyes.

3. Enter online trades at anytime: You can enter online trades at anytime and
from anywhere. This is very convenient if you live in a different time zone
than the country you are trading in. Not to mention, it is especially fit for
investors with busy schedules.

4. With online trading you are in charge: You are in control of your
investments. No sales pitches and no hassle. You decide where to invest your
money.

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 CONCLUSION

Online trading is the new concept in the stock market. In India, online trading is still
at its infancy stage. Online trading has made it easy to trade in the stock market as
now people can trade while sitting at their home. Now stock market is easily
accessible by the people. There are some problems while doing the trade through the
internet. Nevertheless, to say that online trading has the bright future as the
percentage of the trade done through online trading is increasing day by day.

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 BOOKS:

 Investment management
- V.K.Bhalla
 Investment management
-Preethi Singh
 Security Analysis And Portfolio Management
-V.A.Avadhani
 Marketing of Financial Services
-V.A.Avadhani
 Indian Financial System
-M.Y.Khan

WEBSITES:

 www.angelbroking.com
 www.sharekhan.com
 www.bseindia.com
 www.sebi.com
 www.moneycontrol.com
 www.economictimes.com
 www.nseindia.com

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