Avinash @ Online Trading 2003

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Online Trading 2010

A Study on Internet Technology

& Online Trading

A

Dissertation ReportSubmitted in partial fulfillment of theMasters in Business Administration

Under National Institute of Science & TechnologyBerhampur, Orissa

By

K.AVINASH KUMAR

Regd. No.: 0906202001 ROLL NO.

200932734

Under the Guidance of

Dr. Sisira Kanti Mishra

Dissertation Report done by K.Avinash KumarPage 1


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National Institute of Science & TechnologyPALUR HILLS, BERHAMPUR

1. ABSTRACT

In the earlier days, only brokers and companies used to have access to the global

stock market but now online trading India, of trading ensures trading for all.

Internet also gives the required knowledge and learning on the stock market as well

as a brief analysis of the movement of prices.

There are many websites that present free training materials and trade simulators

that prove very capable and are cost-efficient for beginner`. Potential traders can

easily surf the websites and take hold of all the information that would be required.

One can even trade or ask their brokers to buy and sell shares as everything is

merely a click far. As the broker would regularly assist and guide you on which

stocks to take and which not to. Brokers also guide which shares can be for long

term and short term.

Investors must also fully understand the potential risks of investing without the

help of a trained Stock Broker or Investment Advisor. These professionals are

experienced both in trade and education and forgoing their advice could be costly.

For this reason, most online brokers offer a number of investment tools.

Once investors have chosen an online brokerage that best suits their needs, they

will be provided a trading platform. This platform acts as the hub, allowing

investors to purchase and sell securities (fixed income and equities), options,

mutual funds, and forex. Included with the platform are tools to track and monitor

http://www.sooperarticles.com/finance-articles/stocks-articles/online-trading-india-technology-made-simpler-128957.htmlhttp://www.sooperarticles.com/finance-articles/stocks-articles/online-trading-india-technology-made-simpler-128957.htmlhttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Forexhttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Forexhttp://www.sooperarticles.com/finance-articles/stocks-articles/online-trading-india-technology-made-simpler-128957.htmlhttp://www.sooperarticles.com/finance-articles/stocks-articles/online-trading-india-technology-made-simpler-128957.html


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securities, portfolios and indices, as well as research tools, real-time streaming

quotes and up-to-date news releases; all of which are necessary to trade profitably.

2. INTRODUCTION

The stock market has been a part of people's lives throughout the twentieth

century. Millions of people around the world have money invested in their

countries own respective markets. Since the coming of age of online trading, more

people have been investing their money in stocks than ever before because of the

advantages it offers. Online trading allows people to trade stocks quickly without

the help of a broker, letting the investors have more control over their transactions.

The competition between companies has helped decrease the cost of making the

transactions. In addition to that, ordinary people now have access to information

that could only be seen by broke`. Overall, online trading saves time, money and

gives power to the investor rather than the broker.

In the past, investors had to call up their brokers and place an order on thephone.

The broker would then enter the order in their system which was linked to trading

floors` and exchanges.

With the advent of the internet, investors can now enter orders directly online, or

even trade with other investors via ECN's (electronic communication networks).

Some orders entered online are still routed through the broker allowing agents to

approve or monitor the trades. This step assists in the protection of both the client

http://en.wikipedia.org/wiki/Index_(economics)http://en.wikipedia.org/wiki/Phonehttp://en.wikipedia.org/wiki/Trading_floorhttp://en.wikipedia.org/wiki/Trading_floorhttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Electronic_communication_networkhttp://en.wikipedia.org/wiki/Routehttp://en.wikipedia.org/wiki/Index_(economics)http://en.wikipedia.org/wiki/Phonehttp://en.wikipedia.org/wiki/Trading_floorhttp://en.wikipedia.org/wiki/Trading_floorhttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Electronic_communication_networkhttp://en.wikipedia.org/wiki/Route


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and brokerage firm from unlawful or incorrect trades which could affect the

clients portfolio or the brokers license.

Online brokers are most often referred to as discount broke`, due to their lowerfees

as opposed to full service brokers who also give advice to clients.

Before choosing to invest or trade online it is important for investors to research

the online brokers that they plan to employ, assuring that they are licensed within

their state or provincialjurisdiction. One tip is "Don't believe everything you read

in online newsletter`, investing blogs, or bulletin boards. Fraud artists often float

false information and "hot tips" as part of their efforts to rip-off investors or

manipulate the market for a particular security." They also advise that one "Turn to

unbiased sources when researching investments. Investors must also fully

understand the potential risks of investing without the help of a trained Stock

Broker or Investment Advisor. These professionals are experienced both in trade

and education and forgoing their advice could be costly. For this reason, most

online brokers offer a number of investment tools.

Once the above two steps are complete it is dually important to research the sector,

business and financial statements of each company whose stock they plan to

purchase. This, along with diversification and basicportfolio theory, will assist to

mitigate some of the risks associated with the volatility in both the stocks and the

stock markets.

Once investors have chosen an online brokerage that best suits their needs, they

will be provided a trading platform. This platform acts as the hub, allowing

investors to purchase and sell securities (fixed income and equities), options,

http://en.wikipedia.org/wiki/Discounts_and_allowanceshttp://en.wikipedia.org/wiki/Feehttp://en.wikipedia.org/wiki/Researchhttp://en.wikipedia.org/wiki/Jurisdictionhttp://en.wikipedia.org/wiki/List_of_recognized_economic_sectorshttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Diversification_(finance)http://en.wikipedia.org/wiki/Portfolio_theoryhttp://en.wikipedia.org/wiki/Volatility_(finance)http://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Option_(finance)http://en.wikipedia.org/wiki/Discounts_and_allowanceshttp://en.wikipedia.org/wiki/Feehttp://en.wikipedia.org/wiki/Researchhttp://en.wikipedia.org/wiki/Jurisdictionhttp://en.wikipedia.org/wiki/List_of_recognized_economic_sectorshttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Diversification_(finance)http://en.wikipedia.org/wiki/Portfolio_theoryhttp://en.wikipedia.org/wiki/Volatility_(finance)http://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Option_(finance)


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mutual funds, and forex. Included with the platform are tools to track and monitor

securities, portfolios and indices, as well as research tools, real-time streaming

quotes and up-to-date news releases; all of which are necessary to trade profitably.

Often, more robust research tools are available such as full, in-depth analyst

reports and analysis, and customizedback testing to see how particular investment

strategies would have been realized during different historical periods.

Online stock trading in India is a facility based on trading of the stocks. The

investors can easily trade the shares by means of an online website devoid of any

labor-intensive interference from the stock broke`. The companies become online

stock trading online for the investors where they can enjoy the trading facilities.

Such companies are recorded with a few stock exchanges. BSE and NSE are the

two trades in which most of the companies of online stock trading India deals in.

ONLINE TRADING PORTALS IN INDIA

The Indian trader is being fancied by the democratized world of online trading or

also known as e-broking. The regular and attractive advertisements in the print

media and electronic media have added to this fancy world. But as we compare to

the Western countries, in India online trading has not still grasped the market , but

has done a very important amount of progress in the past years and the future of

online trading is bright. That is why many new companies are coming into this

form of business structure and the existing companies are changing to this new

format besides offline and other traditional forms of business. With only a mere

share of 10% online trading a combined gross turnover of around `. 9000-10,000

crores handled by the BSE and NSE together there is a much greater scope for

http://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Forexhttp://en.wikipedia.org/wiki/Index_(economics)http://en.wikipedia.org/wiki/Backtestinghttp://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Forexhttp://en.wikipedia.org/wiki/Index_(economics)http://en.wikipedia.org/wiki/Backtesting


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online trading. At present some of the dominant players in the online trading

market of share market are

1. Sharekhan.com

2. Icicidirect.com

3. Unicon

4. 5paisa.com

5. Indiabulls

6. Kotak Securities

7. Motilal Oswal

8. Geojit Securities

9. Angel Trade



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There are various advantages that one can obtain while trading online, which are as

follows:

Provides with the Freedom of Information Provides Control to Investors Money

Provides access to the market Ensures the best price for investors Online trading offers greater transparency

Provides hassle free trading Online trading allows instant trade execution

It provides a level playing field

Online trading reduces the settlement risk

Provides live financial news & analysis Online help desk

Instant order trade confirmations

Keeps Information Secure

Disadvantages of online stock trading, India

Apart from various advantages, the online trading also has certain disadvantages,

which include:

Brokerages being a little high.

The procedure of online stock trading, India is a bit long-learning procedure

for those who are not aware about the Internet and computer technology.

In online terminal, investor cant get customized expert advice, whereas in

offline the broker gives suggestions according to investors strategy (i.e. shortterm or long-term).

Privacy is less due to hacking scandals

Transactional errors due to technical problem



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3. UNDERSTANDING OF THE TOPIC

Online Trading basically deals with the trade of Shares, Securities, Mutual

Funds and many other different Financial Instruments at the comfort of sitting at

Home or your Office with the help of just a Desktop, an Internet Connection, A

DEMAT Account, a Trading Account, and a Broker to help and guide you with

through the entire process.

There are some key terms in the field of Online Trading which are needed to be

known to get into the depth :::

SHARE

Itis nothing but the Ownership of the company divided into small parts andeach part is called as Share or Stock.

Share is also called by different names like equity, financial security and so on.

SHARE MARKET

A Share market is the place where buying and selling of shares takes place.

Now days due to internet and advanced technology there is no need to present

physically in exchanges like NSE and BSE but in fact the buying and selling of

shares can be done from anywhere, where there is a computer with internet

connection.

One should have a demat and trading account, computer and internet

connection and he/she can start the share trading or investing from anywhere.

STOCK EXCHANGES



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Mainly there are two exchanges in India.

NSE (National stock exchange) - Nifty is listed with NSE.

BSE (Bombay stock exchange) - Sensex is listed with BSE.

NSE and BSE are countries economic barometer.

Stock exchanges like NSE and BSE are the places where the trading of shares

takes place.

3.1 PROCESS OF TRADING IN SHARE MARKET

To learn about how we can earn in the stock market, we have to understand how it

works.

When a person wants to buy/sell shares in the share market then he has to first

place the order with a broker or he can do himselves using online trading systems .

When we place the buying order, the message is transferred to the exchange [either

NSE {National Stock Exchange} or BSE {Bombay Stock Exchange}] and theorder stays in the queue of exchange's other orders and gets executed if the price of

that share comes to that value.

Once you get the confirmation of this transaction, the shares purchased, will be

sent to your demat account. The shares will be stored in demat account in

electronic format.

Online share trading services in India



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There are three primary things required to start online share trading.

Demat account (Trading account), a computer and internet connection or else you

can go to internet cafe.

What is Demat account and why it is required?

Securities and Exchange Board of India (SEBI) is a board of India appointed by

the Government of India in 1992 with its head office at Mumbai.

Its one of the function is helping the business in stock exchanges and in other

security markets. In another word it is the regulator for stock exchanges. It

monitors and regulates both stock exchanges in India.

a) Demat (short form of Dematerialization) is the process by which an investor can

get shares (also called as physical certificates) converted into electronic form

maintained in an account with the Depository Participant (DP).

b) DP could be organizations involved in the business of providing financial

services like banks, broke , financial institutions etc. DPs are like agents ofDepository.

c) Depository is an organization responsible to maintain investor's securities

(securities can be shares or any other form of investments) in the electronic form.

In India there are two such organizations called NSDL (National Securities

Depository Ltd.) and CDSL (Central Depository Services India Ltd.)

d) Investors wishing to open Demat account has to go DP and open the account.

e) Opening the Demat account is as simple as opening the saving bank account

with any bank.



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As you need bank account to save money, deposit cheques etc, likewise you need

to have a demat account to buy and sell stocks in share market and to hold the

shares.

f) All shares what you own will show in your demat account, so you don't have to

possess any physical certificates. All your shares are all held electronically in your

demat account.

As you buy and sell the shares, accordingly, your shares will get adjusted in your

demat account.

How to open a Demat account?

You have to approach a Depository Participant (DP) to open a Demat account.

Most banks are DP participants so you can approach them or else you can contact

us. To have latest list of registered DP please visit websites www.nsdl.co.in and

www.cdslindia.com

A broker and a DP are two different people.A broker is a member of the stock exchange, who buys and sells shares on his

behalf and also on behalf of his customers.

Points to remember while opening a trading account

Enquire about brokerage rates and taxes you have to pay for your trading account.

You have to open the trading account with the agent who is offering you thelowest brokerage rates.

Different brokerage rates are available for different trading methods like delivery

trading and intraday (day trading) trading.



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Before opening your account try to insist the agent to get demo of there online

trading software or terminal and check your reliability and Speed.

Also confirm about there charges and any hidden charges if you have to pay.

TYPES OF TRADING

Trading is done on stock price for a day or for couple of days.

Trader is not worried about company performance; he is only worried to book

profits whenever the share price rises.

Basically there are two types of trading methods

1. Day trading 2. Swing trading.

1. Day trading

Buying and selling of shares on daily basis is called day trading.

Day trader dont carry stocks to next day, he square off the positions (shares) on

same day.

Mainly there are two types of day trade`.

i. Scalp trading

ii. Momentum trading

2. Swing Trading

A swing trader is just like a day trader but swing trade may hold the shares(positions) for couple of days like 4 to 5 days, while day trader doesnt hold shares

even for next day.



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OPTIONS

An option is a contract that gives the buyer the right, but not the compulsion, to

buy or sell an underlying asset at a specific price on or before a certain date.

Underlying assets are like equity (share/stock), indices (nifty, Jr. Nifty),

commodity etc.

There are basically 2 kinds of OPTIONS :

Call and Put

A CALL gives the holder the right to buy an asset at a certain price within a

specific period of time. Calls are similar to having a long position on a stock.

Buyers of calls hope that the stock will increase before the option expires.

A PUT gives the holder the right to sell an asset at a certain price within a specific

period of time. Puts are very similar to having a short position on a stock. Buyers

of puts hope that the price of the stock will fall before the option expires.

MUTUAL FUNDS

A registered company with SEBI (securities exchange board of India) does

investments in various financial products like share market, government bonds,

securities etc on behalf of customers is called mutual fund.

There are various mutual fund companies in the market and few are mentioned

below,

Sundaram, Reliance, SBI, HSBC, Birla and many more.



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The mutual fund companies collect money from customers and invest on their

behalf in various financial products.

Investors who dont want to expose to share market directly or who doesnt have

much knowledge of share market they prefer to invest in equity related mutual

funds.

Mutual funds consist of fund manager who manages all investments.

FOREX ONLINE TRADING

It is undoubtedly one of the largest businesses in the world. Due to this fact lots of

people are eager to become thoroughly engrossed in forex online trading right now

but at first it's necessary to understand that it's not for everyone as far as it's not so

simple as it may seem to be for any average man. In order to trade forex, it's

important to know how it works and to get a proper education about forex online

trading and currency online trading.

DIVIDEND

A company from its post tax profit distribute some proportion to shareholders. This

income for the shareholders is called dividend. Currently dividend income is tax

free in the hands of investor`, but the company is required to pay dividend tax

directly to Government

PORTFOLIO

The set of all securities held by an investor is called his portfolio. The portfolio

may contain just one security. However, since in general no one puts all the eggs in

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one basket, it will contain several securities. Such a portfolio is known as a

diversified portfolio.

MARGIN

After a buy/sell trade takes place, the prices of the stock may move up or down.

This movement in price may result in profit/loss to the investor. To guard against

the possibility of the loss not being paid by the investor, the margins are collectedby the brokers from the investors`. On successful completion of the transaction, the

margin is refunded. When a trade takes place, on the stock exchange, the stock

exchange or the clearing house guarantees honoring of the trade between

member`/brokers. To secure the trade, the stock exchange asks from the

member`/brokers some proportion of total transaction value as a safety deposit, in

case the broker/member defaults in honoring the commitment to the exchange.

This is known as margin.

AUCTION OF STOCKS

Auction is a mechanism which is used when a member broker selling shares

defaults on the delivery ie. if he has delivered short ( shares fewer than what they

have sold) or their deliveries are bad or if they have not rectified the company's

objections reported against them. The exchange resorts to Auction to fulfil its

obligation towards the broker buying the shares

.

BETA



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NEAT-THE NSE ARCHITECTURE

NSE has deployed NIBIS (NSE's Internet Based Information System) for real-time

dissemination it of trading information over the Internet and NEAT a client-server-

based application to help its operations. All the trading information is stored in

NEAT an in-memory database at the server end for achieving minimum response

time and maximum system availability for use`. The trading server software runs

on a fault-tolerant STRATUS mainframe and the client software runs on Windows

PCs. The telecommunications network uses the X.25 protocol and is the backbone

of the automated trading system. Each trading member trades on the NSE with

other members through a PC located in the trading member's office. The trading

member son the Wholesale Debt Market segment are linked to the central

computer at the NSE through dedicated 64 Kbps leased lines and VSAT terminals.

These leased lines are multiplexed using dedicated 2 MB optical-fiber links. The

WDM participants connect to the trading system through dial-up links. The

exchange uses RISC- based Unix servers from Digital and HP for back office

processing. Applications like Oracle 7 and SQL/Oracle Forms 4.5 front ends are

used for the exchange functions

BOLT-THE BSE ARCHITECTURE

BSE has deployed an OnLine Trading system (BOLT) on March 14, 1995. It

works on a Tandem S74016 platform running on 16 CPUs. The Tandem Himalaya

S74016 machines act as the backend to more than 8000 Trader Workstations

networked on Ethernet, VSAT and Managed Leased Data Network (MLDN). The

systems claim to handle up to two million trades a day. BOLT has a two- tier



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architecture. The trader workstations are connected directly to the backend server

which acts as a communication server and a Central Trading Engine (CTE). Other

services like information dissemination, index computation, and position

monitoring are also provided by the system. A transaction monitoring facility in

the Tandem architecture helps keep data integrity through non- stop SQL. With the

help of MTNL, BSE has setup a MLDN Network comprising 300 2 Mbps lines and

1500 64 Kbps lines which connect all regional stock exchanges and offices in

Mumbai. Access to market related information through the trader workstations is

essential for the market participants to act on real-time basis and take instantaneousdecisions. BOLT has been interfaced with various information vendors like

Bloomberg, Bridge, and Routers. Market information is fed to news agencies in

real time. The exchange plans to enhance the capabilities further to have an

integrated two-way information flow.

GROWTH OF ONLINE TRADING IN INDIA

Today online trading accounts for 25-30% of retail market turnover that can make

online stock trading a Rs400 crore industry, measured by the brokerage earned by

them.

The online model has

helped the companies

to expand rapidly

without big

investments in

distribution. Prasanth



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Prabhakaran, Senior VP and Head of Broking, Kotak Securities says that even

though the company has no branches in Rourkela and Sambalpur it gives volumes

and Tier-II and tier-III cities bring in 40-45% of total trading volumes. Apart from

cutting margins and making trades cheaper for investo`, online trading has shaved

off a lot of costs for brokerage firms resulting in business making more money. On

the retail side of the business the companies having a stronger online presence are

enjoying better profitability. But the offline business still rules institutional

business.

HDFC Securities earns 75% of its revenues from online trades. The key to success

is quick ramp-up because the initial system set-up cost is based on assumptions on

the number of accounts and trades that the firm will carry out and once the point is

reached, the break-even can come faster. If today a new entrant comes he will have

to start off with the capacity to handle at least 100,000 trades a day which could

entail an investment of` 25 crore on the initial technology and hardware set-up.

The annual expanses of around ` 4-5 crore will also be needed to scale up.

Industry size:` 5,000 cr

Online share:` 400 cr

Key playe`: HDFC sec, ICICIdirect, Indiabulls, Indiainfoline, Kotaksecurities,

Sharekhan

Current growth rate: 40-50%

The stock markets which saw a dip in online trading due to investor apathybecause of prolonged bearishness in recent yeaRsis now witnessing a revival of

interest and is expected to have a record growth in the coming year



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RECOMMENDATIONS OF SEBI

The SEBI has also played an important role in the issue of the guidelines regarding

online trading so that the chances of fraud and misrepresentation are minimized.

The some of recommendations are as follows:

The stock brokers which are being registered with Securities Exchange Board of

India (SEBI) will have to apply to stock exchanges for a formal permission. The

following conditions must be fulfilled

1. The online trading company must have a minimum net worth of Rs 50 lakh

2. The encryption technology should be there in the system used by the brokers to

ensure the provision for confidentiality ,security ,justifiability and reliability of

data

3. The brokers must maintain adequate back-up systems and data storage capacitywhich must be checked by the stock exchanges.

4. The minimum qualification must be laid down by the stock exchange to ensure

that the persons hired by the brokers must have the proper qualification regarding



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trading so as to guide the clients and he can communicate regarding trading

instructions.

5. To handle contingency situations and for review of incoming and outgoing

electronic correspondence the respective stock exchange must develop uniform

written rules, regulations and procedures.

6. To ensure the authenticity and accuracy of data a certification agency must be

appointed using the certification technologies when notified by the government or

the SEBI.

7. The better client and the broker relationship to be maintained.

8. To determine the risk associated with the clients the brokers must have the have

sufficient verifiable information about clients and the stock exchange must ensure.

9. The clients must be taken into an agreement stating about all the obligations and

rights including the minimum service standards to be maintained by the service

provider broker for services specified by SEBI/exchanges for Internet-based

trading from time to time.

10. The web site of the broker providing the online trading facility should contain

information rules and regulations affecting client broker relationship, arbitration

rules, investor protection rules, etc meant for investor protection. It 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.



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Ticker/quote/order book displayed on the web site of the broker should display the

time stamp as well as the source of such information.

11. An e-mail should be sent to he investor for the confirmation of his Order or

trade.

12. The limits of trading and exposure provided to the client must be set on

system-based control and brokers and exchanges must ensure it. The limits must be

predefined by the broker on the exposure and turnover of each client. The system

of broker should be such that it is capable of assessing the risk of the client as soon

as the order comes in. The system should inform the clients client the reports on

margin requirements, payment and delivery obligations etc.

13. As per the regulations the Contract Notes must be issued to clients within 24

hours of the trade execution.

14. Cross trades of the clients will not be allowed with each other to the brokers

using Internet- based systems for routing client order and all orders must be

offered to the market for matching.

15. A separate working group has been set up 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) will apply to all transactions involving securities or

financial services, regardless of the medium.



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4.METHODOLOGY

Sampling Technique:

Initially, a rough draft is to be prepared & a pilot study is needed to check the

accuracy of the Questionnaire and certain changes which would be needed to be

done to prepare the final questionnaire to make it more judgmental.

Sampling Unit:The respondents who will be asked to fill out the questionnaire in the Regions of

Berhampur, Bhubaneswar, Sambalpur & Rourkela are the sampling units. These

respondents comprise of the persons dealing in stock trading. The people who will

be interviewed in the open market, in front of the companies, telephonic interviews

and through other sources also.

Sample Size:

The sample size can be 100 respondents.

Sampling Area:

The area of the research will be Berhampur, Bhubaneswar, Sambalpur & Rourkela



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4.1 Objectives :

To understand the customer perception of online trading.

To understand the presence of major online traders in the Indian market and

looking about the features provided by them

To determine the growth and development of online trading in India.

4.2 Scope of the Study :

Since the year 2000 a big boom has been witnessed in the Indian Stock Market

when the market showed the coming up of Online Trading System. Many online

stock trading companies came but initially due to lack of online trading some

companies vanished and some survived. The companies which survived are getting

the handsome returns also attracting the foreign Investment Companies. Nowadays

this sector is facing cut-throat competition and also provides huge growth

prospects. The study then goes to evaluate and analyze the findings so as to present

a clear picture of the trends in the online trading sector.

5. CONCLUSION :

The online trading is growing with a rapid pace with the rising level of education

among the customers. The other factors being that the Indian Investor nowadays

wants to deal himself in trading rather than depending upon other middlemen.



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They also consider the factors like time saving in doing the online transactions,

convenience etc. Although some people feel that online trading is not secure but

the people doing the trading online is happy about the increasing security concerns

among the companies. The year 2008 has not been so good for the stock market

and the Sensex and Nifty has been dipping and affecting the business negatively

for these companies. This is due to the fact that at these times people do not prefer

to open the DMAT and Trading accounts. So the companies have to reduce their

account opening fees to attract more and more customers. Also people trade very

less in the bearish market and the companys profits against brokerage fees soarsdownwards. It is also a found fact that during the bearish market the ratio of online

trading becomes very less. Also there is an intense competition among the

companies and the companies come up with new and new promotion schemes such

as discounted and negotiable brokerages, Zero balance accounts, waiving a/c

opening fee and AMC etc. As the internet penetration is growing in India this

business holds a huge potential for growth. The mantra for success in the current

situation will be educating the customers about the benefits of online trading and

the amount of ROI that can be generated through it. The total trading volume of

brokerage companies has increased from US$1239.1 billion in 2004 to US$1492.1

billion in 2005, and is expected to reach US$6535.7 billion by 2015.



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6. REFERENCES / BIBLIOGRAPHY :

Financial Management by I.M. Pandey

Times of India

The Economic Times

The Business Standard

www.daytradingshares.com/

www.google.com

www.sharekhan.com

www.icicidirect.com

www.kotakstreet.com

www.bseindia.com

http://www.daytradingshares.com/http://www.google.com/http://www.sharekhan.com/http://www.icicidirect.com/http://www.kotakstreet.com/http://www.bseindia.com/http://www.daytradingshares.com/http://www.google.com/http://www.sharekhan.com/http://www.icicidirect.com/http://www.kotakstreet.com/http://www.bseindia.com/


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www.nseindia.com

www.sebi.co.in

QUESTIONNAIRE

NAMEAGE

GENDER

1. Do you trade Online or Not .

( ) Yes

( )No

2. Which of the following companies are you aware of ?



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( )Disagree

6. Do you think that Online Trading has helped in Growth and Development of

Indian Stock Market ?

( )Yes

( )No

7. Which trading method do you prefer ?

( )Online

( )Offline

( )Both

8. Do you think that Online Trading is easy and Faster way of trading ?

( )Yes

( )No

9. Do you think that introduction of Online Trading has bought in a new lot of

Investors leading to the growth in the Stock Market ?

( )Yes

( )No



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Documents

Avinash @ Online Trading 2003