Professional Documents
Culture Documents
ON
“A STUDY OF ONLINE TRADING AND STOCK
BROKING”
AT
SUBMITTRD BY
PRITI VERMA
ROLL NO.030018
MMS(Finance)
Batch :2017-2019
1
DECLARATION
Priti Verma
ROLL NO.030018
MMS(FINANCE)
2
ACKNOWLEDGEMENT
Priti Verma
ROLL NO.030018
MMS(FINANCE)
3
TABLE OF CONTENT
Sr. no. Topic Page no.
1 Need for the Study 6
1.1 Objectives Of The Study 8
1.2 Methodology Of The Study 9
1.3 Limitations Of The Study 9
2 Industry profiles 10
2.1 Structure of Indian financial system: 11
2.2 Financial Market 12
2.3 Money markets 13
2.4 Capital markets 14
2.4.1 Primary market and 14
2.4.2 Secondary market 15
2.5 Stock Market In India 16
2.6 Stock exchanges History 17
2.7 Stock exchanges Functions 18
2.8 Various Stock Exchanges in India 19
2.9 major stock exchanges –NSE 21
2.9.1 BSE 22
2.10 SEBI 26
2.11 The Stock Broker 27
3. Company Profile 28
3.1 About the company 29
3.2 ACHIEVEMENTS 30
3.3 VISION 30
3.4 MISSION 30
3.5 The Major Players in ONLINE TRADING 30
(Competitors)
4
3.6 Service Provided 30
4 Introduction of Market 31
4.1 Cash Market 32
4.2 Futures Market 32
4.3 Buy Futures contracts 33
4.4 Settle Futures contracts 34
5 Introduction of the assignment 37
5.1 Online Trading 38
5.2 Stock Trading 39
5.3 Types of Order 40
5.4 Speculator 41
Conclusion
Recommendation
Reference
5
6
Chapter 1
NEED FOR THE STUDY:
7
OBJECTIVES AND METHODOLOGY
NEED FOR THE STUDY:
8
OBJECTIVES OF THE STUDY:
It is to analyze the changes in trading after the exchange
shifted from outcry to online trading system.
It is to study the functions of SEVEN HILLS through
various departments.
To know the online screen based trading system adopted by
SEVEN HILLS and about its communication facilities.
The appropriate configuration to set the network, which
would link the SHAREKHAN to individual / members.
To know about the latest and future development in the
stock exchange trading system.
9
METHODOLOGY OF THE STUDY:
The data collection methods include both primary and secondary
collection methods.
Primary method: This method includes the data collected
from the personal interaction with authorized members of
SEVEN HILLS Securities limited.
Secondary method: The secondary data collection method
includes:
The lecturers delivered by the superintendents of
respective departments.
The brochures and material provided by SEVEN
HILLS Securities limited.
The data collected from the magazines of the NSE,
economic times, etc.
10
Chapter 2
Industry profiles
11
Following diagram gives the structure of Indian
financial system:
12
FINANCIAL MARKET:
13
MONEY MARKET:
14
CAPITAL MARKET:
PRIMARY MARKET:
Primary market is generally referred to the market of new issues
or market for mobilization of resources by the companies and
government undertakings, for new projects as also for
expansion, modernization, addition, and diversification and up
gradation. Primary market is also referred to as New Issue
Market. Primary market n. operations include new issues of
shares by new and existing companies, further and right issues
to existing shareholders, public offers, and issue of debt
instruments such as debentures, bonds, etc.
The primary market is regulated by the Securities and Exchange
Board of India (SEBI a government regulated authority).
Function:
The main services of the primary market are origination,
underwriting, and distribution. Origination deals with the origin
of the new issue. Underwriting contract make the shares
predictable and remove the element of uncertainty in the
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subscription. Distribution refers to the sale of securities to the
investors.
The following are the market intermediaries associated
with the market:
1. Merchant banker/book building lead manager
2. Registrar and transfer agent
3. Underwriter/broker to the issue
4. Adviser to the issue
5. Banker to the issue
6. Depository
7. Depository participant
SECONDARY MARKET
The primary market deals with the new issues of securities.
Outstanding securities are traded in the secondary market, which
is commonly known as stock market or stock exchange. “The
secondary market is a market where scrip‟s are traded”. It is a
market place which provides liquidity to the scrip‟s issued in the
primary market. Thus, the growth of secondary market depends
on the primary market. More the number of companies entering
the primary market, the greater are the volume of trade at the
secondary market. Trading activities in the secondary market are
done through the recognized stock exchanges which are 23 in
number including Over The Counter Exchange of India (OTCE),
National Stock Exchange of India and Interconnected Stock
Exchange of India.
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Secondary market operations involve buying and selling of
securities on the stock exchange through its members. The
companies hitting the primary market are mandatory to list their
shares on one or more stock exchanges in India. Listing of
scrip‟s provides liquidity and offers an opportunity to the
investors to buy or sell the scrip‟s.
The following are the intermediaries in the secondary market:
1. Broker/member of stock exchange – buyers broker and sellers
broker
2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.
19
Various Stock Exchanges in India
20
At present there are 23 stock exchanges recognized under the
securities contracts(regulation), Act, 1956. Those are:
21
Out of these major stock exchanges were:
22
Establishing a nation-wide trading facility for equities
and debt instruments.
Ensuring equal access to investors all over the country
through an appropriate communication network.
Providing a fair, efficient and transparent securities
market to investors using electronic trading systems.
Enabling shorter settlement cycles and book entry
settlements systems, and
Meeting the current international standards of securities
markets.
25
He should not be engaged in any other business
connected with a company.
He should not be a defaulter of any other stock exchange.
The minimum required education is a pass in 12th
standard examination.
27
Chapter 3
COMPANY PROFILE
28
About Company
29
ACHIEVEMENTS
1. 9th in terms of Sub Brokers for 2007*.
VISION
To be the best retail brokering Brand in the retail business
of stock market.
MISSION
To educate and empower the individual investor to make
better investment decisions through quality advice and
superior service.
1. Sharekhan.com
2. 5paisa.com
3. Indiabulls.com
4. Icicidirect.com
5. Angel Broking
SERVICE PROVIDED
1. Share Broking
2. Commodity Broking
30
Chapter 4
Introduction of Market
31
What is a Cash Market?
32
How to Buy and Sell Futures Contracts
Buying and selling futures contract is essentially the same as
buying or selling a number of units of a stock from the cash
market, but without taking immediate delivery.
In the case of index futures too, the index‟s level moves up or
down, replicating the movement of a stock price. So, you can
actually trade in index and stock contracts in just the same way
as you would trade in shares.
Markets face volatility. VIX future by the NSE helps you
quantify the volatility.
In this section, we look at how to buy and sell futures contracts:
On Expiry
In this case, the futures contract (purchase or sale) is settled at
the closing price of the underlying asset as on the expiry date of
the contract.
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Example: You have purchased a single futures contract of ABC
Ltd., consisting of 200 shares and expiring in the month of July.
At that time, the ABC share‟s price was Rs 1,000. If on the last
Thursday of July, ABC Ltd. closes at a price of Rs 1,050 in the
cash market, your futures position will be settled at that price.
You will receive a profit of Rs 50 per share (the settlement price
of Rs 1,050 less your cost price of Rs 1,000), which adds up to a
neat little sum of Rs 10,000 (Rs 50 x 200 shares). This amount is
adjusted with the margins you have maintained in your account.
If you receive profits, they will be added to the margins that you
have deposited. If you made a loss, the amount will be deducted
from the margins.
.
Before Expiry
It is not necessary to hold on to a futures contract till its expiry
date. In practice, most traders exit their contracts before their
expiry dates. Any gains or losses you‟ve made are settled by
adjusting them against the margins you have deposited till the
date you decide to exit your contract. You can do so by either
selling your contract, or purchasing an opposing contract that
nullifies the agreement. Here again, your profits will be returned
to you or losses will be collected from you, after adjusting them
for the margins that you have deposited once you square off
your position.
Index futures contracts are settled in cash. This can again be
done on expiry of the contract or before the expiry date.
On Expiry
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When closing a futures index contract on expiry, the closing
value of the index on the expiry date is the price at which the
contract is settled. If on the date of expiry, the index closes
higher than when you bought your contracts, you make a profit
and vice versa. The settlement is made by adjusting your gain or
loss against the margin money you‟ve already deposited.
Before Expiry
You can choose to exit your index futures contract before the
date of expiry if you believe that the market will rise before the
expiry of your contract period and that you‟ll get a better price
for it on an earlier date. Such an exit depends solely on your
judgment of market movements as well as your investment
horizons. This will also be settled by the exchange by comparing
the index levels when you bought and when you exit the
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contract. Depending on the profit or loss, your margin account
will be credited or debited.
Chapter 5
Introduction of the assignment
37
ONLINE TRADING
Online Trading is an easy way to buy and sell shares from the
comfort of one‟s place instead of trading through individual
stockbroker and broking firms, the customer can transact with
the helpof mouse click and his visits to the neighborhood broker
will become a thing of the past. Eventhe older generation is
adapting the online trading route.Find the right depository to
provide with an online trading account can be difficult, but
many banks and companies offer excellent services for online
trading. Our needs will determine which online broker is best for
us. Online trading brings in total transparency between broker
aninvestor in case of secondary market operation.Whether we
are buying a mutual fund, investing in commodities market or
any other transactioncan be performed with minimal fuss. In
India presently online trading can take place throughorder
routing system, which will route client orders to
exchanges trading system for execution of trade on stock
exchange (NSE and BSE).One of the measure attractions of
online trading is the wealth of free commentary and
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analysisabout stock market and global economy. Any investor
with an ounce of market saviness canextract all the data needed
to make trading decisions and complete the trades. An
importantcatalyst behind the emergence of thriving
online brokerage system has been the buoyant stock market. One
can trade online with e-brokerage such as ICICI Direct, HDFC
Securities, IndiaBulls, Kotakstreet and India Info line‟s
zerodha.com
39
order hits the market the stock exchange (through their
order matching algorithm) tries to find a seller who is
willing to sell you 200 shares of Infosys at 3030.
Now the seller could be 1 person willing to sell the entire 200
shares at 3030 or it could be 10 people selling 20 shares each or
it could be 2 people selling 1 and 199 shares respectively. The
permutation and combination does not really matter. From your
perspective, all you need is 200 shares of Infosys at 3030 and
you have placed an order for the same. The stock exchange
ensures the shares are available to you as long as there are
sellers in the market.
Once the trade is executed, the shares will be electronically
credited to your DEMAT account. Likewise the shares will be
electronically debited from the sellers DEMAT account.
TYPES OF ORDER
40
No guarantee that limit order will be executed
There are certain types of orders which may used by investors to
protect their profit or limit their losses.
Stop orders:-
It is used by investor to protect a profit or limit a loss
It is an order to sell as soon as the price falls up to a particular
level or to buy when the price rises up to a specified level. This
is mainly to protect the clients against a heavy fall or rise in
price. So that they may not suffer more than the specified unit.
41
Day order :-
A day order is an order that is valid only for the trading day on
which the order is placed. If the order is not executed by the end
of the day , it is treated as cancelled.
Week orders:-
These are orders that are valid till the end of the week during
which the orders are placed. They expire at the close of the
trading session on Friday of the week.
Month orders:-
These are orders that are valid till the end of the month during
which the orders are placed. Month order expire at the close of
the trading session on the last working day of the month.
Open orders:-
Open orders are orders that remain valid till they are
executed by the brokers or specifically cancelled by the
investor. They are also known as GTC orders.
42
Speculator
Types of Speculator-
BULL
43
The bulls will able to make profit only if the prices rise as
anticipate otherwise they will suffer losses.
When the prices of securities are generally rising in the
market the market is said to be in a bullish phase.
BEAR
LAME DUCK
44
CONCLUSION
45
Recommendations
46
1. Money saving opportunities The amount of money you save d
ependsprimarily 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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Reference Websites
https://www.nseindia.com/products/content/equities/ind
ices
https://www.zaubacorp.com/company/SEVENHILL-
SECURITIES-LTD/U65990MH1994PLC077771
https://www.bseindia.com/
https://www.nseindia.com/
https://www.slideshare.net/petkarshwt/online-trading-
ppt
https://www.slideshare.net/matthewlawhead/south-america-
intro-ppt
https://www.slideshare.net/SumitBehura1/trading-
system-in-stock-exchange
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