REVIEW OF LITERATURE "Online stock trading in India: An empirical investigation" In 2007, Nidhi Walia and Ravinder Kumar's research

report examined the investors' preference for traditional trading and online trading, investor's perception on Online trading & comparing current usage of online trading and offline trading. This study reveals that out of every 100 investors only 28 trade online, which points out a question as why investors were not able to realize the importance of technology in stock trading. The major findings of the study are the Indian investors are more conservative, they do not change brokers for trading, whereas net traders are more comfortable with online trading for its transparency and complete control of the terminal TRADING Trading is defined as buying and selling shares in stock exchanges. There are two types of trading i.e. online trading (via internet) and offline trading (via broker or call). Gone are the days when the investor must have a stock broker to deal in stocks and make investments. In this age of internet, when everything is going online, stock trading has also gone online. Just like the offline stock trading investor can now buy or sell stocks online with just a few clicks of the mouse. There are obliviously some advantages and some disadvantages of both these form of trading. ADVANTAGES OF ONLINE TRADING

Typically online trading requires the investors to pay lower brokerage. In case of online trading there is no middle man involved. In case of online trading there is no paper work involved. Trading on a real time. Investors can deal with different stock exchanges with single online trading account.

DISADVANTAGES OF ONLINE TRADING

In online terminal, investors can't set customized expert advice, whereas in offline the broker gives suggestions according to investors strategy (i.e. Short term or Long term) Privacy is less due to lacking scandals. Transactional errors due to technical problems.

ADVANTAGES OF OFFLINE TRADING

It is the most trusted and the oldest form of stock trading. With an efficient and trusted broker, investor can effortless manage the portfolio without spending any time for that.

DISADVANTAGE OF OFFLINE TRADING

Often times the broker's takes time to execute investor's instructions of buying or selling the stocks that might incur losses. Offline trading brokerage is always higher than that of online brokerage.

PRODUCTS AND SERVICES ON THE ONLINE TRADING INDIA The major financial products and services of the online trading India are like equities, mutual fund, life insurance, general insurance, loans, share trading, commodities trading, portfolio management and financial planning. NATIONAL STOCK EXCHANGES AND BOMBAY STOCK EXCHANGES In spite of many private stock houses at present involved in online trading in India, the NSE and BS$E are among the largest exchanges. They handle huge daily trading volumes, supporting large amounts of date traffic, and possessing a countrywide network. The automated online systems used for trading by national stock exchanges and Bombay stock exchanges are the NIBIS & NSE'S Internet based information systems and NEAT for the national stock exchanges and the BSE online trading system or BOLT for the Bombay stock exchange. MAJOR PLAYERS IN ONLINE TRADING BROKERAGE HOUSE IN INDIA ? ICICI Securities Ltd ? Kotak Securities Ltd ? India bulls financial services Limited ? India Infoline ? IL & FS investment Limited ? SSKI Ltd ? Motilal Oswal Securities Ltd ? Religare Securities Ltd ? Geogit Securities

? HDFC Securities ONLINE TRADING: INDIAN SCENARIO In the Indian context, online trading can be rightly called as a recent phenomenon, which took with the change of century i.e. April 2000, and even till day online trading is not much popular among investors for which a list of factors can be blamed. This fact is more clearly from the information available that while number of stock exchanges in India has grown from 7 exchanges in1946 to total 23 exchanges till 2005. Only 2 stock exchanges are providing online share trading. Indian stock exchanges have started adopting technology because it provides the necessary edge and ensure timeliness and satisfaction in customer service. However mainly 5 companies control 90 5 of the market in internet trading, ICICI direct.com has around 50% market share, whereas India Bulls hold 26% share, Other dominant players are Kotak Securities and Share khan. ICICI has been able to gain its dominant presence in Internet trading because they have strong connectivity of stock trading, demat account, bank account, etc., ICICI Direct has recorded 6, 75,000 registered customers and has become 19th larger online broker in US whereas Share khan and 5 paisa are loosing their way. CONCLUSION The onset of online trading changed the traditional value proposition of trading, allowing online brokers to supply investors with rich, interactive information in real time including market updates, investment research and robust analytics. The result is an integrated trading experience that combines execution with interactive analysis shown by growth of the online customer community from a mere 23000 average trades on NSE per day in a year 2000 to over 52000 average trade in 2002. Online trading has gained momentum from just 0.5% of total traded volumes 5 years back, which how accounts for 5 5 of the total trading volume of approximately Rs. 14000cr on NSE. Over the past 2 years, the value of all trades executed through internet on NSE has grown from less than Rs.100 Cr in June 2003 to over Rs.700 Cr in June 2005.

Listed below the top 10 shares that have not perfomed well in 2011, and have lost more than 3/4th of share price Top Losers in 2011 Company GTL Jai Balaji Inds ARSS Infrastructure KS Oils Lanco Infratech SKS Microfinance Karuturi Global Great Offshore Sujana Towers 3I Infotech Price (31 Dec' 10) 416.85 265.5 836.25 47.4 63.45 643.85 22.95 386.75 26.75 59.75 Price (21 Dec' 11) 36.2 33.45 110.5 6.4 9.28 98.35 4.15 79.55 5.61 12.65 Growth(%) 91.32 87.4 86.79 86.5 85.37 84.72 81.92 79.43 79.03 78.83

Given below the list of top revenue generating stock as on January, 2012. Fastest Growing Stocks

Compa Ran Reven Price Profit EPS ny k ue Orient Paper & 2 Inds Oberoi Reality Cox & Kings 6 15 77.5 80.9

PE

Yiel PE Ris Bet Analys Ratin d G k a is g 1.2 0.7 13 3 1.3 0.4 31 5 5 4.85 4.42 4.47 4.5

48.83 43.33 7.07 2.59 0.16 19.15 0.74 0.24

269.3 111.52 74.73 81 5

144.9 1.8 1.5 117.37 776.98 863.35 47.25 0.71 0.05 15 5 2 9 157.3 1.9 1.1 104.65 402.61 405.52 59.31 0.76 0.15 26 5 8 5 159.3 85.33 149.29 169.38 36.36 0.96 0.21 1.3 0.7 22 5 3 0.7 0.0 11 7 7

Prestige Estates 16 Proj Mothers on Sumi 20 Systems Kansai Nerolac 36 Paints JSW 47

4.45

949

128.15 155.43 155.5 49.98 1.15 0.32

4 3.1

754.5 18.36

259.78 274.83 31.79 0.98 0.12 2.0 1.8 52

Steel Jaipraka sh 48 Power Ventures Godrej Properti 84 es Pipavav 91 Defence

5 39.55 126.26 84.06 85.72 25.32 0 0.3

9 4.07

1.6 0.9 15 9 9 0.4 23 5

605.0 76.52 5 82.3 129.57

116.38 79.67 43.87 0.5 1744.4 1696.7 257.7 0 7 5 3

0.55 1 0.15

2.22

2.2 0.4 6 7 7

The list is based on stock's Price Earning ratio(PE ratio). Listed below the least expensive stock as of January, 2012. Least Expensive Stock

Company Orient Paper & Inds

Ran Reven Profi Yiel PE Ris Bet Analys Ratin Price EPS PE k ue t d G k a is g 2 77.5 80.9 48.8 43.3 7.0 2.59 0.16 1.23 0.7 13 3 3 7 55.5 51.3 6.3 1.09 0.12 1.56 0.82 7 8 3 1 50.0 46.2 4.6 5.59 0.1 1.24 0.5 7 4 3 1 19.1 19.3 7.7 4.2 1 6 1 0.4 0.81 0.23 8 4.85

Arshiya Internationa 7 l JBF Industries Graphite India Pratibha Industries 11 21 22

127.2 55.89 141.2 13.2 83.15 26.09 50.95 42.45

4.14 3.86 4.38 4.88

29.1 25.5 6.3 1.18 0.25 2.09 1.63 16 8 1 3

Deepak Fertilizers Infinite Computer

42 43

139.6 14.86 5 152.3 34.58 5 190.0 27.77 5 82.35 28.19 84.35 17.04

11.8 14.1 5.4 4.3 8 7 1

0.38 1.16 0.78 11

4.73 4.29 4.43 4.47 4.29

20.6 19.5 5.4 2.94 0.28 1.91 1.16 7 2 1 8 13.7 7.1 14.4 2.18 0.5 1.38 0.86 28 4 9 4.38 12.9 6.7 1.82 0.52 1.55 0.91 19 5 0.2 2.19 1.57 7

IL & FS Transportati 45 on Kalpataru Power Arvind 60 97

25.6 5.0 25.6 1.2 2 3

Given here the list of top Income generating stock of 2012, based on dividend yield provided to share holders for the month January, 2012. Income Generator

Company

Ran Reven Profi Price EPS PE k ue t 138.6 74.06 5 67.75 18.67 141.2 13.2 83.15 26.09 113.4 50.24 119.3 25.71 5 130.7 10.38 139.6 14.86 5 68.94 67.62

Yiel PE Ris Bet Analys Ratin d G k a is g 4.55 4.6 3.86 4.38 4.07 3.08 3.14 4.73

Gateway 1 Distriparks Gujarat Industries 5 Power JBF 11 Industries Graphite India 21

11.5 1.0 0.5 4.26 0.17 20 4 6 4 0.21 1.0 0.7 10 9 4 1.2 0.5 7 4 0.8 0.2 8 1 3 1.6 1.2 29 5 5

41.11 41.05 8.68 3.7

50.04 46.23 4.61 5.59 0.1 19.11 19.36 7.71 4.2 40.3 37.99 12.4 5.4 6 0.4 0.33

Hexaware Technolog 24 ies Jindal Saw 31 Chennai 34 Petroleum Deepak 42 Fertilizers

156.2 18.2 1.3 0.6 156.2 0.83 0.12 12 7 6 2 5 307.0 383.8 31.3 0.9 0.4 1.54 0.08 7 3 5 1 4 5 11.88 14.17 5.41 4.3 0.38 1.1 0.7 11 6 8

TVS 56 Motor Co Oil India 65

38.8

12.11

40.57 63.63 6.23 8.14

14.0 1.6 1.5 3.36 0.22 40 4 2 5 8.31 3.97 1.02 0.9 0.4 47 6 7

3.28 4.13

478.1 16.69

REVIEW OF LITERATURE

Online trading marks a watershed in the application of technology in conducting trading business in stock markets. This book is divided into four sections. The first section deals with fundamentals and framework, the second section focuses on the implication of online trading the third section describes the implications for online investors. The fourth section is about the technology advancements in online trading. The

first section on fundamentals and Framework deals with the evolution of online trading, basic concepts, background and trading mechanisms involved. The opening article, share trading: Moving to the Net, by Dr. T R Rajarajan traces the evolution of securities trading from traditional system to trading through the internet. It discusses the trading mechanism through the major components of online trading, viz, banking, depositories, technology and other infrastructure. Information technology has replaced the age-old share trading method with the

faster and more accurate online stock trading. The second article. Online trading: Trading @ the speed of light, By Mayura jaiswal, deeepad vashist and Abhay Kumar, traces the growth of online trading from the year 2000 using statistics on volume of online trading from the year 2000 using statistics on volume of online trading, number of e-broking firms, brokerages and demographic patterns. Online trading has dramatically changed the way stock business has been conducted over the years.

In the next article, online trading: Issues and concerns, by Anup Bagchi, the author suggests that online trading should balance a technology centric approach to transactions with the human factor for a successful transition from traditional to online trading. In his interview, jade smith (HSBC treasury and capital markets) discusses various aspects of online trading: the types of transactions conducted online, different value propositions in the online

marketing and the future trends in etrading. The process of payment and settlement is an issue of importance in online stock trading. The next article, payments in India: The journey so far and the road ahead, by Vinod Madhavan looks at how the multiple payment systems have developed in India and considers the need for technology and a legal framework to ensure that an electronically linked payments and clearing system, including cheque truncation, can be implemented in

future. In the next article, clearing & settlement system at NSDL, the structure of a clearing account is described along with the process of settling trade in markets.