A REPORT

ON

THE STUDY OF ONLINE TRADING AND

STOCK MARKET

BY
TARUN HANDA
17BSP2990
PGPM
(2016-18 BATCH)

SHAREKHAN LIMITED
JHANDEWALAN, NEW DELHI

1
 A REPORT
ON

THE STUDY OF ONLINE TRADING AND STOCK

MARKET

BY
TARUN HANDA
17BSP2990

SHAREKHAN LIMITED
A report submitted in partial fulfillment of the
requirements of PGPM Program of
IBS GURGAON

Distribution List:
Mr. Amit Sharma (Company Guide)

25 May 2018

2
 AUTHORISATION

I hereby declare that the report titled ―THE STUDY OF ONLINE TRADING AND STOCK
MARKET which I have submitted in partial fulfillment of the requirement of PGPM Program of IBS
Gurgaon is an original piece of work, the data and statistics used have been duly acknowledged. This
submission has never been on the basis of any previously awarded degree to any individual to any
institution.

Date: 25th May, 2018

TARUN HANDA
(17BSP2990)

3
 ACKNOWLEDGEMENT

A project is never the work of an individual. It is more over the combination of ideas, suggestions,
review, contribution and the work involving many folks. It cannot be completed without the
guidelines.

It was a great opportunity to us to work with SHAREKHAN LTD., pioneers in the field of Financial
Industry. We are extremely grateful to all those who have share and experience with me and without
whom the completion of this project could have been virtually impossible.

Firstly, we could like to thank your Company Guide Mr. Amit Sharma who has been a constant source
of inspiration for us during the completion of this project. He gave us invaluable inputs during our
endeavor to this project

We are indebted to all staff of SHAREKHAN LTD for their valuable support and cooperation during
the entire tenure of this project, not to forget, all those who have kept our spirits surging and helped
delivering our best.

We want to give our special thanks to all the members of IBS, for providing us opportunity to work on
this project with this great organization.

At last we could like to thanks to all the respondents met in the preparation, who gave their valuable
time to provide us required information and their honest and support to complete our project on time.

Especially, I would like to give my special thanks to my parents and friends for their patient, love and
help during my internship.

TARUN HANDA

(17BSP2990)

4
 EXECUTIVE SUMMARY

Students Name TARUN HANDA

Enrollment No 17BSP2990

Industry Type BROKING HOUSE

Address 3-E/6, JHANDEWALAN EXTN, GROUND FLOOR, NEW DELHI

SHAREKHAN is an online website portal for online trading, investments and stock marketing. The
company was founded in February 2000 by entrepreneur Shripal. It is the largest stock broker portal
and has its branches in 575 cities in India. In 2016, SHAREKHAN has been bought by French bank
"BNP PARIBAS".

My project title was “TO STUDY THE ONLINE TRADING AND THE STOCK MARKET”.

The main objectives are:

 To pick up learning about the Stock Market.

 To examine how Currency and Equity exchanging stage works in the share trading system.

 To Study how to exchange the Stock Market.

 To investigate share advertise is gainful for clients or not

 To Study the significance of common store. In Mutual Fund, how SIP (Systematic Investment
Plan) is gainful for clients.

 To study the role of brokers in the share market.

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

 To determine what type of products the customers deal while doing the online trading.

AREAS I WORKED FOR DURING MY SIP:

Part one of my internship covered training on Equity, investment, Basics of Indian Stock Market,
Players in the stock market, Factors affecting the stock market, stock index, Basics of Mutual fund,
Market(Primary vs. Secondary), Derivative Market (Future vs. option), commodities Market, Players
behind the mutual fund and different ratios which are helpful for Stock market. Why do the market
fluctuate, when to buy and sell shares?

5
SHAREKHAN has also introduced “Active Training Cell” a series of Online Trading Programs on
Trading, Investing and SHAREKHAN Products. Now, anyone can attend these various sessions at
your home, office etc. All we need is to just register on ATC and then attend sessions on your phone,
Laptop, PC etc. I attended session on Trade Tiger (SHAREKHAN’s Product), Trading, Mutual Fund,
Derivative Market etc.

Part two of my project was to first learn the share markets and the process of online trading.

I am subjected to a lot of responsibility towards SHAREKHAN where my key deliverables to the

company is to provide my work the Accuracy & Consistency. My work includes:-

I. Account Acquisition: - It means I have to acquire 4- 5 accounts for a company. Therefore,

Company’s database is increases. As of now Company has over 15 Lakh trading customers.

II. Revenue Generation: - It means buying & selling of shares, securities to produce an income. I
am required to generate revenue for a company by selling of shares & securities.

 Apart from above two I am also working on the research part, Therefore I get idea about how
many people are aware about the stock market & currency market which is my title of report.
So, I made questionnaire and circulated them around so that it would be easier to talk to people
via questionnaires and understand their mentality about the stock market and find the right
prospect for the company who were willing to invest in stock market.
 My work also included calculation of brokerage charges on buying and selling of shares by the
clients.

FINDINGS AND CONCLUSIONS

 After completing the survey and analyzing the responses of the questionnaire. I came across
the following facts:
 There is huge scope for new investor to invest in Equity market, as it gives great returns, other
than the banks.
 Individuals don't know much about online trading however in coming future there is a huge
scope.
 Awareness campaigns like giving idea about futures and options, derivatives, dividend policies
will create interest in online trading. And this helps organization for market positioning as well
as mind positioning.
 In order to increase online trading, customer ought to be given more and more services so
preference can be given to online trading over offline trading.
 Customer interest should be increased in mutual funds, so that they can invest in it. Even the
Government itself nowadays promoting mutual funds which are an opportunity for such firms
like SHAREKHAN.
 Customer should be aware about the derivative, commodities, currency because it is also an
investment option apart from equity market.

6
SUGGESTION

 I recommend that the organizations should find a way to teach Investors about their rights and
duties. I propose them to build the investor’s belief.
 I suggest that the Company can increase the awareness of the company among the public.
 I suggest that the Company must spread the awareness to its client for the services like F&O
equities to increase the satisfaction level of client as we have find that there is positive aspect
between the satisfaction level of services provided by SHAREKHAN Success In Online
Trading,

7
TABLE OF CONTENTS

Cover Page 1

Title page 2

Authorization 3

Acknowledgement 4

Executive summary 5-7

1 Introduction to SHAREKHAN 10-13

1.1 Porter five forces analysis of SHAREKHAN 14

1.2 SWOT Analysis of SHAREKHAN LTD 15-16

Hierarchy , Competitors And Ties Up Banks
1.3 Of SHAREKHAN 17-18

2 Introduction To Stock Market 19

2.1 History of Stock Market In India 19-20

2.2 Key Features of Stock Market 21-22

3 Stock Exchange In India 23-25

4 The Regulators 25-27

5 Online trading 28-32

6 Growth 33-37

7 What is demat account 38

8 How online trading is done 39-41

8
9 Research Methodology 42

10 Data analysis 43-54

11 Findings and Conclusions 55

12 Suggestion 55

13 Annexure 56-58
14 References 59

15 Glossary 60-61

9
 1. INTRODUCTION TO SHAREKHAN

PROFILE OF THE COMPANY:

Name of the company: SHAREKHAN LTD.

Year of Establishment: 1925

Headquarter: SHAREKHAN SSKI

A-206 Phoenix house

Phoenix mills compound

Lower Parel

Mumbai – Maharashtra, India-400013

Nature of Business: Service Provider

Services: Depository Services, Online Services and Technical Research.

Number of Employees: Over 3500

Website: www.SHAREKHAN.com

Slogan: Your Guide to The Financial Jungle.

SHAREKHAN LTD is one of the leading retail broking House of SSKI Group which was running
successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group,
which has over eight decades of experience in the stock broking business. SHAREKHAN offers its
customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives,
Depository services, Online trading, Investment advisory, Mutual Fund Advisory etc.

The firm’s online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000.
The site has a registered base of over 14 lakh customers. The number of trading members currently
stands More than 10 Lakhs. It has its branches in more than 575 cities in India.

10
In 2016, SHAREKHAN has been bought by the French bank “BNP PARIBAS”.

 SSKI

With a legacy of more than 80 years in the stock markets, The SSKI group ventured into institutional
broking and cooperates finance. Presently SSKI is one of the leading player in institutional broking in
corporate finance .SSKI holds a sizeable portion of the market in each of these segments. SSKI
institutional broking arm account for 7% of the market for foreign institutional portfolio investment
and 5% for domestic institutional portfolio investment in the country. SHAREKHAN the broking arm
of SSKI, an organization with more than eight decades of trust and credibility in the stock market.

 Among pioneers of investment research in the Indian market.

 In 1984 ventured into institutional Broking and corporate finance.
 Leading domestic players in Indian Institutional Business.

 BNP PARIBAS

BNP Paribas acquire SHAREKHAN.

SHAREKHAN has become a subsidiary of BNP Paribas SA, joining Personal Investors, BNP Paribas
business line dedicated to digital banking and investment services that serves 2.9 million individual
customers across four geographies: India, Germany, Austria and Spain.

At present SHAREKHAN is fully owned by BNP Paribas SA.

Mission:

 To achieve and sustain market leadership

 To provide world class Quality services.
 To Educate and empower the individual investor to make better investment
 Decision through the quality advice and superior services.

Vision:

 To be the best brokering brand in the retail business of stock marketing.

 To lead the market.
 To acquire highest market share.

11
The Main Aim of SHAREKHAN is:-

a) To provide Online and Offline Trading Services to clients: - Trading is done through online
with SHAREKHAN website and offline through Dial n Trade Service which is provided by
SHAREKHAN to every customers.

b) Investment: -SHAREKHAN is also providing a platform for investment. An investment is a

monetary asset purchased with the idea that the asset will provide income in the future or
appreciate and be sold at a higher price.

c) Portfolio Management Service: - SHAREKHAN is also having Portfolio Management

Services for Exclusive clients. It offers varies details like:-

• Single window for Multiple investments

• Fast, Simple and Hassle free maintenance
• Portfolio booster with News and views

d) Mutual Fund: - If anyone invests in Mutual fund, SHAREKHAN is also providing the service
of Mutual Fund. We take a monthly SIP (Systematic Investment Plan).

e) Derivative: - If we want to trade in Derivative Market, SHAREKHAN is also providing the

service of Derivative Market. In Derivative Market we trade in Future Derivative Market and
Option Derivative Market.

Services offered by SHAREKHAN

SHAREKHAN offers the following services:-

 Online BSE and NSE executions
 Free access to investment advice from SHAREKHAN’s Research team
 Daily research reports and market review
 Daily Morning Views
 Depository Services.
 Market Watch
 Derivatives Trading (Futures and Options).
 IPO’s and Mutual Funds Distribution
 Currency Trading
 Internet-based Online Trading: Share Mobile App
 Fund Transfer

12
Products offered by SHAREKHAN

 Equity Trading platform(Online/Offline)

 Commodities Trading Platform (Online/Offline).
 Portfolio Management Service.
 Mutual Fund Advisory and Distribution.
 Active Training Cell (ATC)

13
1.1 PORTER FIVE FORCES ANALYSIS OF SHAREKHAN
1. Bargaining Power of Suppliers :-

 NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI, ICICIdirect.com,
etc. The bargaining power of Stock broking house would be less.
 NSE & BSE are playgrounds where an investor trade through stock broking houses, for which they
have to take permission from NSE/BSE.
 MCX & NCDEX are stock exchanges which trade in commodities & derivatives. Here again stock
broking house follow rules & regulation.
2. Bargaining Power of Buyers :-

 There are various types of investors who trade through stock broking house like SHAREKHAN
which include various investors like small investors, medium net worth investors, business partners
and mutual fund companies.

 The Bargaining power of stock broking house depends on how big the investor is.

 So here we can say that bargaining power of stock broking house is high in case of small investors
while in case of HNI & Medium Net worth investor is moderate.

3. Threat from Competitors :-

The company is facing the competition from local as well as national level players. There are
various players in the market like Motilal Oswal, Angel broking, ICICI direct, 5paisa etc.
Competition arises when both are providing same service.
4. Threat from New Entrant:-

 There are various new entrants which are investing in the stock market like UTI Securities, Various
bank collaboration with stock broking house.

 Various new stock broking houses are also thinking to enter in this market.

5. Threat from Substitute :-

 Here substitutes are such instruments which can be used instead of investing in shares.

 The instruments like Bank FD, Bank Saving A/c, Mutual Funds, and Insurance etc. are the
substitutes.

 If the use of this instruments increase this may be disadvantage for the stock broking houses.

14
1.2 SWOT ANALYSIS OF SHAREKHAN LTD.
Strengths

 Services

As a product, SHAREKHAN is a extremely innovative product with very less cost. Services like
onlinetrading facility, institutional and domestic brokering, customizes research reports with almost
80% efficient etc. gives SHAREKHAN edge over its competitors.

 Products

Company’s product line is quite flexible in the sense that there is a product for every kind of investors.
Also all the products cover all the loopholes of all the products offered by the other competitors like
low cost, user-friendly online trading services etc. their competitors like low cost, user-friendly online
trading services etc.

 Marketing

SHAREKHAN a product of SSKI, a veteran equities solution company with over decades of
experience in the Indian stock markets.
SHAREKHAN do not claim expertise in too many things. SHAREKHAN expertise lies in stocks
and that’s what talks about with authority.

Weakness

 Competition From Banks

Most of the banks due to good branding have the faith of the customer of their banking database. So
they enjoy the liberty of huge database and customer find it more reliable to trade their rather with a
unknown broker. Also bank like ICICI and HDFC bank have the advantage of linking the trading
account of their customer to saving account.

 Customer Satisfaction
As far as customer satisfaction goes SHAREKHAN has tighten their socks. Many broking houses
catering to heavy investors or small segment of the market can afford to and do provide relationship
manager for their customers, who can understand the trading needs of individual customer, and advise
accordingly.

 Branding

Though the company has efficient products but large part of investment interested population does not
know the company. The mostly basic expectation for a trader or investor when one begins trading is
that one must get timely delivery of shares and proceeds from sale of shares.

15
Opportunities

 Upgrade Technology

In a country like India technology is always improving which gives the company a chance to keep on
improving their products with time whereas for the small players like local brokers it will be difficult
to keep the same pace as the changing technology. The traditional business model are largely depends
on the large network .

 Expansion Of Market

After the NSE bought the screen based trading system stock market are now more secured which has
attracted lot of retail investors and the demand is increasing day by day. It has been dynamic enough to
move with the time and capture the opportunity that the market throws up from time to time.

 Education Of Stock Market


The education level; in the country is improving year after years as far as technology goes. With that
the understanding of the stock market is also increasing and a lot of retail investors are stepping in
market which shown by increasing volumes, transactions and indices.

Threats

 Technology Based Business

Online trading is totally based on the technology which is quite complex typically the technology
solution has to start from the internet front end .So the technology is kind of threat because unless until
it is working properly it is good but internet is not that safe. Though there is lot of cyber laws are being
made but not yet executed.

 New Entrant

A lot of competition is trying to enter the market in this bullish run to taste the flavor of the cherry.
This is creating a lot of competition for large players like SHAREKHAN and it is creating little
confusion in the minds of customers about services provided by the broker.

16
1.3 HIERARCHY , COMPETITORS AND TIES UP BANKS OF SHAREKHAN
Hierarchy

SALES SIDE DEALING SIDE

 TRAINEES  JUNIOR DEALER

 SUPER TRAINEES  DEALER

 SALES EXECUTIVES  RELATIONSHIP MANAGER

 SENIOR SALES EXECUTIVES  SENIOR RELATIONSHIP MANAGER

 BUSINESS DEVELOPMENT
 EQUITY ADVISOR
EXECUTIVES

 ASSISTANT SALES MANAGER  ASSISTANT BRANCH MANAGER

 DEPUTY MANAGER  BRANCH MANAGER

 TERRITORY MANAGER  CLUSTER HEAD

 AREA SALES MANAGER  DIRECTOR

 REGIONAL SALES MANAGER  CEO

 REGIONAL HEAD

 VICE PRESIDENT

 DIRECTORS

 CEO


17
Competitors of SHAREKHAN

Tied Up Banks

18
2. INTRODUCTION TO STOCK MARKET

“An equity market, stock market or share market is the place in which shares of stock are bought and
sold.”
“Stock markets refer to a market place. Where investors can buy and sell stocks. The price at which
each buying and selling transaction takes is determined by the market forces (i.e. Demand and supply
for a particular stock).”

“A stock market is where shares in corporations are issued and traded”

The security contracts(Regulation)Act 1956 defines, a stock exchange as “an association,organization

or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating
and controlling, business in buying, selling and dealing in securities.

2.1 HISTORY OF STOCK MARKET IN INDIA

The first organized stock exchange in India was started in 1875 at Bombay.

Indian Stock Market is one of the oldest Stock Market in Asia. East India Company used to transact
Loan Securities by the end of 18th Century. In the 1830s, trading on corporate stocks and shares in
Bank and Cotton presses took place in Bombay.

In 1874, with the rapidly developing share trading business, brokers used to gather at a street (now
well known as "Dalal Street") for the purpose of transacting business.

In 1875 The Native Share and Stock Brokers' Association" (also known as "The Bombay Stock
Exchange") was established in Bombay.

In 1894 the Ahmedabad Stock Exchange was started to facilitate dealings in the shares of textile mills
there.

The Calcutta stock exchange was started in 1908 to provide a market for shares of plantations and jute
mills.

19
Then the madras stock exchange was started in 1920.Madras witnessed boom and business at "The
Madras Stock Exchange" was transacted with 100 brokers. When recession followed in 1923, number
of brokers came down to 3 and the Exchange was closed down.

 Post Independence Scenario

The depression witnessed after the Independence led to closure of a lot of exchanges in the country.
Lahore stock Exchange was closed down after the partition of India, and later on merged with the
Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and got recognition
only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for
recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized
under the Act were:

1. Bombay
2. Calcutta
3. Madras
4. Ahmedabad
5. Delhi
6. Hyderabad
7. Bangalore
8. Indore

At present, there are twenty two recognized stock exchanges in India which does not include the Over
the Counter Exchange of India Limited (OTCEI) and the National Stock Exchange of India Limited
(NSEIL).

Indian Capital Markets are regulated and monitored by the Ministry of Finance, The Securities and
Exchange Board of India and The Reserve Bank of India.

The Ministry of Finance regulates through the Department of Economic Affairs – Capital Markets
Division. The division is responsible for formulating the policies related to the orderly growth and
development of the securities markets (i.e. share, debt and derivatives) as well as protecting the
interest of the investors. In particular, it is responsible for

 Institutional reforms in the securities markets,

 Building regulatory and market institutions,
 Strengthening investor protection mechanism, and
 Providing efficient legislative framework for securities markets.

The Division administers legislations and rules made under the

 Depositories Act, 1996,

 Securities Contracts (Regulation) Act, 1956 and
 Securities and Exchange Board of India Act, 1992.

20
2.2 KEY FEATURES OF STOCK MARKET

 Equity Market: Equity or cash market which includes intraday trading and delivery.
It also includes BIGTRADE of SHAREKHAN which provides 10 times exposure to the customers
for trading but it works for intraday trading only.

 Derivatives Market : derivatives includes two types

A. Futures
B. Options

A. Futures:
 In futures customer can carry forward his position for three months which is called
contract.
 Last Thursday of every month is called expiry.
 In futures you cannot select the number of shares to buy. There is always a lot size
defined for every stock which trades in futures.
 M2M (mark to market) is also an important feature of future trading.
 Highest margin is 20% in stock market for future trading.

21
 B. Options:

 This trading is available only in National stock exchange.

 Criteria for OPTIONS trading:
a) Lot Size
b) Premium
c) M2M
d) Strike Price

 Brokerage of SHAREKHAN is 100 rupees per lot.

SHAREKHAN BROKERAGE STRUCTURE FOR EQUITY MARKET:

Particulars BUY SELL

STT (Delivery) 0.125% 0.125%
STT (Intraday) 0.024% Nil
Brokerage (Delivery) 0.50% / 10 Paisa 0.50% / 10 paisa
Brokerage (Intraday) 0.10% / 5 paisa 0.10% / 5 paisa
GST 18% 18%

22
3. STOCK EXCHANGE IN INDIA
The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are the two major
exchanges in India.

1. National Stock Exchange (NSE)

The National Stock Exchange (NSE) was established in 1992 and trading began in 1994.

The NSE is used mainly for spot trading, or cash trading. When you conduct a spot trade, you are
completing the buy/sell immediately. When you sell, you get the price for the stock at that moment in
time; the same goes for selling.

Another large component of the NSE is the trading of futures and options, also called derivative
trading...Other stocks that are traded on the NSE include mutual funds, public offerings, and wholesale
debt. Like the BSE, the NSE has its own index of stocks that traders and investors watch. There are 50
diverse stocks from 13 areas of the economy.

The index is known as the NIFTY 50.

 FUNCTION OF NSE

The primary function of the NSE is

 To facilitate listing of companies and the whole process of trading the same as stocks listed on
the exchange.
 Apart from companies, NSE also has products such as derivatives listed which can be traded.

23
 FEATURES OF NSE

Features of NSE are as follows

 Nationwide coverage i.e., investors from all over country.

 Ringless i.e., it has no ring or trading floor.
 Screen-based trading i.e., trading in this stock exchange is done electrically.
 Transparency i.e., the use of computer screen for trading makes the dealings in
 Securities transparent.
 Professionalization in trading i.e., it brings professionalism in its functions.

2. Bombay Stock Exchange (BSE)

It is oldest and first stock exchange of India established in the year 1875. First it was started under
banyan tree opposite to town hall of Bombay over 22 stock brokers. There are 23stock exchanges in
the India.

Bombay stock exchange is the largest, with over 6000 stocks listed. The BSE accounts for over two
thirds of the total trading volume in the country.

Established in 1875, the exchange is also the oldest in Asia. Among the twenty-two stock exchanges
recognized by the government of India under the securities contracts(Regulation)Act,1956, it was the
first one to be recognized and it is the only one that had the privilege of getting permanent recognition.

24
 Vision And Mission Of BSE

 Vision

Our vision is to be the most sought after learning provider in the world in areas of financial and
leadership learning, by pioneering the generation and dissemination of knowledge of the enhancement
of skills and capabilities of professionals and aspiring professionals.

 Mission

As a centre of learning, our mission is to promote an open learning environment that brings people
together, cultures and ideas from around the world, changing lives and helping transform organizations
through innovative learning programs.

Through our learning programs, we develop responsible thoughtful leaders and entrepreneurs who
create value of their organizations and their communities.

4. THE REGULATORS

1. Securities & Exchange Board of India (SEBI)

The Securities and Exchange Board of India (SEBI) was formed after the Indian parliament passed the
securities and exchange board of India Act, 1992 in response to the financial Services Assessment
Program. SEBI Actually established in the year 1988 and given statutory power in 1992. With the
growth in the dealings of the stock markets, lots of malpractices also started in stock markets such as
price rigging, ‘unofficial premium on new issue, and delay in delivery of shares, violation of rules and
regulations of stock exchange and listing requirements.
25
Due to these malpractices the customers started losing confidence and faith in the stock exchange. So
government of India decided to set up an agency or regulatory body known as Securities Exchange
Board of India (SEBI).

 Function Of SEBI

 Regulating the business in stock exchange and any other securities markets.
 Promoting and regulating self-regulatory organization.
 Registering and regulating the work of collective investment scheme, including
 Mutual funds.
 Prohibiting fraudulent unfair trade practices relating to securities market.
 Promoting education, and training of intermediaries of securities market.

 Purpose and Role Of SEBI

 Issuers: For issuers it provides a marketplace in which they can raise finance fairly and easily
 Investors: For investors it provides protection and supply of accurate and correct information.
 Intermediaries: For intermediaries it provides a competitive professionals market.

2. Reserve Bank of India (RBI)

`

The Reserve Bank of India (RBI) is governed by the Reserve Bank of India Act, 1934. The RBI is
responsible for implementing monetary and credit policies, issuing currency notes, being banker to the
government, regulator of the banking system, manager of foreign exchange, and regulator of payment
& settlement systems while continuously working towards the development of Indian financial
markets.
The RBI regulates financial markets and systems through different legislations. It regulates the foreign
exchange markets through the Foreign Exchange Management Act, 1999

26
3. National Stock Exchange (NSE)

.
In the role of a securities market participant, NSE is required to set out and implement rules and
regulations to govern the securities market. These rules and regulations extend to member registration,
securities listing, transaction monitoring, compliance by members to SEBI / RBI regulations, investor
protection etc. NSE has a set of Rules and Regulations specifically applicable to each of its trading
segments. NSE as an entity regulated by SEBI undergoes regular inspections by them to ensure
compliance.

27
5. ONLINE TRADING

Online trading involves investment activity which takes place over the Internet and it does not require
physical inclusion of the broker. An investor has to register with an online trading portal like
ICICIdirect.com, motilaloswal.com and Sharekhan.com and many companies like that and investor
gets into an agreement with the firm to trade in different securities according to the terms and
conditions given on the agreement. As the servers of the online trading portal are connected all the
time to the stock exchanges and designated banks the order processing is done in real time and
investors can also have updates on the trading. They can also check the status of their orders either
through e-mail or through the interface that it cannot be accessed by a third party. Some options are
usually given to users such as to link their bank account, Demat accounts and brokerage accounts into
a single interface. A single window is also there for all exchanges and a single screen is there for the
complete order routing mechanism. The hardware used comprises Web and application servers,
switches, routers, firewalls and security devices, and specialized appliances. There are two broad
models in play in the online brokerage space-

1. Bank-backed firms
2. Entrepreneur-floated firms.

Bank-backed brokerages such as ICICI direct and HDFC Securities have expanded on the basis of
their brand name and the trust of investors in them. The integrated 3-in-1 accounts offered by these
bank-backed brokerages help their parent bank by giving it accounts along with float income.
In second case i.e. Entrepreneur-backed companies like Sharekhan, Indiabulls, Religare and
motilaloswal have expanded by offering customers a mix of online and offline accounts, higher
margin finance amounts and lower brokerage rates. Though the bank based has performed better but
the latter have not lagged too far behind.

The reason why online trading has developed over conventional offline brokerage firms is that this
conventional method struggled with unfavorable economies. Staff cost is just one example of it. As the
markets opens for 330 minutes a day one dealer can at best execute 500 trades in a day while online
company like ICICI direct executes 150,000-200,000 trades a day on the National Stock Exchange
alone accounting for 3-4% of NSE trades of 5 million a day. It would require a large amount of dealers
to service this demand. Besides the salary costs it would also demand huge expenses in real estate and
support systems.

The offline model has got a downfall in the form of lower bandwidth and IT costs and the cost of
bandwidth has fallen to one-eighth of what it was in year 2000 giving online broking an advantage
especially in the case of lower-volume retail investors.
Today 30% of volumes on the NSE come from this and it may go up to 50% in three-four years
providing explosive growth for online broking in India.
To be a successful trading portal it will definitely depend on bouquet of services provided by it for an
end-user. Most of the portals charge a small registration fee and brokerage based on various conditions
but it's important for the organization to keep focused on customer-centric services and delivery
models to actually enjoy the most attention.

28
The Emergence of E-Broking 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 Rs.
9000-10,000 crores handled by the BSE and NSE together there is a much greater scope for online
trading. At present some of the dominant players in the online trading market of share market are –

1. Sharekhan.com 9. Angel Trade

2. Icicidirect.com 10. Reliance Money
3. Unicon 11. Religare
4. 5paisa.com 12. Karvy
5. Indiabulls 13. ILandFS
6. Kotak Securities

7. Motilal Oswal
8. Geojit Securities
Earlier the share market was not safe enough to invest but some of the changes in the past ten years in
the Indian share market have created the interest of trading in the shares by the people. Broadly we can
classify three important factors which have contributed to the development of online trading in India-
Firstly the major step was taken by the National Stock Exchange (NSE) in the year 1994 which
allowed the electronic trading and seeing to this various other stock exchanges in India followed soon.
This helped in making the fast .accurate and transparent transactions saving a lot of time then the
traditional method of trading. The investors were also saved by the clutches of the fraud brokers at the
times when the clients were not aware of the true prices of the shares.
Secondly, in the year 1996 the dematerialization of the shares came (also known as DEMAT) which
avoided the online presence of shares in an electronic form avoiding them from theft, pilferage or from
other losses like counterfeiting and frauds regarding share transfer.
The third reason was the rapid growth of computer education and learning of internet by the people.
With the evolving of internet the online trading became a hit and the investors became confident in
investing just with a click of a mouse.

29
With the happening of such events the ratio of trading has improved a lot. As it takes less time people
praise this technology for trading purposes. Some people who traded rarely now even trades 2-3 times
every day as it provides edge of researching about companies on the internet. The number of small
investors is increasing on the daily basis that trades on the internet.

If a person invests or trades in equities, derivatives, commodities etc through the use Internet it is
known as online trading enabling the investor to connect electronically to buy or sell stocks,
derivatives etc with the other investors. This can be done with the help of online service providers like
Sharekhan.com, ICICI Direct.com etc. A person can access a stockbroker's website through a PC
connected to Internet and can place his orders. The benefits are-.
• A person can see the latest market movement through streaming quotes.
• Reduces time lag due to self-execution and instant confirmation.
• Empowers traders to have a complete control over their trading decisions.
• A person can access his accounts and related information on the Website.
• Provides greater convenience of trade as a person can trade from home or other convenient
location.
• It is cheap in terms of cost associated and offers reduction in overheads
• A trader can view the historical charts on his computer.
The Internet revolution has changed the way to communicate and the way to do business in today’s
society bringing us closer and closer to vital sources of information. It provides us with means to
directly interact with service-oriented computer systems tailored to our specific needs; therefore, we
can serve ourselves better by making our own decisions.
This new access by the online trading customers to low-cost transactions and cutting-edge, real-time
market information that formerly belonged only to brokers has opened up extraordinary new
investment opportunities as well as a crucial need for state-of-the-art information.
Today the investors use the Internet Client-Server technology to buy and sell the securities at an
instant at any point of time. People investing online have reached the proportions.
Online trading allows an investor to buy and sell shares on the exchange through Internet and helps in
the direct control of his investments.

Advantages of Online Trading

1. Provides with the Freedom of Information

The Internet provides a new sense of controlling our financial future as the amount of investment
information available online is truly outstanding. An investor can-

• Know the price of any stock he desires at any point time on the internet.

• An investor can review the price history of any stock in chart format online

30
• An investor can follow in-depth the events happening in the market

• Helps an investor to conduct an extensive financial research of any company he desires

• He may also consult with other investors online present around the world

Some online stock broking companies provide real-time stock quotes, daily roundups of the stock
market, expert commentary, and a deep community of fellow investors.

2. Provides Control to Investors Money

When an investor wants to buy or sell stock he no longer needs to call his broker on the phone thus
helping in the execution of the order instantly on the internet.

3. Provides access to the market

Through the sophisticated information streams, dedicated trading platforms and sophisticated tools the
investor can access the markets which provides more agility in buying and selling stocks.

4. Ensures the best price for investors

Some companies like Invest smart (ILandFS) specialize in the techniques which offers the best price
deals for the buy and sell orders of the investors and traders providing the high level of transparency
by displaying of information relating to the specific stocks and company profiles which helps in
getting the best quote for the orders.

5. Online trading offers greater transparency

Online trading offers the investors with greater transparency by providing with an audit trail. The
process involves a complete integrated electronic chain starting from order placement, to clearing and
settlement and finally ending with a credit into the depository account of the investor. All these stages
are inspected which brings the transparency into the system.

6. Provides hassle free trading

Online trading provides an integration of the bank account, trading account and demat accounts, which
leads to easy and paperless trading for the client.

7. Online trading allows instant trade execution

Online transactions helps in the quick execution of the entire trading transaction right from logging to
the traders site and to the settlement of the bank account in a very short period of time.

8. It provides a level playing field

Trading online gives even the smallest retail investor access to information which was earlier available
only to the big traders. It has provided with a level playing field for all investors in the securities
market.

31
9. Online trading reduces the settlement risk

This method of trading reduces the settlement risk for the investor as when a short sell order is played
the orders are squared off at the specified cut-off time and are not allowed to be carried forward.

10. Provides live financial news and analysis

The online sites also provide live terminals which provide streaming news to give investor the latest
financial information as it occurs.

11. Online help desk

Some companies provide online help desk an investor cancan contact the Tele Trading Executives
from the Tele Trading team during and after market hours and can clarify questions.

12. Instant order trade confirmations

Through online trading every trade is confirmed immediately and investor receives an on-screen
confirmation following every trade with full details for the investors records which avoids costly
errors that would have been discovered when it is too late.

13. Keeps Information Secure

As per the guideline provided by SEBI every effort has to be made to keep the investors account and
personal information secure by use of encryption technology and updated security technology to
advanced fraud prevention measures.

Disadvantages of Online Trading

1. In online terminal, investor can’t get customized expert advice, whereas in offline the broker gives
suggestions according to investors strategy (i.e. short term or long-term)

2. Brokerage is high compared to offline.

3. Privacy is less due to hacking scandals

4. Transactional errors due to technical problems

32
6. GROWTH

As indicated by an article by Krishnamurthy B in 2005 after commencement of online trading in India

in the year 2000 online trading has picked up energy with exchanging volumes developing by 150
percent for each annum in the years 2003-2005.The volume of all exchanges executed through the
Internet on the National Stock Exchange had developed from not as much as Rs 100 crore (Rs 1
billion) in June 2003 to over Rs 700 crore (Rs 7 billion) in July 2005 which was a nice looking
development.
This additionally gave a massive rise in the quantity of Internet traders. Toward the finish of July
2005, there were 108 enrolled dealers on the NSE and the quantity of Internet exchanging supporters
of around 1.054 million. Also, the main three players ICICIdirect.com, Indiabulls and Kotak Securities
had about 85 percent of the aggregate client base. Today the ICICIDirect has about 36% market share.

In March 2003 ICICIDirect had around 234,000 customers trading through its portal which rose to
more than 675,000 clients in the year 2005.According to Anup Bagchi the MD and CEO of
ICICIdirect.com as their organization was the principal player to enter the online trading segment
section, ICICIdirect has made broking more organized and straightforward which additionally
decreased the operational problems.

In the meantime the quantity of subscribers trading through the entrance of Kotak Securities had gone
up altogether by 150 percent and the quantity of online trading clients had developed from 30,000 to
75,000. What's more, the organization anticipated that would have no less than 130,000 clients before
the finish of that financial.

Indiabulls which was a late contestant in the amusement had its online clients developing from 35,000
in June 2003 to more than 140,000 in the mid 2005. Out of aggregate client base of 180,000 dominant
parts were online clients. Indiabulls delegated 2,000 relationship chiefs to deal with online customers.

In the current past years of 2005 ICICIDirect and Indiabulls recorded a yearly volume development of
100 percent and IndiaBulls had around 30 percent of India's online trading volumes.

In the year 2005 the online incomes became quicker for Indiabulls than offline incomes (online
incomes expanded from 40 percent to 60 percent of the aggregate year 2004 and customers needed a
backup while trading online.

ICICI Direct had 7.5 lakh enlisted0 clients online in the year 2005 more than five times what
Indiabulls had. In 2005 number of demat accounts multiplied to 7.1 million with the office of online
trade since 2002.

From the years 2000-2005 the online broking developed to represent a tenth of the aggregate online
volumes. On the off chance that the numbers are considered for just the retail sections, the
development is starker. Half of the Rs 5,000 crore-6,000 crore daily market volumes on the NSE
represented by non-retail

33
Online trading represented 30 per cent of SHAREKHAN’s broking business in the year 2005.The
number of clients enlisted with SHAREKHAN was 130,000 by then of time of which 60,000 utilized
Internet trading.

By then of time in spite of the fast development of online trading in India it constituted a diminutive 8-
10 percent share of the aggregate turnover on the NSE despite the fact that this rose from 2-3 percent
around two years back. The big players expected a 100 percent development in their supporter base
each year for the following couple of years.

At that point of time despite the rapid growth of online trading in India it constituted a puny 8-10 per
cent share of the total turnover on the NSE although this rose from 2-3 per cent about two years ago.
The big players expected a 100 per cent growth in their subscriber base every year for the next few
years.

According to a recent article in livemint.com while the Indian markets lag those in many emerging and
developed countries in online trade volume, some of the share brokers expect that in the coming years
the buying and selling of shares through the Internet would account for up to half of the total equity
trade volumes.
Today the total volume of online trade in India is about 20% of total trades.
According to brokers the better broadband connectivity across the country and wider awareness of
equity as an asset class will rise the online trade volumes to over 50% of total trade.

In India the demography is such that two-thirds of the population is under the age of 36 and more than
50% is under age of 25 and this is another supporting factor for this view. According to
Mr R. Kalyanaraman the senior vice-president of SHAREKHAN LTD the total number of traders
opting for online trading is on a rising considerably, though people are making more cautious
investments. SHAREKHAN is the India’s largest online brokerage firm and the majority owned by
Citigroup Venture Capital International and Infrastructure Development Finance Co. Ltd.
Also according to him the online volume has suffered a dent because of recent market volatility and
negative market sentiment.

SHAREKHAN gets 60% of its brokerage revenue from the online trading. In 2003 when there were
34
only 10-15 brokers empanelled for Internet trading with the exchange and accounted just about 10% of
total volume in Indian stock markets the number has increased to around 300 brokers wooing Internet-
savvy investors. According to a recent study Ernst and Young only 4% of India’s domestic household
savings or just about 13% of its gross domestic product is being channeled to shares and debentures
issued by companies which is very less or in an initial stage.
Sudip Bandyopadhyay chief executive of Reliance Money Ltd says that online investing is still at a
nascent stage in India and expects that Internet-based trading will eventually take about half of the
total stock market trading as like with developed markets such as the US. Philippines has the highest
online trade with about 55-60% execution of trade is online. The reason is because they had wider
Internet connectivity years before India. The biggest challenge in India remains better Internet
connectivity.
The earlier Online trading used for Internet trading has been replaced by specialized software which
gives real-time global data streaming rates to trader helping investors to analyze the market trends and
helps in faster execution of trades. Earlier the investors made trade calls over the phone which
sometimes led to the delays.
Online share trading in India was at a boom in the end of 2006 with daily-traded volumes more than
tripling from Rs 1,500 crore to Rs 5,000 crore in the last one year and terminals was set up in small
towns such as Rajkot, Hubli and Vijayawada.

In that year the share of online trading rose dramatically from 7% last year to 20% as a percentage of
overall traded volumes. Due to this factor the top five US brokerage firms decided to make a foray into
India in the next year driven by strategic interest. Also at that time non-metros accounted for half of
the daily turnover of online trading.
In a crash of the market in the early February 2008 the investors remained away from online trading
and the turnover of the NSE from internet-based trading dipped to a daily average of Rs 1,648 crore
between February 1 and February 8 as compared with Rs 3,450 crore in January 2008 Rs 3,587 crore
in December 2007 and Rs 4,417 crore in November 2007 in the exchange’s cash market segment.
In the mid February 2008 it accounted for just 12% of NSE’s total cash turnover as compared with a
high of 24% in November last year..
The most online stock broking companies started from 2000 onwards because of development of
global Internet economy and for years 2000 to 2003 the stock market was under a bear hug. The
intense competition among a new wave of online brokerage companies hammered down brokerage
rates from 1% (in 2000) to 0.25 %, or even lower to 5 paisa.
According to Aseem Dhru, MD and CEO, HDFC Securities in today’s scenario an online business can
break even in as short a period as about 18-24 months. Earlier there were other problems like the
Internet connectivity was unreliable, and investors resisted the strict margins and compliance online
stock broking demanded.

Initially it seemed that online stock trading would flop. In the year 2003 online trades were a merely
2% of trades on the National Stock Exchange. Even the strong players like Kotak Securities could only
get online transaction volumes of mere Rs 25-30 crore in a day.

35
A few companies like Hometrade and LTtrade went off after the dotcom implosion. But some
determined companies like SHAREKHAN LTD, Indiabulls and IndiaInfoline, remained despite the
burden of huge cash-burn. SHAREKHAN, for example, is estimated to have lost Rs 20 crore on its
launch campaign.

According to R Kalyanaraman, Senior VP, SHAREKHAN at that time there was room to service the
mass market through a trusted name and those who bore the pain are still around in the market to reap
the gains.
If seen today Kotak Securities deals online transactions worth Rs 1,000 crore a day. This may mean
annual revenues of Rs 120 crore, assuming a 0.05% brokerage. But Kotak Securities’ total revenues
including offline transactions are higher at Rs 834 crore.
HDFC Securities have 500,000 online customers’ deals in daily online trades worth Rs 250-300 crore
is also in the black. The revenues it had in 2007-08 are Rs 100 crore. HDFC Securities had revenues of
Rs 67 crore and a net profit of Rs 7.21 crore in 2006-07. ICICIdirect has 1.5 million online broking
accounts and parent ICICI Securities reported revenues of Rs 750 crore for March 2008.

SHAREKHAN at present has 650,000 customers with daily Internet trading volumes of Rs 400-500
crore. The new player Reliance Money has 2 million online accounts trades worth Rs 2,000 to Rs
3,000 crore per day.
Today online trading accounts for 25-30% of retail market turnover that can make online stock trading
a Rs 400 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 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
investors, 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 Rs 25 crore on the initial technology and hardware set-up. The
annual expanses of around Rs 4-5 crore will also be needed to scale up.
Industry size: Rs 5,000 cr
Online share: Rs 400 cr

Key players: HDFCsec, ICICIdirect, Indiabulls, Indiainfoline, Kotaksecurities, Sharekhan

Current growth rate: 40-50%

The stock markets which saw a dip in online trading due to investor apathy because of prolonged
bearishness in recent years is now witnessing a revival of interest and is expected to have a record
growth in the coming years.
36
Mr Tarun Shah, CEO of SHAREKHAN, Mumbai says that the retail investors in the capital market
are the most neglected ones have no access to research and SHAREKHAN, seeks to fill this vacuum
felt by retail investor.

SHAREKHAN has invested about Rs 13 crore in the last two years in creating the requisite
infrastructure by way of branches and for Internet trading.

SHAREKHAN has presence in about 80 cities across the country now and it is seeking to consolidate
its presence in the current year 2008 and has focus on expanding its membership.

SHAREKHAN enjoyed about 20 per cent market share in Web business (Internet trading) in stock
markets and in past 3 years Web trading showed lot of promise but as the market witnessed a
downturn retail customers had no much interest in it.

By then the company has been adding around 1, 000 customers a month and felt that for retail
customer web trading was a very good medium as it provides live information. Web trading
constituted about 1 per cent to 2 per cent of the revenue SHAREKHAN in the year 2001-02.

But in the year 2002-03 overall revenue of SHAREKHAN trebled and the share of Web trading
constituted 22 per cent of the revenue. At that time the SHAREKHAN’s daily trading volume was
over Rs 200 crore the Web trading constituted at about Rs 40 crore a day major part of the volume
came from the intraday transactions.

According to Tarun Shah the growth of Internet trading in the stock markets would come with a rapid
pace and web trading in the total turnover of the capital markets would go up to 10 to 15 per cent in
the next 2-3 years which is now just about 1 to 2 per cent.

Trading timings are from 9:15 A.M. to 3:30 P.M. on all 5 days of the trading period. Monday to Friday
is the trading period in all the stock exchanges. SEBI has stipulated that all the stock exchanges in
India must have same trading period.
So, firstly to deal in stock market we must have a demat account.

37
7. WHAT IS DEMAT ACCOUNT?
In India, shares and securities are held electronically in a dematerialized (or Demat) account, instead of
the investor taking physical possession of certificates. A Demat account is opened by the investor
while registering with an investment broker (or sub-broker). The Dematerialized account number is
quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder
will have a Dematerialized account for the purpose of transacting
Access to the Dematerialized account requires an internet password and a transaction password.
Transfers or purchases of securities can then be initiated. Purchases and sales of securities on the
Dematerialized account are automatically made once transactions are confirmed and completed.

The benefits of demat are as follows:

 Easy and convenient way to hold securities

 Immediate transfer of securities
 No stamp duty on transfer of securities
 Safer than paper-shares (earlier risks associated with physical certificates such as bad delivery,
fake securities, delays, thefts etc. are mostly eliminated)
 Reduced paperwork for transfer of securities
 Reduced transaction cost
 No "odd lot" problem: even one share can be sold
 Change in address recorded with a Depository participant (DP) gets registered with all companies
in which investor holds securities eliminating the need to correspond with each of them separately.
 Transmission of securities is done by DP, eliminating the need for notifying companies.
 Automatic credit into demat account for shares arising out of bonus/split, consolidation/merger,
etc.
 A single demat account can hold investments in both equity and debt instruments.
 Traders can work from anywhere (e.g. even from home).

38
8. SREENSHOTS ON HOW ONLINE TRADING IS DONE

1. We go to trade now after logging in our clients ID and go to exchange that from where we want to
purchase the shares.

2. Then we go to buy/sell option to buy or sell the shares

39
3. Then we go to validity that is GFD, IOC or MyGTD. Which means for intraday or delivery.

4. We then write the name of share in the scrip. For ex. Axis Bank

40
5. We after filling the required amount of shares we place the order and a box appears for
confirmation.

41
9. RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. Research methodology
consists of different steps that are generally adopted by a researcher to study the research problems
along with the logic behind them . It may be understand as a science studying how research is done
scientifically. It is necessary for research to know not only the research methods/techniques but also
the methodology.

TOPIC OF THE STUDY:

“TO STUDY THE ONLINE TRADING AND THE STOCK MARKET”

RESEARCH DATA SOURCE:

Research is based on primary data. Research has been done by primary data collection and primary has
been collected personally.

 Primary Data

The data collected for the research is in the form of questionnaire and much from meeting
individuals and surveys.

In this project the approach used was questionnaire approach because the main objective was to study
the online trading and the stock market and to have an idea how they invest in the equity market.

SAMPLING:

 Sampling Procedure

The sample was selected randomly irrespective of them being investors or not availing services or not.
It was also collected through personal by formal and informal talks and filling up the questionnaire
prepared. The data has been analyzed by using statistical tools.

SAMPLE SIZE:

The sample size of my project is limited to 50 people.

SAMPLE DESIGN: Data has been presented in pie charts or bar chart.

In this project Descriptive Research design method is used.

42
10. DATA ANALYSIS

QUESTIONS FOR THOSE WHO INVEST IN STOCK MARKET

Survey Response Analysis
TABLE.1. ACTIVE INVESTOR

The table explains about an active investor

Active Investor No Of Respondent % Of Respondent

Yes 23 43.4
No 30 56.6

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 1, pie chart depicted above,

Out of 53 respondents who answered the questionnaire , around 56.6 % people are not the active
investor they invest yearly, monthly. Around 43.4 % people are active investor, they invest daily,
weekly.

43
TABLE.2. TYPE OF INVESTMENT

The table explains about an investment type.

Type of Investment No Of Respondent % Of Respondent

Saving A/C 27 51.9
Mutual Funds 18 34.6
Fixed Deposits 17 32.7
Gold 14 26.9
Stock/Equity 9 17.3
Real Estate 5 9.6
PPF 6 11.5
Insurance 14 26.9

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 2, pie chart depicted above,

Out of 52 respondents who answered the questionnaire , 51.9% of the people are investing in banking
sector as compare to stock market. Fixed Deposit, Insurance and Mutual funds also plays a major role
in investment.

44
TABLE.3. PURPOSE OF INVESTMENT

The table explains about an investment purpose.

Purpose of Investment No Of Respondent % Of Respondent

To meet the cost of inflation 4 7.7
To earn a good return on idle 28 53.8
resources
To make a provision for an 17 32.7
uncertain future
To generate a specific sum of 23 44.2
money for a specific goal in
life

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 3, pie chart depicted above,

Out of 52 respondents who answered the questionnaire , around 53.8% people doing investment to
earn good return on idle resources.

45
TABLE.4. HAVE YOU EVER INVESTED IN EQUITY MARKET?

The table explains about an investment in equity market.

Investment in equity Market No Of Respondent % Of Respondent

Yes 16 30.2
No 26 49.1
Planning to invest in future 11 20.8

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 4, pie chart depicted above,

Out of 53 respondents who answered the questionnaire , People are unaware about the equity market
that’s why 30.2% people are investing in equity market from less than 1 year. Whereas 20.8% people
are interested in investing in equity markets in future.

46
TABLE.5. IF NOT, THEN WHY?

The table explains about the reasons for not investing.

Reasons for not Investing No Of Respondent % Of Respondent

Lack of interest 16 38.1
Lack of knowledge 30 71.4
Unavailability of such firms to 4 9.5
provide information

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 5, pie chart depicted above,

Out of 42 respondents who answered the questionnaire , 38.1% people agree that there is no
promotional or awareness is there about these firms, due to which 71.4% has no knowledge about
these market.

47
TABLE.6. SECTORS FOR INVESTING

The table explains about the reasons for not investing.

Sectors No Of Respondent % Of Respondent

IT 11 32.4
Pharmacy 6 17.6
Telecom 9 26.5
Banking 24 70.6
Petroleum 7 20.6
Automobile 10 29.4
Entertainment 5 14.7
Oil and Gases 5 14.7
Engineering 5 14.7
Metals and Mining 7 20.6

.
INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 6,pie chart depicted above,

Out of 34 respondents who answered the questionnaire , most of the people are invest in Banking
Sector it means they are not aware about any other options like Telecom, Oil & Gas, Hospitality
Sectors etc.

48
TABLE.7. SOURCES USED TO MAKE DECISIONS ON INVESTMENTS IN STOCK MARKET.

The table explains about sources used to make decision on investments in stock market..

Sources No Of Respondent % Of Respondent

Internet 20 41.7
TV 9 18.8
Press 3 6.3
Broker Advice 14 29.2
Others 2 4.2

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 7, pie chart depicted above,

Out of 48 respondents who answered the questionnaire , People make their decision on investments
mainly through internet.

49
TABLE.8. FACTORS TAKEN INTO ACCOUNT WHEN INVESTED IN STOCK MARKET.

The table explains about what factors taken into account when invested in stock market.

Sources No Of Respondent % Of Respondent

Dividend 4 11.9
Low Share price 7 16.7
Expectation of Share price 23 54.8
increases
Taxation of dividends and 7 16.7
stock market gains

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 8, pie chart depicted above,

Out of 42 respondents who answered the questionnaire , 54.8% people has objective that they invest in
share market on the expectation that the share price will increase.

50
TABLE.9. SOURCES TO TRACK THE INVESTMENT.

The table explains about what factors sources to track the investment.

Sources No Of Respondent % Of Respondent

Internet 31 52.2
TV 8 47.8
Press 2
Broker Advice 5

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 9, pie chart depicted above,

Out of 46 respondents who answered the questionnaire , 67.4% people track their investment through
internet.

51
TABLE.10. HOW FREQUENT DO YOU INVEST?

The table explains about how frequent we are investing.

Sources No Of Respondent % Of Respondent

Daily 2 4.3
Weekly 8 17
Monthly 12 25.5
Yearly 31 66

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 10, pie chart depicted above,

Out of 47 respondents who answered the questionnaire , 66 % people invest in market yearly. It means
lack of awareness about stock market.

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TABLE.11. HAVE YOU EVER INVESTED IN MUTUAL FUNDS?

The table explains about invested in mutual funds.

Sources No Of Respondent % Of Respondent

Yes 22 41.5
No 20 37.7
Planning to invest in future 11 20.8

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 11, pie chart depicted above,

Out of 53 respondents who answered the questionnaire , around 3 % people has invested in mutual
funds. And there are 20.8% people who are interested in investing in future

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TABLE.12. OPEN A DEMAT ACCOUNT IN SHAREKHAN.

The table explains about pen demat account in SHAREKHAN.

Sources No Of Respondent % Of Respondent

Yes 7 13.2
No 22 41.5
Maybe, if the right 24 45.3
information is provided

INTERPRETATION: -
Source:Primary data

INFERENCE:

From the table 12, pie chart depicted above,

Out of 53 respondents who answered the questionnaire , around 13.2% people wants to open demat a/c
with SHAREKHAN and are leads for the company. And 45.3% are optimistic that with right
information they can open accounts.

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11. FINDINGS AND CONCLUSIONS

After completing the survey and analyzing the responses of the questionnaire. I came across the
following facts:
 There is huge scope for new investor to invest in Equity market, as it gives great returns, other
than the banks.
 Individuals don't know much about online trading however in coming future there is a huge
scope.
 Awareness campaigns like giving idea about futures and options, derivatives, dividend policies
will create interest in online trading. And this helps organization for market positioning as well
as mind positioning.
 In order to increase online trading, customer ought to be given more and more services so
preference can be given to online trading over offline trading.
 Customer interest should be increased in mutual funds, so that they can invest in it. Even the
Government itself nowadays promoting mutual funds which are an opportunity for such firms
like SHAREKHAN.
 Customer should be aware about the derivative, commodities, currency because it is also an
investment option apart from equity market.

12. SUGGESTION
 I recommend that the organizations should find a way to teach Investors about their rights and
duties. I propose them to build the investor’s belief.
 I suggest that the Company can increase the awareness of the company among the public.
 I suggest that the Company must spread the awareness to its client for the services like F&O
equities to increase the satisfaction level of client as we have find that there is positive aspect
between the satisfaction level of services provided by SHAREKHAN Success In Online
Trading,

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13. ANNEXURE

COMPANY PROFILE QUESTIONNAIRE

QUESTIONNAIRE ON STOCK MARKET INVESTMENTS

NAME:
AGE:
EMAIL ID:
OCCUPATION:

1. Are you an active investor?

14. YES
o NO

2. What kind of investment you have made so far?

 Saving A/C
 Fixed Deposits
 Mutual Funds
 Gold
 Equity/ Stock Market
 Real Estate
 PPF
 Insurance

3. What is the purpose of your investment?

To meet the cost of inflation

To earn a good return on idle resources
To make a provision for an uncertain future
To generate a specific sum of money for a specific goal in life
Others

4. Have you ever invested in equity market?

o Yes
o No
o Planning to invest in future

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5. If not, then why?

Lack of interest
Lack of knowledge
Unavailability of such firms to provide information

6. If yes, then in which sector do you invest more?

IT
Pharmacy
Telecom
Banking
Petroleum
Automobile
Entertainment
Oil and Gases
Engineering
 Metals and Mining

7. What sources do you use to make decisions on investments in stock market?

o Internet
o TV
o Press
o Broker Advice
o Others

8. What are the objective factors that you think are in general taken into account when invested in
stock market

o Dividend
o Low Share price
o Expectation of Share price increase
o Returns of other substitutive investments
o Taxation of dividends and stock market gains
o Other

9. What sources do you use to track your investments?

o Internet
o TV
o Press
o Broker Advice
o Other

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10. How frequent do you invest?

Daily
Weekly
Monthly
Yearly

11. Have you ever invested in Mutual Funds?

o Yes
o No
o Planning to invest in future

12. Would you like to open a demat account with SHAREKHAN?

o Yes
o No
o Maybe, if the right information is provided

Thank you for your valuable time.

58
14. REFERENCES

WWW.SHAREKHAN.COM
WWW.MONEYCONTROL.COM

WWW.INVESTOPEDIA.COM
WWW.SEBI.GOV.IN
WWW.NSEINDIA.COM
WWW.WIKIPEDIA.COM

59
15. GLOSSARY

At-The-Money An option is at-the-money if the strike price of the option is equal (or virtually equal)
to the market price of the underlying security.

After-hours Deal The stock market usually closes at 4:00pm. After this scheduled time, deals can also
be made but the transaction is dated the next day, known as an after-hours deal.

Bearer Stocks This is the stock that is unregistered with the owner’s name.

Bid Price This term indicates the sale price of stocks or shares

Blue Chip These are shares of big and reputed companies.

Brokerage The fee charged by a broker for the execution of a transaction; also called the commission.
A business involving brokers is also referred to as a ‘brokerage house’ or ‘brokerage firm’.

Call An extra installment due on shares.

Cash Settlement In the stock exchange, there are certain deals like Gilts which are rendered for cash
and not for account settlement. They are settled the next day of the deal.

Day Order An order that is placed for execution during only one trading session. If the order cannot
be executed that day, it is automatically cancelled.

Day Trading The practice of buying and selling shares or derivatives within one day’s trading. The
day is ended with no established position in the market.

Daily Range The difference between the highest price paid for a share or derivative and the lowest
price paid during one trading day.

Dealing This means the purchase and sale of shares.

Equities These are the ordinary shares. They are different from debenture and also from loan stock.

Futures Contracts that allow any holder the legal right to buy or sell Indexes and Commodities in the
future at a price set today.

Hedge This means to insure the risk.

Initial Public Offering The issue of new shares by a previously private company as it becomes a
public company.

In The Money A call option whose strike price is below the current market price of the underlying
security or a put option whose strike price is above the current market price of the security. An in the
money option has intrinsic value.
Limit Order This is an order to any stockbroker specifying any fixed price limit.
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Market Order An order to buy or sell a security at the present market price. As long as there is a
market for this security, the order will be filled. This type of order takes precedence over all other
orders.

Options The term means the right to purchase (call option) and sell (put option) a particular share at a
particular price within a particular period.

Ordinary Shares The most commonly-traded security, which grants ownership in a company.
Ordinary shareholders may receive payments in cash, called dividends, and capital appreciation if the
company trades profitably. The ordinary shareholders have no preferential rights in the liquidation
process if a company is wound up.

Out-of-the-Money A call option whose strike price is higher than the current market price of the
underlying security, or a put option whose strike price is below the current price of the underlying
security.

Portfolio A selection of shares usually held by a person or fund. Also known as investment portfolio
or a stock portfolio

Put Call Ratio The ratio of put trading volume divided by the call trading volume over a specific
period of time.

Put Option A contract which gives the purchaser the right, but not the obligation, to sell a certain
quantity of an underlying security to the writer of the option, at a specific price within specified period
of time.

Selling Short The strategy of selling a security you do not already own in the belief that the price will
fall and the security can be bought back at a lower price.

Stock Also referred to share or equity, stock is the basic ownership unit of a company.

Volatility The measurement of how much a security fluctuates over a period of time.

Volume The total number of securities traded during a given period.

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