B Trading System of Stock Exchange

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011
PREFACE
This project has been carried out while working as summer trainee in The Arihant Capital Market LTD, Indore. All efforts have been made to know the Trading System Of Stock Exchange. All efforts have been made so that the information gathered is free from any biasness. Besides gathering information from the institutional guide, it has been my endeavor to gather information from the brokers and other trading staffs also. Many interesting facts have come out in course of investigation. Every endeavor has been made so that the result remains meaningful as well as fruitful.
BHAVESH PATEL MBA 3 Semester FMS, Sagar

rd
ACKNOWLEDGEMENT
At the very outset, I take the opportunity to convey my heartiest gratitude to those persons whose cooperation, suggestions and support paved the way for the accomplishment of my work successfully. I am extremely grateful to Mr. Ankur Atre(manager), Arihant Capital Market LTD, Indore for giving me the golden opportunity to pursue my summer internship programme in this esteemed organization. I extend my warm thanks to all the members of this office, who have extended their kind support whatever & wherever needed. I also extend my gratitude to the Faculty Of Management Studies, Dr. Hari Singh Gour University, Sagar (M.P.) because it is the endeavor of the faculty that has given me such a scope. Last but not the least, I am immensely grateful to my family members, who not only rendered sustained help, moral and encouragement but also provide me the necessary motivation for this work.
With regards BHAVESH PATEL MBA 3rd Semester FMS, Sagar
CERTIFICATE
Date: ........................ This is to certify that project report titled survey of Arihant Capital Market LTD. Indore TRADING SYSTEM OF STOCK EXCHANGE. has successfully completed by Mr. BHAVESH PATEL, M.B.A. 3rd Semester 30th Batch student under the guidance of Mr. Ankur Atre (Manager) at Department of Business Management for the partial fulfillment for the award degree of Master of Business Administration is satisfactory in respect of: 1. Contents and Presentation of the subject matter. 2. Language. 3. Embodies the original work of the candidate. 4. Submission within due date.
Signature of Supervisor
Signature of H.O.D.
Signature of Examiner
DECLARATION
I, Bhavesh Patel, hereby declare that the project report namely, Trading System Of Stock Exchange prepared by me is an original work, is the result of independent research carried out by me in partial fulfillment of the MBA program of FMS Dr. Hari Singh Gour University, Sagar (M.P.). To the best of my knowledge and belief, this research is an original piece of my work and is the sheer outcome of my efforts and has not been submitted to any other University or Institution for the award of any degree or diploma.
Signature of the student BHAVESH PATEL MBA 3rd Semester FMS, Sagar
EXECUTIVE SUMMARY
As a partial fulfillment of my MBA curriculum I have undergone six weeks summer training at ARIHANT CAPITAL MARKET LTD. I have done my summer training project at INDORE branch from 11th May to 30th June. The Arihant Group has emerged as one of the top 10 retail stock broking houses in India, having memberships on BSE, NSE and the two leading commodity exchanges in the country i.e. NCDEX and MCX. Arihant capital market Ltd is also registered as a depository participant with CDSL. Arihant has exceeded customers expectations by providing world-class service. The questionnaire was used as data collection instrument and both open ended and close ended type of questions were used as per the requirement. From the survey it was found that *Business class investors more proportion of their income in shares and securities as compared to service class investors. *Majority of investors trade according to expert the daily traders. *Majority of investors take the decision on investment (where/what amount to invest) on their own idea and some rely on experts opinion and brokers advice. * In case segment, capital gain is the prior motives of the investors followed by regular of the investors followed by regular income and tax income and tax planning etc. *More details about the project are available in later part of this report.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 PREFACE ACKNOWLADGEMENT CERTIFICATE OF THE COMPANY EXECUTIVE SUMMRY
TABLE OF CONTENTS
1. OBJECTIVE OF STUDY 2. INTRODUCTION 3. COMPANY PROFILE 4. TRADING SYSTEM OF STOCK EXCHANGE 5. RESEARCH METHODOLOGY 6. DATA ANALYSIS AND INTERPRETATION 7. SWOT ANALYSIS 8. FINDING 9. LIMITATION 10. CONCLUSION 11. ANNEXURE 12. BILIOGRAPHY
OBJECTIVES OF THE STUDY

(a) (b) (c) (d) (e) To have an idea about the various Trading System Of Stock Exchange. To gather some knowledge about the Trading System. To understand the Trading System in a better way. To understand the trends of trade in the stock market in the last few years. To get the detail information about the company and to analysis the learning in past six weeks at Arihant capital market . (f) (g) To gain the knowledge about the market conditions. How to handle the various questions raised by them and how to deal with them.
INTRODUCTION
A Stock Exchange is the single most important institution in the secondary market for providing a platform to the investors for buying and selling of securities through its member. It is a place where already issued securities of companies are bought and sold by investors. Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts. It also facilitates for the issue and redemption of securities and other financial instruments including the payment of income and dividends. Traditionally a stock exchange is an association of its members or stock brokers, formed for the purpose of facilitating the buying and selling of securities by the public and institutions at large and regulating its day to day operations. Of late however, stock exchanges in India are operating now with due recognition from Security and Exchange Board of India (SEBI)/ the Government of India under the securities contracts (Regulation) Act, 1956. There are 24 recognized stock exchanges in India, out of which one has not commenced its operations. Out of the 23 remaining stock exchanges, the trading volumes are recorded. Most of the regional stock exchanges have formed subsidiary companies and obtained membership of Bombay Stock Exchanges (BSE), or
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 National Stock Exchange (NSE) or both. Members of these stock exchanges are now working as sub brokers of BSE / NSE brokers. Securities listed on the stock exchange(s) have following advantages:o The stock exchange(s) provides a fair market place o It exchanges liquidity o There is continuous reporting of their prices o Full information is available on the companies o Rights of investors are protected
List of Stock Exchanges in India

Bombay Stock Exchange National Stock Exchange Interconnected Stock Exchange Regional Stock Exchanges o Ahmedabad Stock Exchange o Bangalore Stock Exchange o Bhubaneshwar Stock Exchange o Calcutta Stock Exchange o Cochin Stock Exchange o Coimbatore Stock Exchange o Delhi Stock Exchange o Guwahati Stock Exchange o Hyderabad Stock Exchange o Jaipur Stock Exchange o Ludhiana Stock Exchange o Madhya Pradesh Stock Exchange o Madras Stock Exchange o Magadha Stock Exchange o Mangalore Stock Exchange o Meerut Stock Exchange o OTC Exchange Of India o Pune Stock Exchange o Saurashtra Kutch Stock Exchange o Uttar Pradesh Stock Exchange o Vadodara Stock Exchange
Historical Background of Stock Exchanges

The first stock exchange was established in London in the year 1773. just after establishment of London stock exchange various countries like France, Germany and USA also established their own stock exchange markets. In India, the first exchange established in Bombay in the year 1875. later, in year 1908, Calcutta stock exchange was established which was recognized in the company in 1923. mean which in 1920 the madras stock exchange limited in 1973. So far the government of India has recognized 22 stock exchange, which was located at major business centers in different parts of country. Till the mid fifties the stock exchange was governed by their own bye laws and regulations with very little interface by the government. In the year 1925, the government of Bombay promulgated an act securities contracts and control act, 1625 for regulation and the stock exchange. During the world was second trading outside the stock exchange flourished with adverse effect on investors confidence due to base less issues and higher rate of liquidation of companies. In 1956, the center government passed contracts (regulation) act 1956, which came into force through out the country on 20th Feb. 1957.
Earliest records of securities trading in India are available from the end of the eighteenth century. Before 1850, there was business conducted in Mumbai in shares of the East India Company, which were considered as securities for buying, selling\ & exchange. The shares of the Commercial Banks, mercantile bank & the Bank of Bombay were some of the prominent shares traded. In 1850, the Companies Act was passed & that heralded the commencement of the joint stock companies in India. It was the American civil war that helped Indian to establish broking business. The leading broker, Shri Premchand Roy Chand designed & developed the procedure to be followed while dealing in shares. In 1874, the Dalal Street became the permanent place for meeting the brokers to conduct their business. The brokers organized an association on 9 th July 1875 known as Native share 7 stock Brokers Association to protect the stock & interest of the native brokers. That was the foundation of the Stock Exchange, Mumbai. The Exchange was established with 318 members. The Stock Exchange, Mumbai did not have to look back as it started riding high in the ladder of growth. In January 1899, Mr. James M.Maclen, M.P inaugurated the Brokers hall. After the 1st World War, the stock exchange was housed properly at an old building near the Town Hall. In 1928 the present premises were acquired surrounded by Dalal Street, Bombay Samacher Marg and Hamman Street. At new building the present location was constructed and was occupied on 1st December 1930.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 In 1950, the regulation of business in securities and stock exchanges became an exclusively Central Govt. subject following adoption of the constitution of India. In 1956, the Parliament of India passed the Security Contract (Regulation) Act. To regulate the security market, SEBI was initially established on October 12, 1988, as an interim board under control of the Ministry of Finance, Govt. of India. In 1992 the SEBI Act came into existence. In 1992 Over the Counter Exchange of India (OTCEI) came into existence where securities of small companies are listed. In 1994, National Stock Exchange (NSE) came into existence, which brought an end to the open out cry system of trading securities which was in vogue for 150 years, and introduced Screen Board Trading (SBT) system. BSEs one line trading system was launched on March 14, 1995. Now the trading in securities is done using screen based trading system through duly authorized members of the exchange.
MANAGEMENT OF STOCK EXCHANGE Management of stock exchange is done an elected body of members. These bodies are know by different names in different stock exchange for example, the BOMBAY, INDORE and AHEMDABAD stock exchange are managed by a governing board. Council of management governs the MADRAS stock exchange. A committee manages the CALCUTTA stock exchange. While the board of director manages stock exchange. These governing bodies are powerful bodies enjoying extensive administrative power of management and control over their respective stock exchange the day-to-day function of the stock exchanges are executed by the sub-committee like the defaulters committee listing committee, settlement committee etc. STOCK BROKERS SEBI registered stock - brokers interested in providing Internet based trading services will be required to apply to the respective stock exchange for a formal permission. The stock exchange should grant approval or reject the application as the case may be, and communicate its decision to the member within thirty calendar days of the date of completed application submitted to the exchange. The Exchange closely monitors outstanding position of top buying memberbrokers and top selling member-brokers on a daily basis. For this purpose, it has developed various market monitoring reports based on certain pre-set parameters. These reports are scrutinized by officials of the Surveillance Dept. to ascertain whether a member-broker has built up excessive purchase or sale position compared to his normal level of business. Further, it is examined whether purchases or sales are concentrated in one or more scrips, whether the margin cover is adequate, whether transactions have been entered into on behalf of institutional clients and even the quality of scrips, i.e., liquid or illiquid is looked into in order to assess the quality of exposure. The Exchange also scrutinizes the pay-in position of the member-brokers and
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 the member-brokers having larger funds pay-in positions are at times, at the discretion of the Exchange, required to make advance pay-in on T+1 day instead of on T+2 day. BASIC REQUIREMENTS FOR STOCK BROKERS Trading will be on existing stock exchanges through order routing system for execution of trades. Therefore, stockbrokers are to comply with the following before the start of trade on Internet. 1. The broker must have a net worth of Rs. 50 lakh if he wants to avail the facility of Internet for his own. 2. Provision for maintenance of adequate back up system. 3. The software system to be used by him should be secured and reliable. 4. To employ the qualified staff for this purpose. 5. To send order/trade confirmation to the client also through e-mail. 6. The contract notes must be issued to the clients as per existing regulation within 24 hours of the execution of trades. 7. The broker and his client should use authentication technologies. The above are some of the important pre-requisites for the stockbroker should intend to take benefits of trading on Internet. However, detailed guidelines issued by the SEBI for the stock exchange KIND OF STOCK BROKERS 1.Commission Broker Near about all the brokers buy and sell securities for earning a commission for investor point of view he is the most important person and responsibility is to buy and sell stoke for his customer. It means that he acts as an agent of investor and earns commission for his services rendered. The broker is also an independent dealer in securities. He purchases and sell securities in his own name but he is not allowed to deal with nonmember. 2.Jobber He is an professional speculator who works for a profit called turn he makes a continuous auction in the market in the stoke in which he specialized. He trades in the market evens for small difference in the prices and helps to maintain liquidity in the stoke exchange. 3.Floor Broker The floor broker buy and sell shares for the other broker on the floor of the exchange. He is an individual member owns his seat and receives his own commission on the orders he execute. He helps other brokers when they are buy and as compensation receives a portion the broker.
4.Odd lit dealer For trading in stock exchange there a certain number of share a fixed to be transacted in a lot, this is known as round lat which is usually a, 100 share a. Any thing less than the round lot are add lot. If a person is in possession of add lot of share i.e. 10, 20, 30, 40 etc. They he will has to look for the add lot dealer. 5.Budliwala He is the person who finance or provide credit facilities to the market for this service he charges a fees called contango or backwardation charges. The budliwala gives a fully secured loan for period of 2 to 3 weeks. 6.Arbitrageur A person who is specialist in dealing with securities in different stoke exchange centers at the same time. He makes a profit by the difference in the piece prevailing in different centers of the market activity. For example the rte of a certain scrip is higher in some stoke exchange than other on. In this case the broker will buy the scrip from the marked lower price and will sell the scrip in the market at higher price. The profit of the arbitrageur depends on the ability to get the prices from different centers before trading in other stoke exchanges.
COMPANY PROFILE
INTRODUCTION TO ARIHANT
Arihant Capital Markets Limited, an ISO 9001:2008 Certified Company, is one of the leading financial services companies in India. We provide a gamut of products and services including securities and commodities broking, investment planning, financial planning, wealth management and merchant banking to a substantial and diversified clientele that includes individuals, corporations and financial institutions. We are committed to giving our customers the best services and holding to our core values which always place our client's interests first. These values are reflected in our Business Principles, which emphasize integrity, commitment to excellence, innovation and teamwork. We have presence in 110 cities with over 620 offices across the nation. Clients turn to Arihant for its complete platform of financial services combined with excellent execution. We have a dedicated institutional team, which caters to mutual fund houses, insurance companies and almost all the banks active in the capital market segment. Our goal is to create wealth for our retail and corporate customers through sound financial advice and appropriate investment strategies. Philosophy

Integrity and transparency in all transactions. Providing investment solutions based on quality and unbiased research. Providing personalized services to all investors, institutions, business associates. Achieving success through client's growth. Making financial services more affordable, understandable and available to all.
What we aspire To be the pre-eminent and most trusted provider of financial services. The values to which we aspire can be summarised in 5 principles:

Integrity Client commitment Strive for profitability Excellence Innovation
Our history
Arihant Capital Markets Limited was established in 1994 by Mr. Ashok Kumar Jain, a Chartered Accountant. Arihant has followed a consistent growth path and has established itself as one of the leading broking houses of the country with the support and confidence of its clients, investors, employees and associates. We pride ourselves on our independence and continuous service since inception.
Since inception, Arihant is dedicated to creating wealth for clients and over a period of time we have built a reputation for quality service. We have also refined ourselves as an investment advisor and are poised to provide complete investment management solutions to our valued clientele Our Associations Arihant Capital Markets Limited is listed on the Bombay Stock Exchange since 1993 and since then the company has grown in leaps and bounds. We are members of the leading stock exchanges of India:

National Stock Exchange (NSE) Bombay Stock Exchange Limited (BSE)
We are a depository participant with:

National Securities Depositories Limited (NSDL) Central Depository Services Ltd. (CDSL)
We are members of leading commodities and currency exchanges in India:

National Commodities Exchange (NCDEX) Multi Commodities Exchange (MCX) MCX Stock Exchange Ltd (MCX-SX) NSE FX (Currency Derivatives segment of NSE)
We are AMFI Certified Mutual Fund Distributor, are registered with the SEBI for Portfolio Management Services (PMS) and are a Category - I Merchant Banker. Our culture and people Arihant's culture is characterized by five key qualities: commitment to clients, integrity, excellence, strive for profitability and innovation. Integral to our corporate culture is our total dedication to superior client service, reliability and transparency in all our transactions. At Arihant we believe our client's success is our success. Independence and ownership of work is blended in our culture which helps in creating entrepreneurs within the organization and gives a feeling of ownership to our employees. Our people feel a close relationship to Arihant. They associate their success with the company's growth and this strong sense of belonging has helped us grow over the years. We believe that our commitment to the interests of our clients proves our value to them. We have a strong corporate culture that is based on firmly held beliefs. We offer equal opportunity and tremendous growth potential to individuals who have the right talent and a commitment to excellence. Along with our reputation and clients, our people are our most valuable asset. To maintain our competitive edge and meet the high expectations of our clients, our culture continues to evolve. We aspire to be the best financial services company in India. To achieve this goal, we focus relentlessly on carrying out our business principles, which are fundamental to everything we do. Business principles
Our clients' growth is our primary objective. We believe that if our clients wealth will grow, ours will eventually follow.
Every advice that we will give, would be in the interest of the client. We want to work towards making financial services available and affordable to all by offering the right advice. Make things simpler for investors. We believe that our clients deserve the best. Our idea is not simply offering a product or service, but it is building a relationship with clients based on trust, reliability, understanding and respect. We believe that righteousness is very important in every sphere of life, including business. We therefore strive to be open and honest with ourselves, our colleagues and our shareholders. We work as a family which is responsible for the growth of our client. Every person in our company works towards the benefit of the client. We realize the need to constantly change and update ourselves to meet our clients' upcoming needs in this burgeoning world of finance. We constantly endeavour to anticipate the rapidly changing needs of our customers and develop services to meet those needs. Integrity and honesty are at the heart of our business. We seek to achieve the highest standards of professional conduct and ethics, to prevent and detect wrongdoing, and to govern ourselves in accordance with relevant rules and regulations and in adherence to compliance set by various regulatory bodies governing us. While we try to be perfect, we might make mistakes occasionally, and when it comes under our observation, we take immediate steps to rectify those errors and set things right.
Our business Our success is defined by the success of our clients Arihant has developed a diverse and robust portfolio of financial services to help our customers manage their money in the way that benefits them most.
With more than 500 professionals and staff working in 90 plus cities, Arihant has the resources and nationwide reach to ensure the highest level of personalized service. Our fundamental mission is to provide our clients everything they need to do better as realizing their strategic visions is our shared objective. Our service achieves these goals by putting clients at the center of everything we do. Our client-centric approach, ethical and transparent business practices, research-based advice, implementation of cutting-edge technology and keeping up-to-date to the ever changing world of finance has helped our clients grow with the surging Indian economy over the years.
Key business of company

Broking Arihant is one of the leading providers of broking services to individuals and institutions in the equity, derivatives and commodities segment in India. We proactively deliver the full depth and breadth of our broking services to clients through a network of more than 300 branches and franchises across India. Excellent research support, state-of-the-art tools, smart risk management, capital requirements, excellent order routing and efficient operational practices are key components of our offerings. We provide superior pre- and post-trading services to clients through robust technical architecture.
Distribution With the objective of meeting all the investment needs of our clients, we provide distribution services of mutual funds and IPOs. We are an AMFI registered mutual fund distributor and are also registered with all the AMCs in India to sell the schemes offered by them. Our distribution network is backed by in-depth & comprehensive research and a strong team for marketing and sales support.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 We have a dedicated team exclusively for research on mutual funds and IPO. We provide monthly publications on mutual fund activity and fund recommendations and also furnish reports on New Fund Offers (NFO) and forthcoming IPOs recommendations. Our recommendations are objective and unbiased. For us, the clients growth is the top priority. Consistent delivery of high quality advice on mutual funds and IPO investment has established us as a competent and reliable distributor across the country. We are also amongst the few investment firms that offer the facility to invest in mutual funds and IPO online, giving our clients freedom from paperwork and making investing convenient for them. Depository Our Depository business helps us in providing integrated financial solutions to our clients. It is led by a team of professionals and the latest technological expertise, dedicated exclusively for the depository services. This creates a seamless transaction platform for clients to execute trades through Arihant capital market Business and settle them through Arihant Depository Services. Wealth management Our wealth management business provides tailored, impartial and regulated financial planning advice on life, retirement and investment products. Our services to high net worth individuals and corporate clients include:

Asset management Stock broking Wealth structuring Financial planning.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Our Disciplined investment process
Arihant has a philosophy of investing in quality businesses with a strong management at reasonable prices. We follow both a bottom-up approach and top-down approach to investing with an intensive research process for screening potential investments. Research Our research team supplements our broking, wealth management and distribution business. Our research team comprises expert investment professionals for fundamental and technical research covering equity, derivatives, mutual funds and IPOs. We draw upon our experience and depth of resources, to provide the financial and strategic advice necessary for successful asset management. From day one, our focus has been to offer investors a platform to make informed investment decisions based on thorough research and discipline. We have therefore established a research team to offer complete support and the right guidance to our clients. Our research is used only for our personal and institutional clients. Our research extends into every corner of our equities business, supplying invaluable analysis, information, and advice to our clients. We employ a disciplined and rigorous research process. Starting with a top down analysis, we look closely at the megatrends and industry drivers that create opportunities for innovative companies. We identify and affiliate ourselves with the fastest growing and fundamentally strong companies and provide our investors with the best investment opportunities. Merchant banking and investment banking We deliver high-quality strategic advice and creative financing solutions to corporates with the help of qualified professionals who have a combined experience of over 50 years in investment banking, corporate advisory and corporate finance. The primary activities of Merchant Banking Business are:

Capital Market Services Corporate Finance Strategic Services
The comprehensive experience and knowledge of our team enables us to offer a host of financial services covering capital raising, mergers and acquisitions, advisory, debt syndication, qualified institutional placements, private placements, financial restructuring among others.
Quality Policy Arihants Quality Policy Statement ISO 9001:2008

At Arihant Capital Markets Ltd. our aim is to continue to achieve high levels of satisfaction for our clients and help them achieve their financial goals through right investment advice and excellent service. We aim to make financial products easily accessible and understandable to all. We are committed to delivering the highest quality solutions to meet our clients investment needs. To realise this, it is the policy of the Company to continually review and update our processes, improve the competence of human resources and effectiveness of quality management systems, ensure compliance with all regulatory requirements, optimize technology and infrastructure, thereby enhancing customer satisfaction. The Quality Policy has full support of the Senior Management, and as such it is their responsibility to maintain and implement our Quality Policy and ensure that the staff adheres to the procedures.
Why choose arihant.

At Arihant, you build a personal relationship and get to work with someone who is genuinely interested in your growth. You will benefit from an outstanding service, up-to-date technology, comprehensive financial products and services, complete guidance and support. That is not it. We make constant endeavour to understand your needs and make every effort to fulfil them. We strongly believe that our clients growth is strongly correlated to our growth. Why choose Arihant Personal Relationship
At Arihant we believe that it is not just the product or service that we are offering, it is a relationship we are building with our clients. Being a client you deserve a personal
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 relationship based on trust, reliability, understanding and respect. This relationship is the underpinning from which we will support you in meeting your financial objective. Your growth is our objective We are genuinely interested in your growth. When you work with us, we make sure we give you the right guidance and advice you deserve. From time to time, we offer you advice on how you can get the maximum from your investments. Sometimes our advice or view is contrarian to the markets, but that is what makes us different, because we dont work on herd mentality. Our clients value us because of our different approach and the right advice they get from us. We work as a family - an Arihant client is a client for the lifetime. Unbiased and comprehensive Research
We can help you make more informed decisions through our in-depth, unbiased research. Whether you want help managing your own portfolio or want us to manage it for you, youll get investment guidance and portfolio planning thats right for you. Our research team will offer excellent investment opportunities, will help you identify significant market trends, and will make sure that the information reaches you at the earliest. We provide an integrated approach of fundamental and technical research. Short-term, long-term or intraday trading, whatever your investment objective, we will meet your needs. Our solitary objective is to help you achieve your goals. Nationwide branch/franchisee network
Our offices are scattered all over the country. Get individualized assistance and personal guidance by visiting one of our nationwide branches or franchisee near you. Our executive will guide you about all the products and services we offer to help you meet your investment needs. Whatever you require, well cater to your needs.
Array of Products and services
We offer wide range of investment products and services to make saving and investing easier for you.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Equities, derivatives, commodities, depository, IPOs, mutual fund, PMS, merchant banking, internet trading - no matter what investment-related service/product you need, you can get it at Arihant. Sophisticated tools for smarter trades and ease in investing
We have made trading and investing easy and convenient for you. You can seize potential market opportunities with our online trading tools. Whether you are at office, at home, on a holiday or on the move, with our online services you can
trade, view your trade orders and bill summary, subscribe for IPO online with ease view your DP holdings from wherever you want.
anytime, anywhere. Our internet trading portal gives you continuous flow of market information and investment opportunities. We have sophisticated, state-of-the-art order routing technology which allows speedy and accurate execution of your orders. We offer full Backoffice support through internet. All this is for you to make informed decisions on time and with convenience. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance or for other reasons. Excellent service and complete support
Were here for you. On the phone, through email, or one-on-one through personal service. No matter what level of support you need, our executives are always ready to assist you. We have always been known to provide quality and genuine information. Our friendly and helpful team of customer service executive make sure that they provide you excellent service and meet all your needs. To make our dealings convenient for you, we offer doorstep service to our valued clients whether it is regarding collection of payments, delivery of securities and statements, or advice on investment. Were always happy to help you to meet your needs. This service is available to clients with a particular turnover and HNI clients
Chairman Note
From day one, Ive made a commitment to keep the needs of investor as our top most priority. And since then we have never compromised on what is best for you. At Arihant, our goal is simple: We want to help you grow and meet your financial goals. That means we ensure that your money works hard for you. As I look into the future, I am excited about the tremendous opportunities that our booming economy is offering to us. Going forward, our efforts would be to help you tap these opportunities and meet your financial goals. We would compete on the basis of research-driven and quality service to our clients and develop strong long-term relationships based on earned trust, credibility and confidence. We want to provide our investors a platform to make informed decisions based on comprehensive research rather than mere tips. By putting clients at the heart of everything we do, we aim to be consistently recognized as one of the leading financial solution providers. What we really aspire for is to make financial services available, affordable and understandable to all kinds of investors, thus, putting them on the road to financial bliss. I genuinely look forward to the opportunity to serve you better. - Ashok K Jain Founder and Chairman
ABOUT THE TOPIC
Online Trading Systems Online Trading Systems, was started to help you find the right trading system to make money in the market. We offer all different types of trading systems, from Futures Trading, Forex Trading, Stock Trading to Options Trading. Our Trading systems include day trading, swing trading and longer term trading systems. Online Trading Systems will continue to test and list various trading systems on our website. All Trading systems including Futures, Forex, Stocks and Options should be tested and verified before you use real money. Some trading systems will post actual accounts on their websites or newsletters. We still recommend you paper trade their trading system before using real money. Also realize the markets are always changing, and a trading system that has worked in the past might not work going forward. Another thing to consider is when you paper trade a trading system, you can make money with it, but due to slippage or your trading software the actual results once you go live will not be the same.
Online trading in India
Online trading in India is the internet based investment activity that involves no direct involvement of the broker. There are many leading online trading portals in India along with the online trading platforms of the biggest stock houses like the National stock exchange and the Bombay stock exchange. The total portion of online share trading India has been found to have grown from just 3 per cent of the total turnover in 2003-04 to 16 per cent in 2006-07.
Facilities of the Online trading in India: The investor has to register with an online trading portal and get into an agreement with the firm to trade in different securities following the terms and conditions listed down on the agreement. The order processing is done in correct timings as the servers of the online trading portal are connected to the stock exchanges and designated banks all round the clock. They can also get updates on the trading and check the current status of their orders either through e-mail or through the interface. Brokerages also provides research content on their websites, such that the clients can take their own decisions on stocks before investing.
Products and services of the Online trading in India:

The major financial products and services of the Online trading in India are like equities, mutual funds, life insurance, general insurance, loans, share trading, commodities trading, portfolio management and financial planning.
National stock exchange and Bombay stock exchange:

In spite of many private stock houses at present involved in online trading in India, the NSE and BSE are among the largest exchanges. They handle huge daily trading volumes, supporting large amounts of data traffic, and possessing a countrywide network. The automated online systems used for trading by the national stock exchange and the Bombay stock exchange are the NIBIS or NSE's Internet Based Information System and NEAT for the national stock exchange and the BSE OnLine Trading system or BOLT for the Bombay stock exchange.
OVERVIEW OF STOCK TRADING
The marketing of the securities on the stock exchange can be done through member of the stock exchange. These member can be either individuals or corporate bodies. For the process of trading in stock exchange there is the basic need for a transaction between an individual and the broker execute customers order to buy or sell on the stock exchange trading ring. The exchange of scrip between the member of the exchange in from of buying or selling is called trading Broker is the member of recognized stock exchange and help the customers in buying or selling the securities for the brokerage that he receives. Trading Method Listing securities are traded on the floor of recognized stock exchange where its member traded. An investor is not permitted to enter the floor of stock exchange and he has trust the broker to: *. Negotiate the best price for the trade. *. Settle the account, i.e. payment for securities sold on due date.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 *. Take delivery of securities purchase. TYPES OF TRADING Trading in stock exchange is conducted in two ways: Ready delivery contract. Forward delivery contract.
BASKET TRADING SYSTEM The Basket Trading System provides the arbitrageurs an opportunity to take advantage of price differences in the underlying Sensex and Futures on the Sensex by simultaneous buying and selling of baskets comprising the Sensex scrips in the Cash Segment and Sensex Futures. This is expected to provide balancing impact on the prices in both cash and futures markets. The Exchange has commenced trading in the Derivatives Segment with effect from June 9, 2000 to enable the investors to, inter-alias, hedge their risks. Initially, the facility of trading in the Derivatives Segment was confined to Index Futures. Subsequently, the Exchange has introduced the Index Options and Options & Futures in select individual stocks. The investors in cash market had felt a need to limit their risk exposure in the market to movement in Sensex. To participate in this system, the member-brokers need to indicate number of Sensex basket(s) to be bought or sold, where the value of one Sensex basket is arrived at by the system by multiplying Rs.50 to prevailing Sensex. For e.g., if the Sensex is 4000, then value of one basket of Sensex would be 4000 x 50= i.e., Rs. 2,00,000/-. The investors can also place orders by entering value of Sensex portfolio to be brought or sold with a minimum value of Rs. 50,000/- for each order. PROCEDURE OF TRADING 1.Select of broker The first step is buying or selling of share is to select a broker for transaction business on behalf of the investor. The trading of securities on the stock exchange can be done through members of the exchange.

An investor prefers to select a broker who shall. Act with due skill. Care and diligence in the conduct of all his business. Not create false market either singly or in concert with other.
2.Opening An Account With The Broker The next step to open account with the broker. It helps the investor to provide his credit worthiness, if the clients were not to do margin money with the broker. 3.Selection Of Securities
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 This is application for buying securities. The investor may be consulted with broker and take advise for selection of securities. 4.Selection Of Time For Trading This is important to get the best advantage from buying or selling the securities. 5. Placing An Order Various method of placing an order with the broker has been evolved to give the broker leverage when he is on the floor of the stock exchange. 6. Preparation Of Contract Note SEBI circular of 4th Feb. 1991 requires that all member of the recognized stock exchange issue contract note to the investors on the execution of trade. Brokers, therefore issue contract note to the client, which gives the name of the company, price of trade, brokerage, time of execution, provision regarding arbitration etc. in term of the bye-laws of stock exchange, this is statutory requirement and mandatory. 7. Settlement
Compulsory Rolling Settlement
All transactions in all groups of securities in the Equity segment and Fixed Income securities listed on BSE are required to be settled on T+2 basis (w.e.f. from April 1, 2003). The settlement calendar, which indicates the dates of the various settlement related activities, is drawn by BSE in advance and is circulated among the market participants. Under rolling settlements, the trades done on a particular day are settled after a given number of business days. A T+2 settlement cycle means that the final settlement of transactions done on T, i.e., trade day by exchange of monies and securities between the buyers and sellers respectively takes place on second business day (excluding Saturdays, Sundays, bank and Exchange trading holidays) after the trade day. The transactions in securities of companies which have made arrangements for dematerialization of their securities are settled only in demat mode on T+2 on net basis, i.e., buy and sell positions of a member-broker in the same scrip are netted and the net quantity and value is required to be settled. However, transactions in securities of companies, which are in "Z" group or have been placed under "trade-to-trade" by BSE as a surveillance measure ("T" group) , are settled only on a gross basis and the facility of netting of buy and sell transactions in such scrips is not available. The transactions in 'F' group securities representing "Fixed Income Securities" and " G" group representing Government Securities for retail investors are also settled at BSE on T+2 basis. In case of Rolling Settlements, pay-in and pay-out of both funds and securities is completed on the same day.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Members are required to make payment for securities sold and/ or deliver securities purchased to their clients within one working day (excluding Saturday, Sunday, bank & BSE trading holidays) after the pay-out of the funds and securities for the concerned settlement is completed by BSE. This is the timeframe permitted to the Members to settle their funds/ securities obligations with their clients as per the Byelaws of BSE. The following table summarizes the steps in the trading and settlement cycle for scrips under CRS :
ACTIVITY
o o o
Trading on BOLT and daily downloading of statements showing details of transactions and margins at the end of each trading day. Downloading of provisional securities and funds obligation statements by member-brokers. 6A/7A* entry by the member-brokers/ confirmation by the custodians. Confirmation of 6A/7A data by the Custodians upto 1:00 p.m. Downloading of final securities and funds obligation statements by members Pay-in of funds and securities by 11:00 a.m. and payout of funds and securities by 1:30 p.m. The member-brokers are required to submit the pay-in instructions for funds and securities to banks and depositories respectively by 10:40 a.m. Auction on BOLT at 2.00 p.m. Auction pay-in and pay-out of funds and securities by 09:30 a.m. and 10:15 a.m. respectively.
T+1
T+2
T+2
o o
T+3
The pay-in and payout of funds and securities takes places on the second business day (i.e., excluding Saturday, Sundays and bank and BSE trading holidays) of the day of the execution of the trade. The settlement of the trades (money and securities) done by a Member on his own account or on behalf of his individual, corporate or institutional clients may be either through the Member himself or through a SEBI registered custodian appointed by him/client. In case the delivery/payment in respect of a transaction executed by a Member is to be given or taken by a registered custodian, the latter has to confirm the trade done by a Member on the BOLT System through 6A-7A entries. For this purpose, the custodians have been given connectivity to the BOLT System and have also been admitted as clearing member of the Clearing House. In case a registered custodian does not confirm a transaction done by a Member within the time permitted, the liability for pay-in of funds or securities in respect of the same devolves on the concerned Member.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 The following statements can be downloaded by the Members in their back offices on a daily basis.
h. Statements giving details of the daily transactions entered into by the Member. i. j. Statements giving details of margins payable by the Member in respect of the trades executed by him. Statements of securities and fund obligation.
k. Delivery/Receive orders for delivery /receipt of securities. BSE generates Delivery and Receive Orders for transactions done by the Members in A, B1, B2 and F and G group scrips after netting purchase and sale transactions in each scrip whereas Delivery and Receive Orders for "T", "C" & "Z" group scrips and scrips which are traded on BSE on "trade-to-trade" basis are generated on a gross basis, i.e., without netting of purchase and sell transactions in a scrip. However, the funds obligations for the Members are netted for transactions across all groups of securities. The Delivery Order/Receive Order provides information like the scrip and quantity of securities to be delivered/received by the Members through the Clearing House. The Money Statement provides scrip wise/item wise details of payments/receipts of monies by the Members in the settlement. The Delivery/Receive Orders and Money Statement can be downloaded by the Members in their back office Pay-in and Pay-out for 'A', 'B', 'T', 'C', "F", "G" & 'Z' Group of Securities The trades done on BOLT by the Members in all securities in CRS are now settled on BSE by payment of monies and delivery of securities on T+2 basis. All deliveries of securities are required to be routed through the Clearing House, The Pay-in /Pay-out of funds based on the money statement and that of securities based on Delivery Order/ Receive Order issued by BSE are settled on T+2 day.
Demat pay-in : The Members can effect pay-in of demat securities to the Clearing House through either of the Depositories i.e. the National Securities Depository Ltd. (NSDL) or Central Depository Services (I) Ltd. (CDSL). The Members are required to give instructions to their respective Depository Participants (DPs) specifying details such as settlement no., effective pay-in date, quantity, etc. Members may also effect pay-in directly from the clients' beneficiary accounts through CDSL. For this, the clients are required to mention the settlement details and clearing member ID through whom they have sold the securities. Thus, in such cases the
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Clearing Members are not required to give any delivery instructions from their accounts. In case a Member fails to deliver the securities, the value of shares delivered short is recovered from him at the standard/closing rate of the scrips on the trading day.
Auto delivery facility : Instead of issuing delivery instructions for their securities delivery obligations in demat mode in various scrips in a settlement /auction, a facility has been made available to the Members of automatically generating delivery instructions on their behalf from their CM Pool accounts maintained with NSDL and CM Principal Accounts maintained with CDSL. This auto delivery facility is available for CRS (Normal & Auction) and for tradeto-trade settlements. This facility is, however, not available for delivery of non-pari passu shares and shares having multiple ISINs. Members wishing to avail of this facility have to submit an authority letter to the Clearing House. This auto delivery facility is currently available for Clearing Member (CM) Pool accounts and Principal accounts maintained by the Members with the respective depositories.
Pay-in of Securities in Physical Form In case of delivery of securities in physical form, the Members are required to deliver the securities to the Clearing House in special closed pouches along with the relevant details like distinctive numbers, scrip code, quantity, etc., on a floppy. The data submitted by the Members on floppies is matched against the master file data on the Clearing House.If there is no discrepancy, the securities are accepted.
Funds Pay-in The bank accounts of Members maintained with the clearing banks, viz., Axis Bank Ltd.,Bank of India, Bank of Baroda, Canara Bank, Citi Bank, Corporation Bank, Dhanalaxmi Bank, HDFC Bank Ltd., Hongkong & Shanghai Banking Corporation Ltd., ICICI Bank Ltd, Indusind Bank Ltd., IDBI Bank, Kotak Mahindra Bank, Oriental Bank of Commerce., Punjab National Bank, State Bank of India, Standard Chartered Bank, Union Bank of India, Yes Bank are directly debited through computerized posting for their funds settlement obligations. In case of Members whose funds pay-in obligations are not cleared at the scheduled time, action such as levy of penalty and/or deactivation of BOLT TWSs , is initiated as per the prescribed penalty norms.
Securities Pay-out Demat securities are credited by the Clearing House in the Pool/Principal Accounts of the Members. BSE has also provided a facility to the Members for transfer of pay-out securities directly to the clients' beneficiary owner accounts without routing the same through their Pool/Principal accounts in NSDL/ CDSL. For this, the concerned Members are required to give a client wise break up file which is uploaded by the Members from their offices to the Clearing House. Based on the break up given by the Members, the Clearing House instructs the depositories, viz., CDSL & NSDL to credit the securities to the Beneficiary Owners (BO) Accounts of the clients. In case delivery of securities received from one depository is to be credited to an account in the other depository, the Clearing House does an inter-depository transfer to give effect to such transfers. In case of physical securities, the Receiving Members are required to collect the same from the Clearing House on the pay-out day. TOP Funds Payout The bank accounts of the Members having pay-out of funds are credited by the Clearing House with the Clearing Banks on the pay-in day itself In case a Member fails to deliver the securities, the value of shares delivered short is recovered from him at the standard/closing rate of the scrips on the trading day.
Penalty
Norms
For Settlement (Pay-in) Defaults
Violation/s Non-fulfillment of funds obligation (viz.Normal pay-in, securities shortage pay-in and auction pay-in) and failure to deposit additional capital towards capital
Shortage amount a) If the shortage amount is more than the Base Minimum Capital (at present Rs.10 lakhs) :
Late fees/fines/penalty a) - 1% of such shortage amount, and - additional 0.07% per day of the shortage amount. - Also, the trading facility of such member shall be withdrawn and the securities pay-out shall be withheld.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 cushion requirement as per SEBI norms within stipulated time. b) If the funds shortage b) - 1% of such shortage is less than the Base amount, and Minimum Capital (at - additional 0.07% per day of the present Rs.10 lakhs) : shortage amount. - In cases where the shortage amount exceeds 20% of the BMC but less than the BMC on 6 occasions within a period of three months, then also the trading facility of the member shall be withdrawn* and the securities pay-out due to the member shall be withheld. (*In case the members trading facility has been withdrawn on account of (b) above, then upon recovery of the complete shortages, the member shall be permitted to trade, subject to such members providing a deposit equivalent to his cumulative funds shortage amount as the funds shortage collateral. Such deposit shall be kept with the Exchange for a period of ten rolling settlements and shall be released thereafter. Such deposit shall not be available against margin liabilities and also such deposit will not earn any interest. Such deposit may be by way of cash, fixed deposit receipts of banks and/or bank guarantee.)
In case a member fails to meet his obligation amounting to less than 20% of BMC, a penalty equivalent to his obligation amount or Rs.5,000/- whichever is less will be levied: Further, if a member fails to meet his pay-in obligations of a normal settlement, auction settlement and that of securities delivered short in the pay-in for the same settlement, then such instances of default would be considered as a single instance for the purpose of counting violations and levying penalties as above. Non deposit of additional capital under capital cushion requirement would be considered as a separate instance for the purpose of counting instances of violation and levying fines/penalties as above. Risk Management
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Cash Market The expansion of BOLT across the country has led to a significant increase in volumes and liquidity. This has also consequently increased the risk of default by the Members in meeting their settlement obligations. BSE has initiated several risk management measures in order to maintain the safety of the market and to avert defaults by the BSE Members in meeting their payment and delivery obligations. Total Liquid Assets The core of the risk management system is the liquid assets deposited by the Members with BSE. These liquid assets cover the following five requirements: Base Minimum Capital (BMC)
All Members are required to maintain a BMC of Rs.10 lakhs with BSE in the prescribed manner at all times. The composite corporate Members are required to maintain BMC in multiple of the membership rights held by them. The BMC, as prescribed by SEBI, is required to be kept in the form of cash (minimum 12.5%), Fixed Deposit Receipt(s) or Bank Guarantee(s) issued by bank(s) (minimum 37.5%) and balance in the form of eligible shares. The eligible shares for the purpose of the securities portion of the BMC are A and B1 group securities forming part of Group I classified as per the parameters of volatility and liquidity as stipulated in SEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005. BMC is not available for adjustment towards margins.
Additional Capital a. Members are also allowed to deposit Additional Capital (AC) over and above the BMC with BSE as follows :
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 (Liquid Assets) : Cash Equivalent.
Particulars
(i) Cash (ii) Bank Fixed Deposit Receipts ( FDRs ). iii) Bank Guarantee Nil Nil Nil
Hair-cut
Limit on Capital Deposit

No Limit No Limit Limit on BSE's exposure to a single bank exposure as stipulated in the SEBI circular No. MRD/DoP/SE/Cir07/2005 dated February 23, 2005. No limit No limit.
(iv) Securities of the Central Government * . (v) Units of liquid Mutual Fund (or) Govt. Sec. Mutual Fund (by whatever name called which invests in government securities) *.
10% 10%
Other Liuid Assets - Non-Cash Component
(Total of Other Liquid Assets should not exceed total of Cash Equivalent) : Particulars
Non-Cash equivalent : (i) Liquid (Group-I) Equity Shares (as Same as the Value at Risk (VaR) per the criteria for classification of margin for the respective shares. scrips on the basis of liquidity). (Only A and B1 group securities forming part of such Group I) (ii)Mutual Fund units (other than those Same as the VaR margins for the listed under cash equivalent). * units computed using the traded price on BSE, if available, or else, using the NAV of the unit treating it as a liquid security. Limit on BSE's exposure to a single issuer as stipulated in the SEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005.
Hair-cut
Limit on Capital Deposit
* BSE, at present, does not accept such liquid assets towards collateral. Cash equivalents should be at least 50% of the liquid assets. This implies that Other Liquid Assets in excess of the total Cash Equivalents is not regarded as part of the Total Liquid Assets.
a. MTM (Mark-To-Market) Losses: Mark-to-market losses on outstanding settlement obligations of the Member.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 b. VaR Margins: Value at risk margins to cover potential losses for 99% of the days. c. Extreme Loss Margins: Margins to cover the expected loss in situations that lie outside the coverage of the VaR margins. d. Base Minimum Capital: Capital required for all risks other than the market risk (for example, operational risk and client claims). e. Special Margin : Special margin collected as a surveillance measure. Members are required to maintain the liquid assets (collateral) to cover all the above five
Problems online share trading

As there are couples of good advantages there are also some technical disadvantages. As every coin have two sides. Disconnection from Internet In online share trading there is the possibility that your internet connection may get slow or get stopped, this may result in disconnection from share market. At such critical times you have to call your executive (from whom you opened your trading account) and place your order or square off your pending orders. Computer Problem If your computer stops functioning then this may also result in disconnection from share market at this time also you have contact your executive. Other Problem Other problems like electricity disconnection. Solution for this is inverter or batter backup. Above all technical problems which may exist at any time and they are beyond our control means not in control.
What is offline share trading

Trading done through share broker is called offline share trading method Nevertheless, with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. Offline trading has lost some popularity but it is still the main form of investing.
Offline trading offers many benefits as well:

1. The one benefit that an investor appreciates the most is that they are not alone when making investment decisions.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 2. There are experienced and professional brokerage companies that handle their investments for them. 3. Investors are not faced with the challenge of making these vital investment decisions; especially, if they do not have the experience necessary to make the appropriate investments. 4. Also, there is someone there to answer any questions that may cause concerns. Not to mention, with offline trading mistakes are less likely to take place. No one wants to throw their money away or stand by and watch someone else throw their money away. It may be wise to hire a professional to assist you in making the correct investment decisions if you feel you lack the knowledge necessary.
RESEARCH DESIGN
For any researcher the research methodology is the most important criteria to decide before the actual research process starts. There are many methods for conducting the research some of them are as under:
The design of a research is a plan or a model that helps researcher to conduct a formal investigation and survey. It is an application of methods and procedures for acquiring the information needs for getting a desire out come. It decides the sources of data and methods for gathering data. A good design insures that the information obtained is relevant to the research question and that it was collected by objectives. Since, research design is simply the frame work or plan for a study. It is a blue print that of a house devised by an architect. My approach to research is descriptive and quite specific.
Out of various research methods the research method, which was most suitable to my research, was Exploratory Research because it provides me all the opportunities to cover the all the aspect that I require to conduct the research and get an appropriate out come. Types of Data Collection There are two types of data used. They are primary and secondary data. Primary data is defined as data that is collected from original sources for a specific purpose. Secondary data is data collected from indirect sources. (Source: Research Methodology, By C. R. Kothari) Primary Sources These include the survey or questionnaire method as well as the personal interview methods of data collection. Secondary Sources These include books, the internet, company brochures, product brochures, the company website, competitors websites etc, newspaper articles etc.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Data collection instrument was structured schedule. Contact methods : Schedule reservation filled with data by asking questions from respondents. Sampling universe Sample size : : share market investors of indore city 200
Scope of the study:The study was conducted at arihant capital market ltd, Indore ( behind omni palace, near ratlam kothi). The study was conducted for a period of 11th May 2011 to 30th June 2011. Tools for analysis:Weighted average calculation Justification of the project:The company was interested to find out the investor perception and the problems faced by the general investor while dealing with the brokers. The company was also interested to find out the common problems as faced by general investor while in share market and the satisfaction level for the services provided by the brokers to the investor.
Dont be led by market rumours or get into shady transactions. Do not sign blank Delivery instruction slip(s) while meeting security payin obligation
DATA ANALYSIS AND INTERPREATATION
1. Demographic Profile of investors Table 1.0: Demographic Profile of investors Demographics Age Less than 20 years 20-40 Greater than 40 No. of respondents Percentage of respondents 0 40 60 Total 100
0 20 30 Total 50
Qualification Matric Under Graduate Post Graduate
0 25 25 Total 50
0 50 50 Total 100 38 12 30 20 Total 100
Occupation Service Profession Business Student
19 6 15 10 Total 50
Income (per month) Less than Rs.20000 Rs.20000-40000 Greater than 40000 10 25 15 Total 100 Analysis & Interpretation: It was found that the major population of investors was greater than 40yrs and 60% was of 20-40 yrs. And 50% respondents were under graduate and 50% were post graduate. 35% of respondents were doing service. And majority of respondents i.e. 50% earn income between Rs.20000-40000 per month. It means majority of investors was greater than 40 years having income in between Rs 20000-40000. 20 50 30 Total 100
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 1. To know whether respondents invest.
Table No. 1.1 To know whether respondents invest. Investment Decision No. of Respondents Percentage of Respondents
Yes No Total
45 5 50 Figure No. 1.1 To know whether respondents invest.
90 10 100
Yes
No
10%
90%
Analysis & Interpretation: From the survey it was found that 90% respondents invest in the stock market and 10% who were non-investors.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 2. Awareness regarding types of Investment Instruments Table No. 1.2 Type of investment option the person is aware of Types of Investment Instruments Shares Mutual Funds Debentures Bonds Derivatives Total No. of Respondents 15 23 5 5 2 50 Percentage of Respondents 30% 46% 10% 10% 4% 100%
Figure No.1.2 Type of investment option the person is aware of

Shares Mutual Funds Debentures Bonds Derivatives
10% 10%
4% 30%
46%
Analysis & Interpretation Above pie-chart shows that 45% investors were aware of the mutual fund, 25% investors were aware of shares, 15% investors were aware of debentures, 10% investors were bonds. It means majority of persons aware about mutual fund whereas shares and debentures were of second importance.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 3. To know the type of investment option the person has been investing Table No.1.3 Type of investment option the person has been investing
Investment alternative Shares Mutual Funds Debentures Bonds Derivatives Total
No. of Respondents 15 15 10 5 5 50
Percentage of Respondents 30% 30% 20% 10% 10% 100%
Figure No.1.3 Type of investment option the person has been investing
Shares Mutual Funds Debentures Bonds Derivatives
10% 10%
30%
20%
30%
Analysis & Interpretation: From the survey it was found that 30% respondents invest in Mutual funds, 25% invest in Shares and 20% invest in Debentures. Thus, it can be stated that maximum people invest in Mutual Funds whereas shares are having 2nd importance.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 4 .To know the rates at which the investment grow Table No.1.4 The rates at which the investment grow
Investment Growth Rate Steadily At an average rate At fast rate Total
No. of Respondents 0 5 45 50
Percentage of Respondents 0% 10% 90% 100%
Steadily
At an average rate
At fast rate
0% 10%
90%
Analysis & Interpretation: From the survey it was found that 90% respondents wants their investment grow at fast rate whereas only 10% respondents were in the favour of investment growth at average rate.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 5. To know the frequency of investment by the Respondents. Table No. 1.5 Frequency of investment Frequency of Investment Daily Weekly Monthly Yearly Total No. of Respondents 0 10 24 16 50 Figure No.1.5 Frequency of Investment Daily Weekly Monthly Yearly Percentage of Respondents 0% 20% 48% 32% 100%
0% 20% 32%
48%
Analysis & Interpretation: From the above table & chart it was found that 45 respondents invest monthly, 35 invest yearly and there were 20 respondents who invest daily. Thus, it can be stated that majority of the investors invest monthly in stock market.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 6 .To know the percentage of income that respondent invest annually Table No. 1.6 The percentage of income that respondent invest annually Annual Income Invested Up to 10% 10-15% 15-20% More than 20% Total No. of Respondents 7 11 20 12 50 Percentage of Respondents 14% 22% 40% 24% 100%
Figure No. 1.6 The percentage of income that respondent invest annually Up to 10% 10-15% 15-20% More than 20%
24%
14%
22%
40%
Analysis & Interpretation: From the above table & chart, it was found that 40 respondents invest 15-20% of their annual income, 24 respondents invest more than 20% of their annual income, 22 respondents invest up to 10-15% of their income and 14 respondents invest up to 10% of their income in different investment avenues. Thus, it can be concluded that majority of investors invest 10% to 20% of their monthly income.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 7. To know the respondents influence on Investment decision. Table No.1.7 The respondents influence on Investment decision Sources Self Friends & Relatives Service providers & consultants Newspapers & Advertisement Agents Workshops & Seminars Total No. of Respondents 24 10 6 5 3 2 50 Percentage of Respondents 48% 20% 12% 10% 6% 4% 100%
Figure No.1.7 The respondents influence on Investment decision

Self Service providers & consultants Agents Friends & Relatives Newspapers & Advertisement Workshops & Seminars
6% 10%
4%
48% 12%
20%
Analysis & Interpretation: From the above table & chart, it was found that multiple aspects for investing influenced respondents.48% respondents take investment decision on the basis of their personal evaluation where as 20% respondents invest because of influence of friends & relatives, the consultants influences 12% respondent and the advertisement influences 10% respondents. It can be stated that majority of the persons are influenced by their own while opting for investment tool.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 8. To Know The Factors That Were Considered While Investing. Table No. 1.8 The Factors That Were Considered While Investing
Investment Factors Return on investment Tax benefits Capital appreciation Maturity period Risk Safety of principal Liquidity Total
No. of Respondents 15 9 7 3 6 3 7 50
Percentage of Respondents 30% 18% 15% 6% 12% 6% 14% 100%
Figure No. 1.8 The Factors That Were Considered While Investing
Return on investment Capital appreciation Risk Liquidity Tax benefits Maturity period Safety of principal
6% 12% 6%
14%
30%
14%
18%
Analysis & Interpretation: From the survey it was found that the maximum respondents considered return on investment was most important factor, 18% respondents considered tax benefits as an important factor and 14% respondents considered capital appreciation as an important factor. It can be stated that majority of investors were consider return as an important factor while investing.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 9. To Know Investors Action In Case Of Stock Market drop. Table No. 1.9 The Investors Action In Case Of Stock Market drop Investors preference in case of losses Transfer funds into secure investment Wait to see if investment improves Invest more funds Withdraw funds & stop investing Total No. of Respondents 15 20 13 2 50 Percentage of Respondents 25% 40% 30% 5% 100%
Figure No. 1.9 The Investors Action In Case Of Stock Market Drop
Transfer funds into secure investment Wait to see if investment improves Invest more funds
4% 26%
30%
40%
Analysis & Interpretation: From the survey it was found that maximum respondents would wait to see if their investment improves and start generating funds, 30% respondents would invest more funds, 25% respondents would transfer funds into secure investment and 5% respondents would stop investing. It can be stated that majority of investors would like to wait to see whether investment improves or they can invest more funds.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 10. To Know The Decision Regarding Other Investment Policy Table no. 1.10 The Other Investment Policy
Investment Decision
No. of Respondents
Percentage Respondents 98% 2% 100%
of
Yes No Total
49 1 50
Figure 1.10 The Other Investment Policy
Yes
No
2%
98%
Analysis & Interpretation: From the survey it was found that 98% respondents have the other investment policy where as 2% respondents do not have the other investment policy.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 11. To Know the Satisfaction Level Of Respondents With Their Investment Option Table no. 1.11 Important Factors for Choosing The Investment Option Particulars Highly Dissatisfi Neutral Satisfie d Highly Satisfie d (1) Shares Mutual funds Bonds Debentures Derivatives 20 15 30 18 10 10 35 15 20 19 40 30 8 20 10 277 340 280 10 12 (2) 6 15 (3) 14 20 (4) 30 35 (5) 40 18 384 332 Summate d Score
Dissatisfie ed d
Range Max. Score=100*5=500 Avg. Score=100*3=300 Min. Score=100*1=100 (Highly Satisfied) (Neutral) (Highly Dissatisfied)
Analysis & Interpretation: Most of the respondents have given the highest summated score to shares. And the second most important investment option is debentures which influenced the decision regarding investment. Other important factor is mutual fund coverage which has the 332 summated score. Return on derivatives get the 280 summated score.
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 12. Important Factors That Was Considered While Investing
Table No. 1.12 Important Factors That Was Considered While Investing Particulars Highly Dissatisfie Neutral Satisfie d Highly Satisfie d (1) Return on investment Tax benefits Capital appreciatio n Maturity period Risk Safety of principal Liquidity 15 15 20 30 20 325 5 10 10 20 20 40 35 20 30 10 375 300 5 5 40 30 20 355 0 0 20 40 40 420 0 0 18 48 34 416 0 (2) 0 (3) 4 (4) 30 (5) 66 462 Summate dScore
Dissatisfie d d
Range: Max. Score=100*5=500 Avg. Score=100*3=300 Min. Score=100*1=100 (Highly Satisfied) (Neutral) (Highly Dissatisfied)
Analysis & Interpretation: Most of the respondents have given the highest summated score to Return on investment. And the second most important factor is Capital appreciation which influenced the decision regarding investment. Other important factor is Tax benefit which has the 416 summated score.
SWOT ANALYSIS
STRENGTH: 1. The very first strength of trading system is that now T-3 settlement is used. 2. SEBI a regulatory body of Indian stock market who protects the interest of the investors. 3. Latest software is used for trading and settlement 4. Due to computerization the trading is done faster and easier. 5. Person can do trading at home also, need not to go at terminal.
WEAKNESS: 1. Due to computerization data stored are always at risk of damage 2. Knowledge of computer is necessary. 3. In order solve any problem highly qualified person is required, due to computerization.
OPPORTUNITY: 1. Due to step towards user friendly, more turnover can be achieved. 2. It provides an opportunity to the investor to trade on its own. 3. More savings can be indirectly channelized as investor can trade on its own with mere registration only.
THREATS: 1. Due to user friendly of trading system, there are more chances of loss. 2. There are threats to DP clients also.
FINDINGS OF THE STUDY

Following findings were generated from the study:1. Maximum investors are aware of all the investment options. 2. Investors do not invest in a single avenue. They prefer different avenues and maximum investors prefer to invest in shares, mutual funds & debentures. 3. Maximum investors wants their investment grow at fast rate. 4. The investment decision of investors is influenced by their own decision and through friends & relatives. 5. Different factors considered by investors while investing are return, risk, tax benefits, capital appreciation and the most prominent factor is the return on any investment avenue. 6. Majority of investors invest 15-20% of their annual income. 7. Maximum investors invest on monthly basis. 8. The investors investing in different avenues are highly satisfied with the return generated by their investment option. 9. Maximum investors have other investment policies. 10. The most important factor is Return which influenced the decision regarding investment.
LIMITATIONS OF STUDY
It is said, What is worth doing is worth doing best. In other words a person should aim at perfection. However in real life this is not always possible. Human have to work within the limitation set by the nature and society. That is to say even though every possible effort has been made to make this project report authentic and comprehensive however many constraints were also at play. The major limitations of the study are: Due to paucity of time and resources a countrywide survey was not possible. Since a smaller sample was chosen so it may not be a true representative of the population under study. The possibility of the respondents responses being biased cannot be ruled out. Most of the study was restricted to Internet and published data because of the non availability of primary data. The information given by the respondents might be biased because some of them might not be interested to given correct information. Some of the respondents could not answer the questions due to lack of knowledge. Some of the respondents of the survey were unwilling to share information.
CONCLUSION
Stock exchange is a place where the savers and the users if their funds come together in the market for finance, and the rules of supply and demand are applicable and also subject to Government regulation. In the trading, several transfers of funds and securities take place between various investors. And after this trading, the accounts of all those investors need to be settled within a specified time limit. SEBI has developed the rules and regulations to protect the common investors from market failures by fixing margins, capital adequacy of brokers, limits the turnover, indemnity insurance, on-line position monitoring etc. and most of the company is doing online trading because it helps them to be up-to-date from Stock Market.
QUESTIONNAIRE
Dear respondent, I am a student of MBA, FMS Dr. HARI SINGH GOUR CENTRAL UNIVERSITY, SAGAR (M.P.) is conducting a research on Trading System of the Stock Market. I would be extremely thankful if you spare some time to answer the following questions. All the facts disclosed by you will be used for academic purpose only. PERSONAL PROFILE (A) Name: (B) Age:
Less than 20 years 20 40 years Greater than 40 years Less than Rs 20000 Rs 20000 Rs 40000 Greater than Rs 40000
(C) Gender: a) Male b) Female (D) Occupation: a) Service b) Profession c) Business d) Student (E) Income: (per month) (F) Qualification:
a) Matric b) Under Graduate c) Post Graduate Q1. Do you invest in share market? i) Yes ii) No
Q2. Out of the following, which type of instrument are you aware of? a) Shares b) Mutual Funds c) Debentures
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 d) Bonds e) Derivatives
Q3.Where have you been investing? a) b) c) d) e) Shares Mutual Funds Debentures Bonds Derivatives
Q4.At which rates do you want your investment to grow? a) Steadily b) At an average rate c) At fast rate
Q5. How frequently do you invest? a) Daily b) Weekly c) Monthly d) Yearly
Q6. What percentage of your annual income do you invest in share market? a) Up to 10% b) 10-15% c) 15-20% d) More than 20%
Q7. By which source of information you came to know about particular option? a) b) c) d) e) f) Self Friends and Relatives Service providers and Consultants Newspapers, Magazines and Advertisements Agents Workshops & Seminars
Q8.Which factor do you consider before investing in share market? a) Capital Appreciation b) Maturity Period c) Safety of Principal d) Risk e) Return on investment f) Tax benefits
A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 g) Liquidity
Q9. In your opinion, what would be the optimum strategy if stock market drops immediately after you invest in it? a) b) c) d) Cut your losses and transfer funds into secure investments Wait to see if investment improves Invest more funds to lower your losses expecting future growth Withdraw your funds and stop investing
Q10. Do you have any other investment policy? a) Yes b) No
Q11. Rate the satisfaction with the return generated by your investment option? Highly Satisfied (5) ______ ______ ______ ______ ______ Satisfied (4) ______ ______ ______ ______ ______ Neutral (3) ______ ______ ______ ______ ______ Dissatisfied Highly Dissatisfied (2) (1) _______ _________ _______ _________ _______ _________ _______ _________ _______ _________
a) b) c) d) e)
Shares Mutual funds Bonds Debentures Derivatives
Q12. Rate the satisfaction with the factors that was considered while investing? Highly Satisfied Neutral Dissatisfied Highly Satisfied Dissatisfied (5) (4) (3) (2) (1) a) Return on Investment ______ b) Tax Benefits ______ c) Capital Appreciation ______ d) Maturity Period ______ e) Risk ______ f) Safety of principal______ g) Liquidity ______ ______ ______ ______ _______ ______ _______ _________ _________
______ ______ _______ _________ ______ ______ _______ _________ ______ ______ _______ _________ ______ ______ _______ _________ ______ ______ _______ _________
THANKS FOR YOUR CO-OPERATION..
BIBLIOGRAPHY
www.nseindia.com (website) www.bseindia.com (website) www.google.com (website) Securities Market (Basic) Module Work Book Research Methodology- Methods and Techniques (by C.R. Kothari)
www.arihant capital.com www.sebiindia.com

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A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

BHAVESH PATEL MBA 3 Semester FMS, Sagar

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

With regards BHAVESH PATEL MBA 3rd Semester FMS, Sagar

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

OBJECTIVES OF THE STUDY

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

List of Stock Exchanges in India

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Historical Background of Stock Exchanges

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Integrity Client commitment Strive for profitability Excellence Innovation

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

National Stock Exchange (NSE) Bombay Stock Exchange Limited (BSE)

We are a depository participant with:

We are members of leading commodities and currency exchanges in India:

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Key business of company

Asset management Stock broking Wealth structuring Financial planning.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Capital Market Services Corporate Finance Strategic Services

Quality Policy Arihants Quality Policy Statement ISO 9001:2008

Why choose arihant.

Array of Products and services

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

ABOUT THE TOPIC

Online trading in India

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Products and services of the Online trading in India:

National stock exchange and Bombay stock exchange:

OVERVIEW OF STOCK TRADING

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

For Settlement (Pay-in) Defaults

Limit on Capital Deposit

Other Liuid Assets - Non-Cash Component

Limit on Capital Deposit

Problems online share trading

What is offline share trading

Offline trading offers many benefits as well:

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

DATA ANALYSIS AND INTERPREATATION

Qualification Matric Under Graduate Post Graduate

0 50 50 Total 100 38 12 30 20 Total 100

Occupation Service Profession Business Student

45 5 50 Figure No. 1.1 To know whether respondents invest.

Figure No.1.2 Type of investment option the person is aware of

Investment alternative Shares Mutual Funds Debentures Bonds Derivatives Total

Percentage of Respondents 30% 30% 20% 10% 10% 100%

Investment Growth Rate Steadily At an average rate At fast rate Total

Percentage of Respondents 0% 10% 90% 100%

Figure No.1.7 The respondents influence on Investment decision