ABSTRACT

Now a days all the technological changes are being made in the competitive
environment. In all fields computerization as taken place. In case of stock exchange also they
go for on line trading. So the investors have to be aware of online trading procedure, in order
to know the minute-to-minute changes in trading in stoic exchanges.
The main aim of this study to make the investor aware of the online trading procedures,
and the disadvantages from it . When the investor come to know the changes in the trading in
stock exchanges, then only he can sell or buy the securities which give high return and in
order to minimize the risk. The online trading system displays the overall changes in the
world of trading per second. So the knowledge of online trading is must for every investor.
The online system displays the graphs of senses, Nifty, and the risk and return of a
security which the investor need to invest and displays the profile of the company, dividend
declare by that company. The main advantage to the investor is that he can buy and sells
shares by sitting at home instead of calling the broker and ordering him to buy or sell.
Futures or future contracts are transferable specific delivery forward contracts. They
are agreements between two counter parties that fix the terms of an exchange, or that lock
in the price today of an exchange, which will take place between them at some fixed future
dates.

CONTENTS
S.NO

TOPIC

PAGE.NO.

CHAPTER I
1
INTRODUCTION
Need for the study
1-7
Objectives
Methodology of the study
Limitations and scope of the
study
CHAPTER-II REVIEW OF
2

LITERATURE
Introduction of online trading
Online trading advantages and 8-30
disadvantages

INDUSTRYI PROFILE
Financial Market
Definition of stock
exchange
3

CHAPTER III
31-55

COMPANY PROFILE
4

CHAPTER IV
DATAANALYSIS &
INTERPRETATION
Technical analysis

56-70

CHAPTER V
Findings
Conclusion
Bibliography

71-62

CHAPTER-1
INTRODUCTION

INTRODUCTION TO ONLINE TRADING:

Online trading definition is a basic understanding of online trading processes. Since the
invention of Internet people have beena able to do practically everything virtually. Due to the
Internet online trading has become one of the most popular ways to trade as far as stock trading
turned out to be as available to independent investors as possible. Online trading gives both
beginners who've just had a single day trading course and advanced traders an opportunity to
trade stocks, options, forex and futures all over the world without physical presence of a broker
and with much lower commissions, because everything is done online.
Stock online trading is based on buying and selling stocks. Today stock online trading is
the most popular method to trade owing to computers, because information on stocks was
available only to brokers and you had to call a broker and pay brokerages for buying or selling
stocks and now this information is widely available. Since this modification occurred traders
can control their investments with the help of Internet.
Stock option online trading is based on buying and selling options and very perspective
financial products. This system gives traders a perfect chance to control and protect their stocks
and generate their investment benefits as far as an option is an agreement to buy or to sell
certain financial product. The main idea of stock option online trading is that an option you buy
has its fixed price and time limitation.
Forex online trading is another speculative online business based on buying and selling
foreign exchange, gaining profits due to rise and fall of currency rate, namely on the difference
between the currency pairs price.
Futures online trading are another kind of online trading which is based on buying and
selling financial products (commodities, labour and currency) by means of futures contracts.
Such contract specifies a particular date (delivery date or final settlement date) in the future
when a certain financial product should be bought or sold and this product's price.
Speaking about online trading it's necessary to say about safe online trading. It's
obvious that in order to trade online you'll have to open your online account and choose online
trading software. When you choose a certain website for your future account, you should search
for information about a company you are going to fix upon and make sure that it has a
trustworthy reputation. The same refers to choosing online trading software, platform and
online trading portal.
In conclusion it's necessary to say that online trading is a perfect opportunity to trade
and earn money but still it's obvious that online trading is not for everyone. That's why before
4

you start trading, you should find out more about online trading pros and cons, online trading
concepts and of course about online trading tips. Knowledge is a main key for your successful
online trading, don't ever identify online trading with gambling because the results of such
approach can be disastrous.
Ensure your finances are structured accordingly before you hit the trading floors
online...If debt free advice is required...ensure you seek quality advice.
Internet trading commissions are clearly posted on the websites of the various services,
and are typically a fixed rate charge, depending upon the type of security being traded and the
size of trade. In theory, therefore, an Interest investor always knows what commission he is
being charged on each trade. Internet investors can take as much time as they would like to take
prior to placing a trade order. Similarly the online investor likely does not have to worry that
his broker is making unauthorized trades. Since there is no individual broker making a
commission, the only person who is authorized to trace in the account is the actual investor.
Furthermore, the internet investor can never become a victim of excessive trading (where for
the broker) since the investor maintains total control over the number of transactions which
take place in the account.
All of these positive features of internet trading may lead the unwary investor to believe
that Internet trading is a way to take control of their finances and save more money in the
process. Unfortunately, this is not always the case. The advantages of Internet stock trading
have also its weaknesses and these weaknesses present significant drawbacks for the average
investor.
First and foremost, the average investor is not an expert in the financial markets. There
is a danger for allowing the autonomy of online trading to hull you into the belief that you are
an expert investor. An online investor sitting at home at a personal computer also foregoes
proper investment advice and financial planning, perhaps among the most valuable services
provided by traditional brokers.
There are, of course, additional risks relative to performing transactions over the
Internet especially on a shared computer. Those people whom investors have provided their
account number and password can freely trade that account while the investor will have little, if
any, resource against the brokerage firm for the breach of security.
5

NEED FOR THE STUDY:

The present study to review the online trading procedure a case study of ONLINE TRADING
at NETWORTH STOCK BROKING LTD., as the exchange has changed its trading from it
and there is need to assess the performance of the capital market.

OBJECTIVES OF THE STUDY:

It is to analyze the changes in trading after the exchange shifted from outcry to
online trading system.

It is to study the functions of NETWORTH STOCK BROKING LTD through

various departments.

To know the online screen based trading system adopted by NETWORTH STOCK
BROKING LTD and about its communication facilities.

The appropriate

configuration to set the network, which would link the NETWORTH STOCK
BROKING LTD to individual / members.

To know about the latest and future development in the stock exchange trading
system.

METHODOLOGY OF STUDY:
The data collection methods include both primary and secondary
Collection methods.
Primary method: This method includes the data collected from the personal interaction
with authorized members of Networth Stock Broking Ltd Securities limited.
Secondary method: The secondary data collection method includes:
The lecturers delivered by the superintendents of respective departments.
The brochures and material provided by Networth Stock Broking Ltd Securities limited.
The data collected from the magazines of the NSE, economic times, etc.
Various books relating to the investments, capital market and other related topics.

LIMITATIONS OF THE STUDY:

The study confines to the past 2-3 years and present system of the trading procedure in the
and the Indiainfoline study is confined to the coverage of all the related issues in brief.

The data

is collected from the primary and secondary sources and thus is subject to slight variation than
what the study includes in reality.

The study is confined to online trading procedure only. Problems of listing are not covered
due to limited time and to keep the study in manageable limits.

SCOPE OF THE STUDY:

The scope of my study was
1) To know the procedure of online trading/screen based training.
2) To know the trading procedure at NETWORTH.
3) The study is primarily aimed at knowing the procedural formalities a company should
fulfill to get itself in the stock exchange with reference to HYDERABAD STOCK
EXCHANGE.

CHAPTER-II
REVIEW OF LITERATURE

ONLINE TRADING
Before getting in to the online trading we should know some things about the internet, ecommerce and etc.

1.

Internet :

Internet is a worldwide, self-governed network connecting several other smaller networks and
millions of computers and persons, to mega sources of information. This technology shrinks
vast distances, accelerating the pace of business reforms and revolutionizing the way
companies are managed. It allows direct, ubiquitous links to anyone anywhere and anytime to
build up interactive relationships.
A combination of time and space, called the Internet promises to bring unprecedented
changes in our lives and business. Internet or net is an inter-connection of computer
communication networks spanning the entire globe, crossing all geographical boundaries. It has
re-defined the methods of communication, work study, education, business, leisure, health,
trade, banking, commerce and what not it is virtually changing every thing and we are living in
dot.com age. Net being an interactive two way medium, through various websites, enables
participation by individuals in business to business and business to consumer commerce, visit
to shopping arcades, games, etc. in cyber space even the information can be copied,
downloaded and retransmitted.
The use of Internet has grown 2000 percent in last decade and is currently growing at
10 percent per month. In India, growth of Internet is of recent times. It is expected to bring
changes in every functional area of business activity including management and financial
services. It offers stock trading at a lower cost. Internet can change the nature and capacity of
stock broking business in India.
2. E-commerce :
Electronic commerce is associated with buying and selling over computer communication
networks. It helps conduct traditional commerce through new way of transferring and
processing of information. Information is electronically transferred from computer to computer
in an automated way. E-commerce refers to the paperless exchange of business information
using electronic data inter change, electronic technologies. It not only reduces manual
10

processes and paper transactions but also helps organization move to a fully electronic
environment and change the way they operated.
PCs and networking attempts to introduce banks of the tools and technologies required for
electronic commerce. The computers are either workstations of individual office works or
serves where large databases and information reside. Network connects both categories of
computers; the various operating systems are the most basis program within a computer. It
manages the resources of the computer system in a fair and efficient manner.
Now we can enter in to the concept known as online trading.
In the past, investors had no option but to contact their broker to get real time access to
market data. The net brings data to the investor on-line and net broking enables him to trade on
a click of mouse. Now information has become easily accessible to both retail as well as big
investor.

EVOLUTION OF BROKING IN INDIA:

The evolution of a broking in India can be categorized in three phases

Stockbrokers will offer on their sites features such as live portfolio manager, live

quotes, market research and news, etc. to attract more investors.

Brokers will offer online broking and relationship management by providing and

offering analysis and information to investors during broking and non-broking hours based on
their profile and needs, i.e. customized services.

Brokers (now e-brokers) will offer value management or services like initial

public offering online, on-line asset allocation, portfolio management, financial planning, tax
planning, insurance services, etc. and enables the investors to take better and well considered
decisions.
The actual definition of Online Trading is as explained below:
Online trading is a service offered on the internet for purchase and sale of shares. In the real
world you place orders on your stockbroker either verbally (personally or telephonically) or in
a written form (fax). In online trading, you will access a stockbrokers website through your
11

internet enabled PC and place orders through the brokers internet based trading engine. These
orders are routed to the stock exchange without manual intervention and executed thereon in a
matter of a few seconds.The net is used as a mode of trading in internet trading. Orders are
communicated to the stock exchange through website.
In India:
Internet trading started in India on 1 st April 2000 with 79 members seeking permission
for online trading. The SEBI committees on internet based securities trading services has
allowed the net to be used as an Order Routing System (ORS) through registered stock brokers
on behalf of their clients for execution of transaction. Under the ORS the client enters his
requirements (security, quantity, price buy/sell) on brokers site.

Objectives:
Internet trading is expected to

Increase transparency in the markets,

Enhance market quality through improved liquidity, by increasing quote continuity

and market depth,

Reduce settlement risks due to open trades, by elimination of mismatches,

Provide management information system,

Introduce flexibility in system, so as to handle growing volumes easily and to

support nationwide expansion of market activity.

Besides, through internet trading three fundamental objectives of securities

be easily achieved, these are:

Investor protection

Creation of a fair and efficient market, and

Reduction of the systematic risks.

Some of the brokers offering net trading include ICICI direct, kotakstreet, etc.
12

regulation can

Requirements for net trading:

For investors:
1. Installation of a computer with required specification
2. Installation of a modem
3. Telephone connection
4. Registration for on-line trading with broker
5. A bank account
6. Depository account
7. Compliance with SEBI guidelines for net trading

The following should be produced to get a demat account and online trading account:
As identity proof & address proof any one of the following:

Voter ID card

Driving license

PAN card( in case of to trade more than 50000)

Ration card

Bank pass book

Telephone bill

Other requirements, which are necessary

First page of the bank pass book and last 6 months statement.

Bank managers signature along with banks seal, manager registration code on
photograph.

For stock brokers:

13

1. Permission from stock exchange for net trading

2. Net worth of Rs. 50 lac
3. Adequate back-up system
4. Secured and reliable software system
5. Adequate, experienced and trained staff
6. Communication of order (trade confirmation to investor by e-mail)
7. Use of authentication technologies
8. Issue of contract notes within 24 hours of the trade execution
9. Setting up a website.
The net is used as a medium of trading in internet trading. Orders are communicated to the
stock exchange through website. Internet trading started in India on 1st April 2000 with 79
members seeking permission for online trading. The SEBI committees on internet based
securities trading services has allowed the net to be used as an Order Routing System (ORS)
through registered stock brokers on behalf of their clients for execution of transaction.
Under the Order Routing System the client enters his requirements (security, quantity, price,
and buy/sell) in broker's site. They are checked electronically against the clients account and
routed electronically to the appropriate exchange for execution by the broker. The client
receives a confirmation on execution of the order. The customer's portfolio and ledger accounts
get updated to reflect the transaction. The user should have the user id and password to enter
into the electronic ring. He should also have demat account and bank account. The system
permits only a registered client to log in using user id and password. Order can be placed using
place order window of the website.

Procedure for net trading

Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEATIXS, should approach the brokers and get them self registered with the Stock Broker.
Step 2: After registration, the broker will provide to them a Login name, Password and
personal identification number (PIN).
Step 3: Actual placement of an order. An order can then be placed by using the place order
window as under:
(a) First by entering the symbol and series of stock and other parameters like quantity
and price of the scrip on the place order window.
14

(b) Second, fill in the symbol, series and the default quantity.
Step 4: It is the process of review. Thus, the investor has to review the order placed by clicking
the review option. He may also re-set to clear the values.
Step 5: After the review has been satisfactory, the order has to be sent by clicking on the send
option.
Step 6: The investor will receive an "Order Confirmation" message along with the order
number and the value of the order.
Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons
such as invalid price limit, an appropriate message will appear at the bottom of the screen. At
present, a time lag of about 10 seconds is there in executing the trade.
Step 8: It is regarding charging payment, for which there are different mode. Some brokers will
take some advance payment from the investor and will fix their trading limits. When the trade
is executed, the broker will ask the investor for transfer of funds to his account.
Internet trading provides total transparency between a broker and an investor in the secondary
market. In the open outcry system, only the broker knew the actually transacted price. Screen
based trading provides more transparency. With online trading investors can see themselves the
price at which the deal takes place.
The time gap has narrowed in every stage of operation. Confirmation and execution of trade
reaches the investor within the least possible time, mostly within 30 seconds. Instant feedback
is available about the execution. Some of
the websites also offer;

News and research report

BSE and NSE movements

Stock analysis

IPO and mutual fund centers

Step by step procedure in online trading:

Following steps explain the step by step approach to on-line trading:

Log on to the stock broker's website

Register as client/investor

Fill the application form and client broker agreement form on the requisite value stamp

paper

Obtain user ID and pass word

15

Log on to the broker's site using secure user ID and password

Market watch page will show real time on-line market data

Trade shares directly by entering the symbol or number of the security

Brokers server will check your limit in the on-line account and demat account for the

number of shares and execute the trade

Order is executed instantly (10-30 seconds) and confirmation can be obtained.

Confirmation is e-mailed to investor by broker

Contract note is printed and mailed in 24 hours

Settlement will take place automatically on the settlement day

Demat account and the bank account will get debited and credited by electronic means.

ONLINE TRADING HAS LED TO ADDITIONAL FEATURES SUCH AS:

Limit / stop orders: orders that can be go unfilled, but there is an extra Charge for this

leeway facility since one need to hold a price.

Market orders: orders can be filled at unexpected prices, but this type is much more

risky, since you have to buy stock at the given price.

Cash account: where funds have to be available prior to placing the order.

Margin account: where orders can be placed against stocks, to increase Purchasing

power.

ADVANTAGES OF ONLINE TRADING:

Online trading has made it possible for anyone to have easy and efficient access to more

reports and charts than it was previously possible if one went to any brokers' office. Thus we
have access to a lot more information online.

Online trading has let room for smaller organizations to compete with multinational

organizations since it is no longer a leg it issue. Being online does not identify the size of any
particular organization, therefore, this additional power to the underdogs.

Online trading has allowed companies to locate themselves where they want as physical

location is not an issue anymore. Companies can establish themselves according to their gains
and losses, for instance where tax (sales and value added taxes) is best suited to them.

16

Online trading gives control to individuals and they can exercise it over accounts thus

comprehend what is going on when they trade. It is like going back to school and re-educating
oneself on how to trade online.

Individuals benefit by saving comparatively a lot more when trading online as the cost

per trade is less.

Individuals can invest in a variety of products, unlike earlier when people bought bonds,

mutual funds, and stock for long-term basis and sat on them. Now they can invest in stocks,
stock and index options mutual funds, government, and even insurance.

INVESTORS REASONS TO TRADE ONLINE:

They have control over their accounts, can make their own decisions and dont have to

give reasons for their actions. They are independent.

They have a reason to participate in the market and learn about it.

It is interesting, cheap, easy, fast, and convenient.

A lot of information is online so they can keep up-to-date with what is happening in the

trading world.

It will give investors a greater choice and better realization.

The immediate impact will be competition and benefits will accrue to the investors.

It will lead to brokerage commissions going down and brokers striving to increase

business afloat.

Investors will now go to place, which have better trading conditions and also members

to offer them better facilities.

They have access to numerous tools to invest, and can create their own portfolio.

17

HERE ARE THE POSSIBLE DISADVANTAGES:

When network crashes, there will be problems and delays due to a large influx of rapid

online trading criteria.

Individuals are restricted to first-hand financial guidance. This simply means that the

individual is himself / herself alone to.

A tax (sales tax and value added tax) evaluation becomes an issue, especially when you

are trading internationally.

One has no idea with whom he is dealing with on the other end.

According to a study conducted by Mary Rowland, careful investor: is online trading

bad for your portfolio, the more one trades the less returns one gets, meaning that an addicted
trader gets, carried away online and begins to trade for too much which causes losses for him /
her.

Individuals think that they are trading with the market directly and know what they are

doing, but the truth is that even though technology has taken over, the basic rules of trading are
the same. It seems that the middleman has been removed, but that is not so. When the
individuals click on the mouse, his trade goes through a broker. The commissions online
pertain to the intermediary.

There is a need for more effective communication links over the Internet and the ability

of the server to deal with a large volume of visitors.

18

Following diagram gives the structure of Indian financial system:

19

FINANCIAL MARKET
Financial markets are helpful to provide liquidity in the system and for smooth functioning of
the system. These markets are the centers that provide facilities for buying and selling of
financial claims and services. The financial markets match the demands of investment with the
supply of capital from various sources.
According to functional basis financial markets are classified into two types.
They are:

Money markets (short-term)

Capital markets (long-term)

According to institutional basis again classified in to two types. They are

Organized financial market

Non-organized financial market.

The organized market comprises of official market represented by recognized institutions,

bank and government (SEBI) registered/controlled activities and intermediaries. The
unorganized market is composed of indigenous bankers, moneylenders, individual professional
and non-professionals.
MONEY MARKET:
Money market is a place where we can raise short-term capital.
Again the money market is classified in to

Inter bank call money market

Bill market and

Bank loan market Etc.

E.g.; treasury bills, commercial papers, CD's etc.

20

CAPITAL MARKET:
Capital market is a place where we can raise long-term capital.
Again the capital market is classified in to two types and they are

Primary market and

Secondary market

E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:
Primary market is generally referred to the market of new issues or market for
mobilization of resources by the companies and government undertakings, for new projects as
also for expansion, modernization, addition, diversification and up gradation. Primary market is
also referred to as New Issue Market. Primary market operations include new issues of shares
by new and existing companies, further and right issues to existing shareholders, public offers,
and issue of debt instruments such as debentures, bonds, etc.
The primary market is regulated by the Securities and Exchange Board of India (SEBI a
government regulated authority).
Function:
The main services of the primary market are origination, underwriting, and distribution.
Origination deals with the origin of the new issue. Underwriting contract make the shares
predictable and remove the element of uncertainty in the subscription. Distribution refers to the
sale of securities to the investors.
The following are the market intermediaries associated with the market:
1.

Merchant banker/book building lead manager

2.

Registrar and transfer agent

3.

Underwriter/broker to the issue

4.

Adviser to the issue

21

5.

Banker to the issue

6.

Depository

7.

Depository participant

Investors protection in the primary market:

To ensure healthy growth of primary market, the investing public should be protected. The
term investor protection has a wider meaning in the primary market. The principal ingredients
of investors protection are:

Provision of all the relevant information

Provision of accurate information and

Transparent allotment procedures without any bias.

SECONDARY MARKET
The primary market deals with the new issues of securities. Outstanding securities are
traded in the secondary market, which is commonly known as stock market or stock exchange.
The secondary market is a market where scrips are traded. It is a market place which
provides liquidity to the scrips issued in the primary market. Thus, the growth of secondary
market depends on the primary market. More the number of companies entering the primary
market, the greater are the volume of trade at the secondary market. Trading activities in the
secondary market are done through the recognized stock exchanges which are 23 in number
including Over The Counter Exchange of India (OTCE), National Stock Exchange of India and
Interconnected Stock Exchange of India.
Secondary market operations involve buying and selling of securities on the stock exchange
through its members. The companies hitting the primary market are mandatory to list their
shares on one or more stock exchanges in India. Listing of scrips provides liquidity and offers
an opportunity to the investors to buy or sell the scrips.
The following are the intermediaries in the secondary market:
1.

Broker/member of stock exchange buyers broker and sellers broker

2.

Portfolio Manager

3.

Investment advisor

4.

Share transfer agent

22

5.

Depository

6.

Depository participants.

CHAPTER III
INDUSTRY PROFILE

23

STOCK EXCHANGES IN INDIA

Stock exchanges are the perfect type of market for securities whether of government
and semi-govt bodies or other public bodies as also for shares and debentures issued by the
joint-stock companies. In the stock market, purchases and sales of shares are affected in
conditions of free competition. Government securities are traded outside the trading ring in the
form of over the counter sales or purchase. The bargains that are struck in the trading ring by
the members of the stock exchanges are at the fairest prices determined by the basic laws of
supply and demand.
Definition of a stock exchange:
Stock exchange means any body or individuals whether incorporated or not, constituted for
the purpose of assisting, regulating or controlling the business of buying, selling or dealing in
securities. The securities include:

Shares of public company.

Government securities.

Bonds

History of Stock Exchanges:

The only stock exchanges operating in the 19 th century were those of Mumbai setup in
1875 and Ahmedabad set up in 1894. These were organized as voluntary non-profit-marking
associations of brokers to regulate and protect their interests. Before the control on securities
under the constitution in 1950, it was a state subject and the Bombay securities contracts
(control) act of 1925 used to regulate trading in securities. Under this act, the Mumbai stock
exchange was recognized in 1927 and Ahmedabad in 1937. During the war boom, a number of

24

stock exchanges were organized. Soon after it became a central subject, central legislation was
proposed and a committee headed by A.D.Gorwala went into the bill for securities regulation.
On the basis of the committees recommendations and public discussion, the securities contract
(regulation) act became law in 1956.

Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations to the
listed companies, they help trading and raise funds from the market. Over the hundred and
twenty years during which the stock exchanges have existed in this country and through their
medium, the central and state government have raised crores of rupees by floating public
loans. Municipal corporations, trust and local bodies have obtained from the public their
financial requirements, and industry, trade and commerce- the backbone of the countrys
economy-have secured capital of crores or rupees through the issue of stocks, shares and
debentures for financing their day-to-day activities, organizing new ventures and completing
projects of expansion, diversification and modernization. By obtaining the listing and trading
facilities, public investment is increased and companies were able to raise more funds. The
quoted companies with wide public interest have enjoyed some benefits and assets valuation
has become easier for tax and other purposes.

25

Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities contracts
(regulation), Act, 1956. Those are:
Region

Northern Region

Southern Region

Eastern Region

Exchange

City

Ludhiana stock exchange

Ludhiana

Delhi stock exchange

Delhi

Jaipur stock exchange

Jaipur

U.P.stock exchange

Kanpur

Hyderabad stock exchange

Hyderabad

Bangalore stock exchange

Banglore

Mangalore stock exchange

Manglore

Madras stock exchange

Chennai

Coimbatore stock exchange

Coimbatore

Calcutta Stock Exchange

Calcutta

Magadha Stock Exchange

Patna

Bhubaneswar Stock Exchange

Bhubaneswar

Bombay Stock Exchange

Mumbai

National Stock Exchange

Mumbai

OTCEL Stock Exchange

Mumbai

M.p.Stock Exchange

Indore

26

Western Region
Pune Stock Exchange

Pune

Out of these major stock exchanges were:

NSE
The National Stock Exchange of India Limited has genesis in the report of the High
Powered Study Group on Establishment of New Stock Exchanges, which recommended
promotion of a National Stock Exchange by financial institutions (FIs) to provide access to
investors from all across the country on an equal footing. Based on the recommendations, NSE
was promoted by leading Financial Institutions at the behest of the Government of India and
was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in
the country. On its recognition as a stock exchange under the Securities Contracts (Regulation)
Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)
segment in June 1994. The Capital Market (Equities) segment commenced operations in
November 1994 and operations in Derivatives segment commenced in June 2000
NSE's mission is setting the agenda for change in the securities markets in India. The NSE was
set-up with the main objectives of:

Establishing a nation-wide trading facility for equities and debt instruments.

Ensuring equal access to investors all over the country through an appropriate
communication network.

Providing a fair, efficient and transparent securities market to investors using

electronic trading systems.

Enabling shorter settlement cycles and book entry settlements systems, and

Meeting the current international standards of securities markets.

27

The standards set by NSE in terms of market practices and technology, have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere
market facilitator. It's that force which is guiding the industry towards new horizons and greater
opportunities.

BSE
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The
Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the
Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making
Association of Persons (AOP) and is currently engaged in the process of converting itself into
demutualised and corporate entity. It has evolved over the years into its present status as the
premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have
obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts
(Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for
trading in securities, debt and derivatives upholds the interests of the investors and ensures
redresses of their grievances whether against the companies or its own member-brokers. It also
strives to educate and enlighten the investors by conducting investor education programmers
and making available to them necessary informative inputs.
A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors,
who are from the broking community (one third of them retire ever year by rotation), three
SEBI nominees, six public representatives and an Executive Director & Chief Executive
Officer and a Chief Operating Officer.
The Executive Director as the Chief Executive Officer is responsible for the day-to-day
administration of the Exchange and the Chief Operating Officer and other Heads of
Department assist him.
The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to constitution
of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting
28

of three elected directors, three SEBI nominees or public representatives, Executive Director &
CEO and Chief Operating Officer has been constituted. The Committee considers judicial &
quasi matters in which the Governing Board has powers as an Appellate Authority, matters
regarding annulment of transactions, admission, continuance and suspension of memberbrokers, declaration of a member-broker as defaulter, norms, procedures and other matters
relating to arbitration, fees, deposits, margins and other monies payable by the member-brokers
to the Exchange, etc.

REGULATORY FRAME WORK OF STOCK EXCHANGE

A comprehensive legal framework was provided by the Securities Contract Regulation
Act, 1956 and Securities Exchange Board of India 1952. Three tier regulatory structure
comprising

Ministry of finance

The Securities And Exchange Board of India

Governing body

Members of the stock exchange:

The securities contract regulation act 1956 has provided uniform regulation for the
admission of members in the stock exchanges. The qualifications for becoming a member of a
recognized stock exchange are given below:

The minimum age prescribed for the members is 21 years.

He should be an Indian citizen.

He should be neither a bankrupt nor compound with the creditors.

He should not be convicted for fraud or dishonesty.

He should not be engaged in any other business connected with a company.

He should not be a defaulter of any other stock exchange.

The minimum required education is a pass in 12th standard examination.

29

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of
government of India. It was later made statutory body by the SEBI act 1992.according to this
act, the SEBI shall constitute of a chairman and four other members appointed by the central
government.
With the coming into effect of the securities and exchange board of India act, 1992 some of
the powers and functions exercised by the central government, in respect of the regulation of
stock exchange were transferred to the SEBI.
OBJECTIVES AND FUNCTIONS OF SEBI

To protect the interest of investors in securities.

Regulating the business in stock exchanges and any other securities market.

Registering and regulating the working of intermediaries associated with securities

market as well as working of mutual funds.

Promoting and regulating self-regulatory organizations.

Prohibiting insider trading in securities.

Regulating substantial acquisition of shares and take over of companies.

Performing such functions and exercising such powers under the provisions of
capital issues (control) act, 1947and the securities to it by the central government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES):

30

Board of Directors of Stock Exchange has to be reconstituted so as to include nonmembers, public representatives and government representatives to the extent of 50% of
total number of members.

Capital adequacy norms have been laid down for the members of various stock
exchanges depending upon their turnover of trade and other factors.

All recognized stock exchanges will have to inform about transactions within 24 hrs.

TYPES OF ORDERS:
Buy and sell orders placed with members of the stock exchange by the investors. The orders
are of different types.
Limit orders:
Orders are limited by a fixed price. E.g. buy Reliance Petroleum at Rs.50.Here, the order has
clearly indicated the price at which it has to be bought and the investor is not willing to give
more than Rs.50.
Best rate order:
Here, the buyer or seller gives the freedom to the broker to execute the order at the best
possible rate quoted on the particular date for buying. It may be lowest rate for buying and
highest rate for selling.
Discretionary order:
The investor gives the range of price for purchase and sale. The broker can use his discretion to
buy within the specified limit. Generally the approximation price is fixed. The order stands as
this buy BRC 100 shares around Rs.40.
Stop loss order:
The orders are given to limit the loss due to unfavorable price movement in the market. A
particular limit is given for waiting. If the price falls below the limit, the broker is authorized to
sell the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at Rs.22.
Buying and selling shares:
31

To buy and sell the shares the investor has to locate register broker or sub broker who render
prompt and efficient service to him. The order to buy or sell specifying the number of shares of
the company of investors choice is placed with the broker. The order may be of any type. After
receiving the order the broker tries to execute the order in his computer terminal. Once
matching order is found, the order is executed. The broker then delivers the contract note to the
investor. It gives the details regarding the name of the company, number of shares bought,
price, brokerage, and the date of delivery of share. In this physical trading form, once the
broker gets the share certificate through the clearing houses he delivers the share certificate
along with transfer deed to the investor. The investor has to fill the transfer deed and stamp it.
The stamp duty is one of the percentage considerations, the investor should lodge the share
certificate and transfer deed to the register or transfer agent of the company. If it is bought in
the DEMAT form, the broker has to give a matching instruction to his depository participant to
transfer shares bought to the investors account. The investor should be account holder in any of
the depository participant. In the case of sale of shares on receiving payment from the
purchasing broker, the broker effects the payment to the investor.
Share groups:
The scrips traded on the BSE have been classified into A,B1,B2,C,F and Z groups.
The A group represents those, which are in the carry forward system. The F group represents
the debt market segment (fixed income securities). The Z group scrips are of the blacklisted
companies. The C group covers the odd lot securities in A, B1&B2 groups.
ROLLING SETTLEMENT SYSTEM:
Under rolling settlement system, the settlement takes place n days (usually 1, 2, 3 or
5days) after the trading day. The shares bought and sold are paid in for n days after the trading
day of the particular transaction. Share settlement is likely to be completed much sooner after
the transaction than under the fixed settlement system.

The rolling settlement system is noted by T+N i.e. the settlement period is n days after the
trading day. A rolling period which offers a large number of days negates the advantages of the
system. Generally longer settlement periods are shortened gradually.
SEBI made RS compulsory for trading in 10 securities selected on the basis of the criteria that
they were in compulsory demat list and had daily turnover of about Rs.1 crore or more. Then it
was extended to A stocks in Modified Carry Forward Scheme, Automated Lending and
32

Borrowing Mechanism (ALBM) and Borrowing and lending Securities Scheme (BELSS) with
effect from Dec 31, 2001.
SEBI has introduced T+5 rolling settlement in equity market from July 2001 and subsequently
shortened the cycle to T+3 from April 2002. After the T+3 rolling settlement experience it was
further reduced to T+2 to reduce the risk in the market and to protect the interest of the
investors from 1st April 2003.

Activities on T+1:
Conformation of the institutional trades by the custodian is sent to the stock
exchange by 11.00 am. A provision of an exception window would be available for late
confirmation. The time limit and the additional changes for the exception window are dedicated
by the exchange.
The exchanges/clearing house/ clearing corporation would process and download the obligation
files to the brokers terminals late by 1.30 p.m on T+1. Depository participants accept the
instructions for pay in securities by investors in physical form upto 4 p.m and in electronic
form upto 6 p.m. the depositories accept from other DPs till 8p.m for same day processing.

Activities on T+2:
The depository permits the download of the paying in files of securities and
funds till 10.30 a.m on T+2 from the brokers pool accounts. The depository processes the pay
in requests and transfers the consolidated pay in files to clearing House/clearing Corporation by
11.00am/on T+2. The exchange/clearing house/clearing corporation executes the pay-out of
securities and funds latest by 1.30 p.m on T+2 to the depositories and clearing banks. In the
demat mode net basis settlement is allowed. The buy and sale positions in the same scrip can be
settled and net quantity has to be settled.

33

CHAPTER-IV
COMPANY PROFILE

34

Networth has been successfully providing premium financial services and information for more
than a decade. Our aim has consistently been to empower investors to take charge of their
financial future & help them grow their Networth.
Networth has always endeavored to make a difference in the financial services space. It
constantly focuses on scaling and upgrading the technology infrastructure so as to provide the
best services to the investors. We have a presence of around 350 centers across India.
We are

Managed by a talented team of around 800 professionals.

Serving nearly 100,000 clients across the country.

ISO 9001:2000 Certified Software Division.

Winner of CNBC-TV18s Financial Advisor Awards 2008 for Best Regional Level
Financial Advisor.

Proclaimed amongst the most read research analyst (Team Networth) by Thomson
Reuters consistently over a period of time.

A Charter member of Financial Planning Standards Board of India [FPSB].

Alliance partners with PNB for online trading.

Corporate Agents for MetLife India Insurance Co Ltd.

OUR GROUP COMPANIES

35

Networth Stock Broking Ltd. [NSBL]

NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the Bombay Stock
Exchange Ltd (BSE) in the Capital Market and Derivatives (Futures & Options) segment.
NSBL has also acquired membership of the currency derivatives segment with NSE, BSE,
USE & MCX-SX. It is Depository participants with Central Depository Services India (CDSL)
and National Securities Depository (India) Limited (NSDL). With a client base of around
100,000 loyal customers, NSBL is spread across the country though its around 350 branches.
NSBL is listed on the BSE since 1994.

Networth Wealth Solutions Ltd. [NWSL]

NWSL is into the business of delivery of Financial Planning & Advice. Its vision is to Advice
& Execute money related solutions to/for our customers in the most Convenient &
Consolidated manner, while making sure that their experience with us is always pleasant &
memorable resulting in positive advocacy. The product & Services include Financial Planning,
Life Insurance, On-line Trading Account, Mutual Funds, Debentures/Bonds, General Insurance,
Loans and Depository Services.
Networth Commodities & Investments Limited [NCIL]NCIL is the commodities arm of
NSBL. It is a member at the Multi Commodity Exchange of India (MCX), National
Commodity & Derivatives Exchange (NCDEX) and ICEX & is backed by solid research &
analytics in Commodities.
Networth Soft Tech Ltd. [NSL]NSL is an ISO 9001:2000 Certified Company. It is into
Application Development & maintenance. Building & Implementation of packaged software
across various functions within the Financial Services Industry is at its core. It also provides
data center services which include hosting of websites, applications & related services. It
combines a unique delivery model infused by a distinct culture of customer satisfaction.
Ravisha Financial Services Pvt. Ltd. [RFSL]
RFSL is a RBI registered NBFC engaged in financing, primarily it provides loan against
securities.

36

With greater choices comes greater value. Networth offers you more choices by providing a
wide array of products and personalized services, so you can take charge of your financial
future with confidence. So whether you are a new investor or a seasoned one, we have the
resources and advice you would need to make smart, well-researched investments and help you
grow your Networth.
Business Associates for us are partners in every sense. We empower Business Associates &
their clients by taking charge of their financial future & thus helping them grow their networth. We always maintain a win win relationship with them and believe in "Connect &
Grow".
Join us for an exciting business opportunity and the right time is now!
Benefits You Get

You will get the opportunity to provide the following benefits to your clients
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Convenience - all products under one roof

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This will lead to retention of your existing clients and acquisition of new clients.

Increase your revenue streams.

You will be offered technologically advanced trading platform and back office one of
the best in the industry.

You will be offered various tools and trainings which will help increase your client
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Networth Advantage

We ensure that our business associates excel in their entrepreneurial venture

We provide extensive & continuous training on all our products & services

We give our business associates access to all our products & services, including our
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We provide Free online back office platform & online KYC tracking

We use the latest technology to provide seamless & speedy trading connectivity to all
our business associates, across the country

We are flexible, transparent, ethical and service oriented at every step of the business

37

We provide innovative & effective marketing support to our business associates, which
in turn helps them to acquire and retain clients

We provide the best support in the industry, through dedicated region wise associate
support

Networth strives to empower you with information that helps you make informed decisions and
bank upon the right opportunity. We bring you lots of useful information by way of our varied
market research reports. Whether you are a beginner, an investor or a trader, you would find
yourself useful.
We have a dedicated Research Cell wherein some of Indias finest financial analyst regularly
provides factual and reliable research reports. From industry trends to sartorial trends and
market trends. From individual company recommendations to mutual fund updates. From
macro economic updates to New IPOs, we have them all.
For your benefit, we have categorized these reports and suitably named them so that you can
pick and access just the report you want. Whats more, you can access past reports from the
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The reports that we provide include:

The Week Ahead

India Market Report

Company Reports

IPOs / FPO

Sector Reports

Pre-quarter/Updates

Analyst Meet

Derivative Strategy

India is the one of the fastest growing financial market and we are here to provide you with
tailor made facilities to invest in this emerging market.As a Non Resident Indian (NRI),
residing GCC countries & NRI state you may have many questions as to how to invest in India,
which stocks to purchase, what mutual funds to buy, and how investing in India fits in with
your overall financial goals and objectives. This is where Networth Direct makes a difference.

38

We will work with you to figure out how to make your money grow. You will have a NRI
trading account integrated with a depository account to give you full investing functionality.

We will make sure that you get the best service and offer the most comprehensive tools to make
investing in India uncomplicated. Dedicated Indian funds are fast booming and from a global
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We at Networth Direct, backed with in-depth research and expertise, are committed to create
value for you. We provide vast investment opportunities to the global investor for wealth
creation.

CHAPTER-V
DATA ANALYSIS & INTERPRETATION

39

DATA ANALYSIS & INTERPRETATION

OUTCRY SYSTEM
The broker has to buy or sell securities for which he has received the orders. For this, the
broker or his authorized representatives goes to the stock exchange. This method is called the
open outcry system. Basically the brokers shout while buying or selling the securities. The
floor of the stock exchange is divided into a number of markets also known as post pit or
wing based on particular securities dealt there.
In the post pit or wing, the broker using open outcry method makes an offer or bid price. For
making the necessary bargain, he quotes his purchase or sale price, also known as offer or bid
price. The dealer, to whom the price is quoted, quotes his own price when the quotation of the
dealer suits the broker, he may loose the bargain. If he is not satisfied with the quote price, he
may turn to some other dealer. On the close of the bargain, the dealer as well as the broker
makes a brief note of the particulars of the deal. Such notes are made on some pad and on it the
number of shares, the price agreed upon, the name of the party, what membership number etc.,
are noted.

DISADVANTAGES OF OUTCRY SYSTEM:

40

It lacks transparency.

The scope of manipulation, speculation and mal practice is more.

Signal were more important in the outcry system any member who could not interpret
the buy/sell signal correctly often landed himself in disaster situation.

In audibility was another disadvantage of the outcry system.

Due to the above disadvantages of the outcry system the SHARE KHAN has shifted
from outcry system to online trading from February 29th 1997.

MANUAL TRADING
Trading procedure before introduction of online trading
Trading on stock exchanges is officially done in the trading ring. In the trading ring the space is
provided for specified and non-specified sections, the members and their authorized assistants
have to wear a badge or carry with them an identity card given by the exchange to enter the
trading ring. They carry a sauda book or confirmation memos, duly authorized by the exchange
and carry a pen with them. The stock exchanges operations are floor level are technical in
nature .Non-members are not permitted to enter in to stock market. Hence various stages have
to be completed in executing a transaction at a stock exchange .The steps involved in this
method of trading have given below:
Choice of broker:
The prospective investor who wants to buy shares or the investors, who wants to sell shares
and transact business, have to act through member brokers only. They can also appoint their
bankers for this purpose as per the present regulations.
Placement of order:
The next step is the placing order for the purchase or sale of securities with a broker. The
order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid delay, it is
41

placed generally over the phone. The orders may take any one of the forms such as At Best
Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open
Order, Stop Loss Order.
Execution of order or contract:
Orders are executed in the trading ring of the BSE. This works from 11:30 to 2.30 P.M on
all working days Monday to Friday, and a special one-hour session on Saturday. The members
or the authorized assistants have to wear a badge given by the exchange to enter into the trading
ring. They carry a sauda Block Book or conformation memos, which are duly authorized by the
exchange when the deal is struck; both broker and jobber make a note in their sauda block
books. From the sauda book, the contract notes are drawn up and posted to the client. A
contract note is written agreement between the broker and his clients for the transaction
executed.
Drawing Up and Bills:
Both sale and purchase bills are prepared along with the contract note and it is posted on the
same day or the next day. This in a purchase transaction, once the shares are delivered to the
client effects payment for the purchases and pays the stamp fees for transfer, a bill is made out
giving the total cost of purchase, including other expenses incurred by the broker in the price
itself. With this, the process ends.
DEMATERLIZATION:
Dematerialization is the process by which physical certificates of an investor are converted to
an equipment number of securities in electronic from and credited in the investor account with
his DP. In order to dematerialize the certificates, an investor has to first open an account with a
DP and then request for the Dematerialization Request Form, which is DP and submit the same
along with the share certificates. The investor has to ensure that he marks Submitted for
Dematerialization on the certificates before the shares are handed over to the DP for demat.
Dematerialization can only be done to those certificates, which are already registered in your
name and belong to the list of securities admitted for Dematerialization at NSDL.
Most of the active scrips in the market including all the scrips of S&P CNX NIFTY and BSE
SENSEX have already joined NSDL. This list is steadily increasing.
42

Briefly, the process is as follows: after completion of transfer, the investor gets the option to
dematerialize such shares. Investors willing to exercise this option sends a Demat request
along with the option letter sent by the company to his DP. The company or its R&T agent
would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit.
Dematerialized shares do not have any distinctive or certificate numbers. These shares are
fungible-which means that 100 shares of a security are the same as any other 100 shares of the
security. Odd lot shares certificates can also be dematerialized.
Dematerialization normally takes about fifteen to thirty days. To get back dematerialized
securities in the physical form, request DP for Rematerialization of the same is made.
Rematerialization is the process of converting electronic shares in to physical shares.

Benefits of Demat:

It reduces the risk of bad deliveries, in turn saving the cost and wastage of time
associated with follow up for rectification. This has lead to reduction in brokerage
to the extent of 0.5% by quite a few brokerage firms.

In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid the
cost of courier / notarization.

You can receive your bonuses and rights issues into your DA as a direct credit, this
eliminating risk of loss in transit.

You can also expect a lower interest charge for loans taken against Demat shares as
compared to loans against physical shares.

There is no lost in transit, thus the overheads of getting a duplicate copy in such
circumstances is reduced.

RBI has also reduced the minimum margin to 25% for loans against dematerialized
securities as against 50% for loans against physical securities.

TRADING AND SETTLEMENT AT SHARE KHAN

The NSE first introduced online trading in India. The Online trading system imparted a
greater level of transparency and investors preferred exchanges that offered Online trading
because of the following factors:

43

The ease of operation from the view of the both members and the investors.

Increase in the confidence of the investors because of higher level of transparency.

Facilities better monitoring of the market by the exchange.

The best price achieved in buying and selling.

All these resulted in ever-increasing volumes on the exchanges offering the online trading.

TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING

Share Khan deals in buying and selling equity shares and debentures on the National Stock
Exchange (NSE), the Bombay Stock Exchange (BSE) and the Over-The-Counter Exchange of
India (OTCEI).

Share Khan is provided with a computer and required software from their registered stock
exchanges. These centers are called Broker Work Stations. These computers are connected to
the server at the stock exchanges through cable.
The member or broker sitting in his office can send the quotations, orders, negotiations, deals,
in-house deals, auction orders etc., through the computer. The Central trading system (CTS)
will accept these orders and send it for match. If there is any mistake in the order, CTS will
reject the orders and send respective error message to the member concern. All these operations
are in built. The main objective of CTS is to monitor the Stock Exchanges operations.
Order placed by the broker will be sent for a match and if the match is found suitable, the
transaction will be executed. Otherwise, the order will be deleted automatically after
completion of trading time. The carry forward transactions (Good Till cancellation) are
forwarded to the next day. Even if the match is not found with in the prescribed period, the
order will not cancel.
44

TRADING SESSION
Trading timings are from 9:55 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.
BROKER WORK STATION:
At the broker workstation the BBOs, the last traded price, the days opening price,
previous days closing price, highest and lowest prices, the weighted average price and total
trade value will be available continuously, as the BBO for each scrip.
Other information will be available on query from the BWS. These include top gainers
/losers of the day. Trader-wise, scrip wise net position, client wise net position, top scrip by
the volume/value, market summary etc.
Brokers are also provided with information relating to the companies in the matter of Book
closure, Dividend declarations, resolutions in board meeting, information about liquidated
companies, company report etc.
ORDERS:

Orders can be done one at a time or in a batch mode.

The submitted order will be accepted at the CTS, after validation if it finds any invalid

reason the order is return back to the BWS, with the appropriate error message.

If Accepted at the CTS it will be added to the local pending order book.

The order will then be taken up for matching, if it is a buy order the system tries to find

a sell order, which fits the requirement of the buy order, when such match is found a trade gets
executed. Each trade involves two brokers and
respective traders who sent the order. Both these traders are informed of the trade being
executed at their respective BWS.

At the BWS the trade is added to the local trade book.

Orders sent by the brokers are two types:

Good for the day (GFD)

Good till cancellation(GTC)

Good for the day:

45

This is also called as market order. For an order if the member selects the deal as
good for the day, the order is treated as market order. If a best bid founds match with best
order then the transaction gets executed. If the match is not found then after trade time the
order gets cancelled that day. Next day he has to place a new order.
For example if a member wants to purchase 1000 shares of satyam info @ 400 each through
Good for Day order. If the correct match is not found, order gets cancelled automatically and
new quotation has to be placed the next day.
Good till cancellation:
This order is forwarded to the last trading day of that settlement period. This is also
called as carry forward order like GFD; broker has to select the option of GTC for the order. If
the order finds match with in the trading settlement period, the order is executed. If no match is
found, the order is cancelled on the last day of settlement period. This order is not carried
forward to the next settlement period.
For example, if a member a place purchase order of 500 shares of SBI @ 690 per share and
selects the order as GTC and place an order. If the match is not found on that day it will be
forwarded to the next day until trading settlement period day.
SETTLEMENT OF TRANSACTIONS:
Clearing of transaction in the form of shares and cash is called settlement. Buyers will take the
delivery of shares through the depository participants like SHARE KHAN and others.
Finally, the settlement is made by means of delivering the share certificates along with the
transfer deeds. The transferor (or the seller) duly signed transfer deed. It bears a stamp of the
selling broker. The buyer then fills up the certificates fills up the particulars in the transfer deed.
Settlement can be done in the following way.
Spot settlement: under this method, the delivery of securities and payment for them are
affected on the day of the contract itself.
Rolling settlement: Under this rolling settlement the trading is on T+2,basis i.e. if Monday
is trading day then Wednesday is the paying day . In case on non-delivery, the securities will go
for auction.

46

DETAILS OF PROCEDURES:
Delivery in : The members who are in pay-out position delivers share certificates in to
clearing house within the settlement period along with the delivery Chelan filled in with the
details of share certificates which has folio numbers or distinctive numbers etc.
Delivery out: The buyer of shares who made pay in position will take delivery of shares from
the clearing house.
Pay-in: The member who is in paying position shall pay for value of shares with in the trading
settlement period (T+2).
Payout: The cheques paid in the clearinghouse will be paid to members who are in paying
position.
All disputes arising between members regarding non-deliveries, non-payments, good and
bad deliveries pertaining to the settlement will be settled by the settlement committee of the
exchange.

47

The given flow chart clearly explains the process of online trading:

48

L o g in

S e ll t r a n s c a t io n

B u y t r a n s c a t io n

T h e s y s te m w ill c h e c k y o u r
d p ac c o u n t q u an tity

T h e s y s te m w ill c h e c k b u y in g
lim its

O rd e rs a c c e p te d

R e je c t e d o r d e r s w o u ld b e
c o m m u n ic a t e d a lo n g w it h r e a s o n s

o rd e rs a c c e p te d

y o u r o r d e r is t r a n s m it t e d t o e x c h a n g e f o r e x e c u t io n

p e n d in g b u y o r d e r s
w o u ld b e d is p la y e d
o n y o u r s c re e n

y o u m a y e d it y o u r
p e n d in g o r d e r

o n e x e c u t io n
o f y o u r o rd e rs

y o u m a y e d it y o u r
p e n d in g o r d e r

y o u m a y d e le t e
y o u r p e n d in g o r d e r

f la s h e d o n y o u r
s c r e e n im m e d ia t e ly
o n e x e c u t io n

c o n f o r m a t io n c o u l
d b e s e n d to y o u r
e - m a il a n d m o b ile

COMPARATIVE ANALYSIS
Company : AXIS BANK LTD. ( 532215 )

49

p e n d in g s e ll o r d e r s
w o u ld b e d is p la y e d
o n y o u r s c ree n

y o u m a y d e le t e y o u r
p e n d in g o r d e r

c o n t r a c t n o t e w o u ld
b e s e n t t o b y m a il
o r h a n d d e liv e r y

Period ( 12-Dec-2013 to 13-Jan-2014 )

Open High Low
Close
Date
Price Price Price Price
13/01/14 948.10 956.00 928.65 939.60
12/01/14 934.40 969.05 927.15 941.00
11/01/14 896.00 947.90 893.05 933.40
10/01/14 865.00 899.90 865.00 896.95
9/01/14 852.00 862.00 836.00 855.75
7/01/14 852.00 855.00 847.40 851.70
6/01/14 865.40 865.40 836.20 853.65
5/01/14 847.20 878.00 846.00 869.30
4/01/14 844.55 856.30 832.05 847.50
3/01/14 808.00 847.90 803.45 840.20
2/01/14 812.00 815.00 784.50 794.25
30/12/13 818.80 826.85 803.00 806.75
29/12/13 824.90 838.00 810.05 816.55
28/12/13 838.10 840.00 820.80 832.30
27/12/13 874.00 874.00 840.55 843.75
26/12/13 886.00 891.85 866.65 872.80
23/12/13 884.50 895.00 866.15 878.50
22/12/13 849.00 879.70 841.20 873.30
21/12/13 845.00 860.95 832.75 854.25
20/12/13 855.00 857.85 810.00 818.95
19/12/13 898.00 898.00 829.00 848.25
16/12/13 956.00 964.80 891.10 900.45
15/12/13 950.00 953.50 934.05 947.65
14/12/13 961.00 981.00 951.00 959.50
13/12/13 964.00 974.90 941.60 961.05

WAP
943.40
946.93
915.20
889.17
848.64
852.46
848.93
865.89
846.23
824.42
796.31
815.48
824.88
828.82
853.69
877.81
881.74
862.64
845.08
822.40
849.90
924.12
942.80
966.08
956.60

50

No. of
Shares
3,06,566
4,19,551
4,40,626
2,86,849
2,15,730
22,433
4,15,770
3,74,479
5,23,912
3,66,268
3,15,580
3,41,025
3,27,152
2,74,461
2,74,884
2,91,092
3,74,372
5,89,242
3,44,024
5,64,047
5,85,429
7,70,125
4,22,073
2,74,579
4,26,809

No. of
Trades
11,366
16,606
14,303
10,300
8,242
923
13,795
14,573
13,472
14,586
12,756
13,984
12,551
11,014
12,522
12,452
16,440
21,367
13,063
19,916
20,824
25,107
12,457
10,535
11,192

Total
Turnover
(Rs.)
28,92,13,799
39,72,86,701
40,32,59,844
25,50,57,897
18,30,78,066
1,91,23,283
35,29,60,186
32,42,58,207
44,33,47,556
30,19,58,499
25,13,00,173
27,81,00,666
26,98,60,241
22,74,77,460
23,46,64,812
25,55,23,917
33,00,97,148
50,83,06,173
29,07,26,657
46,38,71,132
49,75,58,208
71,16,84,555
39,79,32,369
26,52,64,176
40,82,87,263

INTERPRETATION:
On 2nd Jan open value has fall down to 796.31 than compare to higher value of EPS 54.21
to 59.62. Then coming to lower price from 36.25 to 52.78. Wholly the conclusion is 51.48
to 68.27 fall up.
The comings to the volume on the same dates or days volumes are increased.
Because on this AXIS BANK LTD.. EPS value is fall up.

Company : BAJAJ AUTO LTD. ( 532977 )

Period ( 12-Dec-2013 to 13-Jan-2014 )
Date

Open
Price

High
Price

Low
Price

Close
Price

WAP

13/01/14
12/01/14
11/01/14
10/01/14
9/01/14
7/01/14
6/01/14
5/01/14
4/01/14
3/01/14
2/01/14
30/12/13
29/12/13

1,473.00
1,463.00
1,449.70
1,426.00
1,448.00
1,468.00
1,458.50
1,425.00
1,496.00
1,478.00
1,595.00
1,602.40
1,602.00

1,487.05
1,485.90
1,462.70
1,463.10
1,448.00
1,468.00
1,472.00
1,469.80
1,505.00
1,505.00
1,603.95
1,614.90
1,612.00

1,422.00
1,456.25
1,429.20
1,425.00
1,412.10
1,444.00
1,440.65
1,420.00
1,416.00
1,451.10
1,441.15
1,581.25
1,595.05

1,429.55
1,473.20
1,453.00
1,429.55
1,426.45
1,448.05
1,459.20
1,464.80
1,426.30
1,496.70
1,475.00
1,592.80
1,602.40

1,444.77
1,472.45
1,449.93
1,436.37
1,425.09
1,453.17
1,453.55
1,453.69
1,436.84
1,479.95
1,479.20
1,592.15
1,602.44

51

Total
No. of No. of
Turnover
Shares Trades
(Rs.)
51,828 4,806 7,48,79,451
52,468 3,295 7,72,56,312
53,911 3,328 7,81,67,412
1,29,245 4,214 18,56,43,720
48,478 4,006 6,90,85,520
8,446
419
1,22,73,510
72,776 4,377 10,57,83,227
1,00,888 7,425 14,66,59,927
1,79,477 12,646 25,78,80,045
2,64,423 16,182 39,13,33,742
2,85,450 19,155 42,22,38,092
31,812 1,983 5,06,49,479
41,116 1,544 6,58,85,824

28/12/13
27/12/13
26/12/13
23/12/13
22/12/13
21/12/13
20/12/13
19/12/13
16/12/13
15/12/13
14/12/13
13/12/13

1,634.90
1,598.05
1,615.00
1,615.00
1,595.50
1,629.00
1,655.00
1,639.00
1,655.00
1,639.95
1,655.00
1,625.00

1,643.90
1,635.85
1,618.45
1,620.00
1,622.00
1,629.00
1,660.00
1,655.60
1,708.00
1,665.00
1,681.90
1,670.00

1,601.50
1,598.05
1,595.05
1,589.75
1,590.00
1,567.80
1,597.30
1,628.80
1,637.30
1,625.30
1,642.05
1,620.00

1,612.15
1,627.90
1,610.95
1,600.35
1,615.75
1,616.05
1,604.45
1,644.15
1,653.90
1,655.95
1,648.05
1,660.50

1,619.89
1,624.02
1,609.21
1,598.37
1,606.75
1,596.56
1,621.58
1,642.07
1,680.32
1,645.83
1,659.03
1,644.33

28,932
23,787
14,627
23,569
37,109
42,861
34,915
27,312
60,610
28,214
43,304
55,053

2,040
1,853
1,068
1,897
2,554
3,653
2,436
2,676
5,264
2,108
2,622
2,502

4,68,66,568
3,86,30,458
2,35,37,879
3,76,72,084
5,96,24,746
6,84,30,333
5,66,17,448
4,48,48,139
10,18,44,339
4,64,35,377
7,18,42,706
9,05,25,134

INTERPRETATION:
On 9th Jan open value has fall down to 1412.01 than compare to higher value of EPS 41.25
to 55.27. Then coming to lower price from 52.21 to 59.35. Wholly the conclusion is 57.39
to 68.27 fall up.

52

The comings to the volume on the same dates or days volumes are increased.
Because on this BAJAJ AUTO LTD. EPS value is fall up.

Company : BHARAT HEAVY ELECTRICALS LTD. ( 500103 )

Period ( 12-Dec-2013 to
Open High
Date
Price Price
13/01/14 265.50 268.35
12/01/14 264.00 271.90
11/01/14 263.90 266.90
10/01/14 258.30 267.25
9/01/14 251.00 259.95
7/01/14 251.00 252.50
6/01/14 253.00 255.00
5/01/14 252.50 260.00
4/01/14 250.00 258.60
3/01/14 239.50 251.35
2/01/14 239.00 241.90
30/12/13 240.00 240.95
29/12/13 243.45 247.75
28/12/13 238.60 247.60
27/12/13 245.00 246.85

13-Jan-2014 )
Low
Close
Price Price
263.20 266.80
261.50 262.40
259.30 264.75
258.30 264.90
246.40 258.55
248.10 250.65
245.25 250.00
251.60 254.80
249.00 254.00
239.50 247.95
233.50 236.45
236.50 239.00
233.15 237.40
237.10 246.25
238.00 240.80

WAP
265.79
265.83
263.74
264.88
255.40
250.93
248.55
256.66
254.28
244.35
236.80
238.65
243.21
243.15
242.71
53

No. of
Shares
3,26,244
5,12,274
5,85,329
4,35,558
4,56,857
49,876
4,92,239
5,40,536
6,52,135
3,55,009
3,27,949
4,02,607
5,36,352
5,07,168
3,99,605

No. of
Trades
4,873
9,296
6,794
6,949
7,769
854
7,872
9,187
11,987
6,347
6,989
7,433
8,805
8,482
5,819

Total
Turnover
(Rs.)
8,67,12,469
13,61,78,088
15,43,75,602
11,53,68,854
11,66,82,343
1,25,15,226
12,23,44,486
13,87,32,742
16,58,26,278
8,67,45,556
7,76,59,163
9,60,80,419
13,04,45,436
12,33,18,265
9,69,88,015

26/12/13
23/12/13
22/12/13
21/12/13
20/12/13
19/12/13
16/12/13
15/12/13
14/12/13
13/12/13

243.80
238.50
232.30
238.00
234.70
241.45
253.00
252.80
258.20
255.00

247.35
246.60
239.25
239.30
236.85
241.45
256.00
253.30
265.25
263.90

241.00
238.35
230.80
231.50
225.00
228.00
238.00
246.20
255.10
251.80

243.60
241.95
237.65
234.05
228.75
231.55
240.45
250.15
256.50
261.40

244.73
243.49
234.91
235.66
228.40
232.29
247.99
250.08
260.42
257.81

INTERPRETATION:
54

2,65,973
7,48,727
5,47,388
5,95,748
9,01,361
7,91,260
7,78,192
7,69,012
5,46,293
7,90,821

5,380
11,578
9,109
10,945
15,762
13,404
14,395
13,608
9,034
11,932

6,50,91,553
18,23,04,622
12,85,84,902
14,03,93,321
20,58,69,145
18,38,03,438
19,29,82,046
19,23,14,786
14,22,66,731
20,38,81,605

On 20th December open value has fall down to 228.75 than compare to higher value of EPS
32.36 to 39.65. Then coming to lower price from 31.25 to 37.58. Wholly the conclusion is
29.68 to 34.52 fall up.
The comings to the volume on the same dates or days volumes are increased.
Because on this BHARAT HEAVY ELECTRICALS LTD.. EPS value is fall up.

Company : BHARTI AIRTEL LTD. ( 532454 )

Period ( 12-Dec-2013 to 13-Jan-2014 )
Open High Low
Close
Date
Price Price Price Price
13/01/14 329.40 338.45 328.50 334.55
12/01/14 328.00 329.95 324.45 326.05
11/01/14 333.50 333.50 323.55 325.55
10/01/14 323.80 333.00 321.50 330.65
9/01/14 330.00 330.00 320.55 321.20
7/01/14 333.00 333.50 330.00 330.90
6/01/14 342.90 342.90 328.00 330.20
5/01/14 348.30 349.00 342.05 344.35
4/01/14 356.20 356.30 346.25 347.40
3/01/14 348.65 359.90 345.00 357.95
2/01/14 346.00 348.60 341.90 344.90
30/12/13 341.10 346.20 337.35 342.90
29/12/13 341.30 350.25 336.35 341.10
28/12/13 344.80 345.80 340.05 343.50
27/12/13 347.00 347.35 340.20 343.05
26/12/13 333.95 346.00 333.10 344.70
23/12/13 335.05 337.75 328.05 330.45
22/12/13 339.00 342.00 323.60 335.45
21/12/13 332.00 344.50 327.35 341.50

WAP
334.46
327.14
327.05
328.94
322.39
331.08
331.92
345.15
350.03
353.56
345.24
341.91
343.92
342.86
343.22
341.54
331.27
330.68
336.16
55

No. of
Shares
4,86,715
1,81,666
2,97,415
3,43,178
3,26,118
30,537
3,24,693
1,45,567
1,24,611
2,09,630
1,18,473
1,92,214
2,42,314
1,66,141
2,07,611
4,22,881
2,76,427
4,88,397
3,67,678

No. of
Trades
7,252
3,630
5,525
7,325
6,483
740
7,114
3,362
3,728
5,538
4,008
4,763
5,336
3,744
4,673
9,105
5,979
10,383
9,243

Total
Turnover
(Rs.)
16,27,88,083
5,94,29,816
9,72,68,699
11,28,86,559
10,51,35,659
1,01,10,176
10,77,70,989
5,02,41,976
4,36,17,359
7,41,15,940
4,09,01,858
6,57,19,147
8,33,36,512
5,69,62,818
7,12,56,652
14,44,29,068
9,15,71,514
16,15,03,226
12,35,97,334

20/12/13
19/12/13
16/12/13
15/12/13
14/12/13
13/12/13

340.00
334.00
337.25
339.00
346.90
340.50

340.00
343.45
352.50
342.25
353.50
350.75

319.50
321.45
329.35
332.00
342.00
337.10

322.85
336.40
336.30
337.00
348.85
346.40

327.33
333.34
346.16
336.39
349.83
344.87

INTERPRETATION:

56

4,42,289
5,68,668
5,11,561
4,55,423
5,33,040
3,88,271

8,980
11,317
9,760
7,720
7,313
7,704

14,47,75,127
18,95,59,738
17,70,84,155
15,32,00,217
18,64,72,251
13,39,02,067

On 20th December open value has fall down to 319.50 than compare to higher value of EPS
41.25 to 42.58. Then coming to lower price from 41.89 to 48.36. Wholly the conclusion is
39.68 to 48.57 fall up.
The comings to the volume on the same dates or days volumes are increased.
Because on this BHARTI AIRTEL LTD. EPS value is fall up.

57

CHAPTER-V
SUGGESTIONS, CONCLUSION & CONCLUSION

FINDINGS:
The people who are working in the stock exchange are not giving the accurate
information about the share market.
The investors are also lacking knowledge in the shares Lack of awareness on online trading
The investors are not allowed to trade the quotations directly to buy or sell their securities
SEBI is not conducting seminars to get awareness on the share market to the investors
I found a major fluctuation in the equity behavior of particular companies i have taken for a
particular period (RPL & WIPRO COMPUTERS).

58

SUGGESTIONS
The SEBI has to conduct the regular seminar to create awareness on the share market
The stock exchange has to permit the investors to trade their quotations directly
They have to improve the online trading perfectly
The online system has to advice the investor, at the time of trading which price can get
him profit for a security
In NETWORTH STOCK BROKING LTD. settlement of the accounts will be improved.

59

CONCLUSION
In this present competitive world economy plays a vital role in development of the
country, if a person is able to have the better life by having sufficient wealth with him. It
can be made happen only by means of earnings, any person cannot earn more by staying
stagnated at one place there are many ways of earning one among them is by way of
investing in the stock exchanges. No person can directly enter into the markets; the only
source is through the middle man that is any company that is member in the stock
exchange.
These member companies are providing many services to the investors or their clients
like portfolio investments, derivatives and mutual funds etc., so any company has to
provide better services to the costumer in such a way that they can trust the company in
investing their wealth through the company. It can be done only by fallowing the certain
guidelines and rule & regulations framed by SEBI.

60

BIBLIOGRAPHY

61

BIBLIOGRAPHY
BOOKS:

Investment management
-V.K.Bhalla

Investment management
-Preethi Singh
Security Analysis And Portfolio Management
-V.A.Avadhani
Marketing of Financial Services
-V.A.Avadhani
Indian Financial System
-M.Y.Khan

WEBSITES:

www.networth.com
www.bseindia.com
www.sebi.com
www.moneycontrol.com
www.economictimes.com
www.nseindia.com

62