A Study On The Consumer Perception of Online Trading

A STUDY ON THE CONSUMER PERCEPTION OF ONLINE TRADING
CHAPTER NO 1.
Introduction
1.1 Objectives
The project was basically taken in accordance to my interest attached to the topic. The
following objective below show the reasons for choosing the topic:
Covering different aspects of consumer perception of online trading.

Identifying keys for effective consumer perception of online trading.
To understand the research of consumer perception of online trading.
1.2 Scope of data
The scope of making this project is to know more about the consumer perception of online
trading.
1.3 Research methodology
Research methodology which has been used in making this project is secondary data.
Secondary data are those which has been collected by someone else and which already have Been
passed through statistical process.
Secondary data has been taken from internet, newspaper, business magazines and companies
websites.
CHAPTER NO 2.
2.1 Introduction
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The Internet revolution has been changing the fundamentals of our society. It shapes the way
we communicate and the way we do business. It brings us closer and closer to vital sources of
information. It provides us with means to directly interact with service-oriented computer
systems tailored to our specific needs; therefore, we can serve ourselves better by making our
own decisions. This prevailing shift of the business paradigm is reshaping the financial industry
and transforming the way people invest.
In the following discussion, we will briefly explain

how the Internet has been changing the way people
trade stocks, and we will introduce some of the pros
and cons of using online brokerage companies. Then
we will look at some of the trading styles people
practice and introduce an important trading
technique that a lot of professional traders have been
using with great success.
Finally, you will learn how Tradetrek.com can help you apply these trading techniques online
with trading tools that make online trading easy, fun, profitable, and understandable!
In the old days, because of the limitations of communications technology, Wall Street was the
center for most of the Stock Exchange and Brokerage firms. Today, at this millennial transition,
investors can use revolutionary Internet Client-Server technology to trade stocks nearly
anywhere, anytime, independent of brokers' fees and service limitations.
This new access by the trading public to low-cost transactions and cutting-edge, real-time
market information that formerly belonged only to brokers has opened up extraordinary new
investment opportunities as well as a crucial need for state-of-the-art information. It is exactly
these new-market investment services that Tradetrek.com specializes in satisfying.
Learning to use the new online trading tools provided by brokerage houses may take very little
time. In only a couple of mouse clicks, you can make thousand-dollar transactions in a matter of
2
seconds. Modern technology in hand, you have total control over the money you are investing,
which really gives you the tools and confidence to beat the S&P Index
2.2 Meaning
The act of buying and selling international currencies, futures, stocks, bonds and other
financial instruments through the Internet. Online trading generally requires an online trading
platform offered by most online brokers for order execution. Many online brokers also offer free
demo accounts allowing anyone connected to the Internet the possibility of virtual trading.
The use of online trades has increased the number of discount brokerages because internet
trading allows many brokers to further cut costs and part of the savings can be past on to
customers in the form of lower commissions.
Another benefit of online trading is the improvement in the speed of which transactions can
be executed and settled, because there is no need for paper-based documents to be copied, filed
and entered into an electronic format.
2.3 Definition
An online trading community provides participants with a structured method for trading,
bartering, or selling goods and services. These communities often
have forums and chatrooms designed to facilitate communication between the members. An
online trading community can be likened electronic equivalent of a bazaar, flea market,
or garage sale.
CHAPTER NO 3.
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3.1 scope
Online Trading is an internet based investment activity which eliminates the association of a
broker. Anyone who has a computer, enough money to open an account and reasonable financial
history has the ability to invest in the market. Nowadays there are many online trading
companies working as portals for the biggest stock houses like the National stock exchange and
the Bombay Stock Exchange.
The person has to get registered with the online trading portal and get into into an agreement
with the company to trade in different kinds of securities by accepting the terms and conditions.
The online trading portals are connected to the stock exchanges and the assigned banks.
Such online portals offer the trader an opportunity to check live online stock prices which they
can either check through mail or the interface. Also ample amount of research data is provided
which helps the user make their own decisions as to whether to invest in a particular stock or not.
The online trading companies allow the users to invest in a number of financial products and
services like equities, mutual funds, life insurance, loans, share trading, commodities trading,
institutional trading, general insurance and financial planning.
Due to this invent, the market has become more accessible, but that doesnt mean that it should
be taken lightly.
When you trade online, you use the services of an online broker. You use actual money, but
instead of talking to the broker about which investments to make, you yourself decide which
stock to buy since you have resource to the online stock prices.
Thus online stock company not only acts as a portal, but also as a broker and offers you to
maximize your returns in the most efficient manner.
3.2 Online stock trading in India
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In 2007,Nidhi walia and Ravinder kumars research report examined theinvestors preference
for traditional trading and online trading, investors perception on online trading and comparing
current usage of online trading andoffline trading. This study reveals that out of every 100
investors only 28 tradeonline, which points out a question as why investors were not able to
realize theimportance of technology in stock trading.Online trading has gained momentum from
just 0.5% of total tradedvolumes 5 Years back, which now accounts for 5% of the total trading
volume of approximately Rs 14000 Cr on NSE. Over the past 2 years, the value of all
tradesexecuted through internet on NSE has grown from less than Rs 100 cr in June2003 to over
Rs 700 Cr in June 2005.The major findings of the study are that Indian investors are
moreconservative, they do not change easily and indian traditional traders still choose brokers for
trading ,whereas net traders are more comfortable with online tradingfor its transparency and
complete control of the terminal.
3.3 Understanding and managing customers perceptions
In September 2006, Effective executive special edition speaks aboutunderstanding customers

perception to get a distinctive competitive advantage inthe market.Internet trading in India is
discussed in chapter 11,Dalal street journals stock market book, which highlights the
introduction to online trading, advantages anddisadvantages of it and value added services
provided by online trading service providers.
Trading:
Trading is defined as buying and selling shares in stock exchange. There are twotypes of
trading i.e. Online trading(via internet) and Offline trading(via broker or call).
Online Trading:
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Online trading refers to trading via the internet .The onset of online tradingchanged the
traditional value proposition of trading ,allowing online brokers tosupply investors with rich
,interactive information in real time including marketupdates ,investment research and robust
analytics. The result is an integratedtrading experience that combines execution with interactive
analysis shown by thegrowth of the online customer community from a mere 23000 average
trades on NSE per day in a year 2000 to over 52000 average trades in 2002
CHAPTER NO 4.
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Customer relationship mangement
CRM customer relationship management has existed since people first started selling
things. The first shopkeeper who stopped to chat with his customers, who remembered their
names, and perhaps gave them a small freebie for continually using his services, was practicing
a form of customer relationship marketing by making customers feel special. He was also
probably seeing the favourable impact on his bottom line. Today, with businesses becoming more
digitally remote, and person-to-person contact becoming more scarce, CRM is more important
than ever. We need to build and maintain relationships with our customers. A faceless company is
not personable or engaging - it has to work harder to fill the gap between attracting and retaining
customers (and their good will). The relationship a customer builds with a company is often the
reason they return but building it today is more difficult than ever, in a society where data is
protected, customers are smart and exercise their right to choose, and a competitor can be just a
click away. CRM is a customer-focused approach to business based on fostering long-term,
meaningful relationships. CRM is not about immediate profit. Its about the lifetime value of a
customer the purchases they will make in future, the positive word of mouth they will generate
on your behalf and the loyalty they will show your brand. Effective CRM enables businesses to
collaborate with customers to inform overall business strategies, drive business processes,
support brand development and maximise ROI. There is a truism that a happy customer tells one
person, but an unhappy customer tells ten. With your customers voices being heard on blogs,
forums, review sites and social media, they can talk really loudly and impact your business much
more easily.
A CRM model
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Many companies that practice CRM rely on a simple model to guide them strategically in
many cases, this sums up exactly what CRM is about. Here is a simple model that demonstrates
this:
As you can see, a good CRM strategy turns strangers into customers, customers into friends, and
friends into advocates for your business.
Understanding customers
Customers can be seen as the most important stakeholders in a business. Without customers
purchasing goods or services, most businesses would not have a revenue stream. But it can be
difficult to shift from realising this important fact to implementing it in day-to-day business
decisions and strategy. A successful relationship with a customer is based on meeting or even
exceeding their needs. It is in determining what problems the customer has, and in providing
solutions, sometimes before the problem occurs. It depends on continually giving the customer a
reason to transact with your company above any other. CRM should not only mean
implementing customer-centric processes and consider technology, but embracing customer-
driven processes. Through innovations in digital technologies, enhanced customer engagement
and the introduction of mass personalisation, the customer can often drive the business.
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Consumer touchpoints
Consumer touchpoints are all the points at which brands touch consumers lives during their
relationship. This is the starting point for all CRM a brand needs to speak with one voice across
all of these touchpoints and deliver a rewarding experience every time it interacts with its
customers. Touchpoints can be brand initiated (for example, a brand sending an email
newsletter) or customer initiated (for example, the customer making a purchase in a store).
People dont start out as customers; they begin as prospects people who merely view a
businesss offering. Once a prospect has expressed interest, CRM can help to convert them into a
customer. Some people will always shop on price they need to be converted to loyal customers.
Here brand perception and service are often the differentiators. Consider the prospect who walks
into a car dealership and is given outstanding service. In this case, CRM in the form of an
aware and trained sales force can help turn a prospect into a customer.
A consumer touchpoint can be as simple as a print or banner ad. It can also be as multifaceted as
a conversation between a call centre agent and a customer. It can be a timely tweet, or an
outbound email giving the customer details about their account. Even statements and bills are
touchpoints and need to be managed carefully to ensure that the brand continues its
relationship with the customer successfully.
CUSTOMER TOUCHPOINTS CAN GENERALLY BE DIVIDED INTO THREE

SPHERES OR PHASES
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1. Pre-purchase or pre-usage covers
the various ways brands and prospects interact before the prospect decides to conduct business
with a company. The brands goals here are to:
Gain customers
Heighten brand awareness
Shape brand perceptions to highlight the benefits it offers over competitors
Indicate how the brand provides value and fulfils the needs and wants of consumers
Educate consumers about products and services
2. Purchase or usage covers
the touchpoints at which the customer decides to purchase a product, use a service or convert
according to set criteria, and initiates the brand-customer relationship. The key goals are to:
Instil confidence
Deliver value
Reinforce the purchase decision
Heighten brand perceptions
3. Post-purchase or usage covers
all the post-sale interactions between the brand and customer. Now, the brand wants to:
Develop a relationship
Maximise the customer experience
Deliver on the brand promise
Increase brand loyalty
Remain top of mind
Invite repeat purchases
Customer loyalty
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The main objective of any CRM strategy should be to gain customer loyalty over the long term.
But what is loyalty? This may mean different things for different organisations. Ultimately, it is
about acquiring and retaining customers who:
Have a projected lifetime value that makes them a valuable prospect to your business
Buy a variety of your products or use your services repeatedly during their time as a
customer
Share their positive experiences with others
Provide honest feedback on these products and services, and their experiences
Collaborate with you on ways to improve their experiences
CRM and data
data is central to the success of CRM initiatives. Knowing who your customer is and what they
want makes a CRM strategy successful. Data gathering can begin even before your prospect
becomes a customer. Matching a prospects profile to the product or offer is the first step. But
data on its own is meaningless if it is not analysed and acted upon. Through analysis, data can be
turned into insights, which can then inform the various CRM processes and, indeed, the business
itself. Data should be used to drive consumer loyalty across all possible touchpoints. Consider
the consumer who shops on her store card at a retail outlet. Her transactions are recorded against
her card she is sent offers that detail the latest fashion trends and earns points on her card
shopping for these. At some point, her transactional data shows that she has started shopping for
baby clothes she can now be cross-sold products to do with babies, and rewarded with double
points when she buys them. Now she is upping her spend in the store, cross-shopping for both
herself and her family and being rewarded for this, thus ensuring that the retail outlet is offering
her value and retaining her business.
A. Customer data
A good CRM programme begins with data. Who are my customers and what do they want?
Why did they choose me in the first place? How many of them are active, and continue doing
business with me? Why do the others stop? Often, you will need to research this information. If
the company has a database, conducting surveys, focus groups or dipstick telephonic research
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can help you get an idea. Consider that an Audi Q7 driver is vastly different to an Audi A1 driver,
for instance. They both pick the brand for the same reasons, but their motivations behind
choosing the products vastly differ. Data can give you these insights. It can enable a company to
create real value for the customer and thereby gain true loyalty. There is little point in running a
customer insights survey, looking at the results and saying thats interesting without putting
into action any changes suggested by the results. It also means customers are less likely to take
part in surveys going forward, and quite rightly so whats in it for them? Conversely, if you do
action changes, customers will feel increased ownership in the brand and its offering. The actual
database in which you choose to gather and collate data is also crucial. Remember that there are
many facets to CRM, and the quality and accessibility of the data will have a major impact on
how well these processes run. When looking at data, it is essential to keep in mind the Pareto
principle. The Pareto principle, or 80/20 rule, holds that in many situations approximately 80%
of profits are delivered by 20% of customers. Also keep in mind that 20% of customers are
responsible for 80% of problems related to service and supply (Koch, 2008). This means
designing solutions with efforts directed at the 20% of customers who generate the most profits.
To do this, you should segment customers effectively.
Youll also want to consider the exact data to collect. While this will depend largely on your
business objectives, here are some considerations:
Information should be commercially relevant.

Capture additional contact details from the customer at every interaction on purchases,
contracts, negotiations, quotes, conversations and so on.
Capture any information you send out to the customer.
Consider anything that adds value to the relationship.
B. Traditional CRM
system data Most traditional CRM systems are used to capture data for sales, support and
marketing purposes. On top of simply creating a central repository for data access, these systems
and their related databases also offer basic analytics. The actual range of data collected within the
traditional CRM system is dictated by the CRM objectives. For instance, data could include:
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Demographic details on potential leads, current leads and contacts, such as age, gender,
income, etc.
Quotes, sales, purchase orders and invoices (transactional data)
Psychographic data on contacts such as customer values, attitudes, interests, etc.
Service and support records
Customer reviews or satisfaction surveys
Web registration data
Shipping and fulfilment dates, such as when orders were shipped and delivered
C. Data mining
Data mining involves analysing data to discover unknown patterns or connections. It is

usually conducted on large datasets and looks for patterns that are not obvious. Data is analysed
with statistical algorithms that look for correlations. It is used by businesses to better understand
customers and their behaviour, and then to use this data to make more informed business
decisions. For instance, women might traditionally be shopping for nappies during the week. But
on the weekend, men become the primary nappy-shoppers. The things that they choose to
purchase on the weekend, such as beer or chips, might dictate different product placement in a
store over a weekend.
D. Analytics data
Analytics data is generally captured through specialised analytics software packages.

These packages can be used to measure most, if not all, digital marketing campaigns. Web
analytics should always look at the various campaigns being run. For example, generating high
traffic volumes by employing CRM marketing tactics like email marketing can prove to be a
pointless and costly exercise if the visitors that you drive to the site are leaving without achieving
one (or more) of your websites goals.
E. Social media monitoring data
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There are many social media metrics that are important to monitor, measure and analyse,
and some of these can provide valuable insights for CRM implementation. This can cover
everything from quantitative data about number of fans and interactions, to qualitative data about
the sentiment towards your brand in the social space.
CRM loyalty programs
There is a difference between CRM and loyalty programmes often loyalty programmes actively
seek to maintain customers by rewarding them with a hard currency, like points. Loyalty
programmes are designed to develop and maintain customer relationships over a sustained period
of time by rewarding them for every interaction with the brand for instance, you may earn
points on a purchase, for shopping on certain days, completing a survey, or choosing to receive a
statement by email.
Consider health insurer Discovery and their Vitality program: it aims to keep customers healthy
by rewarding them for health-related behaviours like exercising, having regular check-ups,
stopping smoking and buying fresh foods. By doing so, it reduces the burden of ill-heath on the
medical aid itself.
Not all loyalty programmes are created equal. Many brands have embraced them as a way to
improve their sales, and consumers have come to believe that they are simply a way of extorting
more money from them.
To create an effective loyalty programme, consider the following:
Carefully calculate the earning and redemption rates of points a loyalty programme
needs to give the appearance of real value, while working within the companys profit
projections
Loyalty programmes are about engagement you need to find a way to partner with the
customer
Rewards are key to success you need to reward the customer in a way that is real and
desirable
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Customer care is important technology allows for effective real-time conversations

Data is central to success you need to maintain accurate records in one central place
Digital allows for innovation this can apply to new payment technology, digital
communications channels and more
Trust is pivotal to success customers need to know that their data is being protected and
that you will honour your commitments
Loyalty programmes are not quick wins consider up-front how the programme might
come to a close or you risk alienating and disappointing customers and undoing any
positive results
A cost perspective decreasing the amount you spend on customers; it costs more to
attract a new customer than maintain an existing one
A sales perspective turning the people who know about your service or product into
people who have made a purchase
A service perspective ensuring people who have interacted with you are satisfied and
delighted.
Social CRM and support Social
customers are increasingly turning to social media channels for support. With the immediate
accessibility offered through mobile devices, they see this as a convenient channel to
communicate with brands. This means that brands need to respond quickly and transparently to
consumers questions, gripes and even compliments. A support query going unanswered on
Twitter, for instance, is likely to cause frustration for the consumer, and prompt them to take a
situation that is already visible to other consumers even further, potentially causing a brand
crisis.
Brands should carefully consider whether all social media channels are appropriate for them, and
be prepared for any eventuality. Brands that are well liked will generally have positive responses
on social media, those that receive a mediocre response from consumers will have a bit of a
mixed bag, but those that have a lot of support issues are likely to experience very large numbers
of complaints that need to be addressed.
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Social support staff should have access to all the historical data relating to customer issues such
as all the data collected about previous complaints and reference numbers. In this way, they can
respond directly to the consumer in the social channel that theyve selected and escalate the
problem appropriately.
Step-by-step guide to implementing a CRM strategy
Step 1 Conduct a business needs analysis
A major part of determining where to begin with a CRM implementation is having a clear
understanding of the business needs, and where CRM would most benefit the organisation. CRM
touches on sales, marketing, customer service and support both online and offline. Its important
to review the needs of each business area so that you can determine your strategy for CRM.
Ideally you should have individual goals for each department and all members within the
organisation should buy in to the strategy in order to drive it successfully, from the highest rank
to the lowest. Implementing successful CRM across the organisation is a process, with
stakeholders making decisions collectively and sharing their views and needs. Decisions should
be based on realistic budgets and resources and full calculations carried out before any kind of
loyalty currency is decided upon.
Step 2 Understand customer needs CRM is about the customer.
You might have identified a range of business needs, but what about the needs of the
customer? Two elements of CRM in particular service delivery and customer support are
actually all about meeting the needs of the customer. And whats the best way of determining
customer needs? By asking them, of course. There are various ways to find out what customers
want, but in all of them, it is important to listen. Use online monitoring tools and insights from
social media to gather a more rounded view of what your customers think, feel and want. Look at
past behaviour, churn rates, successes a detailed data mining exercise could also be on the
cards, as you will need to understand which of your customers is the most valuable and why.
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Step 3 Set objectives and measurements of success
CRM is a long-term commitment and you need to consider a long-term approach.

Depending on the business needs, your objectives and success measures could include:
Increasing customer numbers

Increasing profitability per customer
Increasing market share
Improving responses to campaigns
Raising customer satisfaction
Improving end-to-end integration of the sales process cycle The metrics you select for
measurement will depend on these objectives. There are numerous metrics that you can choose
from when measuring your performance, and the actual metrics you choose are generally
referred to as your key performance indicators (KPIs).
Step 4 Determine how you will implement CRM
Once youve identified all of the objectives of your CRM implementation, you will need
to determine how you are actually going to roll it out. What channels will you use? What
touchpoints will you leverage? What data will you need for this? And what tools will you need to
gather this data and implement your initiatives across these channels? How will you address the
shift and communicate with your internal stakeholders before you launch the initiative to your
external ones? You will need to make choices based on what is available to you, or what you
intend on embracing. The digital space offers a range of innovative spaces for CRM delivery;
you simply need to get creative in your execution.
Step 5 Choose the right tools
There are lots of excellent CRM tools available, but these are useless without a clear
CRM strategy in place. You can only select your tools once you know what your objectives are,
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what touchpoints and channels you are going to utilise and what data you need to collect and
analyse.
CHAPTER NO 5.
5.1 Eight Factors That Influence Daily Trading
There are a number of things that can affect an investors entry (buy) into or exit (sell) out of
a given stock and/or sector. Depending on the investor and his or her goals and investing time
frame, the importance of timing the entry will differ. Obviously, the shorter the time frame the
more important the entry; specific entries matter little to long-term (five years or more) investors.
All investors should be aware of some of the more common market moving influences that can
affect a stocks price, so they can make better entries and catch an extra percent or two in return.
Lets take a look at eight items that can materially affect the average days trading.
I. Overseas Market/Economic Action
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The New York Stock Exchange opens for business at 9:30 a.m. EST each day. However,
prior to the opening trade on the NYSE, equity markets in Asia and Europe have already (or
almost) finished their trading day. The point is, if certain stocks and/or sectors have had a
particularly good or bad day in those markets, the sentiment could have an impact on trading
here in the U.S.
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For example, a pessimistic outlook for technology companies in Asia or pharmaceutical

companies in Europe could easily spill over into U.S. trading and cause American technology
and pharmaceutical stocks to take a nosedive. This in turn has a major adverse impact on all of
the major indexes. If you see major negative activity in a foreign market that affects your sector,
it might be best to wait until the dust settles before you enter the position. This will often save
you some money right from the start.
II. Economic Data
If there is talk that China may revalue its currency (the yuan), then it may cause shares of
exporters to China to trade higher. (The logic behind this is that Chinese companies and
individuals will be able to afford more U.S.-made products with a higher yuan.)
Incidentally, interest rate changes can also cause money to flow into and/or out of certain
markets. For example, as interest rates in the U.K. rise, investors in that market may flee for
better opportunities. Often, U.S. stocks will reap the benefit. (Read more about interest rates
in How Interest Rates Affect The Stock Market and Trying To Predict Interest Rates.)
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In choosing when to invest, you should be aware of any economic news that is or will be coming
out around the time you go to enter your position. If a highly anticipated economic release is set
to come out that may lead to market volatility, it might be best to wait for its release instead of
jumping in beforehand.
III. Futures Data
Although an individual might be eager to buy or sell stock at the open at a favorable
price, futures data will give the individual a better idea of whether that will actually be
possible. Index futures cover the major market indexes. They start trading before the stock
market and are a very good indicator of what the stock market opening will look like. The reason
for this is that index futures prices are closely linked with the actual level of the Dow Jones
industrial average (DJIA). (To learn more, read Are ETF Futures The Wave Of The Future?)
In short, investors should check to see if futures contracts are trading higher or lower in pre-
market trading. This will give them a better feel for where the index they are tracking might be
headed after the open. You will usually find CNBC or other market outlets talking about the
movement of DJIA or S&P 500 futures before they open.
IV. Buying At The Open
Buying or selling stock at the open of the market might not be a good idea. Why?
A lot of buying and/or selling typically occurs within the first hour of the trading day. The
opening hour of trading is basically the first time that most market participants have to enter or
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exit the stock, which can easily produce higher than average trading volume. These market
participants are reacting to the myriad news stories that came out between yesterdays close and
todays open, which includes major market news events like economic reports and political
changes.
Prior to the open, a handful of bellwether stocks report earnings or disseminate news. This can
cause some investors (both retail and institutional) to rotate money in or out of a sector at the
first chance they get, creating a mad rush at the open.
V. Midday Trading Lull
There is typically a drop-off in trading (meaning the volume of transaction) at noon, as

most of the major news events are out in the market. During this lull, stock prices can often lose
some ground.
When this happens, stocks can be purchased at a cheaper price at 1 p.m. than they could at, say,
11 a.m. Again, this is important to know, as this can affect both entry and exit points.
VI. Analyst Upgrades/Downgrades
An analyst may disseminate an intraday note that can have a significant impact on a given
stock and/or sector. As a tip, remember to scan financial Web sites or watch business reports on
television. If a large company has just been upgraded or downgraded, try to judge the potential
impact on certain industries and the market as a whole.
For example, if a major semiconductor stock was downgraded by a well-known analyst due to
slackening demand for that companys products, it might be reasonable to assume that other
smaller players may be experiencing similar trends. It might also be logical to assume that shares
of computer makers (which purchase large numbers of semiconductors) might be affected as
well. (To read more on analysts impacts on stocks, see Mad Money Mad Market?, What
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To Know About Financial Analysts andForecasts Can Spell Disaster For Some Stocks.)
Also, if a major home builder was upgraded due to strong demand for its homes, it is reasonable
to assume that other sizable players within the industry (which have the same geographic
footprint) may be experiencing a similar increase in demand. By extension, the increase in
demand for new homes could mean big business for home improvement stores and/or furniture
makers.
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VII. Web-Related Articles
The Internet has transformed the way people invest, as well as the way the public at large
obtains news. Therefore, if a Web writer or journalist disseminates a bullish or bearish article
about a company throughout the trading day, this can have a huge impact on its stock.
All investors should try to peruse the Web and visit major news portals throughout the day, to see
if there are any potentially market-moving news stories in the public domain. Be careful to avoid
sites that give recommendations based on the stocks they own. These pump-and-dumpschemes
are prevalent on the Web. (For more information on online scams, see our Online Investment
Scams Tutorial.)
VIII. Friday Trading
Even if youre a buy-and-hold investor, a significant number of retail and institutional

traders typically liquidate their equities on Friday (usually in the afternoon), so they dont have
to hold their positions and assume risk through the weekend.
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What does this mean for you? It means that stocks can and often sell off Friday afternoon during
the last few hours of the trading day, if for no other reason than traders are looking to go home
flat (without positions on their books). Keep this in mind on Fridays if you are trying to find a
favorable time to enter or exit a stock position.
5.2 Models Of E-Commerce

1) Ban on e-commerce as a sales form
The growing importance of the retailers omnichannel strategies13 shows the interdependence
between online and offline sales channels. Technically, it is feasible to sell online any product, which is
also available in brick-and-mortar stores.14 There may be commercial reasons for not doing so, especially
for luxury goods,15 but we have found only a few examples of EU States restricting the online sales of
goods and services that are otherwise legally available in real life. In our survey from 2011, we
identified a number of such bans on e-commerce as a sales form.16 Those concerned the online sales of
pharmaceuticals in Germany, contact lenses in Hungary and the provision of gambling services in the
Netherlands. All cases were subject to review by the European Court of Justice (the EU Court) which
acknowledged that the distribution of some of these goods and services may, under certain conditions, be
banned from the internet.17 Below is an update on the status of the restrictions examined by the EU
Court. We also discuss a current proposal to partly ban the online sales of alcohol products in Sweden and
a sales ban on tobacco products in some EU States.
2) Ban on the online sales of certain drugs
In the EU, the sale of drugs has traditionally been reserved to pharmacies. The exclusive rights of
licensed pharmacists were considered as a prerequisite to guarantee the safety of the consumers.
However, the development of internet-based pharmacies and the possibility to sell online medicines cross-
border forced most EU countries to adjust their legislation. The responses varied between EU States, with
some countries banning all online sales while others adopted a more liberal approach. The disparities
between different national rules resulted in a fragmented market and difficulties in the online cross-border
sales of drugs. The EU Court addressed this issue in a 2003- judgment related to the online sales of drugs
by a Dutch operator in Germany which at the time was subject to a general prohibition on the mail-order
trade in medicines. In its ruling, the EU Court held that EU States may impose a ban on the online sales of
prescription drugs as long as this is moti - vated on the grounds of public health. The EU Court also stated
23
that no such ban may in principle apply to over-the-counter (OTC) drugs. Since that ruling, a number of
EU countries have legalised the online sales of OTC drugs,18 and, in some cases, also for prescription
drugs.19 We have found no evidence of EU States which still ban the online sales of non-prescription
drugs.20 Cases of abuses due to the selling of outdated or counterfeit medicines by illegal operators have
led to discussions on the risks posed by the online trade in pharmaceuticals. In some countries, a ban on
the online sales of OTC drugs has been debated.21 But as far as we could see, the public authorities in the
EU are looking for a way to regu - late and control such trade and inform consumers about possible risks,
rather than forbidding the activities of online pharmacies.
3) No ban on the online sales of contact lenses
Striking a balance between free movement and consumer protection was also a key issue in the
discussions on the legality of an online sales ban for contact lenses. The ban in place in Hungary was
quashed by the EU Court in 2010. In its ruling, the EU Court made it clear that the protection of the
health of consumers did not justify a general measure such as a prohibition to sell contact lenses online.
Although a number of restrictions may remain in force in the EU, such as who is qualified to sell contact
lenses online or under which conditions, to our knowledge there is no such ban in place.
4) Ban on the provision of online gambling services
Although the gambling sector is highly profitable, with revenues of over 80 billion a year in the EU,22
it is still a fragmented market. The EU lacks a uni - form view on the risks posed by the gambling
industry. Whereas some EU States (the UK and Malta) have opened their markets to competition, others
are concerned with the threats associated with gambling such as addictions that may lead to excessive
indebtedness and the risks of fraud and criminal activities. Some EU States have restricted gambling
activities, often by limiting the possibility to provide gambling services and in some cases by granting
exclusive rights to local operators.23 In countries where gambling activities are reserved to national
monopolists or license-holders, a debated issue concerns the way to deal with competition from foreign
online gambling operators. In 2010, the EU Court shed some lights on this issue in a ruling that
acknowledged the right of the EU States to ban the online provision of gambling services under certain
conditions. According to a study from the European Commission in 2012,24 one can now distinguish
between different national approaches in respect of online gambling. First, a number of EU States have
banned the online provision of certain gambling activities (such as Germany and the Netherlands).
Meanwhile other countries that have imposed a monopoly on online gambling activities (such as Finland,
Sweden and Portugal) where foreign operators are prohibited from offering their services.25 A third group
opted for a licensing regime (e.g. Denmark, France, Italy and Spain) and in some cases recognise licenses
24
delivered in other EU States, hence allowing cross-border trade in gambling services.26 Finally, the
Commissions report notes that a few EU States still lack rules on online gambling services (e.g. Ireland
and Lithuania).
5) Partial ban on the online sales of alcohol products
In most EU countries, it is as easy for a consumer to buy a bottle of wine online as it is in a

supermarket. However some of the Nordic countries have long-standing restrictive alcohol policies which
are at odds with most of their European neighbours. In Finland, Norway and Sweden the sale of alcohol
products is reserved to State-owned retail monopolies. Those monopolies are facing competition from
online retailers established in other EU States which could ultimately jeopardise the restrictive alcohol
policies in the Nordic countries. In Sweden, for instance, the consumption of alcohol bought online,
although still marginal, has grown exponentially in the past years.27 In that respect, the EU Court held in
2007 that Sweden may not prohibit private persons from importing alcoholic beverages from other EU
States as this would be in breach of the EU rules on free movement of goods.28 That ruling led to a
number of Swedish operators setting up websites to mediate between consumers in Sweden and vendors
of alcohol products in other EU States. The development of this online intermediation industry was
considered by the Swedish authorities as a threat on the countrys alcohol policy. The Swedish
Government therefore commissioned an inquiry which, in the summer of 2014, proposed to ban
commercial mediation (other than transportation services) between buyers and sellers of alcohol
products.29 According to that inquiry, similar bans on online commercial mediation are in place in
Finland and in Norway. The Finnish regime is currently subject to a legal review by the EU Court.30 The
outcome of that case may have consequences for the Finnish and Norwegian regimes as well as for the
Swedish proposal.
6) Ban on the online sales of tobacco products
The ban on the online sales of tobacco products is special in that it is explicitly allowed under the
newly-adopted EU Tobacco Directive.31 According to the Directive, cross-border distance sales of
tobacco products could facilitate access to illegal tobacco products (e.g. not complying with health
warnings and ingredients requirements) and may lead to an increased risk that young people would get
access to tobacco products. An additional problem with online sales of tobacco products is the risk of
smuggling products which are heavily taxed in many EU countries. In 2009 France adopted a law
25
prohibiting all online sales of tobacco products32 and we understand that a similar ban is also in place in
Austria.
CHAPTER NO 6.
6.1 What are the advantages and disadvantages of Online Trading

Due to the problems that arose during paper shares, there was a need of a system that would
make share transfer, buying/selling of shares, etc. an easier affair.
Therefore in 1996, the Indian parliament passed the Derivatives act, which allowed online
transaction of shares, thus making it much easier for the broker and investor.
In the new online Trading system, an investor must open a demat account with one of the Stock
Brokers to start trading online.
A demat account is a must for an investor to trade online.
Mentioned below are some of the advantages of trading online:
i. Easier and convenient way to own shares

ii. Immediate transfer
iii. Zero stamp duty on transfer of shares
iv. Safer than paper shares, e.g., fake signatures, delay, thefts, etc.
v. Lesser paperwork for transfer of securities
vi. Less transaction cost
vii. No odd problems. Even a single share can be sold.
viii. DP registers a change in address with all companies. No need for the investor to contact
the companies immediately.
ix. DP transmission of securities, thus eliminating the need of notifying the companies.
x. Automatic credit in demat accounts
xi. Both equity and debt instruments can be held by a demat account
The depository system aids in reducing the expenditure of new issues due to lesser printing
and distribution costs. It increases the efficiency of the registrars and transfer agents and the
26
secretarial department of a company. It provides better facilities for communication and timely
service to shareholders and investors.
The disadvantages of online trading are mentioned below:
a) Investors, who are trading for the first time, go with the flow and get immersed in
technology and actually temporarily forget that they are actually using their real money.
b) There is no relationship that of a mentor between a professional broker and an online
trading account holder, thus leaving the investor on his own to make choices of the right
shares.
c) Users who are not familiar with the ins and outs of the basics of brokerage software can
make mistakes which can prove to be a costly affair.
d) This is like any other financial strategy, where your commitment to online trading takes
research and dedication to make sure by yourself that everything is up to par. You have to
take time out to do your own research where you will have to overcome a great learning
curve to make some money from online trading a possibility.
6.2 Money Laundering

Money laundering legislation restricts cross-border trade Money laundering legislation may
render online payments via payment service providers problematic in the case of cross-border
transactions. In our 2011 study, we noted that the EU rules on money laundering95 impose an
obligation on financial intermediaries to conduct customer due diligence. In practice, this means
that payment service providers need to verify a new customers identity. Whereas the payment
service providers have access to national databases and standardised procedures that facilitate
such verification for local transactions, they may have to request paper copies of identification
documents in the case of customers who reside in other EU countries. One Swedish operator
contacted by the Board in 2011 mentioned that this administrative burden may have a deterrent
effect on foreign customers, especially when the transaction concerns small sums. To the Boards
knowledge, the problem identified in our earlier study remains to this day. The European
Commission recently proposed to amend the EU rules on money laundering without addressing
this issue.
27
CHAPTER NO 7.
Case study
Forex Trading in India Legal or Illegal A Critical Analysis
I requested Aalma Edwards(Finanical Blogger) to analyze and present a case study on Overseas
Forex trading from India and its legality in India. Here is her first guest report over forex trading
in india.
In India, Foreign Exchange or Forex trading is not allowed. If someone is found trading Forex
instruments on the forex market by the Reserve Bank of Indias representatives, he/she is
immediatelycharged of violation of law. Hence it is legally a crime to involve in Forex trading
and the chargesof the crime areimprisonmentin jail in this country. Theoffence is considered
immense, the prediction of intensity can be deduced from this fact that it has been labeled to be
non-bailable.
However it is legal to trade forex with Indian Exchanges like NSE, BSE, MCX-SX where they
currently offer 4 pairs(USDINR, JPYINR, GBPINR, EURINR) in Derivatives (Futures and
Options Segment). So if you are trading with Indian Brokers whom have membership with the
above mentioned Indian Exchanges it is perfectly legal.
And Also it is perfectly legal for

Indian Retail traders to invest in
overseas equity markets. But margin
trading in overseas is suppose to be
illegal as per RBI regulation
guidelines.
Evidences of the Issueof illegality of Forex Trading
28
Thisis a confirmed finding based on a news report published in Indian Times, in

April 2011. As per the report the author narrated that the illegal nature of forex trading has been
confirmed by five private sector and public sector banks.
Forex Trading and Corporations
The reports issued by the banks on this evidences also said that only corporations are allowed to
trade but the conditionality for the corporations is to use only free dollars from their reserves.
Free dollars usage means that they are not allowed to convert the Indian currency to dollars and
then use those converted dollars for trading. Moreover they are conditioned to stick to a leverage
of less than ten times.
Forex Trading and Individual Traders:Reports of RBI
Individualsare strictly forbidden from electronic and internet based foreign trading. The reason
being it brings high returns to them but at high charges-the imprisonment charges.
The individual traders at India have also been warned by the RBI against the online trading
portals which offer these alluring outcomesof high gains but do not reveal to the traders that they
are trapping themselves in an illegal activity considered by their state.
RBI also published a circular that reported certain agents who contacted the traders and urged
them to invest in forex trading to earn huge profits. In this retrospective many of the individuals
became trapped to this illegal dealing. Moreovermost of the trading done trough theseinternet
portals had a very huge leverage.
RBI revelations of additional findings and actionagainst fraudulent agents
An additional finding revealed by the RBI was that the public was asked to pay these marginal
payments for the trading transactions through their bank account deposits or debit cards. And
then the accounts to which the money was being paid were of the same agent but they were
opened in many different banks. Therefore the RBI issued a special instruction to the commercial
banks of the country to be very careful in sorting out such accounts.
29
RBi clarified that if any such person is caught, then strict action would be taken against him/her
under the FEMA, 1999, contraventions. In addition he/she would also be considered liable for
violations of the KYC policy and money laundering standards. And all the transactions which
have been declared non-permissible under FEMA are also not allowed. These transactions also
include any transactions related to foreign currency, remittances marginal trading or exchanges.
30
CONCLUSION
Online trading has been proved to be the future of bulls and beers industry. Online services offer
customers a splendid display of benefits such as enhanced control, ease of use and reduced
transaction charges.
As a trader, you can be your own boss, set your own schedule, work from home and have the
opportunity to reach unlimited income potential. While it is easy to get into trading, it is
challenging to become a successful trader. Its like football: its easy to get out on the field and
toss the ball around, but its a whole other ball game (no pun intended) to become a pro player.
Like the football player, you have to put in your time if you want to be successful.
Trading as a business, and not as a hobby, is a long-term endeavor that requires continual
learning, evaluation and adaptation. When approached as a business, trading can be an exciting
and rewarding venture.
Consequently , online services have grown rapidly and have emerged as a leading edge of
service industry.
31
RECOMMENDATIONS
Always Use a Trading Plan

Treat Trading Like a Business
Use Technology to Your Advantage
Protect Your Trading Capital
Become a Student of the Markets
Risk Only What You Can Afford to Lose
Develop a Trading Methodology Based on Facts
Always Use a Stop Loss
Know When to Stop Trading
keep Trading in Perspective
Understanding the importance of each or these trading rules, and how they work together,
can help traders establish a viable trading business. Trading is hard work, and traders who have
the discipline and patience to follow these rules can increase their odds of success in a very
competitive arena.
BIBLIOGRAPHY
32
http://www.marketcalls.in/forex/forex-trading-in-india-legal-or-illegal-a-
critical-analysis.html
http://www.kommers.se/Documents/dokumentarkiv/publikationer/2015/Publ
-online-trade-offline-rules.pdf
http://stockmarket-topserchablekeywordslist.blogspot.in/2012/05/what-are-
advantages-and-disadvantages.html
http://www.articlesbase.com/finance-articles/the-scope-of-online-trading-in-
india-1095803.html
http://www.forbes.com/2007/08/29/market-timing-djia-pf-education-
in_gc_0829investopedia_inl.html
33

A Study On The Consumer Perception of Online Trading

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A STUDY ON THE CONSUMER PERCEPTION OF ONLINE TRADING

Covering different aspects of consumer perception of online trading.

1.2 Scope of data

1.3 Research methodology

In the following discussion, we will briefly explain

3.2 Online stock trading in India

3.3 Understanding and managing customers perceptions

In September 2006, Effective executive special edition speaks aboutunderstanding customers

Customer relationship mangement

CUSTOMER TOUCHPOINTS CAN GENERALLY BE DIVIDED INTO THREE

1. Pre-purchase or pre-usage covers

2. Purchase or usage covers

3. Post-purchase or usage covers

CRM and data

Information should be commercially relevant.

Data mining involves analysing data to discover unknown patterns or connections. It is

Analytics data is generally captured through specialised analytics software packages.

E. Social media monitoring data

CRM loyalty programs

To create an effective loyalty programme, consider the following:

Customer care is important technology allows for effective real-time conversations

Social CRM and support Social

Step-by-step guide to implementing a CRM strategy

Step 1 Conduct a business needs analysis

Step 2 Understand customer needs CRM is about the customer.

Step 3 Set objectives and measurements of success

CRM is a long-term commitment and you need to consider a long-term approach.

Increasing customer numbers

Step 4 Determine how you will implement CRM

Step 5 Choose the right tools

5.1 Eight Factors That Influence Daily Trading

I. Overseas Market/Economic Action

For example, a pessimistic outlook for technology companies in Asia or pharmaceutical

II. Economic Data

III. Futures Data

IV. Buying At The Open

V. Midday Trading Lull

There is typically a drop-off in trading (meaning the volume of transaction) at noon, as

VI. Analyst Upgrades/Downgrades

VII. Web-Related Articles

VIII. Friday Trading

Even if youre a buy-and-hold investor, a significant number of retail and institutional

5.2 Models Of E-Commerce

2) Ban on the online sales of certain drugs

3) No ban on the online sales of contact lenses

4) Ban on the provision of online gambling services

5) Partial ban on the online sales of alcohol products

In most EU countries, it is as easy for a consumer to buy a bottle of wine online as it is in a

6) Ban on the online sales of tobacco products

6.1 What are the advantages and disadvantages of Online Trading

A demat account is a must for an investor to trade online.

Mentioned below are some of the advantages of trading online:

i. Easier and convenient way to own shares

The disadvantages of online trading are mentioned below:

6.2 Money Laundering

Forex Trading in India Legal or Illegal A Critical Analysis

And Also it is perfectly legal for

Thisis a confirmed finding based on a news report published in Indian Times, in

Forex Trading and Corporations

Forex Trading and Individual Traders:Reports of RBI

RBI revelations of additional findings and actionagainst fraudulent agents

Always Use a Trading Plan

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