INTRODUCTION TO THE STUDY

In stock market the trading of already listed companies stock are taken place during the time period of 9.15 am to 3.30 pm on every working day. These securities are issued by the government government bodies semi! public sector undertakings and companies for

borrowing funds and raising resources. "ecurities are defined as any monetary claims #promissory notes or I.$.%& and also include shares debentures bonds and etc. if these securities are marketable as in the case of the government stock they are transferable by endorsement and alike movable property. They are tradable on the stock e'change. "o is the case shares of companies. %nder the "ecurities (ontract )egulation *ct of 195+ securities, trading is regulated by the (entral -overnment and such trading can take place only in stock e'changes recogni.ed by the government under this *ct. *s referred to earlier there are at present such recogni.ed stock e'changes in India. /ombay "tock 0'change #/"0& 0'change 3yderabad #1"0& are national and /hubaneswar madras 1ational "tock 2elhi (hennai

and /angalore etc. are some of the regional

recogni.ed stock e'changes of India . The above act has also laid down that trading in approved contract should be done through registered members of the e'change.

OBJECTIVES OF THE STUDY

The ob4ectives of the study are as follows5 To know the on!line screen based trading system To know about the software used for online trading purpose . To know the investors awareness label and perception towards mutual fund investment. To know the online trading mechanism

SCOPE OF STUDY:

The scope of the project is to study and know about Online Trading and investors perception towards online trading. By studying the Online Trading and Clearing & Settle ents! a clear option of dealing in stock e"change is been understood. #nlike olden days the concept of trading anually is been replaced for fast interaction of shares of shareholder. By this we can access anywhere and know the present dealings in shares.

RESEARCH METHODOLOGY
DATA COLLECTION METHODS

The data collection methods include both the primary and secondary collection methods. Primary Colle !io" Me!#o$%: This method includes the data
collection from the personal discussion with the authori.ed clerks and members of the broking house my company guide and the investors those are coming to the branch for trading purpose .

Se o"$ary Colle !io" Me!#o$%: The secondary collection

methods includes the lectures of the superintend of the department of market operations and also the data has been collected from the news maga.ines various books and websites.

First Phase:
Secondary infor ation review & desk study of e"isting literature are conducted. $ fle"ible! creative! open and dyna ic social dialogue with the staff and the project functionaries is carried out.

Second Phase:
%reli inary visits to the field! observation! interactive group interviews! and &nvestors 'iew are also conducted.

Third Phase:
Stakeholders consultation involving the project tea sensitive fra ework to guide field work. for consensus building on a

Fourth Phase:
(ata collection through )uestionnaire round.

2.1. Sampling:

Sample Size:
$ sa ple of *++ individual &nvestors was selected.

Sampling Technique,
Both stratified as well as convenient rando the study. sa pling techni)ues were used for

2.2. Data Collection:

Sa ple survey was conducted using a closed )uestionnaire. -ocused group discussions were conducted a ong the etc. provided by the individual investors e bers to cross verify

the certain critical infor ation such as individual investors savings! invest ent !

FINDINGS

6ost of the investors are investing in stock market Investors are preferring more to online trading than offline The investors are facing some problems while operating in computer Investors are also facing some problems on online software

SUGGESTION

 The broking firms and stock e'changes should conduct more awareness programs for the investors The broking companies should conduct some training program for the investor to make them familiar with the software . The broking companies should concentrate on their software while preparing it taking into consideration the computer illiterate investors.

LIMITATIONS OF THE STUDY

The study on investor,s perception is not an easy task to come out as it is believed. The main limitations of my study are5! 1. It is the s7uee.ed time boundary

8. It is not possible to obtain responses to all 7uestions which could have enable to capture the total perception of investors due to structured 7uestionnaire. 3. "ome important 7uestions which could have yielded more valuable information were deleted intentionally to increase the response rate. 9. The secondary data was insufficient.

(3*:T0) ! 8
ORGANI&ATION PROFILE
/hubaneswar "tock 0'change #/h"0& was initially incorporated on the 1;th *pril 19<9 as a (ompany limited by guarantee without having share capital with an ob4ect to facilitate assist regulate and control the business of dealing in stocks shares and like securities in the "tate of $rissa. 6inistry of =inance -ovt. of India 1ew 2elhi granted recognition to (ompany on 5th >une 19<9 under the provisions of the "ecurities (ontracts #)egulation& *ct 195+ and the )ules made there under for an initial period of five years to perform the role of a "tock 0'change. *t present the said recognition of /h"0 is being renewed by "ecurities and 0'change /oard of India #"0/I& from time to time.

3I"T$)?
Initial step was taken by the 2epartment of Industry -ovt. of $rissa and Industrial :romotion @ Investment (orporation of $rissa Atd. #I:I($A& in the early eighties to set up a "tock 0'change in the "tate

of $rissa. "ubse7uently /hubaneswar "tock 0'change was incorporated on 1;th *pril 19<9 as a :ublic (ompany limited by guarantee with an ob4ect to facilitate assist regulate and control the business of dealing in stocks shares and like securities in the "tate of $rissa. 6inistry of =inance -ovt. of India granted recognition to the "tock 0'change on 5th >une 19<9 under the provisions of the "ecurities (ontracts #)egulation& *ct 195+ for an initial period of five years. Thereafter the recognition of the "tock 0'change is being renewed from time to time by "ecurities and 0'change /oard of India #"0/I&. $n being recogni.ed during 19<9 /hubaneswar "tock 0'change admitted 1+1 member brokers in the first phase and commenced its trading operation on 8nd >anuary 1991. To impart greater li7uidity in both shares and debentures and to increase the volume of business the 0'change has e'panded its membership strength during the year 1995 by admitting ;5 more member! brokers. 3owever the status of the "tock 0'change was converted from a (ompany limited by guarantee to a (ompany limited by shares during the year 8005 pursuant to BThe /hubaneswar "tock 0'change #(orporatisation and 2emutualisation& "cheme 8005C approved by "0/I.

MANAGEMENT
The affairs of the /h"0 are managed by a /oard of 2irectors consisting < 2irectors from the following categories5 1. 8. 3. 9. $fficer 8 #Two& Trading 6ember 2irectors 8 #Two& :ublic Interest 2irectors 9 #=our& "hareholder 2irectors 1 #$ne& 2irector in the capacity #/h"0&

of

(hief

0'ecutive

:ublic Interest 2irectors 1. "hri Divekananda :attanayak I*" #)etd.& #*ppointed as (hairman of the /h"0& 8. "hri /ibekananda 6ohanty )egistrar of (ompanies $rissa "hareholder 2irectors

3. "hri E.1. )avindra )epresentative of the "hareholder of the /h"0 1ational *luminium (ompany Atd. #1*A($& 9. "hri 2eelip Eumar (houdhury "hareholder of the /h"0 5. "hri *nil Eumar :atro "hareholder of the /h"0 +. "hri Tarun Eumar *grawalla "hareholder of the /h"0 Trading 6ember 2irectors ;. "hri Thomas 6athew Trading 6ember of the /h"0 <. "hri )a4 Eumar Ehemka Trading 6ember of the /h"0 0'!officio 2irector

9. "hri 2ebara4 /iswal (hief 0'ecutive $fficer of the /h"0 B'%i"e%% o(era!io"%
/h"0 had been witnessing a good amount of volume of trading on its floor till the year 8000. 3owever with the e'pansion of nation!wide trading terminals by ma4or "tock 0'changes such as 1ational "tock 0'change #1"0& and /ombay "tock 0'change #/"0& to all most all cities of the country the business of local "tock 0'changes was shifted to 1"0 and /"0. To overcome such situation /h"0 along with other )egional "tock 0'changes #)"0s& in the country promoted a "tock 0'change namely Inter!connected "tock 0'change of India Atd. #I"0& which was set up at 1avi 6umbai to provide a nation!wide stock market to the member!brokers of all participating )"0s as well as to the investing public of the respective "tates. :resently the member!brokers of /h"0 are conducting business on the 1ational "tock 0'change #1"0& and /ombay "tock 0'change #/"0& segments through I"0 "ecurities @ "ervices Atd. #I""& subsidiary of I"0. :resent daily average turnover of member!brokers of /h"0 on the 1"0 and /"0 segment is )s.5 crores. /h"0 is e'ploring the ways as to how business on its own segment can be restored. =or this purpose /h"0 has constituted a Task =orce to study and e'amine several related facts and circumstances and to recommend measures to be taken for restoration of business.

AUTOMATION The entire trading and settlement operation was computerised since inception. 3owever the 0'change switched over to B"creen /ased TradingC with effect from 80 th6ay 199; through which the member! brokers conducted trading on line thereby bringing to an end to the old tradition of open Bout!cry systemC of trading.

OPERATIONAL INFRASTRUCTURE %pon automation of the trading activities Trading 3all of the "tock 0'change has been modernised with the latest capital market infrastructures. SETTLEMENT SYSTEM The "ettlement system of the 0'change is carried out on B2aily )olling /asisC #TF1& as per the "0/I -uidelines issued from time to time. :ay!inGpay!out in terms of "ettlement (alender are effected well in time through the (entrali.ed /anking "ystem of the "tock 0'change. (anara /ank has established a /ranch to facilitate the pay!inGpay!out operation as well as the banking transactions of the "tock 0'change and its trading members. (A0*)I1- 3$%"0 /hubaneswar "tock 0'change has its own (learing 3ouse. The transactions entered among the trading members of the 0'change are settled by delivery and payment obligations through the (learing 3ouse of the "tock 0'change in accordance with the prescribed settlement program under a (entrali.ed 2elivery and :ayment "ystem. I1T0)!($110(TIDIT? /hubaneswar "tock 0'change has played an instrumental role among others in mooting the idea of establishing of an Inter! to connected 6arket "ystem #I(6"&. This effort was resulted in establishing BInter!connected "tock 0'change of India of Atd.C provide a nationwide e7uity market through the trading members of participating "tock 0'changes. It has also facilitated the trading members of participating "tock 0'changes including /hubaneswar "tock 0'change to trade on the 1ational "tock 0'change segment. AI"T02 "T$(E"2espite introduction of "0/I 2elisting -uidelines 8003 /hubaneswar "tock 0'change continued to have listing of securities of several companies having aggregate paid!up capital of around )s.8 800 crores.

PRIMARY MAR)ET /hubaneswar "tock 0'change has been playing an active role for the growth of primary market activities with the support of its trading members. The "tock 0'change ensures promotional steps for participation of investing public at a large scale in the public offers of several companies. CUSTOMERS* PROTECTION FUND Investors, protection is the cornerstone of a vibrant market. /hubaneswar "tock 0'change has established a "tatutory =und namely B/hubaneswar "tock 0'change (ustomers, :rotection =undC with an ob4ect to protect the customers from the risk of defaulting trading members. *t present as per the )ules of the said =und a customer is entitled to be indemnified to a ma'imum of )s.85 000G! towards his claim against a defaulter trading member of the "tock 0'change. INVESTORS* SERVICE CELL /hubaneswar "tock 0'change has an BInvestors, "ervice (ellC which also ensures protection of the investors. It promptly attends the complaints of various nature lodged by the investors against companies as well as the trading members of the "tock 0'change and plays an important role in a friendly approach to redress the investors, grievances market. LIBRARY /hubaneswar "tock 0'change has a good library. It has a list of several books and guidelines relating to capital market. It also subscribes :eriodicals and =inancial 1ews 2ailies for readers. In The Investors, "ervice (ell undertakes due care to build up confidence of the common investors on the capital

addition to this prime maga.ines for new issues annual reports of several listed companies are available with it. The library of the "tock 0'change is thus playing a promotional role for enrichment of and research knowledge of the staff trading members investors

scholars at large. The "tock 0'change with the support of its library also helps the management students to prepare their pro4ect reports.

EMPLOYMENT /hubaneswar "tock generating indirectly various 0'change has nature of also been instrumental in both directly and apart from direct employment

in the "tate of $rissa. *s a result

employment for its own purpose

it has created opportunity for assistants authorised

generation of a number of indirect appointments in various capacities such as sub!brokers authorised representatives and other staff in the stock!broking firms.

FUTURE UNDERTA)INGS
/hubaneswar "tock 0'change has undertaken a number of measures to activate business in securities and to spread the message of goodwill among the investing public. "uch measures are H I To provide 2epository "ervice so that the trading in securities and supporting depository operation connected to it shall be carried out under an umbrella. I To upgrade the infrastructural facilities to facilitate e'pansion of trading activities.

I To host Training :rogram for trading member as well as employees of the "tock 0'change. I To introduce provide and conduct a (ourse for imparting education on Indian "tock 6arket to the aspirants. I To construct a modern hi!tech building of the "tock 0'change.

LITERATURE REVIE+

STOC) MAR)ET :
* stock market or e7uity market is a public market #a loose network of economic transactions not a physical facility or discrete entity& for the trading of company stock and derivatives at an agreed priceJ these are securities listed on a stock e'change as well as those only traded privately.

STOC) E,CHANGES
The stock e'changes are the e'clusive centres for trading of securities. Aisting of companies on a "tock 0'change is mandatory to

provide an opportunity to investors to invest in the securities of local companies. The trading volumes on e'changes have been witnessing phenomenal growth for last few years. "ince the advent of screen based trading system in 1999!95 it has been growing by leaps and bounds and reported a total turnover of )s.51 30 <1+ crore during 800;!0<. The growth of turnover has however not been uniform across e'changes as may be seen from Table 3.1. The increase in turnover took place mostly at big e'changes#1"0 and /"0& and it was partly at the cost of small e'changes that failed to keep pace with the changes. The business moved away from small e'changes to big e'changes which adopted technologically superior trading and settlement systems. The huge li7uidity and order depth of big e'changes further diverted li7uidity of other stock e'changes. The 19 small e'changes put together reported less than 0.08K of total turnover during 800;!0< while 8 big e'changes accounted for over 99.9< K of turnover. =or most of the e'changes the raison d,etre for their e'istence i.e. turnover has disappeared. 1"0 and /"0 are the ma4or e'changes having nationwide operations.

TRADING- :
The concept of share broking emerged after the establishment of the 4oint stock companies. The ownership of the companies was divided into small parts and that every part was called share. "o the term B"hareC denominates some part in the ownership of the company. The shares are freely transferable sub4ect to the some certain restrictions. Lhen the need was felt to sell the shares by the owner of the shares it was difficult to find out the buyers of the shares who want to buy the shares at the price the seller want to sell. *t that time a need was felt to bring the buyers and sellers on a common platform. To solve this problem a group of persons came

into picture which used to bring the buyers and sellers together for the trade of the shares. These persons are called the share /rokers who find the persons who wish to buy or sell their securities. The whole process of finding the buyers and sellers of the securities by the brokers is called the "hare trading.

De.i"i!io"% :
* transaction of a security or commodity. /uying and selling securities or commodities on a short!term basis hoping to make 7uick profits. 6ore generally any buying and selling of securities

commodities goods or services.

Ty(e% o. !ra$i"/ :
Two types 1. $nline trading 8. $ffline trading MEANING OF ONLINE TRADING :
B(hange is the law of natureC. There were times when man was a wanderer or a normal. 3e himself had to go place to place in search of food water and now everything is available at your doorstep 4ust at the click of the mouse. The growth of information technology has affected almost all sectors of life. Internet has enabled us to get every information at our doorstep. Lhen Internet has affected all sectors he could Bstock marketsC the most important player of the economy has remained far behindM Aike all other sectors Internet has set its feet in the stock markets also. Internet trading commissions are clearly posted on the websites of the various services and are typically a fi'ed rate charge depending upon the type of security being traded and the si.e 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. "imilarly the online investor likely does not have to worry that his broker is making unauthori.ed trades. "ince there is no individual broker making a commission the only person who is authori.ed to trace in the account is the actual investor. =urthermore the internet investor can never become a victim of e'cessive trading #where for the broker& since the investor maintains total control over the number of transactions which take place in the account. *ll 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. %nfortunately 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. =irst and foremost the average investor is not an e'pert 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 e'pert investor. *n 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. +#e" 0a% o"li"e !ra$i"/ i"!ro$' e$ i" I"$ia 1

$nline trading started in India in =ebruary 8000 when a couple of brokers started offering an online trading platform for their customers.

+#y o"li"e !ra$i"/ e"!ere$ la!e i" I"$ia 1

The Indian e'changes and brokering houses have been very slow in moving their transactions online and the ma4or reason has been the lots of government regulations. The initial delay was due to laying down the specifications for creating (losed %ser -roups #(%-s&. This issue was resolved between the 2epartment of Telecommunications #2oT& and the =inance 6inistry around 199< and after that soon came the online trading portals like IA @ =" invest smart I(I(I 2irect.com related motilaloswal.com was perhaps sharekhan.com the most etc. (onnectivity issue important

technological factor. )/I made regulation that it is mandatory for company to store at least ;year financial and transactional data. In the non!stop 89 hours a day seven days a week world of investing we are able to $btain investment news around the clock. (heck 7uotes on e'changes all over the world ! day or night. 0asily compare one investment to another via numerous ratios charts graphs and tables.

"creen for the best ur individual goals and re7uirements.

Trade

stocks

as

easily

and

7uickly

as

professiona

linvestments to fit o traders.

(alculate retirement needs based on various scenarios. )egularly monitor portfolios and make necessary changes 7uickly and almost effortlessly.

(ontrol the routing of individual trades for the be 0ven many years after the launch of the first online brokerage firm there remain a large contingent of individual investors who still pick up the phone and call their stock broker to buy and sell investments. 3owever every year a growing number of investors are placing their trades using online brokers.

PROCESS OF ONLINE TRADING : *n investor interesting in trading through Internet shall have to firstly register himself with an Internet brokerage firm. "ome formalities such as filling the account opening form of the e!broker copies of identity proof copy of residence proof are made to register himself with the e!trader. "econdly the investor would be re7uired to open a bank account with a scheduled bank and sufficient balance

should be kept in the account. S!e(23 :

Those investors interested in doing the trading over Internet system that is 10*T!I"N #1"0& should approach the brokers and register with the "tock /roker.

S!e(24 :
*fter registration the broker will provide to them a login name password and a personal identification number #:I1&.

S!e(25 :
*ctual placement of an order %sing the place order window as under can then place an order5 a& =irst by entering the symbol and series of stock and other parameters such as 7uantity and price of the scrip on the place order window. b& "econd fill in the symbol series and the default 7uantity.

S!e(26 : It is the process of review. Thus the investor has to review the order placed by clicking the review option. 3e may also re!set to clear the values.

S!e(27 :
*fter the review has been satisfactoryJ the order has to be sent by clicking on the send option.

S!e(28 :
The investor will receive an B$rder (onfirmationC message along with the order number and the value of the order.

S!e(29 :
In case the order is re4ected by the /roker or the "tock 0'change for certain reasons such as invalid price limit an appropriate message will appear at the bottom of the screen. *t present a time lag of about ten seconds is there in e'ecuting the trade.

S!e(2: :
It is regarding charging payment for which there are different modes. "ome brokers will take some advance payment from the investors and will fi' their trading limits. Lhen the trade is e'ecuted the broker will ask the investor for transfer of funds by the investor to his account.

Me #a"i%m o. o"li"e !ra$i"/ : (lient :lace an order on the net on the broker,s website through the distinctive I.2. /roker "tock 0'change *ccept the order after checking the script limit of the broker for the day. 0'ecute the order.

*ccept the order checks the idea and place the order with the stock e'change.

:ays the e'change through his account and received its The client is from the client,s intimated about the account. DIFFERENCE BET+EEN e'ecution of the delay by e!mail pays the broker ON2LINE AND OFF2LINE pending physical delivery.

The settlement of the deal #buy and sell order& gets reflected in the demat account.

)eceive the money complete the settlement.

TRADING :
1evertheless with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. $ffline trading has lost some popularity but it is still the main form of investing. $ffline trading offers many benefits as well. 1. The one benefit that an investor appreciates the most is that they are not alone when making investment decisions. 8. There are e'perienced and professional brokerage companies that handle their investments for them. 3. Investors are not faced with the challenge of making these vital investment decision especially if they do not have the e'perience necessary to make the appropriate investments. 9. *lso there is someone there to answer any 7uestions that may cause concerns not to mention with offline trading mistakes are less likely to take place. 1o one wants to throw their money

away or stand by and watch someone else throw their money away. It may be wise to hire a professional to assist you in making the correct investment decisions if you feel you lack the knowledge necessary. DEFINITIONS AND E,PLANATIONS OF SOME TERMS RELATED TO ONLINE TRADING :

3;

S#are% :
In everyday language when we talk of shares we normally

refer to e7uity shares or ordinary shares of a company. The terms shares and stock essentially means the same things the letter being a more common *merican usage. *n e7uity share is evidence of ownership in a company. The physical evidence of this ownership of this document is called the "hare (ertificate. 1ow days shares are usually kept in electronic or demateriali.ed form with a depository participant #/anks brokers financial institutions& of the 1ational "ecurities 2epository Aimited #1"2A&. 3owever if one wants one can still hold the share in the physical form which has your name endorsed on it and is proved that you are a part owner of the company. ?our ownership rights are proportionate to the number of share you own. (ompanies issue shares of a certain fi'ed denomination called face value or par value of that share which is clearly indicated on a share certificate in the physical form.

4;

I"<e%!me"! :
Investment essentially refers to what you do with your savings

in order to preserve them and make them grow or yield an income. If you keep your savings in the form of cash they are certainly going to diminish in value because the purchasing power of money is

constantly going down as a result of inflation. #The value of money is 4udged by the 7uantity of goods and services you can buy with it&. Therefore if you want to maintain or increase the value of your savings you have to keep them in forms other than cash. This is what investment is all about deployment of your saving with the intentions of preserving or increasing their value. This deployment can be done by using your savings to buy land residential properties commercial properties gold 4ewelry works of art fi'ed deposits in banks and companies shares bonds in fact anything whose value is likely to either remain constant or appreciate with time. Investment also refer to using one,s savings with the intention of earning an income.

5;

Dema! A= :
$n doing an online business ever customer has to open and

demat account in any bank whichever he likes. 2emat account is the account in which the trading done by the customer is mentioned. If the customer sales or purchases any share the details of this sale and purchasing are in demat account. This account contents the name of the shares and also the number of shares held or sold and also the rate of the share with this demat account. It is also compulsory for every customer to open a saving account in the bank because the amount which is to be received when the customers sales the shares are transferred from the demat account to the saving account. It is the responsibility of the customers that the share which he purchased or sales are properly transferred in demat account from the stock e'change whichever he deals. The amount of dividend whichever to be received on the shares when held for one or more year are also transferred in this demat account. It is compulsory for

every customer to have a :*1 no. =or opening an demat account. If :*1 no. Is not there is no chance for the customer to do any trading on line. There is no limit of amount to deal in this account.

6;

Tra$i"/ A

o'"! :

*n account similar to a traditional bank account holding cash and securities and is administered by an investment dealer. Though trading accounts are traditionally thought to hold only stocks a trading account can hold cash foreign cash securities and a number of other types of investments. 2ifference between trading account and demat account is trading account is only for a specific branch @ demat account is global means in all branch.

7;

Se"%e> :
Lhen the shares are issued to the public the stock e'change

gives a particular group to the company. =or e'. The )eliance -roup is given the group B*C like this there are several companies which fall in B*C -roup. The weightage mean is calculated according to its e7uity when all the companies of -roup B*C has calculated this weightage mean they are added all together when this addition is done the result which comes down is known as B"ense'C. The trading of shares of B*C group is totally depended on this sense' value. The price of the share rises this sense' value also rises and when the price of this share comes down the sense' value also comes down with the sense'.

8;

S ri(!% :
The company which has more than one working area it has to

issue the share separately than that company is the company which has the script of its name. =or 0'. The )eliance this company has its

several working area 1amely )eliance (apital )eliance Infocom )eliance 0nergy )eliance Industry. "o reliance company issues separate share for separate working area but the bold name which is given to the working area is B)elianceC. "o in this case )eliance has its own scripts. $ther e'ample *mbu4a /irla etc.

9;

Gro'(% :
Lhen the shares are issued by the company they are given the

particular group by the "tock e'change according to its demand in the market. There are mainly ; groups. #i& #ii& #iii& #iv& #v& #vi& #vii& -roup B*C -roup B/C -roup B(C -roup BEC -roup BTC -roup BT"C -roup BOC The companies which are in great demand is given as -roup B*C company. *nd the companies which are not in so demand are given in other group. This means that the companies are given the group according to its demand.

:;

Co"!ra ! "o!e :
(ontract note is a confirmation of trades done on a particular

day on behalf of the client. It establishes a legally enforceable relationship between the client and the trading member with respect to the settlement of the trades. It also helps to settle

disputesGclaimGdifferences in terms of the contract note. It is a prere7uisite for filling a complaint or arbitration proceeding against the trading memberGsub!broker in case of a dispute. * valid contract note should be in the prescribed form contains the details of trades stamped with re7uisites value and duly signed by the authori.ed signatory. (ontract notes are made in duplicate the trading members and the client should keep one copy each. *fter verifying the details contained therein the client keeps the one copy and returns the 8nd copy to the trading member duly acknowledge by him. 2o not accept unsignedGduplicate contract note confirmation memo or contract not confirmation memo signed by any authori.ed person.

ADVANTAGES OF ONLINE TRADING : 3; Pro<i$e% 0i!# !#e Free$om o. I".orma!io" :

The Internet provides a new sense of controlling our financial future as the amount of investment information available online is truly outstanding. *n investor can H Enow the price of any stock he desires at any point time on the internet. *n investor can review the price history of any stock in chart format online. *n investor can follow in!depth the events happening in the market. 3elps an investor in receiving a wealth of free commentary and analysis about stock markets in the global economy. 3elps an investor to conduct an e'tensive financial research of any company he desires.

3e may also consult with other investors online present around the world. "ome online stock broking companies provide real!time stock

7uotes daily roundups of the stock market e'pert commentary and a deep community of fellow investors.

4;

Pro<i$e% Co"!rol !o I"<e%!or% Mo"ey :

Lhen an investor wants to buy or sell stock he no longer need

to call his broker on the phone thus helping in the e'ecution of the order instantly on the internet.

5 Pro<i$e% a

e%% !o !#e mar?e! :

dedicated

Through the sophisticated information streams

trading platforms and sophisticated tools the investor can access the markets which provides more agility in buying and selling stocks.

6;

E"%'re% !#e @e%! (ri e .or i"<e%!or% :

"ome companies like Invests mart #IA @ ="& speciali.e in the

techni7ues which offers the best price deals for the buy and sell orders of the investors and traders providing the high level of transparency by displaying of information relating to the specific stocks and company profiles which helps in getting the best 7uote for the orders.

7;

O"li"e !ra$i"/ o..er% /rea!er !ra"%(are" y :

$nline trading offers the investors with greater transparency

by providing with an audit trail. The process involves a complete integrated electronic chain starting from order placement to clearing and settlement and finally ending with a credit into the depository

account of the investor. *ll these stages are inspected which brings the transparency into the system.

8;

Pro<i$e% #a%%le .ree !ra$i"/ :

$nline trading provides an integration of the bank account which leads to easy and

trading account and demat accounts paperless trading for the client.

9;

O"li"e !ra$i"/ allo0% i"%!a"! !ra$e e>e '!io" :

$nline transactions helps in the 7uick e'ecution of the entire

trading transaction right from logging to the traders site and to the settlement of the bank account in a very short period of time.

:;

I! (ro<i$e% a le<el (layi"/ .iel$ :

Trading online gives even the smallest retail investor access to

information which was earlier available only to the big traders. It has provided with a level playing field for all investors in the securities market.

A;

O"li"e !ra$i"/ re$' e% !#e %e!!leme"! ri%? :

This method of trading reduces the settlement risk for the

investor as when a short sell order is played the orders are s7uared off at the specified cut!off time and are not allowed to be carried forward.

3B;

Pro<i$e% li<e .i"a" ial "e0% C a"aly%i% :

The online sites also provide live terminals which provide

streaming news to give investor the latest financial information as it occurs.

33;

O"li"e #el( $e%? :

"ome companies provide online help desk an investor cancan contact the Tele Trading 0'ecutives from the Tele Trading team during and after market hours and can clarify 7uestions.

34;

I"%!a"! or$er !ra$e o".irma!io"% :

Through online trading every trade is confirmed immediately

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

35;

)ee(% I".orma!io" Se 're :

*s per the guideline provided by "0/I every effort has to be

made to keep the investors account and personal information secure by use of encryption technology and updated security technology to advanced fraud prevention measures.

DISADVANTAGES OF ONLINE TRADING :

1. In online terminal investor canPt get customi.ed e'pert advice whereas in offline the broker gives suggestions according to investors strategy #i.e. short term or long!term&. 8. 3.
9.

/rokerage is highly comprises to off!line. :rivacy is less due to hacking scandals. Transactional errors due to technical problems.

TYPES OF ONLINE TRADING :

1. 07uity market trading.

8. 1.

=G$ trading #future and option&.

07uity market trading 5 This type trading is done in both 1"0 and /"0. 07uity market trading include trading of stocks of all the companies listed in /"0 and 1"0.

In the e7uity market trading there is two modes of trading. 1. 8. Intraday Trading. 2elivery /ased Trading.

3;

I"!ra$ay Tra$i"/ :
Intraday Trading is the most popular Trading that many

Traders use this type Trading to cash their money soon. If you buy and sell shares in a single day then the type of Trading is called as Intraday Trading. In Intraday Trading you can sell shares within seconds minutes and hours after you buy whenever you want and when your you feel that your profit Target has been reached. /ut all the shares you bought with the intraday option should be sold 80 minutes prior to the closing time. The general closing time of "tock 6arket is 3530 pm. "o you should sell all your shares those you bought with intraday option should be sold before 3.10pm. )emember if you sell the shares which bought on previous Trading day then it will not be considered a Intraday Trading. In Intraday Trading if you buy shares on 88nd you should sell them on 88nd itself. Intraday Trading gives you high profits when you analy.e and trade perfectly and also makes you big loss if you donPt trade perfectly.

The great advantage of Intraday Trading is that in Intraday Trading brokerage is very less. Intraday /rokerage is 4ust about 0.08K to 0.09K depending on the broker you choose. *nd the disadvantage of Intraday Trading is that In Intraday Trading fear of loss of money is more compared to other types of trading. "o you may also book more losses in Intraday trading if you do wrong analysis. *s we cannot guarantee returns on our Investment in Intraday Trading you should be ready for loses that may occur when you Trade. ?ou should know all the current news and issues about share market and analy.e the shares that you buy with more care if you want to Trade in Intraday Trading.

4;

Deli<ery @a%e$ Tra$i"/ :

2elivery based trading is the most common form share trading

done by most of the stock market investors throughout the world. In this type of trading the investors have to pay the full price of the stock and the stocks are deposited in their demat account. There is no predefined time limit in case of the delivery based trading for selling the stocks. Aike all other forms of stock trading delivery based trading also comes with its pros cons.

A$<a"!a/e% o. $eli<ery @a%e$ !ra$i"/ :

The biggest advantage of delivery based trading is that you are not bound with time for selling the stock. ?ou can hold the stocks for as long as you want. "o you can always hold a stock until you are getting a significant profit from the investment. Therefore with delivery based trading you can always take your time to take a decision and reduce the risk of losses.

Lhen you are making a long term investment with delivery based trading you can also benefit from other things like dividends split of stocks bonus shares and so on. These are benefits that the companies offer to their share holders from time to time and you can make significant profit from these offers if you are holding the stocks for long periods.

Di%a$<a"!a/e% o. $eli<er @a%e$ !ra$i"/ :

The biggest disadvantage of delivery based trading is the higher brokerage rate. The brokerage rate for delivery based trading is relatively higher than the margin trading. ?ou have to pay the full price of the stock for deliver based trading whereas in case of margin trading you can buy stocks by paying only a part of the stock price. "o in case of margin trading you can buy more stocks by investing less In delivery based trading you can never benefit from short selling. That means you have to hold the shares before you actually sell them. These are the benefits and disadvantages of delivery based trading. Lhether you invest through delivery based trading or not solely depends on your financial capacity and willingness to take risks.

SOME IMPORTANT TERMS AND DEFINATIONS IN EDUITY MAR)ET ONLINE TRADING : Cir 'i! Limi! :
Lhile issuing the shares to the public the company has to fi' a particular limit of the rate of the per share this limit is called as

circuit limit. This circuit limit is generally fi'ed on the percentage basis. This circuit limit is applied to both the ends of the share. That is to the upper limit also and also to the lower limit actually circuit limit is of two types 5 1& 8& %pper limit. Aower limit. It is compulsory for every company to fi' the circuit limit. This limit is beneficial to both. The customer and also to the company generally every company fi' below l0K of the rate of per share.

U((er Limi! :
Lhile issuing the shares to the public the company has to fi' the upper limit this limit is also calculated in percentage the limit is also beyond which the rate of the shares cannot e'ceed nor that the customer doing the trading can sell above the level. =or e'. (ustomer wants to sell a share which is of )s. 10 and its upper limit is fi'ed at 10K so in this case the person will have to sell it at )s. 11 or the rate whichever he wants but the person cannot sell it beyond this )s. 11 because by addition of upper limit to the rate of share the ma'imum amount of the shares is )s. 11 only and not above.

Lo0er Limi! :
*t the time of issuing share the company has to fi' the lower limit also. This lower limit is calculated on the basis of the rate of the shares. This limit bears the same percentage which is mentioned for the upper limit of the share. Aike upper limit in this limit also the share minimum rate of the share is fi'ed the customer who wants to seeJ the holding shares has to first consider the upper@ lower limit of the share he cannot sell the share below the lower limit and not above the upper limit like the upper limit :ercentage generally in this

limit also the percentage is below 10K of the face value of the shares the percentage is below 10K of the face value of the shares the percentage of the upper @ lower limit is e7ual to every type of share. =or e'. "uppose the person wants to sell the shares and the rate of the share is )s. 10G! and the lower limit percentage is 10K of the rate. "o in this case the person cannot sell the share at below )s. 9G!. 3e will have to sell at above )s. 9G! or up to the upper limit of the share.

Pay2I" :
:ay!in day is the day when the securities sold are delivered to the e'change by the sellers and funds for the securities purchased are made available to the e'change by the buyers.

Pay2O'! :
:ay!out day is the day the securities purchased are delivered to the buyers and the funds for the securities sold are given to the sellers by the e'change. *t present the pay!in and pay!out happens on the 8nd working day after the trade is e'ecuted on the stock e'change.

A' !io" :
$n account of non delivery of securities by the trading member the securities are put for auction by the e'change. This ensures that he buying trading member receives the securities on time. 1on!delivery by the selling trading member can arise on account of short delivery and deliveries not rectified. The e'change purchases the re7uisites 7uantity in the auction market and gives them to the buying trading member.

Rolli"/ Se!!leme"! :
%nder rolling settlement all open positions at the end of the day mandatorily result in paymentQ delivery Rn, days later. (urrently trades in rolling settlement are settled on TF8 basis where T is the

trade day. =or e'ample a trade e'ecuted on 6onday is mandatorily settled by Lednesday #considering two working days from the trade day&. The funds and securities pay!in and pay!out are carried out on TF8 days.

Se!!leme"! y le % #e$'le : T TFl TF8 TF3 TF5 Trading 2ay :ay!in by 10.30 *.6 :ay!out by 8 :.6 *uction of shortage in delivery *uction :ay!in by 10.30 *.6

4;F=O MAR)ET :
=G$ market is future @ option market.

FUTURES MAR)ET :
It is different from e7uity market. %nlike the e7uity market here an investor can buy stocks value more than the money available in his account by giving the margin money. =or eg! suppose the price of "/I stock in nifty future is 8300G! today an investor wants to buy this the lot si.e of "/I is 185 so total amount is 8300S1850T8<;500. /ut if he has not that amount of money in his account. In that case by giving the margin money the investor can buy this stocks. /ut here the investor has to give the margin money by ne't day 18.00 pm means the cash settlement is TF1 basis.

*fter buying the stocks the investors has to sell within a specified date.

1ifty future is closed last Thursday of every month. If the investor will not sell the contract will be broken. *n investor can also carry forward the contract to ne't month. It is 4ust like commodity trading which is discussed later in this report.

It

is

standardi.ed

contract

with

standard

underlying

instrument a standard 7uantity and 7uality of the underlying instrument that can be delivered #or which can be used for reference purposes in settlement& and a standard timing of such settlement. The standardi.ed items in a futures contract are 5 Uuantity of the underlying. Uuality of the underlying. The date and the month of delivery. The units of price 7uotation and minimum price change. Aocation of settlement

Co"!ra ! %(e i.i a!io": S!o ? .'!'re% :

Trading cycle The futures contracts will have a ma'imum of three month trading cycle ! the near month #one& month the ne't month #two& and the far #three&. 1ew contract will be

introduced on the ne't trading day following the e'piry of near month contract. 0'piry day The last Thursday of the e'piry month or the previous trading day if the last Thursday is a trading holiday. "ettlement "ettlement price In (ash on TFl /asis. 2aily settlement price will be the closing price of the futures contracts on the trading day and final settlement price will be the closing price of the underlying on the last trading day of the options contract.

F'!'re% !ermi"olo/y :

S(o! (ri e : The price at which an asset trades in the spot

market.

F'!'re% (ri e : The price at which the futures contract

trades in the futures market.

Co"!ra !

y le : The period over which a contract trades.

The inde' futures contracts on the 1"0 have one month two! month and three month e'piry cycles which e'pire on the last Thursday of the month. Thus a >anuary e'piration contract e'pires on the last Thursday of >anuary and a =ebruary e'piration contract ceases trading on the last Thursday of =ebruary. $n the =riday following the last Thursday a new contract having a three month e'piry is introduced for trading. E>(iry $a!e : It is the date specified in the futures contract. This is the last day on which the contract will be traded at the end of which it will cease to e'ist.

Co"!ra ! %iEe : The amount of asset that has to be

delivered under one contract. *lso called as lot si.e.

I"i!ial mar/i" : The amount that must be deposited in the

margin account at the time a futures contract is first entered into is known as initial margin.

OPTIONS :
$ptions are fundamentally different from forward and futures contracts. *n option gives the holder of the option the right to do something. The holder does not have to e'ercise this right. In contrast in a forward or futures contract the two parties have committed themselves to doing something. Lhereas it costs nothing #e'cept margin re7uirements& to enter into a futures contract the purchase of an option re7uires an upfront payment. Two types of option 5 1. 8. call option. put option.

3;

Call o(!io" :
* call option gives the holder the right but not the obligation to

buy an asset by a certain date for a certain price. 4;

P'! o(!io" :
* put option gives the holder the right but not the obligation to

sell an asset by a certain date for a certain price. *ll stock trading depends on 8 terms. 0ither you could be bullish or bearish. 2epending on whether you are bullish or bearish on the underlying stock you could purchase either a call option or a put option.

B'yi"/ a all O(!io" :

Lhen you buy a call option before the e'piration date.

you hold the right to buy a

specified 7uantity of the underlying stock at the strike price on or If you are bullish on a stock you could purchase a call option at a predetermine #(alled it as the strike price& that is lower than the appreciation you e'pect then if all goes well and the stock price does rise beyond the strike price F the premium you have paid on or before the e'piration of the contract you can e'ercise your option to buy the stock at the strike price and simultaneously sell it in the spot market i.e. the cash market to book your profit. If on the other hand the price of the stock in the cash market does not rise beyond the strike price F premium you can let the contract lapse i.e. you do not buy the underline stock at the strike price. ?our loss in such a case would be premium you have paid. 3owever in India e7uity options and futures are currently cash settled and are not settled by delivery.

E>am(le
(urrent spot price per share T )s. 100. :remium payable per shareT )s. 10. */( company has a lot si.e T 50 shares. If the spot prices rises to )s 180 per share before the contract e'pires you could e'ercise your option to buy the shares at )s 100 and then sell them in the market for )s 180. ?our profit in this transaction would be )s. 500 #"ale price of )s 180 ' 50 ! purchase of 100 ' 50&! premium of 10 ' 50&. If on the other hand if the price does not go beyond )s 100 until the e'piry date you could 4ust let the contract lapse. In this case your loss would be e7ual the premium that you have paid i.e. )s 500.

B'yi"/ a ('! O(!io" :

Lhen you buy a put option before the e'piration date.

you hold the right to sell a

specified 7uantity of the underlying stock at the strike price on or If you are bearish on a stock you could purchase a put option at a pre!determine #strike price& that is higher than the fall you e'pect in the price of the stock. If all goes well and the stock price does fall beyond the strike priceFthe premium you have paid on or before the e'piration of the contract you can e'ercise your option to sell the stock at the strike price and simultaneously buy it in the spot market i.e. the cash market to book your profit. If on the other hand the price of the stock in the cash market does not fall to the strike price F premium you can let the contract lapse i.e. you do not sell the underlying stock at the strike price. ?our loss in such a case would be premium you have paid. -oing with the above e'ample if the spot prices depreciate to )s <0 per share before the contract e'pires you could e'ercise your option to sell the shares at )s. 100 and then buy them in the market for )s. <0. ?our profit in this transaction would be )s. 500 #"ale price of )s.100'50! purchase of <0 ' 50 ! premium of 10 ' 50&. If on the other hand if the price does not fall below )s 100 until the e'piry date you could 4ust let the contract lapse. In this case your loss would be e7ual the premium that you have paid i.e. )s 500.

Selli"/ Call a"$ ('! O(!io"% :

?ou buy options from the seller called #$ption Lriter& who is obliged to comply with your decision for which he receive a fee. #The premium you pay to but an option&. If you e'ercise your option the option writer bears a loss which is the price differential between the spot price and the strike price less the premium income he has earned. 3owever when you let your

option lapse the option writerPs income is the premium you have paid to buy the option. )emember the $ption writer Breturn is limitedC and Brisk is un! limitedC.

DATA ANALYSIS C INTERPRETATION

GRAPHICAL ANALYSIS

*ge group known about share market /ellow 80 8 80!30 ;0 30!90 19 90!50 + *bove 50 +

9B 8B 7B 6B 5B 4B 3B B B ello0 4B 4B25B 5B 26B 6B27B A@o<e 7B

This figure is drawn on the basis of sample observed of different age group. $nly 8K of age group below 80 are known about the share market whereas ;0K between 80!30 19K between 30!90 +K between 90!50 know about the share market.

Lhere people want to invest /ank 30 insurance 19 6utual fund 90 "tock market 1+

6B 57 5B 47 4B 37 3B 7 B B a"? i"% 'ra" e M'!'al .'"$ S !o ? m ar?e!

*bove figure shows the investment of money in different sectors. 6ost of the people are interested to invest in the mutual fund followed by bank stock market and insurance #90K 30K 1+K and 19K& accordingly.

6onthly income group are investing

/elow 5000 5

5000!10000 80

10000!80000 90

*bove 80000 35

6 B 5 7 5 B 4 7 4 B 3 7 3 B 7 B

Belo07 B BB

7 BB B23B B B B

3BB B B 24B B BB

A @o<e 4B BB B

=rom the above figure we come to know that which income group is investing more in the share market. )s.10000!80000 income group are investing more in the share market.

:eople know about share market.

?es ++
9B 8B 7B 6B 5B 4B 3B B Ye% No

1o 39

In the above figure we come to know that ++K people know about share market and 39K people have no idea. *ccording to =igure ma'imum number of people aware about share market.

=rom which sources people know about share market.

=riends 88

*gent 1<

*dvertisement 8+

SOURCE
FRIENDS AGENTS ADVERTISE

33K 90K

8;K

This figure indicates from which sources people get the information about share market. It shows that most of the people get information about share market from the advertisement

In which sector people wants to invest more :rivate 3; :ublic 13

SECTOR OF INVESTMENT

PUBLIC Series1 PRIVATE

10

20

30

40

*ccording to servey of 50 persons 3; number of people are interested to invest private companies and 13 people are interested in the public sector.

Lhich type of people are interested to invest "ervice 33 /usiness 8+ :rofessional 91

33% 41%

26%

SERVICE

BUSINESS

PROFESSIONAL

*ccording to servey of 100 people 91 number of professionals 33 service holder and 8+ businessmen invest their money in the share market.

FINDINGS
6ost of the investors are investing in stock market Investors are preferring more to online trading than offline The investors are facing some problems while operating in computer Investors are also facing some problems on online software

SUGGESTION
The broking firms and stock e'changes should conduct more awareness programs for the investors The broking companies should conduct some training program for the investor to make them familiar with the software. The broking companies should concentrate on their software while preparing it taking into consideration the computer illiterate investors.

CONCLUSION
*fter having the practical knowledge of online trading and the work of /hubaneswar stock e'change towards investor,s awareness I am very glad that I got a chance to work in such a wonderful organi.ation. I am sincerely grateful to all members of /hubaneswar stock e'change for allowing me to do summer pro4ect in their organi.ation. /efore concluding I will suggest the investors that whenever you are going for stock market investment 4ust gain the detail knowledge about the software of the broking company and the company you are going to invest.

BIBILOGRAPHY

1. V.E. Dallah!Investment management! :ublished by (hand and (ompany AT2. :ublished house 1ew 2elhi! 13th 0dition. +e@%i!e% 000;@%ei"$ia; om 000;"%ei"$ia; om 000;@#%eio"$ioa; om 000;%e@i;/o<;i" 000F+i?i(e$ia; om

U%0"TI$11*I)0
1*605 2.$./5 *2)0"" ($1T*(T 1$5 06*IA I25

1. Lhich age group of people knows about share

marketM *. /ellow 80 (. 30!90 0. *bove 50 8. Lhere people want to investM *. /ank (. 6utual fund *. /ellow 5000 (. 10000!80000 /. Insurance 2. "hare market /. 5000!10000 2. *bove 80000 /. 80!30 2. 90!50

3.3ow much the monthly income group are investingM

9. 3ave you any idea about share marketM *. ?es /. 1o 5. =rom which source people know about share marketM

*. =riends (. *dvertisement

/. *gent

+. Lhat is the perception about online tradingM *. /ad (. -ood ;. 2o you like to trade online M *. ?es /. 1o <. In which sector you want to invest more M *. :rivate *. "ervice (. :rofessional 10. *ny suggestion /. :ublic /. /usiness 9. Lhich type of people are interested to invest /. *verage 2. 0'cellent