Summer Training Report On A Study Of Online Trading At Sharekhan Submitted In Partial Fulfillment of the Requirement Of Bachelor of Business Administration

Training Super isor! "r# Surinder Singh &esignation! $"# Sales

Submitted By! $irish %egi '()*(+'(,'-

Submitted To! .Banarsidas /handi0ala Institute of Professional Studies1 &0arka1 %e0 &elhi2 .Affiliated to $uru $obind Singh Indraprastha 3ni ersity2

ACKNOWLEDGEMENT
Success is an effort bounded actively, involvin t!e co"o#eration of all$

To create and for%ulate t!is #ro&ect re#ort, ' (ould be t!an)ful to t!e entire individual (!o Served %e t!e ri !t #erson at t!e ri !t ti%e$ ' (ould li)e to t!an) Mr$ d!a(al ,,A *ro&ect anyti%e and every ti%e uidance e+#erience and %et!odolo y of #rovidin uide -'nternal. f o r su##ort$ /is !el#s % e not to as a true uide and e#ito%e of )no(led e$ A *ro&ect usually falls s!ort of its e+#ectations unless uided by

and continuous trainin

#erfor% t!e desired activity but to acco%#lis! creativity$ ' also li)e to t!an) %y #arents and %y fa%ily %e%bers (!o are al(ays a su##ort for %e$ Above all, ' (ould li)e to t!an) t!e Al%i !ty God (it!out (!o% t!is (or) could never !ave been co%#leted$

Giris! Ne i

DECLA0AT'ON

I hereby declare that this Project Report titled A STUDY OF ONLINE TRADIN AT S!ARE"!AN# s$b%itted by %e to &a'arsidas (ha'di)ala I'stit$te o* Pro*essio'al St$dies+ D)ar,a is a bo'a*ide )or, $'derta,e' d$ri'- the period *ro% ./ 0$'e to /1 A$-$st by %e a'd has 'ot bee' s$b%itted to a'y other U'i2ersity or I'stit$tio' *or the a)ard o* a'y de-ree diplo%a 3 certi*icate or p$blished a'y ti%e be*ore4

5Si-'at$re o* the St$de't6 Na%e7 irish Ne-i E'roll4 No47 /8198./8:/;

,ONA1'DE CE0T'1'CATE
This is to certi*y that as per best o* %y belie* the project e'titled A Study Of Online Tradin At S!are)!an2 is the bo'a*ide research )or, carried o$t by Giris! Ne i st$de't o* &&A+ &(IPS+ D)ar,a+ Ne) Delhi+ d$ri'- 0$ly<A$-$st partial *$l*ill%e't o* the re=$ire%e'ts *or the S$%%er Trai'i'- Project o* the De-ree o* &achelor o* &$si'ess Ad%i'istratio'4 He has worked under my guidance.

-------------------Name -: Project Guide (Interna ! "ate -: #ounter signed $y ------------Name -: "r. %atish &aneja "irector Date <7

'

A/4%O567&$7"7%T
I take this o((ortunity to e)(ress my gratitude* high regards and sincere thanks to these res(ected (eo( e who ha+e he (ed me throughout this (roject.

%u$mitted $y:

TAB67 OF /O%T7%TS
P,-&I#./,-% 2 P,G0 N1.

 0)ecuti+e %ummary 1$jecti+es o4 study #ha(ter-1 Introduction! 1.1 1+er+iew o4 1n ine trading 1.2 Pro4i e o4 the #om(any - 1+er+iew o4 %H,-05H,N /&". - 6ision 7 8ission - 8arket share - ,wards 7 ,chie+ements - Product range #ha(ter-2 %ituation -e+iew - %<1& ana ysis #ha(ter-3 =inancia ana ysis o4 com(any - Inter(retation through ratios - /imitations #ha(ter-' /earning in e)ecuti+e training - Persona e)(erience 8 #onc usion >i$ iogra(hy ,nne)ure @uestionnaire.

31 32 33 33-13 1' 1' 12 19 1: 1; 32 32-3' 32 32-'3 '' '2 '9 ': '; '?-22 22-23

797/3TI:7 S3""AR;
&his (roject is $ased on A, %&."B 1= 1N/IN0 &-,"INGC at %harekhan /imited. =urther* in this Project #ha(ter-1 inc udes re+iew o4 iterature 7 the introduction o4 the com(any
9

wherein I to d a$out the (ro4i e o4 %harekhan imited. #ha(ter-2 inc udes %ituation -e+iew wherein I ha+e shown swot ana ysis o4 com(any. #ha(ter-3 shows the 4inancia ana ysis o4 com(any. #ha(ter-' inc udes the /earningDs 7 =indings#

OB<7/TI:7S OF T=7 ST3&;

&he 1$jecti+e is to re+iew the study o4 1N/IN0 &-,"ING at %H,-05H,N as the e)change has changed itDs trading 4rom the outcry mode to on ine trading on 23th =e$ruary 1??:. It is to ana yEe the changes in trading a4ter the e)change shi4ted 4rom outcry to on ine trading system. &o know the on ine screen $ased trading system ado(ted $y
:

%H,-05H,N and a$out its communication 4aci ities. &he a((ro(riate con4iguration to set the network* which wou d ink the %H,-05H,N to indi+idua F mem$ers. &o know a$out the atest and 4uture de+e o(ment in the stock e)change trading system.

Stocks
&he stock or ca(ita stock o4 a $usiness entity re(resents the origina ca(ita (aid into or in+ested in the $usiness $y its 4ounders. It ser+es as a security 4or the creditors o4 a $usiness since it cannot $e withdrawn to the detriment o4 the creditors. %tock is distinct 4rom the (ro(erty and the assets o4 a $usiness which may 4 uctuate in Guantity and +a ue. >uying a stock 4or the ong term means that you want to own (art o4 a com(any and you think that in the 4uture the com(any wi $e (ro4ita$ e. I4 you $uy stock in a com(any and the com(any (er4orms we * the stockHs (rice shou d rise. I4 the com(any 4ai s* then the stock shou d 4ai you* too and go down. #om(anies ist their stocks on the +arious stock e)changes ocated throughout the ..%. &he stock e)changes actua y com(ete with each other 4or these istings* since com(anies that attract more trading make more money 4or the stock e)change that isted it. #om(any stocks are assigned a ItickerI* or trading sym$o $y the isting e)change. Bou may notice some we -chosen tickers that are easy to remem$er* ike I"N,I 4or the com(any Genentech* a $iotechno ogy 4irm. 1r some com(aniesH ticker is the same as its name* Nike 4or e)am( e.

Stock market
;

, stock market or eGuity market is a (u$ ic market (a oose network o4 economic transactions* not a (hysica 4aci ity or discrete entity! 4or the trading o4 com(any stock and deri+ati+es at an agreed (riceJ these are securities isted on a stock e)change as we as those on y traded (ri+ate y. &he siEe o4 the wor d stock market was estimated at a$out K39.9 tri ion .% at the $eginning o4 1cto$er 233;. &he total wor d deri+ati+es market has $een estimated at a$out K:?1 tri ion 4ace or nomina +a ue* 11 times the siEe o4 the entire wor d economy. &he +a ue o4 the deri+ati+es market* $ecause it is stated in terms o4 notiona +a ues* cannot $e direct y com(ared to a stock or a 4i)ed income security* which traditiona y re4ers to an actua +a ue. 8oreo+er* the +ast majority o4 deri+ati+es Hcance H each other out (i.e.* a deri+ati+e H$etH on an e+ent occurring is o44set $y a com(ara$ e deri+ati+e H$etH on the e+ent 'ot occurring!. 8any such re ati+e y i iGuid securities are +a ued as marked to mode * rather than an actua market (rice. &he stocks are isted and traded on stock e)changes which are entities o4 a cor(oration or mutua organiEation s(ecia iEed in the $usiness o4 $ringing $uyers and se ers o4 the organiEations to a isting o4 stocks and securities together. &he argest stock market in the .nited %tates* $y market ca( is the New Bork %tock 0)change* NB%0* whi e in #anada* it is the &oronto %tock 0)change.

Tradin
Historica y* stock markets were (hysica ocations where $uyers and se ers met and negotiated. <ith the im(ro+ement in communications techno ogy in the ate 23th century* the need 4or a (hysica ocation $ecame ess im(ortant* as traders cou d transact 4rom remote ocations. Partici(ants in the stock market range 4rom sma indi+idua stock in+estors to arge hedge 4und traders* who can $e $ased anywhere. &heir orders usua y end u( with a (ro4essiona at a stock e)change* who e)ecutes the order. %ome e)changes are (hysica ocations where transactions are carried out on a trading 4 oor* $y a method known as o(en outcry. &his ty(e o4 auction is used in stock e)changes and commodity e)changes where traders may enter I+er$a I $ids and o44ers simu taneous y. &he other ty(e o4 stock e)change is a +irtua kind* com(osed o4 a network o4 com(uters where trades are made e ectronica y +ia traders. &he shares o4 a com(any may in genera $e trans4erred 4rom shareho ders to other (arties $y sa e or other mechanisms* un ess (rohi$ited. 8ost jurisdictions ha+e esta$ ished aws and regu ations go+erning such trans4ers* (articu ar y i4 the issuer is a (u$ ic y-traded entity. &he desire o4 stockho ders to trade their shares has ed to the esta$ ishment o4 stock e)changes. , stock e)change is an organiEation that (ro+ides a market( ace 4or trading shares and other deri+ati+es and 4inancia (roducts. &oday* in+estors are usua y re(resented $y stock $rokers who $uy and se shares o4 a wide range o4 com(anies on the e)changes. , com(any may ist its shares on an e)change $y meeting and maintaining the isting reGuirements o4 a (articu ar stock e)change. ,ctua trades are $ased on an auction market mode where a (otentia $uyer $ids a s(eci4ic (rice 4or a ?

stock and a (otentia se er asks a s(eci4ic (rice 4or the stock. (>uying or se ing at market means you wi acce(t any ask (rice or $id (rice 4or the stock* res(ecti+e y.! <hen the $id and ask (rices match* a sa e takes ( ace* on a 4irst-come-4irst-ser+ed $asis i4 there are mu ti( e $idders or askers at a gi+en (rice. &he (ur(ose o4 a stock e)change is to 4aci itate the e)change o4 securities $etween $uyers and se ers* thus (ro+iding a market( ace (+irtua or rea !. &he e)changes (ro+ide rea -time trading in4ormation on the isted securities* 4aci itating (rice disco+ery.

/istory
&he two main stock markets o4 India are: Nationa %tock 0)change(N%0! >om$ay stock e)change(>%0!

BS7!- ,t the end o4 the ,merican ci+i war* the $rokers who thri+ed out o4 this war in 1;:'* 4ound a ( ace in a street* where they wou d easi y assem$ e and transact $usiness. &his street is nowadays* (o(u ar y known as ",/,/ %&-00&. In 1;;:* they 4orma y esta$ ished in >om$ay* and were known as ANati+e %hares and %tock >rokers ,ssociationC. In 1;?2* it acGuired a (remise in the same street and 4ina y was inaugurated in 1;?? with the name >om$ay %tock 0)change (>%0!. IndiaHs (remier stock e)change >om$ay %tock 0)change (>%0! can a so trace $ack its origin to as 4ar as 122 years when it started as a +o untary non-(ro4it making association. Bou hear a$out it any time it reaches a new high or a new ow* and you a so hear a$out it dai y in statements ike H&he >%0 %ensiti+e Inde) rose 2L todayH. 1$+ious y* stocks and stock markets are im(ortant. %tocks o4 (u$ ic imited com(anies are $ought and so d at a stock e)change. >ut what rea y are stock e)changesM 5nown a so as News on the stock market a((ears in di44erent media e+ery day. &he stock market or $ourse* a stock e)change is an organiEed market( ace 4or securities ( ike stocks* $onds* o(tions! 4eatured $y the centra iEation o4 su(( y and demand 4or the transaction o4 orders $y mem$er $rokers* 4or institutiona and indi+idua in+estors. 13

&he e)change makes $uying and se ing easy. &he need 4or stock e)changes de+e o(ed out o4 ear y trading acti+ities in agricu tura and other commodities. "uring the midd e ,ges* traders 4ound it easier to use credit that reGuired su((orting documentation o4 dra4ts* notes and $i s o4 e)change. (=igure-1! IndiaHs other major stock e)change Nationa %tock 0)change (N%0!* (romoted $y eading 4inancia institutions* was esta$ ished in ,(ri 1??3. 1+er the years* se+era stock e)changes ha+e $een esta$ ished in the major cities o4 India. &here are now 23 recognised stock e)changes N 8um$ai (>%0* N%0 and 1&#!* #a cutta* "e hi* #hennai* ,hmeda$ad* >anga ore* >hu$haneswar* #oim$atore* Guwahati* Hydera$ad* Oai(ur* 5ochi* 5an(ur* /udhiana* 8anga ore* Patna* Pune* -ajkot* 6adodara* Indore and 8eerut. %S7:<ith the i$era iEation o4 Indian economy it was 4ound necessary to i4t the Indian stock markets on (ar with the internationa standards. &he N%0 was incor(orated in 1??2 $y industria de+e o(ment $ank o4 India* industria credit and In+estment #or(oration o4 India* industria 4inance cor(oration o4 India* a insurance cor(orations* se ected commercia $anks and others. N%0 is IndiaDs eading stock e)change co+ering more than 193 cities and towns across the country. It (ro+ides the modern 4u y com(uteriEed trading system designed to o44er in+estors across the country a sa4e and easy way to in+est to iGuidate in+estment and securities. In+estors in many areas o4 country did not ha+e the same access and o((ortunity to trade so there arise the need 4or setting u( the nationa stock e)change. &he N%0 network has $een designed to (ro+ide eGua access to in+estors 4rom anywhere in India and to $e res(onsi+e to their needs. (=igure-2! 1n its recognition as a stock e)change under the %ecurities #ontract ,ct* 1?29 in ,(ri 1??3* N%0 started o(erations in the <ho esa e "e$t 8arket (<"8! segment in Oune 1??'. #a(ita market (eGuities! segment commenced o(erations in No+em$er 1??'* and o(erations in deri+ati+e segment started in Oune 2333.N%0 started trading in the ca(ita market segment on No+em$er3* 1??' and within one year $ecame the argest e)change in India* in terms o4 +o umes transacted. "uring the year 2332-39 N%0 re(orted* a turno+er o4 -s 1*29?*229 crores in the eGuity segment. In 12th century =rance the co$rratiers de cha'-e were concerned with managing and regu ating the de$ts o4 agricu tura communities on $eha 4 o4 the $anks. >ecause these men a so traded with de$ts* they cou d $e ca ed the 4irst $rokers. , common mis$e ie4 is that in ate 13th century >ruges commodity traders gathered inside the house o4 a man ca ed >a' der &e$r?e* and in 133? they $ecame the I>rugse >eurseI* institutiona iEing what had $een* unti then* an in4orma meeting* $ut actua y* the 4ami y 6an der >eurEe had a $ui ding in ,ntwer( where those gatherings occurredJ the 6an der >eurEe had ,ntwer(* as most o4 the 11

merchants o4 that (eriod* as their (rimary ( ace 4or trading. &he idea Guick y s(read around = anders and neigh$oring counties and I>eurEenI soon o(ened in Ghent and ,msterdam. In the midd e o4 the 13th century* 6enetian $ankers $egan to trade in go+ernment securities. In 1321 the 6enetian go+ernment out awed s(reading rumors intended to ower the (rice o4 go+ernment 4unds. >ankers in Pisa* 6erona* Genoa and = orence a so $egan trading in go+ernment securities during the 1'th century. &his was on y (ossi$ e $ecause these were inde(endent city states not ru ed $y a duke $ut a counci o4 in4 uentia citiEens. &he "utch ater started joint stock com(anies* which et shareho ders in+est in $usiness +entures and get a share o4 their (ro4its - or osses. In 1932* the "utch 0ast India #om(any issued the 4irst share on the ,msterdam %tock 0)change. It was the 4irst com(any to issue stocks and $onds.

Relation of the stock market to the modern financial system

&he 4inancia systems in most western countries has undergone a remarka$ e trans4ormation. 1ne 4eature o4 this de+e o(ment is disintermediation. , (ortion o4 the 4unds in+o +ed in sa+ing and 4inancing* 4 ows direct y to the 4inancia markets instead o4 $eing routed +ia the traditiona $ank ending and de(osit o(erations. &he genera (u$ icHs heightened interest in in+esting in the stock market* either direct y or through mutua 4unds* has $een an im(ortant com(onent o4 this (rocess. %tatistics show that in recent decades shares ha+e made u( an increasing y arge (ro(ortion o4 househo dsH 4inancia assets in many countries. In the 1?:3s* in %weden* de(osit accounts and other +ery iGuid assets with itt e risk made u( a most 93 (ercent o4 househo dsH 4inancia wea th* com(ared to ess than 23 (ercent in the 2333s. &he major (art o4 this adjustment in 4inancia (ort4o ios has gone direct y to shares $ut a good dea now takes the 4orm o4 +arious kinds o4 institutiona in+estment 4or grou(s o4 indi+idua s* e.g.* (ension 4unds* mutua 4unds* hedge 4unds* insurance in+estment o4 (remiums* etc. &he trend towards 4orms o4 sa+ing with a higher risk has $een accentuated $y new ru es 4or most 4unds and insurance* (ermitting a higher (ro(ortion o4 shares to $onds. %imi ar tendencies are to $e 4ound in other industria iEed countries. In a de+e o(ed economic systems* such as the 0uro(ean .nion* the .nited %tates* Oa(an and other de+e o(ed nations* the trend has $een the same: sa+ing has mo+ed away 4rom traditiona (go+ernment insured! $ank de(osits to more risky securities o4 one sort or another.-iskier ong-term sa+ing reGuires that an indi+idua (ossess the a$i ity to manage the associated increased risks. %tock (rices 4 uctuate wide y* in marked contrast to the sta$i ity o4 (go+ernment insured! $ank de(osits or $onds. &his is something that cou d a44ect not on y the indi+idua in+estor or househo d* $ut a so the economy on a arge sca e. &he 4o owing dea s with some o4 the risks o4 the 4inancia sector in genera and the stock market in (articu ar. &his is certain y more im(ortant now that so many newcomers ha+e entered the stock market* or ha+e acGuired other HriskyH in+estments (such as Hin+estmentH (ro(erty* i.e.* rea estate and co ecta$ es!.<ith each (assing year* the noise e+e in the 12

stock market rises. &e e+ision commentators* 4inancia writers* ana ysts* and market strategists are a o+ertaking each other to get in+estorsH attention. ,t the same time* indi+idua in+estors* immersed in chat rooms and message $oards* are e)changing Guestiona$ e and o4ten mis eading ti(s. Bet* des(ite a this a+ai a$ e in4ormation* in+estors 4ind it increasing y di44icu t to (ro4it.

The beha ior of the stock trading

=rom e)(erience e+eryone know that in+estors may Htem(orari yH mo+e 4inancia (rices away 4rom their ong term aggregate (rice HtrendsH. (Positi+e or u( trends are re4erred to as $u marketsJ negati+e or down trends are re4erred to as $ear markets.! 1+er-reactions may occurNso that e)cessi+e o(timism (eu(horia! may dri+e (rices undu y high or e)cessi+e (essimism may dri+e (rices undu y ow. 0conomists continue to de$ate whether 4inancia markets are Hgenera yH e44icient. ,ccording to one inter(retation o4 the e44icient-market hy(othesis (08H!* on y changes in 4undamenta 4actors* such as the out ook 4or margins* (ro4its or di+idends* ought to a44ect share (rices $eyond the short term* where random HnoiseH in the system may (re+ai . (>ut this arge y theoretic academic +iew(ointNknown as HhardH 08HNa so (redicts that itt e or no trading shou d take ( ace* contrary to 4act* since (rices are a ready at or near eGui i$rium* ha+ing (riced in a (u$ ic know edge4! &he HhardH e44icient-market hy(othesis is sore y tested $y such e+ents as the stock market crash in 1?;:* when the "ow Oones inde) ( ummeted 22.9 (ercentNthe argest-e+er one-day 4a in the .nited %tates. &his e+ent demonstrated that share (rices can 4a dramatica y e+en though* to this day* it is im(ossi$ e to 4i) a genera y agreed u(on de4inite cause: a thorough search 4ai ed to detect a'y Hreasona$ eH de+e o(ment that might ha+e accounted 4or the crash. (>ut note that such e+ents are (redicted to occur strict y $y chance * a though +ery rare y.! It seems a so to $e the case more genera y that many (rice mo+ements ($eyond that which are (redicted to occur Hrandom yH! are 'ot occasioned $y new in4ormationJ a study o4 the 4i4ty argest one-day share (rice mo+ements in the .nited %tates in the (ost-war (eriod seems to con4irm this. Howe+er* a Hso4tH 08H has emerged which does not reGuire that (rices remain at or near eGui i$rium* $ut on y that market (artici(ants not $e a$ e to syste%atically (ro4it 4rom any momentary market Hine44icienciesH. 8oreo+er* whi e 08H (redicts that a (rice mo+ement (in the a$sence o4 change in 4undamenta in4ormation! is random (i.e.* nontrending!* many studies ha+e shown a marked tendency 4or the stock market to trend o+er time (eriods o4 weeks or onger. 6arious e)( anations 4or such arge and a((arent y nonrandom (rice mo+ements ha+e $een (romu gated. =or instance* some research has shown that changes in estimated risk* and the use o4 certain strategies* such as sto(- oss imits and 6a ue at -isk imits* theoretica y cou d cause 4inancia markets to o+erreact. >ut the $est e)( anation seems to $e that the distri$ution o4 stock market (rices is non-Gaussian (in which case 08H* in any o4 its current 4orms* wou d not $e strict y a(( ica$ e!. 1ther research has shown that (sycho ogica 4actors may resu t in e)aggerated stock (rice mo+ements (contrary to 08H which assumes such $eha+iors Hcance outH!. Psycho ogica research has demonstrated that (eo( e are (redis(osed to HseeingH (atterns* and o4ten wi (ercei+e a (attern in what is* in 4act* just 'oise. (%omething ike seeing 4ami iar sha(es in 13

c ouds or ink $ ots.! In the (resent conte)t this means that a succession o4 good news items a$out a com(any may ead in+estors to o+erreact (ositi+e y (unjusti4ia$ y dri+ing the (rice u(!. , (eriod o4 good returns a so $oosts the in+estorHs se 4-con4idence* reducing his ((sycho ogica ! risk thresho d.

,nother (henomenonNa so 4rom (sycho ogyNthat works against an o$jecti+e assessment is grou( thinking. ,s socia anima s* it is not easy to stick to an o(inion that di44ers marked y 4rom that o4 a majority o4 the grou(. ,n e)am( e with which one may $e 4ami iar is the re uctance to enter a restaurant that is em(tyJ (eo( e genera y (re4er to ha+e their o(inion +a idated $y those o4 others in the grou(. In one (a(er the authors draw an ana ogy with gam$ ing. In norma times the market $eha+es ike a game o4 rou etteJ the (ro$a$i ities are known and arge y inde(endent o4 the in+estment decisions o4 the di44erent ( ayers. In times o4 market stress* howe+er* the game $ecomes more ike (oker (herding $eha+ior takes o+er!. &he ( ayers now must gi+e hea+y weight to the (sycho ogy o4 other in+estors and how they are ike y to react (sycho ogica y. &he stock market* as with any other $usiness* is Guite un4orgi+ing o4 amateurs. Ine)(erienced in+estors rare y get the assistance and su((ort they need. In the (eriod running u( to the 1?;: crash* ess than 1 (ercent o4 the ana ystHs recommendations had $een to se (and e+en during the 2333 - 2332 $ear market* the a+erage did not rise a$o+e 2L!. In the run u( to 2333* the media am( i4ied the genera eu(horia* with re(orts o4 ra(id y rising share (rices and the notion that arge sums o4 money cou d $e Guick y earned in the so-ca ed new economy stock market. (,nd ater am( i4ied the g oom which descended during the 2333 - 2332 $ear market* so that $y summer o4 2332* (redictions o4 a "1< a+erage $e ow 2333 were Guite common.!

Investment strategies
1ne o4 the many things (eo( e a ways want to know a$out the stock market is* IHow do I make money in+estingMI &here are many di44erent a((roachesJ two $asic methods are c assi4ied as either 4undamenta ana ysis or technica ana ysis. =undamenta ana ysis re4ers to ana yEing com(anies $y their 4inancia statements 4ound in %0# =i ings* $usiness trends* genera economic conditions* etc. &echnica ana ysis studies (rice actions in markets through the use o4 charts and Guantitati+e techniGues to attem(t to 4orecast (rice trends regard ess o4 the com(anyHs 4inancia (ros(ects. 1ne e)am( e o4 a technica strategy is the &rend 4o owing method* used $y Oohn <. Henry and 0d %eykota* which uses (rice (atterns* uti iEes strict money management and is a so rooted in risk contro and di+ersi4ication. ,dditiona y* many choose to in+est +ia the inde) method. In this method* one ho ds a weighted or unweighted (ort4o io consisting o4 the entire stock market or some segment o4 the stock market (such as the %7P 233 or <i shire 2333!. &he (rinci(a aim o4 this strategy is to ma)imiEe di+ersi4ication* minimiEe ta)es 4rom too 4reGuent trading* and ride the genera trend o4 the stock market (which* in the ..%.* has a+eraged near y 13LFyear* com(ounded annua y* since <or d <ar II!.

1'

Online trading
1n ine stock trading is $ecoming a +ery (o(u ar way in which to in+est in the stock market. 1rdinary e+eryday citiEens such as you and me can now trade stocks ike the (ros without (aying the ridicu ous $roker 4ees that are o4ten associated with trading on the stock market. &his doesnHt mean there are no 4ees in+o +ed or that you wonHt $e discouraged 4rom ca(ricious y trading stocks. <hat it does mean is that you wi $e a$ e to trade stocks* as you may ha+e ne+er $een a$ e to do $e4ore $ecause the costs in+o +ed in trading were so high that on y the wea thiest among us cou d rea y a44ord to work the market to any rea ad+antage. 1n ine trading has changed the a+erage in+estorsH in+o +ement in trading their own stocks. &he a+ai a$i ity o4 com(any in4ormation has $ecome so wides(read and easi y attaina$ e that researching and 4inding stock to $uy and se is as easy as ogging onto your com(uter. Bou wi 4ind Guite a 4ew com(anies that are going to com(ete 4or your $usiness when it comes to em(owering you to trade stocks on ine. It is $est to go with a $usiness that o44ers education and ad+ice in addition to the a$i ity to trade. &here are many $ig names in the $rokerage $usiness that are getting in touch with the techno ogy o4 today and o44ering 4u ser+ice $rokers and 4inancia ad+isors in addition to o44ering new on ine ser+ices that inc ude Internet trading. &here are* $road y* two ty(es o4 trading in the 4inancia markets:

>usiness-to-$usiness (>2>! trading* o4ten conducted on e)changes* where arge in+estment $anks and $rokers trade direct y with one another* transacting arge amounts o4 securities* and >usiness-to-c ient (>2#! trading* where retai (e.g. indi+idua s $uying and se ing re ati+e y sma amounts o4 stocks and shares! and institutiona c ients (e.g. hedge 4unds* 4und managers or insurance com(anies* trading 4ar arger amounts o4 securities! $uy and se 4rom $rokers or Idea ersI* who act as midd e-men $etween the c ients and the >2> markets I4 one decides to go with some o4 the $igger names in the $usiness one shou d understand that he wi (ay a itt e more than he wou d (ay going with many o4 the esser name 4irms and trading com(anies. &he good news is that the $igger names ha+e more to oose a4ter working 4or decades to esta$ ish themse +es and de+e o( a good re(utation among traders. &his means that they are not going to $e I4 y $y nightI and are going to work to make sure you ha+e the $est (ossi$ e ser+ice 4rom them 4or your 4uture in the stock market trade. 12

8any o4 these 4irms in addition to o44ering the a$i ity to $uy* se * and trade on ine wi a so o44er 4inancia ( anning 4or retirement* 4uture e)(enses* and ad+ice on how to create a 4i)ed income 4rom your in+estments. &hey wi o44er many ti(s* hints* and ad+ice 4ree o4 charge on their we$site whi e a so (romoting the ser+ices they o44er through discounts in ho(es o4 gaining your $usiness 4or some o4 the higher ticket transactions that rea y (ay their $i s. 1n ine in+estment ser+ices o44er consumers the o((ortunity to in+est with ower commissions and 4ees which means you $ring more o4 the money home when a is said and done and s(end 4ar ess on 4ees and e)(enses associated with in+esting. >y sa+ing these 4ees you may $e doing yourse 4 a huge ser+ice $ut kee( in mind that the in+a ua$ e ad+ice o4 a $roker can o4ten mean the di44erence $etween mi d successes and wi d successes. I4 you can manage the 4ees it is a good ( an to at east consu t with a $roker or 4inancia ad+isor or ( anner once or twice a year in order to get the most out o4 your in+estment money. ,ccording to #hiang-Nan #hao * -o$ert O. 8ock er * "orothy "o ogite :-&he market downturn since 8arch 2333 has (osed a serious threat to $rokerage 4irms* (articu ar y those that o44er on ine trading =indings o4 this study suggest that $roke rage 4irms shou d 4ocus on im(ro+ing customer ser+ices* whi e at the same time (ro+iding ser+ices in addition to on ine trading. 1n ine $rokerage 4irms shou d mo+e into the areas that ha+e $een traditiona y dominated $y 4u ser+ice $rokerage 4irms and $anks. Introduction 1n ine trading has $ecome a 4ormida$ e 4orce in todayHs in+estment market* thanks to recent de+e o(ments in in4ormation techno ogy. , though set$acks in the techno ogy industry discouraged indi+idua in+estors 4rom acti+e y trading* the tota num$er o4 on ine trading accounts continues to grow. ,s the N,%",@ has dro((ed 4rom its a time high o4 2*333 in 8arch 2333* and the economic situation is continuing to deteriorate* many in+estors ha+e withdrawn their 4unds 4rom the stock market Ne+erthe ess* the interest in on ine trading is e)(ected to increase (12*1:!. In ,(ri 2332* ,mericaHs third- argest discount $rokerage house* ,meritrade* agreed to (urchase "atek 1n ine Ho dings #or(oration* a (ri+ate y he d on ine trading com(any* in an a -stock transaction +a ued at a most K1.2? $i ion. &he mo+e wou d trans4orm ,meritrade o4 1maha* Ne$raska* into the argest on ine $rokerage 4irm in the ..%. in terms o4 eGuity trades (er day* sur(assing industry eaders 0P&rade Grou(* Inc. and #har es %chwa$ #or(oration. &he (ro(osed com$ination comes as the on ine trading industry a((ears to $e reco+ering gradua y 4rom a se+ere recession that has (rom(ted conso idation. 1n the academic side* many recent studies ha+e shown that on ine $rokerages ha+e mo+ed away 4rom o44ering on y on ine trading* and are now adding many other ser+ices (i.e.* $anking ser+ices! in order to sur+i+e in this +o ati e market &his study 4ocuses on how on ine $rokerage 4irms can $etter ser+e the market 4rom the on ine usersH stand(oint. 1n ine trading $ecame huge $usiness in the ate 1??3s. &he ure o4 re ati+e y ow $rokerage costs 4or e ectronic share trading* together with the ca(acity to monitor rea -time market de+e o(ments 4rom a com(uter screen* ha+e contri$uted to the 4act that internet-$ased trading now com(rises a$out 23L o4 a retai share trading. &he on ine trading market has $ecome 4 ooded with discount $rokers o44ering ow (rices and $etter transaction costs. %ome o4 the most nota$ e on ine discount $rokers are 19

,meritrade* 0P&rade* #har es %chwa$ and &" <aterhouse. =u -ser+ice 4irms* inc uding $anks* reacted to the emergence o4 on ine discount $rokers $y entering the on ine market with their own we$ sites. &he 4u -ser+ice =inns want to (rotect their c ient $ase and gain market share in the new on ine market "iscount 4irms 4e t a minima im(act 4rom 4u -ser+ice 4irms entering the on ine trading market( ace. 8any sma discount $rokerage com(anies are niche =inns* against which 4u -ser+ice 4irms do not com(ete direct y. How e+er* since the $ear market started in ear y 2333* discount $rokerage 4inns ha+e $een more a44ected $y com(etition. %e+era 4irms attri$ute acce erated changes in com(etiti+e a((roaches to the market( ace to the entry o4 4u -ser+ice =inns. &hese 4irms e)( ain that com(etition in on ine trading has $ecome more simi ar in (roduct o44erings and (ricing. &he on y area e4t 4or on ine trading 4irms to gain a com(etiti+e ad+antage is through the ser+ice (ro+ided to their c ients. =irms now a so com(ete on the $asis o4 Gua ity ser+ice and res(onse to c ients. In a way* the entry o4 4u ser+ice 4irms has $ene4ited c ient consumers $y esta$ ishing a range o4 (roduct and ser+ice o(tions 4rom which they can choose. ,s a co atera $ene4it 4or in+estors* the con+ergence o4 4u -ser+ice and discount 4irmsH o44erings has high ighted niche 4irms that can ser+e a imited c ient $ase more e44ecti+e y than arger com(etitors (2*9*;*11*19!. %ome 4irms in the industry state that with the entry o4 traditiona 4u -ser+ice $rokers* in+estors ha+e $ecome more aware o4 their on ine trading o(tions* and on ine trading now a((ears more egitimate to in+estors. <hen customers rea iEed that 8erri /ynch* =ide ity In+estments* Paine <e$$er and other major 4u -ser+ice 4irms had on ine trading we$ sites* it strengthened the credi$i ity and sa4ety o4 on ine trading* at east in in+estorsH minds (1;*?!.<ith the current market conditions* 4irms wi not win $y com(eting on (rice or (roduct $ecause most on ine trading sites o44er +irtua y the same things. =irms ha+e to stand out on ser+ice* and the way 4irms ser+e (eo( e has to stand out on mu ti( e channe s. , the com(anies are o44ering mu ti( e moda ities: %chwa$ is now ike a %mith >arney* and =ide ity In+estments com(etes direct y with 0P&rade. &homas %utton* -ight/ine 0ditor-in-#hie4* said that:=ew (eo( e who set out to get rich Guick trading stocks on ine actua y $ecome rich. &he sma grou( o4 get-rich-Guickers who do make ots o4 money 4ast do it (ure y as a resu t o4 chance. &hey rare y kee( their trading gains 4or +ery ong. &his is $ecause trying to get rich Guick causes stock traders to take on way too much risk. &his is norma y done $y trading with e)cessi+e margin or $y in+esting too much money in one (osition. .n4ortunate y* (eo( e who are in a hurry to make a ot o4 money trading on ine tend not to do a good jo$ o4 managing risk. 8anaging trading risk in+o +es 4ocusing more on the (otentia downside o4 a trade or in+estment than the (otentia u(side. In (ractica terms this means using an o$jecti+e stock market trading method designed to imit draw downs in the +a ue o4 your stock (ort4o io. I4 you do a good jo$ o4 managing risk you wi a most certain y make money trading the stock market o+er the ong-term. &hose who consistent y ignore risk and o+er oad the wagons in an attem(t to get rich Guick are guaranteed 4ai ure. =or e)am( e* most traders with a get-rich-Guick mindset donHt rea iEe that i4 they re(eated y $et e+erything on trades in which the (ro$a$i ity o4 success is ?3L they wi e+entua y ose e+erything. %ure* they ook ike a genius 4or a whi e* $ut the one 1:

out o4 e+ery ten trades that ha((ens to $e a H oserH wi wi(e them out.

%tock market trading on ine is a ty(e o4 s(ecu ation where education and ski can dramatica y im(ro+e your odds o4 winning. -isk management is a ski . -educing your stock market trading risk dramatica y increases the odds that you wi win. %tay 4ocused on what you need to know and what you need to do to $e success4u trading the stock market on ine. -emem$er that money is just a $y-(roduct o4 wise trading methods and actions. ,ccording to 8ark #ris(:-It is common now 4or (eo( e to undertake stock trading on ine. Historica y there ha+e $een ,merican stock markets 4rom the 1:33s. In Phi ade (hia an e)change 4or trading currency was esta$ ished to ena$ e $usiness owners to su((ort their $usiness and to grow the economy. In the ear y 1;33s* the New Bork %tock 0)change re( aced the Phi ade (hia e)change. Initia y New Bork %tock 0)change was a grou( o4 $usiness (eo( e who met on a dai y $asis on <a %t to trade their stocks or $onds. &his initia trading was a done outside unti the 0)change mo+ed indoors in the ear y 1?33s. <hi st this traditiona 4ormu a ser+ed its (ur(ose admira$ y* trading is no onger the $ricks and mortar industry it once was. &rading no onger reGuires you to $e in <a %t. &he way the New Bork %tock 0)change works cou d $e com(ared to an auction. I4 a com(any is isted on the stock e)change* they ha+e a (ost in <a %t where$y trades are isted and a s(ecia ist is em( oyed as an IauctioneerI to o+ersee the $idding on each trade. &his 4orm o4 trading kee(s an accurate $a ance $etween su(( y and demand in the stock market so the (rice o4 the shares is ke(t in check. &hese days* it is 4ar easier to get in+o +ed in in+esting in stocks. In traditiona stock trading* you engage a stock $roker to take and ( ace your order 4or you. Bou (hone your $roker to take the order and then there can $e a de ay in the order $eing e)ecuted. Now you no onger need to worry a$out using a stock $roker to act on your $eha 4. I4 $uying or se ing stocks on ine you can ( ace your order with the c ick o4 a mouse. #on+enient y* trading this way is a so a time sa+er. %etting u( an account with a re(uta$ e* on ine $rokerage com(any is easy. &hese on ine com(anies (ro+ide access to a wide range o4 ser+ices that were (re+ious y on y a+ai a$ e +ia a traditiona $ricks and mortar stock $roking ser+ice. %etting u( an on ine account gi+es you access to a +ariety o4 ser+ices inc uding: u( to the minute stock Guotes* detai ed historic (er4ormances o4 indi+idua stocks* as we as detai ed in4ormation a$out com(any 4undamenta s. 1ne o4 the most common reasons in+estors ike $uying and se ing stocks on ine com(ared with traditiona $rokerage is (rice. &here are much ower $rokerage 4ees 4or $uying and se ing stocks on ine than there are through $uying and se ing stocks at a traditiona $rokerage house. ,n im(ortant ad+antage o4 using an on ine $rokerage ser+ice to trade stocks on ine is the signi4icant (rice sa+ing in $rokerage 4ees. &his is com$ined with the immediacy at which you can gather in4ormation reGuired in making your stock (urchasing decisions when trading on ine. 8any in+estors a so ike the inde(endence associated with trading shares on ine. 8any traditiona $rokerage houses wou d try to in4 uence your decisions when trading shares* $ut an on ine account means a the decisions you make are 4u y your own. 1n ine $rokerage sites are not just a$out trading shares on ine. 1;

%harekhan is one o4 the to( retai $rokerage houses in India with a strong on ine trading ( at4orm. &he com(any (ro+ides eGuity $ased (roducts (research* eGuities* deri+ati+es* de(ository* margin 4unding* etc.!. It has one o4 the argest networks in the country with :3' share sho(s in 2;3 cities and IndiaDs (remier on ine trading (orta www.sharekhan.com. <ith their research e)(ertise* customer commitment and su(erior techno ogy* they (ro+ide in+estors with end-to-end so utions in in+estments. &hey (ro+ide trade e)ecution ser+ices through mu ti( e channe s - an Internet ( at4orm* te e(hone and retai out ets. %harekhan was esta$ ished $y 8orakhia 4ami y in 1???-2333 and 8orakhia 4ami y* continues to remain the argest shareho der. It is the retai $roking arm o4 the 8um$ai$ased %%5I Q%H,N&I/,/ %H0<,N&I/,/ 5,N&I/,/ I%<,-N,&H /I8I&0"R Grou(. %%5I which is esta$ ished in 1?33 is the (arent com(any o4 %harekhan td. <ith a egacy o4 more than ;3 years in the stock markets* the %%5I grou( +entured into institutiona $roking and cor(orate 4inance o+er a decade ago. Present y %%5I is one o4 the eading ( ayers in institutiona $roking and cor(orate 4inance acti+ities. %harekhan o44ers its customers a wide range o4 eGuity re ated ser+ices inc uding trade e)ecution on >%0* N%0* and "eri+ati+es. "e(ository ser+ices* on ine trading* In+estment ad+ice* #ommodities* etc. %harekhan /td. is a $rokerage 4irm which is esta$ ished on ; th =e$ruary 2333 and now it is ha+ing a the rights o4 %%5I. &he com(any was awarded the 2332 8ost Pre4erred %tock >roking >rand $y ,wwaE #onsumer 6ote. It is 4irst $rokerage #om(any to go on ine. &he #om(anyHs on ine trading and in+estment site - www.%harekhan.com - was a so aunched on =e$ ;* 2333. &his site gi+es access to su(erior content and transaction 4aci ity to retai customers across the country. 5nown 4or its jargon-4ree* in+estor 4riend y anguage and high Gua ity research* the content-rich and research oriented (orta has stood out among its contem(oraries $ecause o4 its stead4ast dedication to o44ering customers $est-o4-$reed techno ogy and su(erior market in4ormation. %hare khan has one o4 the $est states o4 art we$ (orta (ro+iding 4undamenta and statistica in4ormation across eGuity* mutua 4unds and IP1s. 1ne can sur4 across 2*233 com(anies 4or in-de(th in4ormation* detai s a$out more than 1*233 mutua 4und schemes and IP1 data. 1ne can a so access other market re ated detai s such as $oard meetings* resu t announcements* =II transactions* $uyingFse ing $y mutua 4unds and much more.

1?

T=7 /O"PA%;
Name o4 the com(any: %harekhan td. Bear o4 0sta$ ishment: 1?22 HeadGuarter: %harekhan %%5I ,-239 Phoeni) House Phoeni) 8i s #om(ound /ower Pare 8um$ai - 8aharashtra* IN"I,- '33313 Nature o4 >usiness: %er+ice Pro+ider %er+ices: "e(ository %er+ices* 1n ine %er+ices and &echnica -esearch. Num$er o4 0m( oyees: 1+er 3233 <e$site: www.sharekhan.com % ogan: Bour Guide to &he =inancia Oung e.

:ision
&o $e the $est retai $rokering >rand in the retai $usiness o4 stock market.

"ission
&o educate and em(ower the indi+idua in+estor to make $etter in+estment decisions through Gua ity ad+ice and su(erior ser+ice. Sharekhan is infactS ,mong the to( 3 $randed retai ser+ice (ro+iders S No. 1 ( ayer in on ine $usiness S /argest network o4 $randed $roking out ets in the country ser+ing more than :* 33*333 c ients. %harekhanHs management team is one o4 the strongest in the sector and has (ositioned %harekhan to take ad+antage o4 the growing consumer demand 4or 4inancia ser+ices (roducts in India through in+estments in research* (an-Indian $ranch network and an outstanding techno ogy ( at4orm. =urther* %harekhanHs ineage and re ationshi( with %%5I Grou( (ro+ide it a uniGue (osition to understand and e+erage the growth o4 the 4inancia ser+ices sector. %%5I #or(orate =inance Pri+ate /imited (%%5I! is a eading India-$ased in+estment $ank with strong research-dri+en 4ocus. &heir team mem$ers are wide y res(ected 4or their 23

commitment to transactions and their s(ecia iEed know edge in their areas o4 strength.

A5AR&S A%& A/=I7:7"7%TS

- %%5I has $een +oted as the &o( "omestic >rokerage House in the research category* twice $y 0uromoney %ur+ey and 4our times $y ,siamoney %ur+ey. - %harekhan /imited won the #N># ,<,-" 4or the year 233'. &he team has com( eted o+er .%K2 $i ion worth o4 dea s in the ast 2 years - making it among the most signi4icant ( ayers raising eGuity in the Indian market. %%5I 1 a +eteran eGuities so utions com(any has o+er ; decades o4 e)(erience in the Indian stock markets. I4 we e)(erience their anguage* (resentation sty e* content or 4or that matter the on ine trading 4aci ity* weH 4ind a common threadJ one that he (s us make in4ormed decisions and sim( i4ies in+esting in stocks. &he common thread o4 em(owerment is what %harekhanHs a a$outT I%harekhan has a ways $e ie+ed in co a$orating with ike-minded #or(orate into 4orming strategic associations 4or mutua $ene4it re ationshi(sI says Oaidee( ,rora + "irector - %harekhan /imited. %harekhan is a so a$out 4ocus. %harekhan does not c aim e)(ertise in too many things. %harekhanHs e)(ertise ies in stocks and thatHs what he ta ks a$out with authority. %o when he says that in+esting in stocks shou d not $e con4used with trading in stocks or a (ort4o io-$ased strategy is $etter than $etting on a sing e horse* it is something that is s(oken with years o4 4ocused earning and e)(erience in theD stock markets. ,nd these $e ie4s are re4 ected in e+erything %harekhan does 4or usT %harekhan is a (art o4 the %%5I grou(* an Indian 4inancia ser+ices (ower house* with strong (resence in -etai eGuities Institutiona eGuities In+estment $anking. In de hi it is ha+ing the $ranches at netaji su$ash ( ace and Nehru ( ace. <e ha+e $een gi+en the centre at netaji su$ash ( ace.

Sharekhan pro ides > in ( account#

"emat aFc &rading aFc: 4or cash ca cu ation >ank aFc: 4or 4und trans4er "ia and &rade: 4or Guery re ating trading

21

PRO&3/TS A%& S7R:I/7S OF S=AR74=A% 6I"IT7&

(=igure-3!

METHODOLOGY:
&he data co ection methods inc ude $oth (rimary and secondary co ection methods. Primary method: &his method inc udes the data co ected 4rom the Guestionnaires and (ersona interaction with authoriEed mem$ers o4 %harekhan %ecurities imited. 22

%econdary method: &he secondary data co ection method inc udes: -&he ecturers de i+ered $y the su(erintendent. -&he $rochures and materia (ro+ided $y %harekhan %ecurities imited. -&he data co ected 4rom the magaEines o4 the N%0* economic times and 4rom internet.

&emat account!
%harekhan is a de(ository (artici(ant. &his means that we can kee( the shares in demateria iEed 4orm in %harekhan. >ut 4or this one has to the demat account in %harekhan. "emateria iEation is the (rocess $y which a c ient can get (hysica certi4icates con+erted into e ectronic $a ances maintained in his account with the "P. In %harekhan* under demat account there are two ty(es o4 termina s. &BP0 1= "08,& "0P1%I& (-e4unda$ e! ,##1.N& &0-8IN,/ #/,%%I# -s.2333 -s.13333 &-,"0&IG0-s.2333 -s.13333F22333 #H,-G0% (nonre4unda$ e! -s.:23 Ni -s.1333 Ni

Account opening!
1(ening a "P account with %harekhan1ne can o(en a "e(ository Partici(ant ("P! account* either through a %harekhan $ranch or through a %harekhan =ranchisee center. &here is no 4ee 4or o(ening "P accounts with %harekhan. Howe+er a nomina de(osit (re4unda$ e! is charged towards ser+ices which wi $e adjusted against a 4uture $i ings. , in+estors ha+e to su$mit their (roo4 o4 identity and (roo4 o4 address a ong with the (rescri$ed account o(ening 4orm.

23

BRO47RA$7 STR3/T3R7 OF S=AR74=A% BRO47RA$7!

I%TRA&A; /AS=8 7?3ITI7S FnO PR7PAI& S/=7"7 3.32L 3.32L 3.322L 3.22L &76I:7R; 3.2L

Sharekhan has tie up 0ith the follo0ing banks!

H"=# ,)is >ank I">I #iti >ank IndusInd >ank .nion >ank I#I#I >ank.

"I%I"3" I%:7ST"7%T I% "3T3A6 F3%&!

IN60%&80N& 8utua =und (,ny #om(any! %ystematic In+estment P an (,ny #om(any! 8INI8.8 ,81.N& 2333 233

2'

/3STO"7R
>usiness c ass (eo( e (high c ass! High Net worth Indi+idua s %er+ice c ass (eo( e Go+ernment 0m( oyees Boung ,du ts (1?-33 yrs.! ,du ts (32-23 yrs.! H.= (Hindu .ndi+ided =ami y! <omen ( iterate and working!

"arket Share
%harekhan enjoyed a$out 23 (er cent market share in <e$ $usiness (Internet trading! in stock markets. &hree years ago* <e$ trading showed ot o4 (romise $ut with the market witnessing a downturn* there was not much interest among retai customers.

Profits
&he share o4 <e$ trading constituted 22 (er cent o4 the re+enue. ,s %harekhanHs dai y trading +o ume was o+er -s 233 crore* the share o4 <e$ trading at a$out -s '3 crore a day was su$stantia and a arger (art o4 the +o ume was coming 4rom day traders

22

Its core ser ices are!

0Guities* and "eri+ati+es trading on the Nationa %tock 0)change o4 India /td. (N%0!* and >om$ay %tock 0)change /td. (>%0!* #ommodities trading on Nationa #ommodity and "eri+ati+es 0)change India (N#"0U! and 8u ti #ommodity 0)change o4 India /td. (8#U!* "e(ository ser+ices* 1n ine trading ser+ices* IP1 %er+ices* "ia -n-&rade Port4o io management ser+ices* =undamenta and &echnica -esearch ser+ices* In addition to this they a so (ro+ide ad+isory ser+ices and distri$utions 4or mutua 4unds. %harekhan 6a ue/ine (a month y (u$ ication with re+iews o4 recommendations* stocks to watch out 4or etc.! "ai y research re(orts and market re+iew (High Noon 7 0ag e 0ye! Pre-market -e(ort "ai y trading ca s $ased on &echnica ,na ysis #oo trading (roducts ("aring "eri+ati+es and 8arket %trategy!

Sharekhan First Step

&he %harekhan =irst%te( is a $rand new (rogram designed es(ecia y 4or those who are new to in+esting in shares. , one ha+e to do is o(en a %harekhan =irst%te( account and they guide us through the in+esting (rocess.

Features of Trading 5ith Sharekhan!

1. 2. 3. '. 2. 9. :. ;. =reedom 4rom (a(erwork Instant credit and money trans4er &rade 4rom any net ena$ ed P# ,4ter hour orders 1n ine orders on the (hone &ime y ad+ice and-research re(orts -ea -time Port4o io tracking In4ormation and Price a erts. 29

WEEKLY ANALYSIS

5774 %o# (! Had training 4or three days. In this training we were to d a$out %harekhan #om(any* history o4 %harekhan* organiEation structure* (roducts* %harekhan research re(orts* trading techniGues* c ients* "emat accounts* "eri+ati+es* and 1n ine trading accounts in $rie4 - %(eed &rade and # assic account* earned how to $uy and se shares through these on ine termina s* %a es techniGue* %harekhanVs $rokerage. ,s this was my 4irst week and had training 4or 3 days I got +ery ess time to understand the (roducts* market and (otentia customers.

5774 %o# +! Gained detai ed know edge a$out c assica account. # assica account is a we$-$ased (roduct o4 sharekhan and consists o4 1n ine trading in 0Guity 7 "eri+ati+e "ia -n-&rade 1n ine &rading W >ank W demat #ash trans4er 1rder and trade con4irmation through e-mai s %ing e screen inter4ace 4or cash and deri+ati+e

2:

5774 %o# @! In this week we were to d a$out the s(eed trade. %(eed trade tiger is a so4tware o4 sharekhan which is gi+en to its customers 4or trading. %(eed trade ena$ es its users 1n ine trading in 0Guity 7 "eri+ati+e "ia -n-&rade 1n ine &rading W >ank W "emat #ash &rans4er 1rder and trade con4irmation through e-mai s %ing e screen inter4ace 4or cash and deri+ati+e /i+e &ermina

5774 %o# >! <e were asked to o(en a demat account so that we cou d ha+e (ractica know edge a$out what we ha+e earned in three (re+ious weeks and a so we were gi+en an assignment to (re(are a (ort4o io o4 our in+estment in 4i+e di44erent sectors.

2;

,G0 %&-.#&.-0 1= -0%P1N"0N&%

Age Chart

10%

20% 15 to 30 31 to 45 46 to 60

,G0 12-33 31-'2 '2-93

-0%P1N"0N& 1' ' 2

70%

(=igure-'!

IN&0-P-0&,&I1NIt can $e seen that most o4 the (eo( e who are $etween 12 to 33 o d are most in+o +ed in on ne trading whi e there are 4our (eo( e who are $etween 31 to '2 and on y two are a$o+e '2.

2?

IN#180

Income Chart

10% 5%

%e&o' 15000 15001 to 30000 30001 to 45000 ("o)e 45000 25% 60%

Income/Month %e&o' 15000 15001 to 30000 30001 to 45000 ("o)e 45000

!m"e# o$ Mem"e# 12 5 1 2

(=igure-2!

33

IN&0-P-0&,&I1N&his is c ear 4rom the chart that (eo( e ha+ing income ess than 12333 are more in+o +ed in on ine trading and 2 (eo( e are ha+ing income more than 12333 $ut ess than 33333 and 3 (eo( e are ha+ing income more than 33333.

0".#,&I1N @.,/I=I#,&I1N

Education Chart

2 Othe#

5 .o/t G#+,!+t-on

!m"e# o$ Mem"e#

13 G#+,!+t-on

10

12

14

(=igure-9!

31

IN&0-P-0&,&I1NIt can $e seen that most o4 the (eo( e who are in+o +ed in on ine trading are graduates and 2 res(ondents are (ost graduates and 2 (eo( e ha+e di44erent education Gua i4ication.

,##1.N& 1P0NING
(cco!nt 0e$ 2h+#t

15% 30% 10% .e#/on+& +c1!-nt+nce 0e$e##+&-2&-ent/ 0e$e##+&- on 2&-ent/ 2+&& / 3+&& -n .e#/on+& .#o/4ect )-/-t

5%

(cco!nt 0e$ .e#/on+& +c1!-nt+nce 0e$e##+&2&-ent/ 0e$e##+&on 2&-ent/ 2+&& / 3+&& -n .e#/on+& .#o/4ect )-/-t

!m"e# o$ Mem"e# 6 * 1 2 3

40%

(=igure-:!

32

IN&0-P-0&,&I1N8any o4 the res(ondents o(ened their accounts through agent(c ient! o4 the com(any 7 9 (eo( e o(ened $y (ersona acGuaintance whi e 9 res(ondents used other mode o4 account o(ening.

=00/ %,=0..M

(n/'e# Ye/ o

!m"e# o$ Mem"e# 14 6

33

14 14

12

10

* 6 6

!m"e# o$ Mem"e#

0 Ye/ o

(=igure-;!

IN&0-P-0&,&I1NIt is shown in the 4igure that :3L o4 res(ondents 4ee sa4e whi e trading on ine and 33L are ha+ing 4ear o4 4raud.

81%& &-,"0" %&1#5

3'

/toc8 E1!-t5 M.6!n,/ 2ommo,-t-e / 67O Othe#

Mem"e# 7 * 3 1 1

Most Traded Stock

5 * 7 3

!m"e# o$ Mem"e#

2 3 1 1 0 E1!-t5 M!t!+& 6!n,/ 2ommo,-t-e/ 67O E1!-t-e/ Othe# 1

(=igure-?! 32

IN&0-P-0&,&I1NIt can $e seen that '3L res(ondents most trade in mutua 4und and : (eo( e trade in eGuity 7 3 in+est in commodities whi e 1 (erson trades in 4uture and o(tion and 1 in other stocks.

0UP0-I0N#0
Online Trading Experience

e94e#-ence %e&o' 5 Ye+# 5 to 10

15%

!m"e# o$ Mem"e# 17 3

%e&o' 5 Ye+# 5 to 10

*5%

(=igure-13!

-0#0I60 .P",&0" IN=1-8,&I1N

39

"pdated Information

: Ye/ o

(n/'e# Ye/ o

!m"e# o$ Mem"e# : 11

11

Successful broker

(=igure-11!

%.##0%%=./ >-150-

5%

5%

5%

5%

;t#on<&5 +<#ee (<#ee Mo,e#+te D-/+<#ee ;t#on<&5 ,-/+<#ee

5!%

;!cce//$!& "#o8e# ;t#on<&5 +<#ee (<#ee Mo,e#+te D-/+<#ee ;t#on<&5 ,-/+<#ee

!m"e# o$ Mem"e# 1 7 10 1 1

3:

(=igure-12!

IN&0-P-0&,&I1N- It can $e seen that most o4 res(ondents moderate y agree that their $roker is success4u in on ine trading 7 32L just agree whi e 1 (erson is strong y agree on the statement#

S5OT A%A6;SIS

%trengths
It is a (ioneer in on ine trading with a turn o+er o4 -s.'33 crores and more than ;33 (eo( es working in the organiEation. %%5I the (arent com(any o4 %hare 5han has more than eight decades o4 trust and credi$i ity in the Indian stock market. In the ,sian 8oney >rokerDs (o %%5I won the AIndiaDs $est $roking house 4or 233'C award. %hare 5han (ro+ides mu ti-channe access to a its customers through a strong on ine (resence with www.sharekhan.com* 223 share sho(s in 133 cities and a ca -center $ased "ia -n-&rade 4aci ity 3;

 %hare 5han has dedicated research teams 4or 4undamenta and technica research. <hich constant y track the (u se o4 the market and (ro+ide time y in+estment ad+ice 4ree o4 cost to its c ients which has a strike rate o4 :3-;3L. 0asier access to the customer due to argest ground network o4 2;3 $randed share sho(s in 123 cities. 044icient research and ana ysis team* which is* inter(reting the economy and com(anyDs (er4ormance accurate y* is enhancing the (ro4ita$i ity o4 the c ient.

<eakness
/oca iEed (resence due to insu44icient in+estments 4or country wide 0)(ansion. /ack o4 awareness among customers $ecause o4 non-aggressi+e (romotiona strategies ((rint media* news(a(ers* etc!. /esser em(hasis on customer retention. =ocuses more on HNIs than retai in+estors which resu ts in meager market%hare as com(ared to c ose com(etitors. Promotiona acti+ities conducted $y the com(any are not at (ar with the other =irms.

1((ortunities
<ith the $ooming ca(ita market it can success4u y aunch new ser+ices and raise its c ientDs $ase. It can easi y ta( the retai in+estors with sma sa+ing through (romotiona #hanne s ike (rint media* e ectronic media* etc. 3?

 ,s interest on 4i)ed de(osits with (ost o44ice and $anks are a time ow* more and 8ore sma in+estors are entering into stock market. ,$o ition o4 ong term ca(ita gain ta) on shares and reduction in short term ca(ita gain is making stock market as hot destination 4or in+estment among sma in+estors. Increasing usage o4 internet through $road$and connecti+ity may $oost a who e new $reed o4 in+estors 4or trading in securities.

&hreats
,ggressi+e (romotiona strategies $y c ose com(etitors may ham(er %hare 5hanDs acce(tance $y new c ients. /ack o4 su44icient $ranch-o44ices 4or s(eedy de i+ery o4 ser+ices. 1ther ( ayers are (ro+iding margin 4unds to in+estors on easy terms where as there is no such 4aci ity in share khan. 8ore and more ( ayers are +enturing into this domain which can 4urther reduce the earnings o4 %hare 5han. ,+ai a$i ity o4 .nit /inked Insurance Po icies (./IPDs! and mutua 4unds in the market.

'3

FI%A%/IA6 A%A6;SIS
=inancia statement ana ysis is a judgmenta (rocess. 1ne o4 the (rimary o$jecti+es is identi4ication o4 major changes in trends* and re ationshi(s and the in+estigation o4 the reasons under ying those changes. &he judgment (rocess can $e im(ro+ed $y e)(erience and the use o4 ana ytica too s. Pro$a$ y the most wide y used 4inancia ana ysis techniGue is ratio ana ysis* the ana ysis o4 re ationshi(s $etween two or more ine items on the 4inancia statement. =inancia ratios are usua y e)(ressed in (ercentage or times. Genera y* 4inancia ratios are ca cu ated 4or the (ur(ose o4 e+a uating as(ects o4 a com(anyHs o(erations and 4a into the 4o owing categories:

/iGuidity ratios measure a 4irmHs a$i ity to meet its current o$ igations. Pro4ita$i ity ratios measure managementHs a$i ity to contro e)(enses and to earn a return on the resources committed to the $usiness. /e+erage ratios measure the degree o4 (rotection o4 su(( iers o4 ong-term 4unds and can a so aid in judging a 4irmHs a$i ity to raise additiona de$t and its ca(acity to (ay its ia$i ities on time. 044iciency* acti+ity or turno+er ratios (ro+ide in4ormation a$out managementHs a$i ity to contro e)(enses and to earn a return on the resources committed to the $usiness.

, ratio can $e com(uted 4rom any (air o4 num$ers. Gi+en the arge Guantity o4 +aria$ es inc uded in 4inancia statements* a +ery ong ist o4 meaning4u ratios can $e deri+ed. , standard ist o4 ratios or standard com(utation o4 them does not e)ist. &he 4o owing ratio (resentation inc udes ratios that are most o4ten used when e+a uating the credit '1

worthiness o4 a customer. -atio ana ysis $ecomes a +ery (ersona or com(any dri+en (rocedure. ,na ysts are drawn to and use the ones they are com4orta$ e with and understand.

6iquidity Ratios
<orking #a(ita <orking ca(ita com(ares current assets to current ia$i ities* and ser+es as the iGuid reser+e a+ai a$ e to satis4y contingencies and uncertainties. , high working ca(ita $a ance is mandated i4 the entity is una$ e to $orrow on short notice. &he ratio indicates the short-term so +ency o4 a $usiness and in determining i4 a 4irm can (ay its current ia$i ities when due. =ormu a #urrent ,ssets - #urrent /ia$i ities

,cid &est or @uick -atio , measurement o4 the iGuidity (osition o4 the $usiness. &he Guick ratio com(ares the cash ( us cash eGui+a ents and accounts recei+a$ e to the current ia$i ities. &he (rimary di44erence $etween the current ratio and the Guick ratio is the Guick ratio does not inc ude in+entory and (re(aid e)(enses in the ca cu ation. #onseGuent y* a $usinessHs Guick ratio wi $e ower than its current ratio. It is a stringent test o4 iGuidity. =ormu a #ash W 8arketa$ e %ecurities W ,ccounts -ecei+a$ e #urrent /ia$i ities

#urrent -atio Pro+ides an indication o4 the iGuidity o4 the $usiness $y com(aring the amount o4 current assets to current ia$i ities. , $usinessHs current assets genera y consist o4 cash* marketa$ e securities* accounts recei+a$ e* and in+entories. #urrent ia$i ities inc ude accounts (aya$ e* current maturities o4 ong-term de$t* accrued income ta)es* and other accrued e)(enses that are due within one year. In genera * $usinesses (re4er to ha+e at east one do ar o4 current assets 4or e+ery do ar o4 current ia$i ities. Howe+er* the norma current ratio 4 uctuates 4rom industry to industry. , current ratio signi4icant y higher than the industry a+erage cou d indicate the e)istence o4 redundant assets. #on+erse y* a current ratio signi4icant y ower than the industry a+erage cou d indicate a ack o4 iGuidity. =ormu a #urrent ,ssets #urrent /ia$i ities

#ash -atio Indicates a conser+ati+e +iew o4 iGuidity such as when a com(any has ( edged its recei+a$ es and its in+entory* or the ana yst sus(ects se+ere iGuidity (ro$ ems with in+entory and recei+a$ es. =ormu a #ash 0Gui+a ents W 8arketa$ e %ecurities '2

#urrent /ia$i ities

Profitability Ratios
Net Pro4it 8argin (-eturn on %a es! , measure o4 net income do ars generated $y each do ar o4 sa es. =ormu a Net Income P Net %a es

P -e4inements to the net income 4igure can make it more accurate than this ratio com(utation. &hey cou d inc ude remo+a o4 eGuity earnings 4rom in+estments* Iother incomeI and Iother e)(enseI items as we as minority share o4 earnings and nonrecuring items.

-eturn on ,ssets 8easures the com(anyHs a$i ity to uti iEe its assets to create (ro4its. =ormu a Net Income P (>eginning W 0nding &ota ,ssets! F 2

1(erating Income 8argin , measure o4 the o(erating income generated $y each do ar o4 sa es. =ormu a 1(erating Income Net %a es

-eturn on In+estment 8easures the income earned on the in+ested ca(ita . =ormu a Net Income P /ong-term /ia$i ities W 0Guity

-eturn on 0Guity 8easures the income earned on the shareho derHs in+estment in the $usiness. =ormu a Net Income P 0Guity

Gross Pro4it 8argin Indicates the re ationshi( $etween net sa es re+enue and the cost o4 goods so d. &his ratio shou d $e com(ared with industry data as it may indicate insu44icient +o ume and e)cessi+e (urchasing or a$or costs. '3

=ormu a

Gross Pro4it Net %a es

Financial 6e erage Ratios

&ota "e$ts to ,ssets Pro+ides in4ormation a$out the com(anyHs a$i ity to a$sor$ asset reductions arising 4rom osses without jeo(ardiEing the interest o4 creditors. =ormu a &ota /ia$i ities &ota ,ssets

#a(ita iEation -atio Indicates ong-term de$t usage. =ormu a /ong-&erm "e$t /ong-&erm "e$t W 1wnersH 0Guity

"e$t to 0Guity Indicates how we creditors are (rotected in case o4 the com(anyHs inso +ency. =ormu a &ota "e$t &ota 0Guity

/ong-term "e$t to Net <orking #a(ita Pro+ides insight into the a$i ity to (ay ong term de$t 4rom current assets a4ter (aying current ia$i ities. =ormu a /ong-term "e$t #urrent ,ssets - #urrent /ia$i ities

7fficiency Ratios
#ash &urno+er 8easures how e44ecti+e a com(any is uti iEing its cash. =ormu a Net %a es #ash

%a es to <orking #a(ita (Net <orking #a(ita &urno+er! Indicates the turno+er in working ca(ita (er year. , ow ratio indicates ine44iciency* ''

whi e a high e+e im( ies that the com(anyHs working ca(ita is working too hard. =ormu a Net %a es ,+erage <orking #a(ita

&ota ,sset &urno+er 8easures the acti+ity o4 the assets and the a$i ity o4 the $usiness to generate sa es through the use o4 the assets. =ormu a Net %a es ,+erage &ota ,ssets

=i)ed ,sset &urno+er 8easures the ca(acity uti iEation and the Gua ity o4 4i)ed assets. =ormu a Net %a es Net =i)ed ,ssets

/apital $earing Ratio! Closely related to solvency ratio is t!e ca#ital earin ratio$ Ca#ital earin ratio is %ainly used to analy3e t!e ca#ital structure of a co%#any$ 1or%ula E4uity S!are /apital 1i+ed 'nterest ,earin 1unds

Retained 7arnings to Total Assets Ratio T!is ratio indicates t!e e+tent to (!ic! assets !ave been #aid for by co%#any #rofits$A retained earnin s to total assets ratio near 565 -5778. indicates t!at ro(t! !as been financed t!rou ! #rofits, not increased debt$A lo( ratio indicates t!at ro(t! %ay not be sustainable as it is financed fro% increasin debt, instead of reinvestin #rofits$ 1or%ula Retained earnings Total assets

/ash Flo0 Indicator Ratios6

'2

Operating /ash Flo0ASales Ratio T!is ratio, (!ic! is e+#ressed as a #ercenta e, co%#ares a co%#any9s operating cash flo0 to its net sales or re enues1 0hich gi es in estors an idea of the companyBs ability to turn sales into cash# Formula6

Operating cash flo0 %et sales.re enues2

/ash Turno er Ratio T!e cas! turnover ratio indicates t!e nu%ber of ti%es t!at cas! turns over in a year 1or%ula Sales /ash /ash Flo0 to 6ong Term &ebt Ratio T!e cas! flo( to lon ter% debt ratio a##raises t!e ade4uacy of available funds to #ay obli ations$ 1or%ula Cas! flo( 6ong term debt

Operations /ash Flo0 to /urrent 6iabilities Ratio If the operations cash flo0 to current liabilities ratio keeps increasing1 it may indicate that cash inflo0s are increasing and need to be in ested# Formula /ash flo0 from operations Current liabilities

/ash Flo0 for In esting to /ash Flo0s from Operating and Financing This ratio compares the funds needed for in estment to the funds obtained from financing and operations# =ormu a #ash 4 ows 4rom in+esting . #ash 4 ows 4rom o(erations W cash 4 ows 4rom 4inancing

'9

SO6:I%$ C A%A6;SI%$ RATIOS!

iD %et profit margin E ()+#'+ F('' E ++#G+H
**)#-, higher (ro4it margin indicates a more (ro4ita$ e com(any that has $etter contro o+er its costs com(ared to its com(etitors. &his is com(ared with the ast yearDs (ro4it margin o4 com(any.

iiD ?uick ratio X (*)*#') E (#@(

(+)G#)+ Idea @uick ratio is 1:1. #om(any needs to im(ro+e this.

iiiD /urrent ratio E (,'-#G( E (#@*

(+)G#)+ Idea @uick ratio is 2:1. #om(any needs to increase its assets or decrease its ia$i ities#

i D Operating profit margin E +>*#G)F('' E @,#'*

**)#-, hea thy o(erating margin is reGuired 4or a com(any to $e a$ e to (ay 4or its 4i)ed costs* such as interest on de$t.

D Total debtAequity ratio E >-,#,)' E '#>)

':

((',#,( &he norma y acce(ta$ e de$t-eGuity ratio is 2:1. -atio ess than one means eGuity (ro+ides a majority o4 the 4inancing.

iD Return on in estment E ()+#'+F('' E -#>,

(*')#>* Higher ratio is $etter. In this case the ratio has increased as com(ared to ast yearDs ratio (;.23!. the

iiD $ross profit margin E +,(#(> F ('' E >'#,+H

**)#-Higher the ratio $etter it is.

iiiD Return on equity E ()+#'+ E (@#,@

((',#,(

iFD /apitaliIation ratio E >-,#,) E '#@( or @(H

(*')#>* /ow de$t and high eGuity e+e s in the ca(ita iEation ratio indicate in+estment Gua ity.

FD 6ong term debt to net 0orking capital E >-,#,) E (#((

>)(#+-

FiD FiFed assets turno er ratio E **)#-- E '#),

(()+#>+ , high ratio means a high rate o4 e44iciency o4 uti iEation o4 4i)ed asset and ow ratio means im(ro(er use o4 the assets.

FiiD &ebtor turno er ratio E **)#-- E (#()

),,#)' Higher ratio is $etter. In this case com(anyDs net sa e is more than the a+erage ';

de$tors.

FiiiD /apital gearing ratio E ((',#,( E +#+@

>-,#,)

Fi D Operating cash flo0 ratio E )#(+' F ('' E '#,*H

**)#-&he greater the amount o4 o(erating cash 4 ow* the $etter.

F D /ash flo0 to long term debt E (@(#)- E '#+*

>-,#,) &he higher the (ercentage ratio* the $etter the com(anyHs a$i ity to carry its tota de$t. In this case* their de$t oad is higher than their o(erating cash 4 ows* gi+ing it a ratio o4 ess than one* howe+er the (ercentage ($eing $e ow '3L! is considered ow.

F iD /ash turno er ratio E **)#-- E (#(G

)*(#G>

F iiD Operations cash flo0 to current liabilities E )#(+'' F ('' E '#>-H

('+*#+( ,ny resu t ess than 1 indicates that the com(any is not a$ e to iGuidate its current ia$i ities 4rom o(erating cash 4 owJ the com(any wi (ro$a$ y ha+e to se assets* $orrow money or issue stock in order to meet its short term de$t o$ igations.

F iiiD Retained earnings to total assets E (,,#)> E '#((

(*')#>* -etained earnings to tota assets ratio near 1:1 (133L! indicates that growth has $een 4inanced through (ro4its* not increased de$t. &his ow ratio indicates that growth is not sustaina$ e as it is 4inanced 4rom increasing de$t* instead o4 rein+esting (ro4its.

FiFD 7quity multiplier E (*')#>* E (#>>

((',#,( &he eGuity mu ti( ier ratio disc oses the amount o4 in+estment e+erage. , higher eGuity mu ti( ier indicates higher 4inancia e+erage* which means the com(any is '?

re ying more on de$t to 4inance its assets.

FFD /ash flo0 for in esting to cash flo0 from operating and financing
E8 +*)#*+' )#(+J@-+#'G E 8+*)#*+ @-,#+' E 8'#**

/I8I&,&I1N% 1= &H0 %&."B:

"es(ite o4 the training my e+e $est* there were sti some imitation which I think remains there to draw 4ruit4u conc usion. &here were some (ractica (ro$ ems which come across and cou d not $e (ro(er y death with &he ad+isory ser+ices $eing (romised $y the $rokers wou d $e o4 itt e use to in+estors ooking 4or an insight into the market. ,s a c ient one wi access the N%0 through a ser+er o4 the on ine $rokerage and this may in+o +e Gueuing de ays &he com(any does not (ro+ide its 4inancia re(ort to anyone. %o the $a ance sheet* cash-4 ow-statement 7 (ro4it and oss account shown in this (roject are not audited and are o4 some otherDs com(any.

23

67AR%I%$S C FI%&I%$S

/0,-NING%: "uring my summer training* I ha+e earned:

Im(ortance o4 in4ormation techno ogy in the 4ie d o4 stock $roking is immense. %tock $roking com(anies run with the he ( o4 I&. &he termina through which the $rokers $uy and se shares is so4tware that com( ete y de(ends on the internet. =or %harekhan* this termina has $een designed $y the so4tware com(any A%(iderC. >uying and se ing through internet is 4ast. ,s soon as the (rices o4 the shares goes u( or comes down then they can $e so d or (urchased instant y within seconds. #ustomer -e ationshi( is +ery necessary 4or the com(any to retain the customers. In %harekhan /td. I ha+e earned a ot re ating to the 4inance* earned the meaning 21

o4 the words that are most y used in the share market. /earned a$out +arious (roducts o4 the %harekhan /imited* /earned +arious as(ects regarding %hare 8arket. /earned how to use on ine trading termina . /earned the +arious (o icies o4 the com(any. /earned a$out +arious (roducts used in the share market es(ecia y "emat accounts and "eri+ati+es.

Got the (ractica know edge o4 the market.

=IN"ING% ,N" 1>%0-6,&I1N%: = uctuations are more in secondary market than any other market. &here are more s(ecu ators than in+estors. In4ormation ( ays a +ita ro e in the secondary market. Pre+ious y ro ing sett ement is &W2 days* now it changed to &W2 days and 4urther it wi $e changing to &W1 day. It was a so o$ser+ed that many $roking houses o44ering internet trading a ow c ients to (ro+iders. &he num$er o4 ( ayers is increasing at a steady rate and today there are o+er a doEen o4 $rokerage houses who ha+e o(ted to o44er net trading to their customers and (rominent among them are %H,-0 5H,N* India $u s* kotakstreet* I#I#I direct. use their con+entiona system as we just ensure that they do not oose them and this instead o4 o44ering e-$roking ser+ices they $ecomes ser+ice

22

#1N#/.%I1N ,N" -0#1880N",&I1N%

&hings ha+e changed 4or the $etter with the %H,-05H,N going on- ine cou( ed with endea+or to stream ine the who e trading system* things ha+e changed dramatica y o+er the ast 3 to ' years. New and ad+anced techno ogies ha+e $reached geogra(hica and cu tura $arriers* and ha+e $rought the countrywide market to doorste(. &he introduction o4 on- ine trading wou d in4 uence the in+estors resu ting in an increase in the $usiness o4 the e)change. It has he (ed the $rokers hand ing a +ast amount o4 transactions and this can $e an e44icient trading* de i+ering* sett ement system with adeGuate (rotection to in+estors. &he trading o4 %H,-05H,N o4 the 4irst day was -s. 1.; crores. "ue to in+ention o4 on ine trading there has $een greater $ene4it to the in+estors as they cou d se trading. &he $rokerDs has a greater sco(e than com(ared to the ear ier times $ecause o4 in+ention o4 on ine trading. &he conce(t o4 $usiness has changed today* this is a ser+ice oriented industry hence the sur+i+a wou d reGuire them to (ro+ide the $est (ossi$ e ser+ice to the c ients. 23 F $uy shares as and when reGuired and that to with on ine

I recommend the e)change authorities to take ste(s to educate In+estors a$out their rights and duties. I suggest to the e)change authorities to increase the in+estorsD con4idences.

I recommend the e)change authorities to $e +igi ant to cur$ wide 4 uctuations o4 (rices. &he s(ecu ati+e (ressures are res(onsi$ e 4or the wide changes in the (rice* not attracting the genuine in+estors to the greater e)tent towards the market. Genuine in+estors are not at a interested in the s(ecu ati+e gain as their in+estment is $ased on the 4uture (ro4its* there4ore the authorities o4 the e)change shou d $e more +igi ant to cur$ the s(ecu ation.

BIB6IO$RAP=;

'''./h+#e8h+n.com www.economictimes.com www.moneycontrol.com www.bseindia.com www.nseindia.com www.sebi.gov.in www.investors.com www.investopedia.com

News(a(ers!8
The Times of India 2'

 The Economic Times BOOKS: Beri .!" #ar$eting %esearch &pta !.B" #ar$eting #anagement.

A%%793R7
Balance sheet
"ar B (' 2:.3' 3.'3 1*323.9 : 1.1: '?9.2; 1*932.; 9 13;.;3 93.93 ';.23 1.:2 1*13'.2 2 1*:3?.; 1 1*22;.1 2 '21.9? 22 "ar B '29.9; 11.3: ?;3.13 1.:3 3.13 1*3'?.? ? 1'3.9; ''.?' ?;.:3 '.21 ;9?.31 ::;.:2 :31.31 ::.'3

0Guity share ca(ita %hare a(( ication money Pre4erence share ca(ita -eser+es 7 sur( us %ecured oans .nsecured oans &ota Gross $ ock /ess : re+a uation reser+e /ess : accumu ated de(reciation Net $ ock #a(ita work-in-(rogress In+estments #urrent assets* oans 7 ad+ances /ess : current ia$i ities 7 (ro+isions &ota net current assets

"ar B (' 8isce aneous e)(enses not written 1*932.; &ota 9 1*131.' >ook +a ue o4 unGuoted in+estments ? 8arket +a ue o4 Guoted in+estments 3.2: #ontingent ia$i ities 2'.1: 2;22.1 Num$er o4 eGuity sharesoutstanding (/acs! 2

"ar B '1*3'?.? ? ;9?.2; 3.33 23.;2 2;3'.3 3

Cash flo# statement

"ar B (' Pro4it $e4ore ta) 233.31 Net cash4 ow-o(erating acti+ity 2.12 Net cash used in in+esting acti+ity 292.92 Netcash used in 4in. acti+ity Net incFdec in cash and eGui+ nt #ash and eGui+a nt $egin o4 year #ash and eGui+a nt end o4 year 3?2.3; 131.2? '33.22 291.;' "ar B '121.'; 213.:3 -1;.:1 2:?.11 212.;; 21'.3: '33.22

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Profit loss account

"ar B (' "ar B '2'2.2: ?3.32 139.?1 9:.3; ;2.;1 3;3.'2 12;.;2 2?.3: 1;;.22 11.12 22.29 121.21 ':.;; 133.93 -3.33 2.23 132.;3 22;.:' :?.'2 13.23 132.:?

Income
1(erating income 992.?? 1'.22 192.92 13:.1; 13'.;3 '1?.1' 2'9.;2 2'.33 2:1.1' 13.;; 31.;9 222.'3 ::.3' 1';.3: :.?3 -3.?9 122.32 2::.22 ;2.23 1'.'; 1::.2'

7Fpenses
8ateria consumed 8anu4acturing e)(enses Personne e)(enses %e ing e)(enses ,dminstrati+e e)(enses 0)(enses ca(ita ised #ost o4 sa es 1(erating (ro4it 1ther recurring income ,djusted P>"I& =inancia e)(enses "e(reciation 1ther write o44s ,djusted P>& &a) charges ,djusted P,& Non recurring items 1ther non cash adjustments -e(orted net (ro4it 0arnigs $e4ore a((ro(riation 0Guity di+idend Pre4erence di+idend "i+idend ta) -etained earnings

?37STIO%%AIR7
, %&."B 1N 1N/IN0 &-,"ING 1N %H,-05H,N /&"
&he (ur(ose o4 this Guestionnaire is to know the $eha+ior o4 in+estors a$out on ine trading

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and this is on y 4or academic (ur(ose.

1. NameYYYYYYYYY 2. ,ge Z 12 to 33 Z '9 to 93 3. Income (er month Z >e ow 12333 Z 33331 to '2333 '. 0ducation Gua i4ication Z Graduation Z 1thers 2. "o you know a$out on ine tradingM Z Bes 9. How was account o(enedM Z Persona acGuaintance Z -e4erra -Non # ients Z Persona Pros(ect 6isit :. Net worth in+o +ed in on ine trading YYYYYY... Z -e4erra -# ients Z #a F<a k in Z No Z (ost graduation Z 12331 to 33333 Z a$o+e '2333 Z 31 to '2 Z a$o+e 93

;. "o you 4ee sa4e whi e trading on ineM Z Bes Z No 2;

?. In which stock you most trade on ine Z 0Guity Z #ommodities Z 1ther 13. No. o4 years o4 on ine trading e)(erience in stocks at this 4irm Z $e ow 2 yrs Z 2 to 13 Z 8utua =unds Z =71 0Guitie

11. "o you recei+e u(dated on ine in4ormation regarding the stock market 4rom your dea erF$rokerM ZBes ZNo

12. "o you $e ie+e that your traderF$roker is +ery success4u in on ine tradingM Z %trong y ,gree Z"isagree Z,gree Z%trong y "isagree Z8oderate

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