Online Share Trading Portal

On-Line Share Trading Portal
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Why invest?
If you were to open a book on economics and look up the word “investing”, chances
are that you would find the following definition: “Investing is building up to meet
future consumption demands with the intention of making surpluses or profits, as
they are popularly known.”
And after reading it, the last trace of your eagerness to invest is likely to evaporate.
But investing is essential. Here is why…
While the life expectancy of the average human being has increased, we are
productive only between the ages of 30 and 60 years. Hence the short time span
that we are able to earn money needs to provide for our future when we may not be
capable of earning.
Everything being the same, we could keep away a part of our earnings every year
(save) that will come in handy when we will not be able to earn. However inflation
destroys the value of what we save. A sum of Rs10,000 saved this year will not have
the same purchasing power ten years down the line. Hence we need to preserve the
purchasing power of what we save.
The only way to hedge inflation is to invest in shares, debentures, bonds, gold or real
estate, to earn returns from these assets that compensate for the decline in our
purchasing power.
What is a share?
“Share” or “Equity” represents part of an ownership of a business. So as a

shareholder you own a piece of the action that happens in that business. Why would
you want a piece of the action? For the rewards of course. As a shareholder you
have a right over the profits generated by your business. Your company might pay
out the profits generated every year as dividends or it may retain the profits to further
grow them.
There’s another way you as a shareholder can make money. If your company does
well, then its shares listed on the stock market become more valuable and the stock
price appreciates. On the other hand, the company might perform badly. Then not
only do you not get dividends but the stock price also declines. Hence investing in
shares is a risky proposition.
When you invest in shares, you can expect certain returns based on the
fundamentals of a business. However you have no control over it. What you have
control over is managing risks associated with it.
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CHAPTER - 1
INDIAN SECURITIES MARKET
1.1 Introduction
Securities market has essentially three categories of participants, namely the

issuer of securities, investors in securities and the intermediaries and two categories
of products, namely the services of the intermediaries, the securities including
derivatives.
The securities market has two interdependent and inseparable segments, the
new issues (primary market) and the stock (secondary market). The primary market
provides the channel for sale of new securities while the secondary market deals in
securities previously issued.
1.2 History
 1850 – Shares of banks and securities of East India Company traded in

Mumbai under a sprawling banyan tree in front of Town Hall, which is now in
the Horniman Circle Park.
 1875 – Brokers organized an association known as the Native Share Brokers

Association, and the country’s first stock exchange the Bombay Stock
Exchange (BSE), set up in Mumbai with 318 members. The membership fee
gradually increased from Re 1 in 1887 to Rs 1,000 in 1896, and Rs 48,000 in
1920.
 1956 – Securities Contract Regulation Act passed
 1957 – The BSE and eight other stock exchanges registered under the
Securities Trading Contract Act.
 1982 – The BSE classifies scripts into Group A for carry forward, and Group B
for cash transactions.
 1986 – The BSE 30-share Sensitivity Index (a.k.a. the Sensex) compiled;
updated every two minutes.
 1987 – Stock Holding Corporation of India set up.
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 1992 – Ordinance promulgated for granting statutory powers to the SEBI. The
Over-The-Counter Exchange Of India begins operations. The National Stock
Exchange incorporated. The new 9,000-sq. ft ring in the rotunda of the new
annexe to Jeejeebhoy Towers inaugurated.
 1994 – The NSE’s debt segment begins operations on June 30; and the
capital market segment begins on-line script less trading on November 3.
 1995 – The BSE computerizes its trading operations, signaling the end of 120
years of floor-trading with open out-cry system of share-trading and the
beginning of screen-based trading on the BSE.
 1996 – NSE 50 index launched April 22. NSDL set up as the first depository in
India, and the NSE commences trading in dematerialized securities on
December 26.
 2000 – The SEBI approves the report on Net trading brought out by the SEBI
committee on Net based trading and services. Pursuant to the circular, stock
exchanges are required to give permission to members to start Net-based
trading after ensuring fulfillment of the minimum conditions. The NSE is the
first exchange to grant provisional permission to Cochin-based Geojit
Securities to commence Net-based trading.
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1.3 Changing Trend
Remember the time when you left orders with your broker in the morning
and received a confirmation fax late in the evening?
You wondered whether you had acquired the shares at the best possible
price for the day. Today, the picture is different. Imagine a scenario where you log
on to your account, get the live quotes of scripts you are interested in, get
advise from experts and research reports on your investment choice and then just
click the mouse to place your order, pay the amount due (which automatically
gets debited into your account with the on line brokerage firm), get your account
statement, and the delivery of your shares into your Demat account. All this
through just one click of a mouse. Seems like a dream? But with online trading this
has become a reality. A few seconds later, you get the confirmation on your screen.
And after the trade settlement, your bank and DP accounts will reflect the changes
accordingly.
The speed of transaction, confidentiality about the prices and ease of

settlement in the paperless mode should be good reasons for retail investors to
jump on to the Net. All they need is a PC, a modem, a subscription to an ISP, an
account with a bank (which has a web presence) and a depository account. And
they can choose from a plethora of e-trading web sites.
So, finally the changing trend is known as E-trading which really means
Buying and selling securities via the Internet or other electronic means such as
wireless access, touch-tone telephones, and other new technologies with online
trading. In most cases customers access a brokerage firm's Web Site through their
regular Internet Service Provider. Once there, customers may consult information
provided on the Web Site and log into their accounts to place orders and monitor
account activity"
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CHAPTER - 2
Important Terms
2.1 Depository
What is a Depository?
A Depository is a Company where the shares of an individual are held in the

electronic form, at the request of the shareholder. This eliminates the physical form
of holding.
The National Securities Depository Limited (NSDL) was promoted by IDBI, UTI, SBI
and NSE.
The Central Securities Depository Limited (CDSL) was promoted by BSE .
What is the Depository System?
Your money may be held in the form of liquid cash at your home or may be
deposited in a bank. The bank holds your funds in the electronic form and
subsequently debits or credits the account. Depending on your issuance of cheques
or deposit of cheques. The advantages of safety and convenience of dealing with a
Bank overweigh the reasons for holding liquid cash in your home. Your financial
assets such as Equity Shares may be compared to the above example. You may
hold physical share certificates in your home and be exposed to the various risks of
lack of safety, mutilation, loss etc. Alternatively, person may deposit your shares in
an organization called a Depository, which holds your shares in the electronic form.
The advantages of the Depository System can be further compared with physical
shares as below:
The risk of loss, mutilation is common for physical certificates and completely
removed in electronic shares. Handling of a large number of physical certificates is
ended in the Depository mode. In the electronic segment, there are no bad delivers
as in physical segment. There is no stamp duty payable in electronic shares
compared to the duty of 0.50% in the physical segment while transferring ownership.
In loans against shares, banks usually charge a lower interest rate and margin
money than in the physical share certificates. Settlements in the Stock Exchanges
have commenced in the electronic segment and have proven to be far more efficient
and convenient compared to physical shares.
How can Person Deal with the Depository directly?
You cannot deal with the Depository directly. However, if person have any
unresolved grievances against your DP, person can make a complaint to the
Depository at the below mentioned address.
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What are the obligations of a Depository?
The Depository is obligated to maintain the Client Holdings, enable demat and remat
of eligible securities, disbursement of corporate benefits, effect settlement of
securities traded on the exchanges as well as Off-market trades through book entry
transfers, provide for Pledging/Hypothecation of eligible securities.
What is NSDL?
National Securities Depositories Limited is a Depository promoted by UTI, IDBI, SBI

& NSE who hold the securities in electronic form on behalf of the beneficiary holder.
About the Insurance Policy by NSDL
Shares in the electronic segment are 100 percent secure. The agreement between
person and the DP indemnifies person against misuse of your electronic holdings
by any party, in any manner whatsoever. Person may legally invoke such indemnity
and be 100 percent compensated. A comprehensive Insurance Policy has been
taken by NSDL which covers your DP account so as to protect person against any
losses, breach of security etc.
What is CDSL?
Central Depositories Securities Limited is a Depository promoted by BSE.
How does the Depository curtail Forgeries / Fakes in Duplicate Distinctive

Numbers?
Physical share certificates with duplicate distinctive numbers are essentially forged
certificates. The R&T would identify and reject the certificates. The concerned Stock
Exchanges are informed of the details.
2.2 Depository Participant
Who is a Depository Participant?
Depository Participant (DP) is an 6rganization that acts as an Agent of the

Depository and interacts with the investor. A DP is responsible for maintaining your
securities account and operating it only under your written instructions. The
Depositories Acts mandates that investors can use Depository facilities only through
DP’s. The distribution channel and geographical spread of the DP’s offices allows
person to access the Depository at a low cost.
What is a DP ID No?
It is an identification number given to a DP similar to a client ID.
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2.3 Dematerialisation
What is meant by Dematerialisation?
Dematerialisation is a process in which person can convert physical share

certificates into electronic shares. Shares should have been transferred in your name
/ joint names before sending it for Dematerialisation.
Why should Person buy shares in the demat form?
The single biggest reason over buying shares in the physical form is that demat
shares credited to your account within 2 to 3 days after the end of the settlement.
This is unlike the average 30 to 40 days taken in receiving back physical shares from
the R&T Agent and sometimes with objections. Further, possibility of loss or theft of
the certificates is eliminated. This is in addition to the 0.50% stamp duty savings,
which works out to Rs.50 for transfer of shares worth of Rs.10, 000
How does Person benefit by selling demat shares?
Brokers have no fear of bad delivery while selling demat shares. Due to this, they
offer lower brokerage to you. As bad deliveries are eliminated shares are not
returned due to objections, resulting in saving of costs and follow up.
What is meant by Companies in compulsory Demat?
Only share certificates in these companies can be dematerialized by the investor.

Shares must be registered in your name to allow for Dematerialisation. Shares
delivered by your Broker on Purchase (known as street name deliveries) cannot be
dematerialized.
What if Person hold shares of Companies not in Demat?
You may approach the company and request them to sign up with NSDL Vigorously
follow up as Demat is in your favor.
Is it true that Demat is not compulsory?
Yes. Person has the option to hold shares either in the physical OR in the
dematerialized form. This is as per the Depositories Act, 1996.However, when
person buy shares person may receive delivery in the demat form as per the
option of the seller.
Can physical AND Demat shares be held for a company?
Yes. Person may dematerialize only a part of your holdings.
In Demat does Person need a Transfer Deed?
No, there is no need for a Transfer deed in order to get your share certificates
dematerialized.
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How does Person demat his/her Shares?
In order to demat your shares/certificates, person has to fill in a Dematerialisation

Request Form in triplicate along with the relevant details and submit the same to
your DP along with the certificates to be dematerialized. The combination of names
in the shares must be same as that in the account.
What is a DRF?
In order to get your shares converted from the physical to the electronic form, person
has to submit your certificates along with a request form asking for the conversion.
This request form is called a DRF or a Demat Request Form.
What is Defacing of Shares?
When the certificates are surrendered for demat they are to be canceled at the face
of the certificate by putting a stamp "Surrendered for Demat" so that the certificate
cannot be traded. This process of affixing the "Surrendered for Demat" stamp on the
shares is known as defacing of shares.
How long would it take Person’s account to be credited when he/she submit
shares for Dematerialisation?
Your account will be credited typically in 15 days.
Are there Distinctive Numbers & Certificate Nos. in Demat Shares?
No. Dematerialized shares do not have any distinctive or certificate numbers. The
shares are in FUNGIBLE ~ 100 shares of a company are the same as any other 100
in that company.
Why dematerializing, can a sole holder add a Joint Holder?
No. At this point, ownership cannot be transferred from an individual name to a joint
name. To do this, person should first open a Depository Account as the sole holder
and dematerialize the shares. You should open another Depository Account in the
joint names (AB).Now make an off-market transaction from account A to account AB.
The DP will charge a nominal amount for this transaction. As an alternate, the
certificate can be sent for transfer in the joint names AB and then surrendered for
demat with the DP.
What are the various reasons for Rejections in Demat?
Fake Certificate, Signature difference, Third Party Claim, Court Cases are the
reasons as to why a demat request is rejected by R&T Agent.
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2.4 Rematerialisation
What is meant by rematerialisation?
Rematerialisation is a process in which person can convert your electronic holding

into physical share certificates
Does the NSDL issue fresh certificates in Remat?
In the rematerialisation process, a request goes from the DP to the R&T Agent
through the NSDL for the remat. The R&T Agent will process the request, print and
then dispatch the new share certificates directly to you. Thus, the NSDL does not
issue or handle share certificates.
What are the rules for Odd lot Rematerialisation?
There is no concept, any longer, of a market lot in the electronic segment. Thus,
person may remat your odd lot shares at any time. This would be done in exactly the
manner as person would remat market lot shares.
What are the rules for stamp duty in Remat?
The Depository is the registered holder in the Company’s records. In a remat,

transfer from the Depository to person will NOT be liable to a levy of Stamp Duty.
This is as per the Depositories Act. However, the Depository will charge nominal
charges for this process.
How to remat person’s securities?
For Remat of Securities, person have to submit a Remat Request Form (RRF)to
the DP mentioning the relevant details for the rematerialisation process to take
place.
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CHAPTER - 3
TRADING SYSTEMS
3.1 Offline Trading System
As the internet has taken over the physical trade, the same is the
situation in trading in shares. Even the internet has not spared trading in shares
and still the conventional system of offline trading continues in today’s world.
What is meant by Offline trading?
In offline trading system, two parties i.e. an individual and a broker

come into contact with each other and the transaction takes place. The investor
goes to the broker for the purpose of buying or selling of securities and for that he
has to make a payment to settle the transaction.
Here both the parties would be facing some risk. Brokers would be
facing the risk of default. In a typical situation, a customer would be allowed to
trade on margin, either by way of transferring it to trade account with the broker
or giving the broker authority to keep a hold on his bank or depository account till
the time of settlement.
If the margin goes below the specified limit, the website of the broker
would give warning to the investor to replenish the same. Brokers can either ask
for blanket permission/power of attorney from the customer to replenish the same
or take risk on that, in which case they may also square off the contract.
For settlement, different brokers may follow different models:
1. They would require full funding before the pay in day.

2. They may debit the customer's account with the margin money and keep
hold on balance amount. On pay-in day, the balance amount will be
transferred to broker's trade.
3. The broker would debit only the margin amount and would wail to the
customer to pay on the pay-in day.
As a matter of prudence, the broker would have checked the balance in the
customer's account, but the balance may go down between trade day and the
pay-in day. Here, brokers would have to decide the extent of risk if at all they are
ready to take. In periods of volatility, especially when markets are failing,
decision-making of the broker as to the extent of risk he is willing to take would
be very important.
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Customers would face the risk of leakage of personal information.
Merits of Offline trading
• Low Brokerage
In case of offline trading, brokerage charged by the broker is quite low
because of some personal relations, low cost of installation as compared to
online trading.
• Less Margin
Generally, company charges 25% margin while the brokers charge
nearly 10%margin from the investors in case of trading in derivatives.
Sometimes broker charges negligible amount and he allows trading up to his
limit. This shifts the investors from trading online to the trading with the
brokers. Foe example: Local Brokers like Motilal Oswal, Ratnakar, Pravin
Ratilal etc. allow trading in shares with less margin and low brokerage.
• Flexibility in credit period

Local Brokers allow their customers to trade in shares with longer
credit periods which facilitate the payments for the investors. Whereas in
Online trading a customer is required to make the payment in less than 2
days which is not the case in offline trading. The conventional system also
allows to make delay in settlement of payment if the relation with the broker is
good.
• Customized Advice
Normally, investors would like to take to the broker before taking an
investment decision. Internet trading would lack this personal touch. As far as
customization of data using data mining is concerned, that would not attract
customers looking for something different. Some of the brokers are of the
view that they would have to provide advisory services to the customers. But,
with increased volumes they will have to balance their preferences and needs
of the customers.
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Demerits of Offline Trading System
• Problems in getting in touch with the Broker

• Limited Clientele
• Problem of Attention from the Broker due to load
• Reliance on the Broker's information
• Customer has to believe what the broker says
• Broker might not give the best price
• Reconciliation of accounts and cash settlements
• Paperwork
• Geographical Restriction
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3.2 Online –Trading - A New Dimension of Trading
Walter, business professional logs on to the Internet, punches in his id

code and places an order for 100 shares of Microsoft. His broker checks to see if
Walter has the necessary bank balance to buy the shares and then places an
order with the Stock Exchange. The exchange accepts the order after checking
the scrip's limit for the day. Then Walter's Demat account gets credited with the
shares.
Time taken: 2 minutes.
Welcome to the world of e-Trading.....

 No more phone calls to your stockbroker for placing an order.
 No confirmation problem.
 No cash/cheque payments and no physical delivery of shares.
 Just log onto the net for a few minutes and everything will be taken care of.
WHAT IS E-TRADING?
 E-trading is the mechanism of buying/selling securities via the Internet.
 E-trading is considered as a logical extension of e-commerce.
To put it simply, e-commerce is buying and selling through electronic

medium. There could be not be a better place than the stock market, where
tremendous volumes are traded, to exploit the opportunities of e-commerce. But,
there are certain inherent characteristics of this market, which make it more
vulnerable to risks associated with e-commerce. The market requires knowledge,
information, ability to analyze and quick decision-making. This requires utmost
care while trading on the net. A single click can make or destroy investor's wealth.
E-Trading is a service offered on the Internet for purchase and sale of

shares. In the real world, you place orders on your stockbroker verbally
(personally or telephonically).
In Online Trading, a customer can access a stockbroker's website

through his internet-enabled PC and place orders through the broker's
internet-based order routing and trading engine. These orders are routed to
the Stock Exchange without manual intervention and executed thereon. The
order routing to the exchange will happen in a matter of seconds. The order
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execution once it reaches the exchange system is similar to that of an offline
transaction,
3.2.1 History of E-Trading In Global Scenario
The history of e-trading began in 1983, when a doctor in Michigan

placed the first online trade using E*TRADE technology. What began with a
single click over 16 years ago has now taken the world by storm. The concept
was visualized by one Bill Porter, a physicist and inventor with more than a dozen
patents to his Credit: who provided online quotes and trading services to Fidelity,
Charles Schwab, and Quick & Reilly. This led Bill to wonder why, as an individual
investor, he had to pay a broker hundreds of dollars for stock transactions.
Today his dream has become a reality. E-trading has become a way of
investing in the developed world and is soon catching on in developing countries
too. Since that time, online trading has increased dramatically - according to an
unprecedented efficiency and control.
Recent estimate, there are 7.8 million individuals trading online, making
807000 trades per day. Currently, there are over 200 broker-dealers providing
retail investors with the ability to trade online. Along with the growth in online
trading, there has been a surge in investor complaints related to online trading.
The downfall of a few international dotcom like Value America Inc, Net
Inoperative Ltd, Toysmart.com, boo.com has not diminished the opportunities
thrown by internet trading. There are investment banking firms which offer a suit
of services such as online trading, research reports, real-time market
commentary, Java-based charts, analysis and other professional services. E-
Trade has presence in around 119 countries, as one of the renowned players in
the international market.
E-Trade Securities Inc was floated in 1992 to offer online investing

services through America Online and CompuServe and launched
www.etrade.com in 1996. Recently, it announced strategic alliances with Wit
Sound Vies, the online banking subsidiary of Wit Capital Group Inc, to capitalize
on the complementary core strengths of the two groups. TD Waterhouse, the
second largest global brokerage, has over 2.9 million customer accounts
worldwide and more than $150 billion in customers' assets under administration.
In addition to securities trading services, it also provides banking, mutual funds
and other financial products/services to its customers.
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History of e trading in Indian context
Net trading begins in India....
On Jan 31st 2000, the Securities Exchange Board of India (SEBI)

formally notified all the stock exchanges, giving them a green signal for
Net/Online trading. The various players of the securities market, which includes
NSE, BSE, other regional stock exchanges and the brokers, had been waiting
long for the go-ahead sign. Trading via the net is expected to generate greater
volumes than ever before and this has attracted a large number of players. One
day after SEBI announced its regulations for net trading, Kerala based ‘Geojit
Securities’ took the lead and started online trading in Mumbai. The Kerala State
Industrial Development Corporation (KSIDC) decided to join Geojit Securities in
1994. It has a 24% stake in the equity, the balance belonging to Geojit Securities
itself. This is the only venture in India where a state owned development
institution is participating in the equity of a stock broking company. The first net
transaction was a trade for 100 shares of Reliance executed by DR Metha,
Chairman, and SEBI for the Chairman of Geojit Securities. Today there are many
other big brokerage firms like Motilal Oswal, Kotak Securities, SSKI and ICICI
Direct running successfully.
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Why Online Share Trading?
FAQ (Frequently Asked Questions)
Is trading through the Internet safe?
The safety of transactions on the Internet depends on the encryption system used.
The better this transaction system, the more difficult it is for any person to hack the
site.
Internationally, the best system available today, is the 128-bit encryption, a system,
which even the Pentagon uses. Sharekhan.com is one of the few online share-
trading sites in the country equipped with this 128-bit encryption.
Secondly, you too can ensure the safety of the transactions online. You normally get
a secured user id and password, the secrecy of which is to be maintained entirely by
you.
Thirdly, if the transaction system requires no manual intervention, you further

improve the safety in the transactions. Among Indian sites, Sharekhan.com is one of
the very few fully integrated online trading sites. This enables the elimination of the
possibility of any manual intervention. Which means orders are directly sent to the
exchange ensuring that you get the best and right price.
What about security of my money, demat shares and my transaction

documents?
In systems where the broking, banking and demat accounts are completely
integrated, your money remains in your own bank account, and does not get
transferred to the broker's pool account.
Is trading through the Internet a difficult and cumbersome process?

The experience of trading through Internet depends a great deal on the type of
product offered by the site. Say, for example, one of the issues bothering you may
be tired of the paperwork involved after every trade in writing cheques or TIFDs.
You would then seek a system that eliminates these processes.
In online trading sites, the greater the back-end integration of the system, the greater
the amount of work the sites do for you, therefore greater the convenience available
to you.
For example, incase of Sharekhan.com, your broking account, bank account and
demat account are linked electronically. So when you punch in a buy or sell order,
the system checks the funds/ shares availability and automatically credits/debits the
accounts once the order is executed by the exchange.
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But I am not comfortable with Internet, or with finance, how can online trading
be easy for me?
Contrary to common perceptions, trading through Internet does not require either
any expertise in working on the computer, or any special financial skills.
You could try the demo (demonstration) of the online trading sites like
Sharekhan.com to find out why others like you, with little or no knowledge about the
Internet or finance, have switched on to online trading. Or you could attend the
demonstrations sessions held by such websites in your city.
Is trading through the Internet a costly affair?
The convenience provided by online trading is even then worth the costs involved.
And online trading sites are not that costly. For example, a trader can trade shares
on margin at rates as low as 0.10%on Sharekhan.com and if one wishes to trade in
cash, then the rates applicable are as low as 0.5%.
However, it is important to compare various online trading sites on brokerage rates,

inclusive of all sub-charges.
I am pretty satisfied with my present broker who serves me offline. Why

should I choose to go online to trade shares?
Many of those customers who have chosen to trade shares online today, had at one
point of time been trading through offline brokers, just like you are today. They took a
chance to go online and trade shares. After realising the advantages of trading
shares online, they have shifted to online trading now. In fact, there are many
customers who have already opened an account with sharekhan.com. Just try
trading shares after opening an account with any online trading site. However, before
choosing an online trading site, please compare all such websites and then make a
decision.
How frequently is the prices updated at all these online trading sites?
The tickers available at online trading sites provide instantaneous updates. Also,
some websites can offer to transact in those shares instantaneously and with
convenience.
How can I be sure that I shall be trading at a price I want to or at a price

appearing in the website?
The solution to your problem could be provided in different ways by different online
share trading sites. At sharekhan.com, for any trade order, the customer is asked to
click "Proceed" after he has the opportunity to completely check the order verification
form.
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Moreover, you have the option of modifying or canceling the order till the moment the
order is executed at the exchange.
Finally, online trade confirmations reach reaches our customers within 4 minutes,
while contract notes are dispatched at the end of the day and reach within 24-36
hours.
With Sharekhan, you decide what you want to buy and buy the share at the price you
want to and therefore you are in total control of your trades.
What other services can I get by trading shares online?
Internet has brought to the retail investores what was till sometime ago the sole
prerogative of large brokerage houses and high net worth individuals. For example at
Sharekhan.com one can access multitude of resources to arrive at his stock picks.
Reliable research with an enviable track record is available free of cost.
An investor can now access sharekhan.com and do his technical analysis, know
what other leading brokers think about a company and whether it is a buy or a sell,
(Multex Global estimates), access live news from international news agencies such
as Reuters, CNBC, read about what the leading CEOs think about the state of the
economy and the capital market.
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3.2.2 WORKING OF E-TRADING
How it works?
Trading has two aspects of working one is technical and second One is
procedural. We will see both aspect and how it is working?
Procedure:
Sitting in ones own home or office or even from your car, as long as
you can access the net, you can trade on the market. There are three basic
things needed for e-trading:
 A bank account,
 A D-Mat account and
 A brokerage account.
The steps in e-trading replicate the real life situation and are fairly simple
to follow. Once these three accounts are opened, the money and shares are
transferred to your bank and Demat account automatically, electronically and
without any paper work.
 The first step is of course to open an account. One can open multiple
accounts with himself or herself as the first name in the account. Then it is
necessary to determine the type of account that you want and how you want
to pay for the trades you make. Joint accounts are allowed but for that you will
need to have certain information about those people. Accounts can be
Individual, Joint, Sole Proprietorship, Corporate, or Partnership etc.
The form filling requires simple personal details like full legal
name, Citizenship status, Residency status, employer's name and
address, your passport\PAN number, Date of birth etc.' One can download the
forms or request for them by post or even request for a representative of the
firm to come over to help you with the form. Post-submitting, you are allotted a
USERID and PASSWORD while giving details for registration. Then an
Account reference Number is generated and displayed to you. These three
things are unique to an individual and ensure security of transactions. The
acceptance of the application is communicated by email.
 Once you have got your USER ID and PASSWORD and your account has
been set up, you can access the website and login using the same. The
second step is then to Fund Your Account. In order to start trading online it is
important that you deposit money in your bank account before placing a buy
order. In order to place a sell order you must have shares in your DEMAT
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Account. You can sell your shares anytime as long as shares are there in your
DEMAT Account. In order to place a buy order you need to fund your account.
You can do this by depositing money in your bank account or else you can
sell some shares existing in your Demat account and use the proceeds of sale
to fund your purchase transaction. The amount of money required before
placing a buy order would depend on the value of order and the type of e-
invest account you have enrolled for - whether cash or margin.
In a Margin account one can use a line of credit to buy marginable

securities or for overdraft protection. Such an account is opened after taking
into consideration Annual income, Net worth, description of your investment
objectives, as it involves lending a line of credit. In a cash account, the
amount of securities bought has to be backed by the cash in the account.
 Then comes placing the order:
 For this you enter your Trading password and go to trade.
 From the Trading tab, select Enter Order under the Stocks heading.
 Select a transaction type: Buy, Sell, ShortSell.
 At Number of Shares', type the number of shares that you want to buy.
 At 'Stock Symbol or Name(s)', type the stock symbol. If you don't know the
symbol click 'Find Symbol', type the company name, click 'Search' and
click the symbol that you want from the list.
 For a market order, select 'Market'. Otherwise, select 'Limit'. 'Stop Loss' or
'Stop Limit’ and enter the price.
 'Market Order': you just ask the broker to buy or sell your stocks at the
best price available.
 'Limit Order': you tell the broker to trade only when the stock hits a
certain price or better.
 'Stop Loss': you tell the broker to sell your shares if the stock drops
below a certain price.
 Select either 'Good for Day' or 'Good Until Canceled'. If you want to place
an 'All-or-None' order, click 'All or None'. Type your trading password and
click 'Preview Order'.
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 If you want to change your order, click 'Modify' and make your changes.
 To see if your order has been executed and filled as you expect, check
your account balance. The 'Account Balances' page shows your account
equity (the value of your account) and your buying power. To check your
account balance, click the 'Accounts Services' tab, make sure the correct
account number displays at 'Select Account' and click 'Go'. At Total
Account Value', see your account balance.
 For a new price, select the appropriate option button and then enter the
price (unless you're changing it to a market order). You cannot change the
stock symbol or the transaction type (Buy. Sell, Sell Short, or Buy to
cover). Enter your trading password and click 'Preview Change Order'. Or,
if you want to cancel your changes, click 'Do Not Change'.
 In order to cancel a stock order, from the Trading' tab, select 'View Open
Orders' under the 'Stocks' heading. Make sure you're currently in the
correct account. Click 'Cancel' beside the order you want to cancel.
Review the information presented to make sure this is the order you want
to cancel. Click 'Cancel Order'. Enter the symbol or the name of the scrip,
press "GO" or the relevant button.
 The Account Opening Charge, commission rates and the minimum limit of
transaction vary from site to site. Other charges can include Annual Services
Charges, Custody charges, D-Mat account charges etc. Also most online traders
offer a host of other tools to aid the investment decision. A full research back up
in terms of reports, articles, opinions, etc., live time quotes, latest news on the
scrip, technical charts to see how the stock's price has changed over time.
So sitting at home one can take an investment decision at ease after

having researched and read up fully about the stock. With the advent of online
trading, it would seem that the markets are just a click away. Please however, do
remember that currently in India the handful of online trading offers are mere
order routing systems. But it will not be long enough before the entire system
goes online.
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3.2.3 Benefits of E-broking

• Seamless Trading
E-broking integrates Bank, Demat account and Brokerage account.
Transfer of money and shares from and to Bank account and Demat account is
done automatically.
• No Geographical Restriction
Customers have access to site from anywhere in world. So even if
customer is out of station, customer can take the advantage of market condition.
• No Time Restriction
Customer can trade not only during market hours but also when market is
closed. He is required to give limit as to at what price he wants to buy or sell the
shares. When market will open, the shares will be purchased or sold
automatically at that particular price or best favorable price.
• Online Brokers Make Investing Cheaper

By charging drastically lowered commissions; online brokers offer cheaper
access to financial markets, consequently encouraging more investing, as is
evident by the increasing number of day-traders. The latter are individuals who
have tried to make a career out of buying and selling stocks very quickly, often
making and closing dozens of trades in a single day.
• The Online Investor Is Self-Reliant

Because online trading greatly diminishes the role of brokers. Investors have
more freedom when making investment decisions and come to rely on
themselves when developing strategies. The online investor is responsible for
researching, making decisions, entering an order and using a computer. All this
makes online investors the masters of their domain and leaves them with no one
to blame. Thus, online trading promotes self-empowerment.
• Offers Greater Transparency

Online trading gives greater transparency to the investors by providing
them an audit trail. This involves a complete integrated electronic chain starting
from order placement, to clearing and settlement and finally ending with a credit
to the depository account of the investor. Each of the above mentioned stages
are subject to inspection, thus bringing in transparency into the system. Greater
transparency helps in reducing the systematic risk for the investor. This is
possible as the market related information affecting the stocks gets
communicated to the investor on a regular basis. Due to this increased exposure,
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the investor can take necessary steps, which would reduce his overall market
risk.
• Enables Hassle Free Trading

Online trading integrates the bank, the brokerage firm and the demat
accounts which leads to easy and paperless trading for the client.
• Quick Trading
The investor will be able to execute the entire trading transaction,
right from logging on to the broker's site, to the execution and settlement of
his bank account, in a very short period of time.
• Provides A Level Playing Field

Trading on the net, gives even the smallest retail investor access to
information that earlier was available only to the big traders. This provides
a level playing field for all investors in the securities market.
• Reduces The Settlement Risk

This method of trading reduces the settlement risk for the investor,
as in this case no short sale is possible i.e. the seller will not be able to sell
the securities unless he has actual possession of them. In the case of a
demat account (which is required for an online transaction), when a seller
wants to sell the securities, his demat account is checked by the
Depository Participant before executing the sale transaction. This reduces
the settlement risk for the buyer, who is assured of the delivery of the
securities.
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3.2.4 Loopholes in E-Broking
• Lack Of Speed
If customers in large number access the site at the same time, server gets
overloaded, so it results into delay in process.
• Security Aspect
There may be chances of hacking of password if customer is not alert.
This may cause a major loss to the investor.
• Lack Of Flexibility
If the customer is not alert about his position on last trading day and if he is
not able to square off his position, he has to take delivery compulsory or if he
doesn't have enough liquidity, the site will automatically square off his position.
This action may or may not be in benefit of customer. Whereas in conventional
broking, broker will inform the customer time to time or will take the decision
himself in favor of the customer.
• Network Crash:
There will be problems and delays due to a large influx of traffic and
rapid online trading criteria as it happened on 17th May, 2004 which is
referred to as ‘Black Monday’.
• Computer Illiteracy:
Literacy of Computers is mandatory for traders using this online trading
service. So for those who are computer illiterate, using websites serves as a
handicap for them.
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3.3 Trading Vs E-Trading
The advent of technology has added a new dimension to broking system.

Through E-broking system, broking has become more transparent and faster. It
has reduced the back office paper work. It settles the account within a couple of
days rather than long period of time. It has also eliminated physical transfer of
shares and money by invent of Demat account and on line banking.
When anyone wants to enter into the market for trading purpose, there is
common process through which individual has to pass either in conventional
broking or E-broking which is basically divided in three parts.
Decision -> Execution -> House keeping

Now let us understand how E-broking makes itself different from conventional
broking in this process.
• Decision
Decision about choosing particular scrip is made by investor himself based
on his knowledge and his experience about market condition. Sometimes
investors seek advice from broker and they both decide about investment. Thus
in conventional broking and E-broking decision parts remain same.
• Execution
In execution part of broking, E-broking is completely different from
conventional system. This can be explained from graph below.
Conventional Broking E-broking
Call Log on
Get Rates See the rates online
Give order Punch in order
Confirmation Confirmation
through phone through e-mail
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House Keeping
After matching of order at a predetermined price, the question of payments

and deliveries of securities /transfer of shares take place where also wide
difference in terms of operation can be seen.
Conventional Broking E-broking
Payment through Payment through
Physical Cheque Online Banking
Transfer of shares Transfer of shares

in paper form in paper less form
House keeping of Demat Keeping of

materialized shares dematerialized shares
Advantage of Online Trading Over Conventional Trading
• The speed of transaction

• Ease of settlement in the paperless mode
• Confidentiality of transaction
• More transparent
• More convenient
• Broker's reach to large number of customers with less cost
Limitation Of On Line Trading Over Conventional Trading
• Lack of internet penetration

• Lack of expertise in share market
• High brokerage
• High operating cost
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3.4 Grey Market
In this type of market, there are only two parties i.e. the broker and the
investor. The Exchange does not come into picture at all. So the transactions
taking place are out of the purview of the exchange, which in other words can
also be termed as illegal. In this type of market the brokerage is quite low as
there isn’t actual transaction or delivery of security as such. The transaction is
written in a book as to keep record of buying and selling price and quantity. If buy
price is higher than sell price then difference is paid by investor and that amount
is profit for broker and loss of investor and vice versa.
Major Driving Forces of Grey Market:

Nowadays even grey market is also quiet popular because of many
advantages: -
 No Margin
The trader is not required to keep any deposit as margin to buy or sell
the shares. There is credit flexibility allowed to a large extent.
 Trading of Index
Prediction of Index is Easier than of Security. In a SEBI regulated
market, a trader is not allowed to trade in Nifty or Sensex in equity market, while
in grey market, trading in Nifty or Sensex in equity market is permitted.
 Longer Trading Period (One Week)

The trading duration in this market is of one Week and the settlements are
made on the end of each week (Friday). So investor can take 5 days position in
the trading. This can be considered as a major driving force for this market.
 Advantage Of Future And Equity Price Difference

There is one simple rule known by everyone that “on the Last Thursday
of every month security and its future’s value matches”. How to take advantage of
it??? Its possible on grey market with a fix profit not affected with the market
movement.
i.e.: -
Reliance security price is :- 440
Reliance Future is traded at :- 400
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Now, Investor will Sell (Shortsell) Reliance Shares at 440 and Buy reliance
future at 400 so on the last Thursday of the month when both the prices match,
investor will reverse the transaction.
Last Thursday’s Profit in Equity Profit in Futures Net Profit **

Price
420 20 20 40
480 (-40) 80 40
360 80 (-40) 40
** Brokerage is not deducted in Net Profit
This can be possible legally in some cases but with very large investment
because futures are traded only in lot sizes.
Negative Factors
 Risk of Defaulting Broker
 Illegal
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CHAPTER - 4
COMPANY AT A GLANCE
4.1 SSKI History

• Founded 1922, it is one of India’s oldest brokerage houses having over eighty
years of Broking experience
• Founding member of The Stock Exchange, Mumbai and pioneer institutional
Broker
• SSKI is the only domestic player in a market crowded by 44 multinational
securities firms.
• Foray into Institutional Broking and Corporate Finance 18 years ago
SSKI group also comprises Institutional broking and Corporate
Finance 18 years ago. While the Institutional broking division caters to the
largest domestic and foreign institutional investors, the corporate finance
division focuses on niche areas such as infrastructure, telecom and
media. SSKI holds a sizeable portion of the market in each of these
segments.
• Forerunner of investment research in the Indian market,
SSKI provide the best research coverage amongst broking houses
in India. The company’s research team was set up in dec.1992 and is rated as
one of the best in the country. Voted four times as the Top Domestic
Brokerage House by Asia money Survey, SSKI is consistently ranked
amongst the top domestic brokerage houses in India.
• Retail broking started in 1985
• Research group was set up in December 1992
• It acts as a pioneer of investment research in the Indian market aimed at
generating quick investment ideas
• Its Research team is rated as one of the best in the industry…. Across retail &
institutional
• Group interest in Investment Banking, Institutional Broking and Retail Broking
• It is an Integrated equity solutions provider
• It commands good market share of the institutional business.
• It has over 60 institutional clients spread over India, Far East, UK and US
• It occupies 65% of business share from Foreign Institutional Investors
• Its daily turnover averages to US$ 2 million.
• The private equity deals sum over US$ 1billion.
• SSKI named its online division as “Sharekhan” on February 8, 2000 coinciding
with the launch of its website
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3.2 SSKI Group - Corporate Structure
Owns 56%
of Owns 50.5% of
SSKI Securities Pvt. Ltd.
Morakhia Family & Associates
SSKI Investor Services Pvt. Ltd.
SSKI Corporate Finance Pvt. Ltd.

Retail broking arm of the group
Shareholding pattern
Investment Banking arm of the group
56% Morakhia family (promoters)
Shareholding pattern
18.5% HSBC Private Equity
50.5% SSKI Securities Pvt. Ltd.
Management, Mauritius
49.5 % Morakhia family
18.5% First Carlyle Ventures, Mauritius
7% Intel Pacific Inc.
Integrated Equity Solutions Provider

• Among the top 3 branded retail service providers
(Rs. 200+crs average daily Vol- FY 03-04)
• Multi-channel access to clients
• Tailor made research and products
• Depository Services
• Derivatives
• Innovative products for enhanced performance
- 30 –
___________________________________________________________________________
4.2 About Sharekhan
• SSKI named its online division as SHARE KHAN and it is into retail
Broking
• The business of the company overhauled 4 years ago on February 8,
2000.
• It acts as a discount brokerage house to a full service investment solutions
provider
• It has a 150 member strong team.
• It has specialized research product for the small investors and day traders
• Largest chain of share shops, 103 Franchisees & 17 Branches across
India.
• It has $25m/trades every day.
• Leading player today with 20% market share
• Over 8000 online clients
• The site was also launched on February 8, 2000 and named it as
www.sharekhan.com
• The SpeedTrade account of share khan is the next generation technology
product launched on April 17, 2002
• SpeedTradePlus was launched on October 28, 2002 for trading in
Derivatives
• It offers its customers with the trade execution facilities on the NSE, for
cash as well as derivatives, depository services
• Ensures convenience in trading experience:

Share Khan’s trading services are designed to offer an easy,
hassle free trading experience, whether trading is done daily or
occasionally. The customer will be entitled to a host of value added
services, in the investment process depending on his investing style and
frequency. and offers a suite of products and services, providing the
customer with a multi-channel access to the stock markets.
• It gives advice based on extensive research to its customers and provides
them with relevant and updated information to help him make informed
about his investment decisions.
• Share khan offers its customers the convenience of a broker-DP.
• It helps the customer meet his pay-in obligations on time thereby reducing
the possibility of auctions. The company believes in flexibility and therefore
allows accepting late instructions without any extra charge. And execute
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the instruction immediately on receiving it and thereafter the customer can
view his updated account statement on Internet.
• Sharekhan Depository Services offers demat services to individual and
corporate investors. It has a team of professionals and the latest
technological expertise dedicated exclusively to their demat department. A
customer can avail of Demat \ Remat, Repurchase, Pledge, Transmission
facilities at any of the Share khan branches and business partners outlets.
Ground Network –
Largest in India
122 Franchisees and 28 branches

Covers 82 cities in 17 states across
India
Trade execution facility on BSE and
NSE for Cash as well as
Derivatives
Depository/Demat account services
Personalized Sharekhan research
advice
Uniform service standards
- 32 –
___________________________________________________________________________
Award-Winner
Winner of
Chip
magazine’s
‘Best
Financial
Website
Award’
- 33 –
___________________________________________________________________________
4.3 Organization Structure
ALTERNATE CHANNEL DEVELOPMENT
The alternate channel was founded in December 2003. Till then only
direct channel existed which aimed at targeting only HNI customers. The
alternate Channel was started with an aim of targeting the retail customers who
traded on small volumes. This channel was launched in Delhi, Mumbai, Gujarat,
Pune and Bangalore for experiment. Ms. Jignasha Sevak acts as a Regional
Product Manager of alternate channel of Gujarat zone and handles the
Ahmedabad and Baroda branches. This Channel is very successful in all the five
cities and Sharekhan is planning to launch it in many other cities of India. In
Gujarat even they are working on starting alternate channel in Surat and Rajkot.
In short span of 6 months Sharekhan has more than 600 retail customers in
Gujarat.
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4.4 What does Share khan offer?
Share khan offers online trading account through which a customer can buy and
sell shares in an instant from any part of the globe trough website. It does not
take into account any type of physical restriction of going to the broker for
carrying out a transaction or any type of settlement of payment. It facilitates the
customer a speedy and hassle free transaction. Share khan’s product consists of
a 3-in-1 concept, which integrates:
1. Trading Account
2. Demat Account
3. Linking with the Savings account.
Through its trading account, a share khan customer can directly transfer his funds
from his savings bank account affiliated to share khan to his trading account
without any paper work. He can buy and sell shares from the website and also
view the market prices of the shares he trades on the terminal.
Share khan .com allows trading at present only on NSE. BSE trading will be
shortly available. To open an account a customer requires filling up a form
consisting of 12 agreements, a passport size photograph, a residential proof, a
photo id proof and a cheque drawn of respective amount in favour of S. S.
Kantilal Ishwarlal securities Pvt. Ltd.
After opening an account with Share khan, a customer will be given User id,
Membership password and trading password, which will enable him to access his
account and trade.
Share khan offers 3 types of products according to the volume-based

requirements of the investors that are as follows:
1. CLASSIC ACCOUNT
• This account allows the client to trade through the website and is suitable for
the retail investors.
• Here maximum scripts that can be shown on the terminal are only 25. Also the
technical charts are not available.
• It’s a JAVA based applet, which allows trading only through website and see
latest prices of the scripts of your choice.
• This account also allows trading in Derivatives.
• The lifetime registration charge for this account is Rs.750 and there is no
constraint of minimum turnover.
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___________________________________________________________________________
2. SPEED TRADE ACCOUNT
• This is ideal for active traders who transact frequently during day’s trading
session to capitalize on intra-day price movements.
• Speed trade is an Internet-based application available on a CD, which provides
everything a trader needs on one screen, thereby, reducing the time required to
execute a trade.
• SPEEDTRADE offers a tick-by-tick update on stock price movements with
market depth and intra-day chart and lets the client do his own stock/technical
analysis.
• While the Lifetime charge for this account is Rs.1000 with a minimum brokerage
of Rs.1000 to be paid monthly.
3. SPEED TRADE PLUS ACCOUNT
• Speed trade plus has all the above-mentioned features with an additional power
to also trade in Derivatives.
• Speed Trade Plus extends the power of online trading from cash
markets to Futures & Options. On a single screen, a customer can trade cash
as well as future & option contracts.
• Other features include advanced Intra-Day Charting (Bar & Japanese
Candlestick Charts), easy order placement and instant trade confirmations in
seconds, price alerts, research calls, and derivative tool-kit to help the customer
trade like the experts.
• While the Lifetime charge for this account is Rs.1500 with a minimum brokerage
of Rs.1500 to be paid monthly.
BANK AFFILIATION
Share khan has affiliation with 5 banks, which allows its customers to enjoy the
facility of instant credit and transfer of funds from his savings bank account to his
share khan trading account. The affiliated banks are as follows:
 HDFC BANK
 UTI BANK
 CITY BANK
 GLOBAL TRUST BANK
 IDBI
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___________________________________________________________________________
AFTER HOUR ORDERS

Share khan customers also enjoy the facility of placing orders even after the
trading hours, and the orders are executed as soon as the market opens.
DIAL-N-TRADE
It is also an exclusive service available to all Share khan customers for trading in
shares via the telephone. On dialing the toll free number 1600-22-7050 and on
entering the customers TPIN number, the customer will be directed to a tele-
broker who will buy or sell shares for him.
TIMELY ADVICE
Last but not the least, the USP of share khan is its timely advice that it gives to its
customers 4 times in a day through e-mails. Among these e-mails sent,
• One is pre-market mail indicating the position of the market (i.e. either bullish
or bearish trend) when it opens.
• The other two e-mails are the during market hours mails which indicate as to
how the market will move and in which direction.
• The fourth e-mail that is called the post market mail or the eagle eye is the
most important and valuable suggestion.
In this e-mail, all the scripts that are under coverage are segregated into 5
clusters. Each cluster represents a certain profile in terms of business
fundamentals as well the kind of returns the customer expects over a certain time
horizon. This he3lps the customer identify the stocks that match to his objectives.
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___________________________________________________________________________
4.5 SEVEN Ps OF SHARE KHAN

1. PRODUCT
• Product Variety
Share khan offers 3 types of online trading accounts for its customers
specially designed according to their volume in share trading. Those 3
varieties are:
 Classic- for retail investors
 Speed Trade: for high net worth investors with large and active
equity portfolio who need to monitor and action swiftly
 Speed trade Plus- for high net worth investors dealing in
derivative market.
• Quality
User Friendly, attractive & colorful Website.
.
• Design
The website of Share khan namely www.sharekhan.com has been
specially designed to facilitate its users to buy and sell shares in an
instant at anytime and from anywhere they like. The site is user friendly
allowing even a layman to easily operate without any hassles.
• Features:
Share khan’s product comes with the following features:
• Trade execution in a fraction of a second!

• Single Screen Trading Terminal
• Real time streaming quotes. Price watch on any number of
scripts.
• Hot keys similar to Brokers Terminal.
• Customized Alerts based on Multiple Parameters.
• Back up Facility to place trades on Direct Phone Lines.
• Intra day charts, updated live, tick-by-tick.
• Instant Order\ Trade Confirmation in the same window
• Live margin, position, marked to market profit & loss report.
• Competitive Brokerage.
• Flexibility to customize screen layout and setting.
• Facility to customize any number of portfolios & watch lists.
• Facility to cancel all pending orders at one click.
• Facility to square off all transactions at one click.
• Top Gainers, Top Losers, and Most Active, updated live.
• Index information; index chart, index stock information live.
• Market depth, i.e. Best 5 bids and offers, updated live for all
scripts
• Online access to both accounts and DP.
• Live updated Order and Trade Book.
- 38 –
___________________________________________________________________________
• Details of pending, executed and rejected orders.
• Online access to Customer Service.
• 128 - bit super safe encryption.
• Facility to place after market orders
• Online fund transfer facility from leading Banks
• Online intra-day technical calls.
• Exhaustive database of over 2000 companies
• Historical charts and technical analysis tools.
• Last but not the least, ideas that help you to make money!!!
• Brand Name
 The company as a whole in its offline business has named itself

as SSKI Securities Pvt. Ltd -Sevaklal Sevantilal Kantilal and
Ishwarlal Securities Pvt. Ltd. The company has preferred to name
themselves under a Blanket Family Name.
 But in its online division started since 1997, the company

preferred to name itself as “SHARE KHAN”. The Brand Name
“SHARE KHAN” itself suggests the business in which the company
is dealing so that the consumer could easily identify the product or
service category.
• Services
 Share khan offers its customers, depository services and trade

execution facilities for equities, derivatives and commodities backed
with investment advice tempered by decades of broking experience.
The teams of its dedicated analysts are constantly at work to track
performance and trends.
 Dial-n-trade is also an exclusive service available to all Sharekhan

customers for trading in shares via the telephone. On dialing the toll
free number 1600-22-7050 and on entering the customers TPIN
number, the customer will be directed to a telebroker who will buy or
sell shares for him.
- 39 –
___________________________________________________________________________
2. PRICE
• List Price
CLASSIC SPEED SPEED

TRADE TRADE PLUS
One time 750 1000 1500
registration fee
Minimum brokerage Nil 1000 1500
Charges –Quarterly
• Brokerage
Share khan in its online business charges brokerage as follows:
- In equity Market:
On Trading: 0.1% On Delivery: 0.5%
- In Derivative Market
On Trading: 0.12% (Total brokerage) On Delivery: 0.1%
• Service Tax
-8% on Brokerage.
• Turnover tax + Stamp duty

-0.015% (Rs. 15 on every turnover of Rs. 100000)
• Custody Charge
Re. 1 per script held per month.
• Discounts
For investors with High Net worth, there are slabs in brokerage rates.
• Payment Period
The transaction settlement date in the securities market is T+ 2 days
i.e. the payment of the transaction taken place has to be made within
two days of its occurrence.
• Credit terms
Share khan allows its customers to trade up to 4 times i.e. by keeping
1/4th margin with them.
• Dematerialization charges
Re. 3 per certificate or Rs.15 per requests whichever is higher.
- 40 –
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3. PROMOTION
Online share trading is totally a new concept in Indian Market. Generally
investor doesn’t like to come out from conventional way of share trading. Share
khan has introduced this product in. The concept and Product are still new in the
market. Therefore the company has undertaken extensive promotion campaign to
create awareness about the product. Share khan adopts the following tools for
promoting the product
• Advertising
Company advertises its product through TV media on channels
like CNBC, Print Media-in leading dailies and outdoors media. It
advertises itself as an innovative Brand with a cartoon of tiger-called
SHERU. Besides attractive and colorful brochures as well as posters are
used giving full details about the product.
Mails are sent to people logging on to sites like
moneycontrol.com and rediff.com.
Also, stalls are opened up now and then at places where
prospective customers can be approached.
•Sales Promotion
The Company offers Rs.500 instead of Rs.750 for corporate
accounts (more than 20 accounts).
Also, it provides online trading accounts for just Rs.300 for IIM
students.
• Sales Force
The Company has an aggressive sales force, which is given
incentives, based on their sales. The sales force is given intensive
training continuously.
• Seminar
The Company also arranges seminar in corporate world for
creating awareness about the product. Recently, it had organized for a
seminar in ONGC, IIM.
• Direct Marketing
Company emphasizes more on direct marketing, as many
people are still not aware of this new way of smart trading. For this, the
company recruits and trains sales representatives so as to explain the
product and solve customer queries related to the product. This is the
most effective way to communicate the three-in-one concept which
company offers.
• Telemarketing
This is another promotional tool company is using to boost up its
sales. For this, the company collects the database of the people
belonging to different professional segments.
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4. PLACE
• Channels
Share khan uses various channel alternatives to reach to its customers
through
 Internet
 Tele Marketing
 Retail Share Shops
 Franchisee Owners
 Power Brokers
 Sales Force
• Coverage
Access to the website from any part of the globe.
• Locations
Share khan has the largest chain of retail share shops in India. It has
180 share shops located in 90 cities all over India like Pune, Thane,
Chennai, Kolkata, Banglore, Luckhnow, Darjleeng, Kanpur, Baroda,
Midnapore, Surat, Delhi, Gaziabad, Hydrabad, Allahbad, etc.
5. PEOPLE
• Employees
⇒ Selection: Employees are selected on the basis of their

experience and qualification as applicable to the job.
⇒ Training: Intensive training is provided to the employees till a
week once they join and even at times required after that.
⇒ Motivation: The employees are motivated through incentives they
are provided.
• Research Team
Share khan has a team of dedicated analysts who have years of working
experience in the industries that they track, and a proven track record in
using their knowledge of the investment science to deliver results.
• Customers, the heart of sharekhan are really treated loyally like the
kings. The customer care, which comprises of highly trained executives
operating from 9:30 to 8:00 p.m.
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6. PHYSICAL EVIDENCE
• Locality of the office: In Ahmedabad, two franchise outlets are located

in posh areas like Navrangpura and Maninagar. A new franchise is going
to open up in Vastrapur.
• Office Environment: The ambience within the office is what can make
the customer feel comfortable in trading. The cordial and friendly
atmosphere at office is like a full time motivation for the employees.
• Interiors and Infrastructure: The office is well furnished and has 24

computer terminals on which tick-by-tick price movements of the
securities are displayed.
7. PROCESS
• In this service organization, the ways in which the customers receive
delivery of the service constitutes the process. Here, the process
involves adding ‘value’ or ‘utility’ so that the customers get full
satisfaction for the money spent by them.
• Here the process begins from the step when customer wants to open e-
invest account and ends when his account is actually activated.
• All Indian residents and NRI are eligible to avail this service.
• Customers can open a sharekhan e-invest account by filling a single

application form.
This form includes 12 agreements like
1. Main form with customer details

2. Agreement between sharekhan and client in respect of the
ONLINE-INVESTMENT SUPPORT service offered.
3. Agreement between the Depository Participant and the client for
providing the transaction statement through Internet.
4. Irrevocable power of attorney
5. Agreement between the DP and the person seeking to open an
account with the DP.
6. Maintenance of client’s account on a running account bases by
SSKI.
7. Agreement giving the right of lien on the credit balance of client in
NSE trading.
8. Agreement giving the right of lien on the credit balance of client in
BSE trading.
9. Risk disclosure document (cash segment)
10. Power of attorney
11. Member and client agreement.
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12. Web-online agreement between member-broker and client.
4.6 Seven - S Model
Structu
re
Strate Syste
gy
ms
Super
ordinat
e
Goals
goals
Skill Style
s
Staff
STRUCTURE:
Share khan is flexible in terms of making temporary structural changes to
cope up with specific strategic tasks without any hassles. If need arises,
the top management can assign the role to any of its employees which it
considers capable and skillful.
STRATEGY:
Share khan believes not only in developing the strategies but also in its
successful execution.
SYSTEMS:
This constitutes of all the training and development systems, estimating
budgets and the accounting system of Share khan.
STYLE:
Style refers to all the symbolic actions undertaken by top managers of
Share khan and its influence on the subordinates.
STAFF:
Share khan values its employees as its assets and therefore carefully
trains and motivates them by giving them incentives at regular intervals.
Talented employees are assigned as mentors and given real responsibility
and moved into higher positions.
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SKILLS:
The term skills refer to those activities organizations do best and for which
they are known. Share khan is known for its timely advice
(suggestions/tips), which it caters to its customers and it boasts of 70-90%
strike rates in booking recommendations.
SUPERORDINATE GOALS:
This refers to guiding concepts, values and aspirations that unite an
organization in some common purpose. It provides the customers the best
service as it believes in customer satisfaction and retention.
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4.7 SWOT Analysis
STRENGTHS WEAKNESSES
• 80 years of experience in • Problems due to Network crash

securities market • Unawareness among investors.
• Largest chain of retail share • Sales Promotion is not effective.
shops in India • Low customer satisfaction and
• Volume based differentiated retention.
product.
• User friendly website.
• Dedicated and responsive
workforce/staff.
OPPORTUNITIES THREATS
• To tap the untapped market • Competitor develops a superior

• To capture the Market lost to its portal
Competitors. • Prolonged depression and high
• To focus on developing a volatility in the market
superior and powerful portal • New Entrants.
• To spread awareness of its
Brand Name
• To increase its Market Share
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4.8 CPA (CUTOMER PROFITABILITY ANALYSIS)

Share khan classifies its customers according to their volume in trade into the
following:
Platinum Customers-
Speed Trade Plus
Gold Customers-
Speed Trade
Iron Customers-
Classic
PLATINUM AND GOLD CUSTOMERS
Share khan pays exclusive attention to its speed trade and speed trade customers
and considers them as platinum (most valuable) customers as they yield high
volume to the company and earn them high income in terms of brokerage. It
specially cares for its speed trade customers in terms of rendering quick response to
attend to their queries and complaints, because these are the customers who once if
satisfied properly would word and recommend the company and its service to other
investors also.
IRON CUSTOMERS
Share khan recognizes its classic account holders as its iron customers as these are
the retail customers who are very small players and yield income to the company in
terms of small brokerage. Share khan always believed in a policy to be responsive to
customers’ queries and complaints.
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4.9 Analysis of the Application Form of Online trading

1. Main form
In main form all important details about customers are covered up.
Like his correspondence address, residential address, bank details, Pan No.
details , details about nominee etc.
2. Web online agreement between member broker and client
This form includes:

 Who can be member broker
 Definition of client
 Duties and responsibilities of both
 Requirements for opening a online demat account
 Rules and regulations of cash segment and derivative segment on web
3. Member and client agreement
This form contains the provisions as to what are terms and conditions
in capital market segment. Derivative segment operative Clauses
4. Agreement between Share khan and the client in respect of the online
investment support services offered
 What all facilities sharekhan.com would be providing

 Up to what client is liable and what are authority responsibility in
relation to transactions
 Registration and account opening
 Subscription rates and regulations
 Transaction processing
 Clearing and settlement of transaction
5. Agreement between the DP and the person seeking to open an account

with the DP
It mainly contains charges charged by Share khan as DP to its clients
for various services offered by him.
6. Irrevocable power of attorney

The power of attorney is irrevocable until all dues payable by client to
member broker are satisfactorily settled and agreed between them.
7. Agreement between the DP and client for providing the transaction

statement through internet
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It contains the agreement of in what way client would be getting
transaction through internet
8. Power of attorney
Here Share khan is irrevocably nominated, appointed as true and

lawful attorney for certain acts for Demat account.
9. Risk disclosure document

Risk involved for cash segment to client,. Investor’s rights and
obligations.
• This form will help him open the sharekhan trading account along with a
bank account and DMAT account.
• There are three options available to the customer for applying:
1. Through toll free number: 1-1600-11-7050

2. Through visit to any of the sharekhan centers in the city.
3. Through filling up the application form online.
• Customer is required to give residential proof and an identity proof

along with the application form.
• On submitting the application form, it will be processed at Bombay and

all the required accounts will be set up. If the application is not
processed because of lack of details, application will be rejected and
the customer will be contacted by company’s representative or by mail.
• Once the application is accepted the customer will be informed by mail

as well as through post.
• Customer will be sent a login ID, membership and trading password,

DP number, customer ID once the form is processed.
• Now the customer can login to the account from any place and start
trading. In case, he faces some difficulty, he can contact the company
through mail or can give a call to customer care or personally visit the
center.
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CHAPTER - 5
EQUITY RESEARCH
All the suggestions, tips and high performance trading

recommendations are received from the research team of Share khan consisting
of 38 dedicated analysts who have years of working experience in the industries
that they track, and a proven track record in using their knowledge of the
investment science to deliver results.
Share khan boasts of strike rates as high as 70-90% in booking
recommendations in the money. “The company believes in not to lose money and
to make some. “
 Efficient Execution on BSE, NSE, Derivatives
 Depository Services
 Advice in many shapes
 Wealth of content and tools to help you make sound investment
decisions
 Stability and Security
 Good risk management
 Substantial shareholding by prestigious foreign institutions.
 Personalized attention
RESEARCH
The scientific approaches that determine market direction and help you
decide what stocks to buy or sell. Whether it is for the short term or the long term,
there is method in this madness!
Research is classified into 3 analysis:
 Fundamental Analysis
 Technical Analysis
 Market Analysis
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5.1 Fundamental Analysis
This science analyses balance sheets, management quality, sectoral

trends and the economy. Value investing or cash flow analysis. In depth and
close tracking of company related performance.
Doing it the Sharekhan way using the bottom-up approach, the idea is
to focus on stock picking, ie identifying winning ideas for our clients.
It is classified into two:

 Sharekhan Research
 SSKI Research
 Sharekhan Research
Our tigers dig meaty Stock Ideas out of the heart of the market and
bring them to you. Their skill at identifying their prey--Stock Ideas--
while keeping your taste for investment in mind is reflected in the depth
of their research and the performance of the ideas. The Market
Strategy reports, on the other hand, identify the hunting-ground for
Stock Ideas, ie sectors and stock groups that are ripe for performance,
discuss the state of the economy and its impact on the stock market as
well as advise you on dealing with the impact of socio-political issues
on the market.
It is classified into two :

 Market Strategy
 Stock Ideas
Market Strategy
The Market Strategy reports identify the hunting-ground

for Stock Ideas, ie sectors and stock groups that are ripe for
performance, and discuss the state of the economy and its
impact on the stock market. Market Strategy also takes a longer-
term view on stocks, ie three to six months. It outlines our
expectations of the broad market and defines a broad strategy.
It gives a five-legged rating to a list of stocks that we think will
outperform the market during the given time period.
Stock Ideas
Stock Ideas is aimed at Sharekhan's trading clients. It

presents our best stock picks in today's market. We categorise
these companies into six clusters to help you identify the stocks
that fit your time horizons and return objectives the best. Each
cluster represents a certain profile in terms of business
- 51 –
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fundamentals as well as the kind of returns you can expect of it
over a certain time horizon.
Stock Ideas are given in form of two ways :
1. Recommendation – In recommendation we give advice to

clients which shares to buy, hold and sell.
2. Cluster
o Evergreen: Dominant players with strong brands, robust

management credentials, supernormal shareholder
returns. Will steadily compound 18-20% pa for next 5 to
10 years.
o Apple Green: Potentially steady compounders, but 5-10-
year graph is a bit unclear. Could gallop at 25-30% pa
over the next 2-3 years.
o Emerging Star: Young companies likely to rule chosen

niches. Even better, the niches could balloon into full-
blown markets. Potentially ten- baggers if you’re patient.
o Ugly Duckling: Trading below fair value or at huge
discount to peer group. But something’s cooking. Could
double in two to three years’ time. Swans, anybody?
o Vulture’s Pick: Companies with valuable assets at
throwaway prices. Buy and await predators. Startlingly
high returns possible. Patience is vital, my dear.
o Cannonball: Season’s favorites. Typically fast gainers in
rising markets could return 30-50% within 6 months. Get
in, cash in, and get out.
 SSKI Research
Institutional Research - Each individual company is analyzed and its

results are placed on our site. Here Rating is given on relative basis, in
the form of underperformer, neutral and outperformer.
• Outperformer: This stock will outperform the market by

giving a relatively higher return than a market-based
index.
• Neutral: This stock is expected to more or less give you

the index rate of return or a return not significantly higher
or lower than the market index.
• Underperformer: This stock is expected to lose value on

a relative basis when compared to a market-based index.
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Sector Watch – Here each sector is analyzed thoroughly. For eg.

Pharma sector, Automotive sector, and various other sectors.
5.2 Technical Analysis
Price, Volume and Open Interest. The scientific study of these parameters
using charts to simulate accumulation and distribution patterns. Use of the Dow
theory, Elliott wave analysis, moving averages and momentum indicators.
Forecasting of stock and index trends plus developing trading strategies based on
the forecasts with appropriate risk-reward ratio. It is again divided into two
Cash –
The cash market encompasses the entire gamut of listed stocks on Indian
stock exchanges. The cash market refers to the secondary market where you may
day trade or take delivery. Every product developed for the cash market can be
replicated in the futures & options market (if it is listed there) by following the trading
levels of the cash market for execution in the derivatives market.
Braveheart: Braveheart Strategies outline the market forecast for the medium term.
Braveheart uses the strategy to identify aggressive stocks to maximize gains based
on trend-based position trading. The portfolio has matured from a cash product to a
cash and futures product to allow investors to take advantage of the short side of the
market. The risk-reward ratio is pegged at 1:3 with average targeted returns of 30%
on stock recommendations.
Day Trader’s Hit List: The hottest product in terms of penetration and usage, it is
found on everyone’s dealing desk in the morning. The list of 15 liquid stocks that are
in action identifies 2 support and resistance levels for the stocks and provides a bias
for the stock to allow day traders to trade effectively.
Momentum Calls: The demand for catching fast movements in stocks for a 1-7-day
period has led to the emergence of this product. Momentum Calls help you make a
quick buck with the use of stop losses and a risk-reward ratio of 1:2 at least. The
idea is to identify momentum the moment it begins and get onto the bandwagon. But
if the move does not happen we move out as fast at minimum loss rather than wait
for stop losses to be triggered. This improves efficiency in trading and maximizes
profits.
Punter’s Call: A daily view on how the market and the major indices, ie the Sensex
and Nifty, are expected to behave during the day. Closest support and resistance
levels plus moving averages are provided to help traders take decisions.
Fortnightly View: A fortnightly recap and analysis of our market view over the short,
medium and long term.
- 53 –
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Derivatives –
Derivatives are about opportunities in derivatives market. In Daring

Derivatives, stock option premiums are traded to capture price movements; margin
trading is carried out using the futures segment; and low-priced options of stocks that
are about to make a big move in the last week before expiry of the options are
identified to help you make a killing. The calls cover index futures too.
Advantage Gamma: Options premiums fall at the end of the month. We spot
momentum stocks to take advantage of the cheap options during this period.
Idhar bhi-Udhar bhi: Expecting a large trend reversal either after a large
move or before a major event. Hedge yourself by buying both a call and a put.
Whichever way it goes you should make money.
Quarter Delta: One should write a call option when the underlying stock is
expected to stay at the same level or fall. Similarly one should write a put
option when the underlying stock is expected to stay at the same level or rise.
However it is less risky to write out-of-the-money options (delta = 0.25) than to
write at-the-money options.
Covered Calls: If you have an equities portfolio you can make consistent
gains on your stocks and that too without selling them or losing delivery of
them most of the time. How? Write call options against the portfolio.
Derivatives Info Kit: The only exhaustive report on the derivatives market
trading data including stock-wise open interest, put-call ratios, strike sizes,
margins and much more than you can dream of.
Futures Commentary: An end-of-day analysis of the activity observed in the

futures & options segment. It discusses where the open interest has
increased and if options traders are buying puts and calls.
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5.3 Market Analysis

If you don’t care about balance sheets or charts and only want to know what
the market grapevine has to offer, this is for you. What’s moving and who is buying
what? Our networking and years of experience bring all such information to you.
It is analyzed in two ways:
Dealing Room The most experienced dealing room with years of experience
in stock market research, always in touch with what is happening. We provide
this information to clients through SpeedTrade, and to our branches and
franchisees through Yahoo Messenger, telephone and SMS.
Dealing Room’s Favourites: Straight from the horse's mouth, the

product is an outcome of our ability to have our finger on the pulse of the
market. It's about stocks that are part of the market grapevine, on top of the
dealing room's watch-list and vetted by our charts. You could hold the stocks
for a few days to a few weeks. That you need to use stop losses with them
goes without saying.
o Intra-day Market Calls & Information: Based on

information from informed sources we push intra-day
calls and information related to the market that allow
clients to take advantage of day trading opportunities.
Editorial: The editorial keeps a track of all the market information and
feeds it live into the Web and brings it to you at the end of the day via the daily
newsletter Eagle Eye
o Live Markets: The Live Markets section begins your

morning with the latest news from the corporate world
and analysis of how the equities markets fared across the
globe. Once the opening bell goes off, Live Markets kicks
in as a real-time commentary on the market. It is updated
several times a day and provides a blow-by-blow account
of market action. It is spiced liberally with breaking news
with a dash of the rumours floating in the market.
o Market Commentary: Market Commentary brings you a

bird's eye view of the day's market action.
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CHAPTER - 6
EVALUATION OF INDIAN E-PORTALS
USP:
Share khan: Online Trading Terminal (Without Any Deposit)
ICICI: Brand Name
5 Paisa: Low Brokerage
HDFC: Brand Name
KOTAK: Terminal Speed
India Bulls: Low account opening charges
DEMERITS:
Share khan: Absence of BSE Online Trading
ICICI: High Brokerage
5 Paisa: No Brand Name, Pool Account
HDFC: High Brokerage
KOTAK: Deposit
India Bulls: Pool Account
- 56 –
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6.1 POSITION ANALYSIS
♦ Speed- Brokerage
0.9
0.8
HDFC sec
0.7
Brokerage (% )
0.6 ICICI direct

0.5 India Bulls
0.4 5 Paisa
0.3 Sharekhan
0.2
Kotak street
0.1
0
0 2 4 6
Speed
♦ Credit Flexibility – Account Opening Charts
12
10 HDFC sec
Credit Flexibility
8 ICICI direct
India Bulls
6
5 Paisa
4 Sharekhan
2 Kotak street
0
0 200 400 600 800
A/c opening Charge
- 57 –
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CHAPTER - 7
PEST Changes Affecting Share Market
POLITICAL IMPLICATIONS
Recently the political environment has affected a lot to the stocks. As the
government changed against the people’s expectations, the prices of the scripts
went down steeply than expected.
NDA government was expected and instead Congress is the ruling one. When
it wasn’t yet decided who will be the next prime minister, the markets went down to
the lowest in the last 8 years. There was a drop of about 800 points on 17 th May, the
black Monday. The markets were closed after a 500 drop at 11:10 p.m. for two hours
and were re-opened and closed again due to a constant fall in sensex. This affected
the turnover highly and many investors especially those dealing with derivatives just
decided to be out of this volatile and risky market.
Even, new investors who wanted to start investing or had just started
investing were stepped back by this fall. Some of the local brokers had to stop their
business or borrow from others.
Also, there was a very high lot size of 2, 50,000 shares of Reliance Industries
Limited ready for sale in the market and transactions were executed every minute.
Then, again when Mr. Manmohan Singh became the PM, markets gained. Right
now, the markets are still volatile, suited more for intra-day trading than investments.
ECONOMIC IMPLICATIONS
The budgets affect highly to the stock markets. It has a relation to stock
market as people’s income is connected to it. The tax brackets play an important part
in this. If a person has high income and falls under the 30% tax bracket, he would
not opt for online trading (as higher the profits, higher the tax he has to pay).
In such economic environment, people prefer to trade offline, wherein their

profits remain un-booked as per their wish. Mr. Chidambaram, who had given an
excellent budget in 1991, which brought a change in economy, is once again the
Finance Minister. The whole country has high hopes on the July 8, 2004 budget. It
will have different effect on the incomes of people belonging to different income
groups and hence will affect the stock markets too.
SOCIAL IMPLICATIONS
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Online trading is being adapted by more and more people each day.
Youngsters have started trading in large numbers too. The society as a whole is
moving towards technology in this digital revolution age. Women in corporate world
or housewives have started earning through this way of smart trading sitting at home
or in their offices. Thus, in this changing technological scenario, e-trading clicks in
people’s mind along with e-shopping, e-governance. Globalization has brought about
a change in consumers who want ease and comfort in trading everywhere they
move.
Again, it’s a different story during black Mondays or at the time of losses,
when the income from the main business gets lost in the stock markets. These affect
the society in the sense that people have given their lives loosing in stock markets.
This is an adverse implication of stock market as a whole.
TECHNOLOGICAL IMPLICATIONS
As this is online trading, one has to be constantly in touch of the latest

developments in the technological field. If the competitor has a better portal due to
developments in software, then there is a chance of loosing market share. Recently,
applet-based software is used which is enabled by Java to get the basic portal.
Even, the speed of execution and internet connection used by the company affects
the customers. An internet version of 6.0 is a must for online trading. So, one has to
be continuously upgraded with new technological developments in the market.
CHAPTER – 8
Website Visit
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Homepage of Sharekhan.com
- 60 –
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My Account Screen
Description of Options Available in My account is as follows
1. Trade Now : It allows the user to enter Script code, Order type(Buy, sell, Short
sell),Choice of Market and Limit Order, Quantity ,limit price in case of Limit order ,
Trading password that is given to user by Sharekhan and finally by Pressing Place
order button order will execute.
2. My Trade Portfolio: It allows the user to see the Portfolio of Trading of the day
after the Market Hours.
3. Account Summary: It allows the user to see the Balance of money in mini
account of Sharekhan which is allocated for the trading by the user. Yield on sale
and Payable amount on purchase will be deducted from this account.
4. Track your Orders: This option allows the user to Track the order that he/she has
put in the day to see what happens to those orders whether they are fully executed,
halfly executed or not executed at all.
5. Check Your Trading Limits: It allows the user to check the limit of the transaction
that he/she can make.
6. Check Your Open Position: It allows user to verify that which are the scripts that
must be square off in Particular day incase of intraday transaction.
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7. View your Transaction: It gives the information about transaction that we have
made on particular scripts at particular price and quantity as per the date criteria.
8. Enable IPO Online: It allows the user to fill up the issue Form of IPO online. Thus
eliminates the Physical Form filling.
9. View Your Contracts: It Gives the information of our Contracts.
10. Cash and Securities Due: It gives reminder to user about how much cash and
securities will be receivable and payable.
11. Move cash to Sharekhan: This Option allows the user to Move Cash to
Sharekhan account from the saving bank account for the Trading purpose. By
entering net banking Password and Userid of the user, he/she will be allow to enter
Amount to be withdrawn from bank and then that amount will be added in Account
summary of Sharekhan.
12. DP Summary: This option allows the user to check his/her demat balance in
SSKI.
13. Receivable Summary: This option is same as Cash and Securities but adds one
Extra Facility of BTST (Buy Today Sell Tomorrow).
14. Miscellaneous Links: This Covers all options in tree Structure and has facility of
Withdrawing cash from Sharekhan to Saving Bank account.
15. Profile: This option allows user to change the Trading password.
16. Research: This option Allows user to search information of particular company,
by the way of news, Ideas, growth charts, turnover, profit, IPO etc.
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Fast-Trade Sharekhan On-Line Terminal
Above Screen Shows On-Line Terminal that is provided by Sharekhan to the

customers of classic account. This Terminal is Applet based and requires Internet
Explorer 6 on computer.
Functions
1. It gives right time fluctuation in Script price by the way of showing

blue color for increased price and orange for decreased script
price.
2. It also shows latest update of Trading messages, Sharekhan
messages, diagnosis, news and ideas about share market.
3. Here customer can select script, order type, quantity and purchase
or sale by the way of pressing Submit button. In this way order will
be execute.
4. Here customer can also build his/her own group of scripts and can
see it in the terminal whenever he/she opens Fast trade terminal.
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Sharekhan Speed Trade Terminal
Above Terminal is provided to the Speedtrade account customer.

Special Software of Sharekhan needs to be installing on the customer’s
Computer for accessing this terminal. It also includes the facilities of
Graphs.
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Graphical Information of Scripts on Sharekhan Terminal.
CHAPTER - 9
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MY EXPERIENCE
9.1 Learning Experience
My training began from 20-May-04 and continued up to 20-july-04. Initially

while joining Share khan, I was trained for 3 days about the Indian security market,
about the company and the product. I was told to go to the field after 3 days of the
completion of the training. An experienced executive from the organization
accompanied us to corporate for initial 2 days. Thereafter I went on my own targeting
corporate in various parts of the city.
Also in my fourth week in the organization, I was given training about the
functioning of the derivatives market. In that I was taught about how the future and
options contracts are dealt with.
9.2 Selling Experience with respect to Financial Product of Sharekhan

Selling! Going to the field as a salesperson and really selling the product is
the most difficult task of all the other tasks. I have read books about selling, studying
consumer behavior but when it comes to applying it practically, nothing works! It all
depends on one’s understanding of the consumer behavior and one’s convincing
power.
Hence, selling besides the consumer’s interest depends much on the sales
person. All a consumer needs to know is how is the product we sell well than other
products? The way these and other questions are answered is what depends on
sales people. It is different for different sales persons. Again, it depends on the
customer too, which language he/she is comfortable with and where to stop.
I met roundabout 15 to 20 people everyday. Out of these I found 2 to 3

persons who took actual interest in the product. With regular follow-ups the
conversion ratio turned out to be only 1 customer in 4 to 5 days per trainee.
As I met more and more people, I came to know more about how to talk to
them, how much time be given to each person we met. Even, by solving the
customer queries, my own understanding was enhanced. In the Second month, my
total conversion ratio became relatively higher i.e. 10% as compare to First month
i.e. 6%.
While selling product in the market, I also came to know more about
competitor’s product like kotakstreet.com, icicidirect.com, India bulls, 5 paisa, and
their strategy of marketing and the consumer’s preference towards the competitor’s
product.
I did cold calling in these two months and created my own database through
it. In the second month, I got leads from tele-caller at Sharekhan which are
generated from Websites like moneycontrol.com, rediffmail.com, indiatimes.com.
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Share khan also gives advertisement in leading English dailies and and on channels
like CNBC where the customer care toll free no. is displayed.
I met people in different retailers located at Ashram road, C.G. road, Mithakali
6 roads, S.G. Highway, Paldi, Maninagar, Judges Bungalow road, Vatva,
Gandhinagar, Bapunagar, Shahibaug, Jodhpur, Naroda, Sabarmati, Naranpura,
Navrangpura, Gurukul etc.
Others include Advertising Agencies, Chartered Accountants, Travel

agencies, Exporters, Education consultants, Samsung as well as other household
appliance showrooms. I met the Customer Relationship Managers, Assistant
Managers, Sales Managers, Accountant officers and even the Directors of some
companies. Getting entry into this big corporate was a big challenge for me. At some
places, I was even offered jobs too!!!
I needed to report daily in my company in the DSRs (Daily Sales Report) the
information about the people I met. This DSR included: Name of the customer, Ph.
Number, Time, Period, Status, Follow up and Reasons. Even, I was required to fill up
a Deal-Sheet for HNIs’ that is the High-Network Individuals (the individuals who trade
in higher volumes) that I met on a particular day.
I opened up stalls with other Trainees at places like IIM, old as well as new
UTI bank, Shivranjini Cross Roads, Torrent House, Hanuman Temple near
Shahibaug, Maninagar, Law garden and Ankur.
The response at places like UTI bank and IIM was really good. I got leads
from there and through follow-ups; some of these leads got converted into my
customers.
Once, a customer filled up the form, I had to call him/her after 4 working days
to check if he has received the login ID and password from us (Bombay office of
Sharekhan). After that, I was required to show the customer how to make a
transaction and how to get access to the terminal. Also, other queries which the
customer faced had to be solved by me. So, it was all a very good learning
experience for me.
What I faced was the scorching heat of the city, be in a one area at one time
and just the opposite area in other time as per customer’s appointment. How to
speak to consumers, solving their queries, building a rapport with them was all up to
me. I created my own databases which I feel is an achievement. Also, getting into
the offices with the “salespeople not allowed” board was an achievement. The
feeling after meeting a customer once and in the final meeting, and closing the deal
gave me a sense of fulfillment. There were 40 signatures in the account opening
form and entertaining my customers while filling-up the form was again a challenge.
At Sharekhan, the atmosphere was perfectly cordial. There were senior

trainees always to solve the difficulties I faced in approaching a customer, filling up
the form, demonstrating the site, or solving their queries. I was supposed to be
formally dressed and required to report twice daily.
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___________________________________________________________________________
I faced some bad and resentful experiences like being sent out of offices
without being listened. Even, I waited for hours for a customer and went to the
customer again in case if a signature is left in the form or in occurrence of any proof
problems. This was again a learning to increase my tolerance and be more careful
while filling up the form.
CHAPTER - 10
RECOMMENDATIONS
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___________________________________________________________________________
To Share khan:
1. BSE online terminal:

At present the company is offering online trading only on NSE but
there are many customers who want to trade on BSE. Company should
provide BSE online trading too, to attract these customers.
2. Post-sales service:
Customer retention is what the company is lacking. It is more
difficult to retain a customer than to form one. For this, an effective post-sales
service is a must, which the company is lacking. For customer care, more
professionals may be recruited to overcome this problem.
3. Effective sales promotion:

Sales promotion schemes should be such to attract the prospective
customers. Proper advertising may be done in order to create awareness and
good schemes to attract the customers may be offered.
4. Customer convenience:
Many of the customers prefer to have the portal on their desktops
itself instead of getting it through the site. Direct login and password may be
provided to have it on desktop, if the customer wants it. Even, the Speed-
trade and Speed-trade plus version can be put in the site, so that there is no
need to carry its CD wherever one moves.
Also, suggestions are not available in the basic portal. The
terminal speed is low and the TPIN and phone ID are not changeable.
Company may provide these facilities as well.
5. Pledging:
In order to attract customers, it may provide exposure not just in
cash terms but also security-wise. This will enhance its sales, as customer will
not have to move cash to the company every time he/she wants to trade.
6. Sales force:
Company does recruit trainees, but it does lack a professional sales
force, which remains with it on a permanent basis. For this, the company may
offer salary on a fixed basis instead of variable one that it offers now.
7. Communication:
There is a big problem in the co-ordination of work due to lack of
proper communication. The middle-level management and the bottom-level
management are not able to work as a team due to this.
BIBLIOGRAPHY
Books:
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• Agarwala Kamlesh N., Agarwala Deekshah, “Bulls, Bears and the Mouse An
introduction to online trading”, New Delhi: Macmilan India Ltd. 2000, 445pp.
• Patel Alpesh B., “Trading Online”, Delhi: Pearson Education Asia Pte. Ltd.,
2001, 454pp.
• Vetri M. Subramanium, “The World of online investing”, Investors’ year book,

The ET knowledge seies, 2000-01. 62pp.
Magazines:
“Share khan value line”
Websites:
 http://www.sharekhan.com
 http://www.nseindia.com
 http://www.bseindia.com
 http://www.hdfcsec.com
 http://www.indiabulls.com
 http://www.5paisa.com
 http://www.icicidirect.com
 http://www.kotakstreet.com
 hhtp://www.google.com
- 70 –

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But investing is essential. Here is why…

“Share” or “Equity” represents part of an ownership of a business. So as a

Securities market has essentially three categories of participants, namely the

 1850 – Shares of banks and securities of East India Company traded in

 1875 – Brokers organized an association known as the Native Share Brokers

 1956 – Securities Contract Regulation Act passed

 1987 – Stock Holding Corporation of India set up.

1.3 Changing Trend

The speed of transaction, confidentiality about the prices and ease of

A Depository is a Company where the shares of an individual are held in the

What is the Depository System?

How can Person Deal with the Depository directly?

National Securities Depositories Limited is a Depository promoted by UTI, IDBI, SBI

About the Insurance Policy by NSDL

Central Depositories Securities Limited is a Depository promoted by BSE.

How does the Depository curtail Forgeries / Fakes in Duplicate Distinctive

2.2 Depository Participant

Who is a Depository Participant?

Depository Participant (DP) is an 6rganization that acts as an Agent of the

It is an identification number given to a DP similar to a client ID.

What is meant by Dematerialisation?

Dematerialisation is a process in which person can convert physical share

Why should Person buy shares in the demat form?

How does Person benefit by selling demat shares?

What is meant by Companies in compulsory Demat?

Only share certificates in these companies can be dematerialized by the investor.

What if Person hold shares of Companies not in Demat?

Is it true that Demat is not compulsory?

Can physical AND Demat shares be held for a company?

Yes. Person may dematerialize only a part of your holdings.

In Demat does Person need a Transfer Deed?

In order to demat your shares/certificates, person has to fill in a Dematerialisation

What is Defacing of Shares?

Your account will be credited typically in 15 days.

Are there Distinctive Numbers & Certificate Nos. in Demat Shares?

Why dematerializing, can a sole holder add a Joint Holder?

What are the various reasons for Rejections in Demat?

What is meant by rematerialisation?

Rematerialisation is a process in which person can convert your electronic holding

Does the NSDL issue fresh certificates in Remat?

What are the rules for Odd lot Rematerialisation?

What are the rules for stamp duty in Remat?

The Depository is the registered holder in the Company’s records. In a remat,

How to remat person’s securities?

3.1 Offline Trading System

What is meant by Offline trading?

In offline trading system, two parties i.e. an individual and a broker

For settlement, different brokers may follow different models:

1. They would require full funding before the pay in day.

Merits of Offline trading

• Flexibility in credit period

Demerits of Offline Trading System

• Problems in getting in touch with the Broker

3.2 Online –Trading - A New Dimension of Trading

Walter, business professional logs on to the Internet, punches in his id

Time taken: 2 minutes.

Welcome to the world of e-Trading.....

 E-trading is the mechanism of buying/selling securities via the Internet.

 E-trading is considered as a logical extension of e-commerce.

To put it simply, e-commerce is buying and selling through electronic

E-Trading is a service offered on the Internet for purchase and sale of

In Online Trading, a customer can access a stockbroker's website