Perception of Investors Towards Online Trading: Introdution

Perception of Investors towards online Trading
INTRODUTION
Online trading is a buying and selling of stocks, through internet in an area of

commercial activity. The set of institution facilitates the exchange of stocks
between buyers and sellers. For the growth of electronic transaction a large fraction
of stock market transaction are not centrally located in a particular location
because of every transaction are made through online trading.
The project is an attempt to identify the current investment trends amongst

individual investors in Bangalore and to ascertain the investor perception about
professional financial advisory services. Also an attempt is made to ascertain
investor opinion about information technology / internet as a means of investment
planning and trading.
This study required both Primary and Secondary data. Primary data was collected
through a structured questionnaire and the Secondary data was made available
through company literature and Internet.
All the respondents were contacted personally which consisted of individual

investors of Bangalore, both current and potential. The information was collected
by meeting them personally. The data collected above was analyzed thoroughly
through appropriate statistical methods and presented in the form of tables and
graphs.
In this project investor’s choice of investment avenues, reasons for the choice,
characteristics they expect from financial advisory services and awareness levels of
various online advisory services have been dealt in length and breadth.
Maharani’s Arts & Commerce College For Women, Mysore Page 1

TRADE:
Trade is the transfer of ownership of goods and services from one person to
another. Trade is sometimes loosely called commerce or financial transaction or
barter. A network that allows trade is called a market. The original form of trade
was barter, the direct exchange of goods and services. Later one side of the barter
was the metals, precious metals (poles, coins), bill, paper money. Modern traders
instead generally negotiate through a medium of exchange, such as money. As a
result, buying can be separated from selling, or earning. The invention of money
(and later credit, paper money and non-physical money) greatly simplified and
promoted trade. Trade between two traders is called bilateral trade, while trade
between more than two traders is called multilateral trade.
Trade exists for man due to specialization and division of labor, most people
concentrate on a small aspect of production, trading for other products. Trade
exists between regions because different regions have a comparative advantage in
the production of some tradable commodity, or because different regions' size
allows for the benefits of mass production. As such, trade at market prices between
locations benefits both locations.
Retail trade consists of the sale of goods or merchandise from a very fixed
location, such as a department store, boutique or kiosk, or by mail, in small or
individual lots for direct consumption by the purchaser hole sale trade is defined as
the sale of goods or merchandise to retailers, to industrial, commercial,
institutional, or other professional business users, or to other wholesalers and
related subordinated services.

Trading can also refer to the action performed by traders and other market agents
in the financial market.
ONLINE TRADING:
The neat is used as a medium of trading in internet trading. Orders are

communicated to the stock exchange through website. Internet trading started in
India on 1st April 2000 with 79 members seeking permission for online trading.
The SEBI committees on internet based securities trading services has allowed the
net to be used as an Order Routing System (ORS) through registered stock brokers
of their clients for execution of transaction.
Under the Order Routing System the client enters his requirements (security,
quantity, price, buy /sell) in broker’s site. They are checked electronically against
the clients account and routed electronically to the appropriate exchange for
execution by the brokers. The client receives conformed on execution of the order
the customer’s portfolio and ledger accounts get updated to reflect the transaction.
The user should have the user id and password to enter into the electronic ring. He
should also have a demat account and bank account. The system permits only
register clients to log in using user ID and password. Order can be placed using
place order window of the website.
 The client has to enter stock code and other parameters such have
quantity and price of the scrip on the place order window.
 The client can review the order place by clicking the review option.
He can also reset to clear the values.
 Satisfactory orders are sent by clicking the send option.

 The client receives an order conformation message with order number

and value of the order.
 If the order is rejected by the broker or stock exchange for certain
reasons such as in valid price limit, a related message appears at the
bottom of the screen. The time taken to execute the order in 10
seconds.
 When the trade is executed, the broker asks for the transfer of funds
by the investor to his account. Stocks are credited or debited
according to the buy or sell in the demat accounts.
Online trading is a buying and selling of stocks, through internet in an area of

commercial activity. The set of institution facilitates the exchange of stocks
between buyers and sellers. For the growth of electronic transaction a large fraction
of stock market transaction are not centrally located in a particular location
because of every transaction are made through online trading.
On its recognition as a stock exchange under the securities contract (regulation)

Act 1956 in April 1993, NSE commenced operations in the Wholesale Debt
Market (WDM) segment in June 1994. The capital market (equities) segment
commenced operations in November 1994 & operations in Derivatives segment
commenced.
The stock exchange covers various cities and town across the country. There are
two leading stock exchange in India, they are;
(a) National Stock Exchange (NSE)

(b) Bombay Stock exchange (BSE)
Technology has always been a destiny of curiosity and learning, the changing
phase of technology incubates a strong urge of study it and to implement it. The

technology redefines the subject where it finds the place. Most important is its
change and velocity. Technology has not left any former of the social, political,
economical life of an individual. The wildered hands of technology found its place
from corner of the house to the ground floor of multi-crores companies. This
dynamic and instrumental application technology always makes it matter of
interest and study.
As quoted earlier technology has extended everywhere. From the rolling of the
wheels to the processing of the material technology has become inevitable, with
the advent of technology everything is being converted to virtual. Internet and
intranet have made the world has a “Global village”. It was found its scope in
various aspects of society like hospital, transportation, education, business,
banking, stock trading and what not.
One of the important activities in any economics is the role of “stock exchange”.
They are the residence of capitalists, investors, economists and all players in
economy stock exchange may be defined as “an association, organization or body
of individuals whether incorporated or not established for the purpose of
assisting, regulating and controlling business in buying, selling and dealing in
securities”.
The traditional form of trading has now been replaced with the technology based
trading. A technology frame work has set into an agreement in share trading. Share
trading, which is the major activity in an economy is not an exception for
technology adoption. The tradition form of bidding is being replaced by ‘screen
based trading which facilitated for trading through tip of the fingers to the
investors’ spread all over the country.

SECURITIES AND EXCHANGE BOARD OF INDIA
INTRODUCTION
SEBI, which was a earlier established as an administrative body in April 1988,

was given a statutory status January 1992. Controller of Capital Issue (CCI) was
abolished with a view to have SEBI as a single agency to look after control over
capital market.
SEBI Act mainly deals with formation, management, staffing, accounts, reports,
and audit of SEBI etc. It is the supervisory and regulatory authority for the stock
and capital markets.
SEBI functions:
The SEBI can take following measures to fulfill its objectives:-
 Regulate business in stock exchanges and other securities market.

 Control and Regulation of the stock Exchanges and stock brokers.
 Development of stock and capital markets in the right direction.
 Registering and regulating self-regulatory organizations (like stock
Exchanges).
 Promoting investors education and training of intermediaries.
 Prohibiting fraudulent and unfair trade practices relating to Securities
Market.
 Prohibiting insider trading in securities.
 To ensure investor protection.

SEBI Guidelines:
Highlights of the guidelines issued by SEBI are summarized below.
 At least 60% of each kind of securities issued by company must offer to

public subscription.
 Offer must be made through a prospectus in news papers for a period not
less than three days,
 Minimum capital for listing on stock exchanges – It should be noted that
minimum equity capital requirement for listing on Bombay Stock
Exchange is Rs. 10 crores.
 Fresh issue must be de-materialized – All fresh issue of capital will have
compulsorily got their securities admitted with all depositories for de-
materialization.
 Company shall promptly forward to Stock Exchange copies of Annual
reports, notice, circulars sent to Share Holders.
ONLINE SHARE TRADING IN INDIA
Online refers to the network of computers/mobile phones/other electronic devices

which share and exchange information. The internet is having a capacity to
broadcast worldwide its capabilities, mechanism for information dissemination
,medium of collaboration and interaction between individuals and their
computers/mobile phones/other electronic devices, which are capable of accessing
the internet without related to geographic location.

BASICS OF ONLINE SHARE TRADING IN INDIA
1. Stock Exchange:
Stocks (shares, equity) are traded in stock exchange. India has two big stock
exchanges (Bombay Stock Exchange – BSE) (National Stock Exchange – NSE )
and few small exchanges like Jaipur stock exchange, Bangalore stock exchange
etc. investor can trade stocks in any of the stock exchange in India
Stock Broker:
Investors require a stock broker to buy and sell shares in stock exchange (BSE,
NSE etc). Stock Broker is registered member of stock exchange. A stock broker
can register to one or more stock exchange Only stock brokers can directly buy sell
shares in stock market. An investor must contact a stock broker to commissions
(brokerages) for their service.
Stock Trading: The main two methods of trading systems are:
Traditional trading system:

Traditionally stock trading is done through stock brokers, personally or through
telephones as known as traditional or opens outcry system.
As number of people increase enormously in last few years, some issues like
location constraints, busy phone lines, miss communication broker offices.
Information technology helps stock brokers in solving these problems with on-line
stock trading.

Online Trading System:

Online stock trading is an internet based stock trading facility. Investor can trade
through a website with from stock broker. In this case on-line stock trading
companies are stock broker for the investor.
The internet is used as a medium of trading in online trading. Orders are

communicated to the stock exchange through website. Internet trading started in
India 1st April 2000 with 79 members seeking permission for online trading. The
SEBI committees on internet based securities trading services has allowed the net
to be used as an order routing system (ORS) through registered stock brokers on
behalf of their clients for execution of transaction.
This internet facility has both advantages and disadvantages. It provides fully
transparency, and best quotes possible at any time. An investor will have he
control over the information and quotes a will be able to hit a quite online basis.
Doubles about the broker’s capacity integrity will be non-issues.
The problems with internet broking are the risk of safety and confidentiality. There
are possibilities someone having in to the system and possible malpractices. These
are controlled by SEBI through the stock exchanges. For an individual broker a
network of Rs. 80 lakhs is laid down and stock exchanges can insist an adequate
network limits to trading and collect margins and ensure trade guarantee.

MAJOR PLAYERS OFFERING ONLINE TRADING SERVICES IN

INDIA:
Below is the detail comparison of major online stock trading websites in India.
This comparison is to help calculated decision while searching for new trading
portal.
1. THE MAJOR INTERNET TRADING SERVICES PROVIDERS IN

INDIA ARE:
 ICICI DIRECT
ICICI direct (or ICICI Direct.com) is stock trading company of ICICI bank.
Along with stock trading and trading in derivatives BSE and NSE. It also
provides facility to invest in IPO’s, mutual funds also.
 5PAISA
5paisa is internet stock trading company of India Info line securities private ltd.,
owner of popular business portal indiainfoline.com and this company has high
quality of investment advice from an experienced research company.
 MOTILAL OSWAL SECURITIES

Motilal Oswal securities ltd., (Most) is one of the best broking houses in India.
Founded in 1987, Most has in 200- 400 outlets. Most provide advice – based
broking (equities and derivative).
 INDIA BULLS

India bulls is India’s leading financial services and real estate Company having
presence over 414 locations in more cities. India Bulls financial services ltd is
listed on the National Stock Exchange.
HDFC SECURITIES:
HDFC securities (HDFC sec) are an equity trading company of HDFC bank.
HDFC securities provide both online trading and on phone. The HDFC
securities trading account has a unique 3-in-1 feature.
 RELIANCE MONEY:
Reliance money (or Reliancemoney.com) is the financial services division of the
Anil Dhirubhai Ambani group provides capital limited. Investment options are
available in Equity trading.
 IDBI PAISA BUILDER:
IDBI paisa builder is a multipurpose internet stock trading websites from IDBI
Capital Market service ltd., a leading financial service in India and is a 100%
subsidiary of industrial development.
 SHARE KHAN:
Share khan is internet stock trading company of SSKI Group, provider of India
– based investment banking and corporate service. Share khan is one of the
largest stock broking houses in the country.
2. THINGS TO DO BEFORE OPENING INTERNET SHARE TRADING

ACCOUNT:
 Ask for demo: contact the broker who provide online trading service and ask
him to give you a demo of product.

 Check if the broker trades in multiple stock exchanges. Usually most of the
online trading websites trade in NSE.
 Check the integration of brokerage account, Demat account and bank account.
 Compare brokerage with other companies.
3. MAJORE PRE-REQUISITES TO DO INTERNET SHARE TRADING:
 A BAND ACCOUNT: Any bank should be having an alliance with the

online trading service provider. This bank account will facilitate as a payment
and receipts gate way.
 A DEPOSITARY ACCOUNT OR DEMAT ACCOUNT: The
depository account also should be having an alliance with the online trading
service provider. This account will act as a bank for the shares you hold. This
account is must for share holders.
THE PROCEDURE OF THE DEPOSITORY ACCOUNT
 To open an account, you can approach any DP of your choice and fill up an
account opening form.
 At the time of opening an account, you have to sign an agreement
with DP in the Depository prescribed standard agreement, which deals the
rights and duties of the investors and his/her DP.
 All investors have to submit proof of identity and proof of address
along with the prescribed account opening form.
PROOF OF IDENTITY:

 Your signature and photograph must be authenticated by an

existing Demat account holder the same DP or by a bank manager.
 Alternatively you want to submit a copy of passport, voters
ID Card, Driving License, PAN card with photograph.
PROOF OF ADDRESS:
You need to submit a copy of passport, voters ID card and Driving License, Pan
Card with photograph, ration card or bank passbook as proof of address. And also
have original documents to the DP for verification with passport-size photograph.
TRADING ACCOUNT:
Trading account positions can be taken purely for intraday purposes. All trading
account positions have to be compulsorily squared off before the end of the market
or any other specified by the trading stock broker. In case any outstanding position
remains the stock broker will square off the same at the prevailing market price. In
case the square off cannot be done, the trading account will get shifted to
investment account off the client.
STANDARD DOCUMENT REQUIRES OPENING AN INTERNET

TRADING ACCOUNT:
I. PROFF OF RESIDENCE: (Address proof)

 Driving license
 Voters ID
 Passport
 Photo credit card

 Photo ration card

 Utility bill (Telephone bill, Electricity Bill)
PROOF OF IDENTITY:
 Driving license
 Voters ID
 Passport
 Photo ration card
 PAN card
 Two photographs
II. ONLINE SERVICE PROVIDER ACCOUNT:
This can be opened with any of the major service provider’s i.e. client
registration form.
III. SYSTEM ORDER ROUTING (ORS):

Under the order routing system the client enters his requirements (security,
quantity, price, and buy/sell) in broker’s site. They are checked electronically
against the clients account and routed electronically to the appropriate exchange
for execution by the broker. The client receives a confirmation on execution of the
order. The customer’s portfolio and ledger accounts get updated to reflect the
transaction.
The user should have the user ID and password to enter into the electronic ring.
He should have a Demat account and bank account. The system permits only a

registered client to log in using user ID and password. Order can be placed using
place order window of the website.
 The client has to enter stock code and other parameters such as quantity and
price of the scrip on the place order window.
 The client can review order placed by clicking the review option. He can also
reset to clear the values.
 Satisfactory orders are sent by the clicking the send option.
 The client receives an order confirmation message with order number and value
of the order.
 If the order is rejected by the broker or stock exchange for certain reasons such
as invalid price limit, a related message appears at the bottom of the screen. The
time taken to execute the orders is ten seconds.
 When the trade is executed, the broker asks for the transfer of funds by the
investor to his account. Stocks are credited /debited according to the buy/sell
order in the Demat accounts.
Internet trading provides total transparency between a broker and an investor in the
secondary market. In the open outcry system, only the broker knew the actually
transacted price. Screen based trading provides more transparency. With online
trading investors can see themselves the price at which the deal takes place.
The time gap has narrowed in every stage of operation. Confirmation and
execution of trade reaches investor within the least possible time, mostly within
thirty seconds. Instant feedback is available about the execution. Some of the
websites also offer
 News and research report

 BSE and NSE movements
 Stock analysis
 IPO and Mutual Fund centers
 Movements of International Stock Exchanges
RESEARCH METHODOLOGY
“PERCEPTION OF INVESTOR TOWARDS ONLINE TRADING”
INTRODUCTION
Research is one of the best instruments to identify the investing pattern of investors
to invest in various sectors & to study different sectors of Capital market.
DEFINITION
“Research is careful inquiry or examination to discover new information and
relationship and to expand and to vary existing knowledge.”
Research always starts with question or any problem and finds answer of problem
by using scientific method. It gives complete knowledge about any problem or
question.
STATEMENT OF THE PROBLEM
The company intended to find out the investment trends amongst individual
investors of Bangalore. So as to refine or retune their portfolio to match the
investor needs. Keeping this in view, the researcher attempts to make a study on

“Perception of individual investors towards online trading Bangalore – A

Study”.
OBJECTIVES OF THE STUDY
 To know the perception of investors towards online trading.

 To study the procedure and benefit of internet share trading.
 To study the awareness and attitude of investors towards online share
trading.
 To study the service of online share trading.
 To analyze the extent usage of technology based share trading among the
investors.
TYPE OF RESEARCH
The research type adopted for the proposed study is an evaluative and descriptive
in nature.
SAMPLING DESIGN
a) Sample size: The study is based on 50 respondents, of which it includes

investors, intermediaries and others involved in online trading.
b) Sample Area: It refers to the place where the studies are conducted. The
Sample Area selected for the study is Bangalore City.
c) Sample Technique: The sample technique adopted for this study is random
and convenient technique.

SOURCES OF DATA
The data pertaining to inventories collected through primary & secondary sources
are analysed through percentage analysis, ratio analysis & marketing analysis.
PRIMARY DATA
Primary data are those that are collected as fresh for the first time & thus happen to
be origin in character. Here primary data was collected through a structured
questionnaire.
The selection of respondents is based on simple random sampling. Information was

collected from personal interview & discussion with the manager of BMA Wealth
Creators Ltd & also with the respondents.
SECONDARY DATA
The secondary data are those, which have collected by same others that have been
processed. For the study, the secondary data is called from various publications and
journals of stock exchanges, newspapers, books, business and investment
magazines, articles & websites.

SCOPE OF THE STUDY
The research on a study of investor’s preference towards online market helps to

know the attitude, awareness & preferences on the investors. Based on the
information investment brokers can carry out further research on specific problem.
The research suggestion through report will help them to improve their services.
Many services will be undertaken to attract new investors. This study helps to give
value-added services & maintain healthy investor relationship.
The scope extends to various classes of investors being classified as employees,

professionals, and businessmen and other. Concerning to the fact that, there is a
need of institutional support which may be broker, agents or even financing
institutions. The study extends to these areas too.
LIMITATION OF THE STUDY
 The study is restricted to Bangalore City.
 Selected Investment Option is only Online Trading.
 Availability of data.
 Time Constraints.
 Respondents might have felt hesitation in providing information related to

their age, income etc. So, there can be some data that might questionable
because of unwillingness of respondents to give right information.
 Sample selected may not represent whole population, as sample size selected
is very small in proportion to population due to time and cost constraints.

 Even many of the respondents may give bias answer.
CHAPTER SCHEME
CHAPTER 1: INTRODUCTION
This Chapter consists of details of online trading, stock brokers, NSE and BSE and
SEBI Guidelines for online trading.
CHAPTER 2: RESEARCH DESIGN
This chapter consists of the objectives of the study, sampling design and frame,
type of research adopted and chapter scheme.
CHAPTER 3 : INDUSTRY PROFILE
This chapter consists of the details of the stock exchanges,
CHAPTER 4: ANALYSIS AND INTERPRETATION OF DATA
This chapter consists of primary data analyses, collected through questionnaire and
graphs to interpret the trends.
CHAPTER 5: FINDINGS, SUGGESTIONS AND CONCLUSION:

This chapter consist of findings, suggestions and conclusion for the study.
INDUSTRY PROFILE
The Indian retail brokerage industry consists

of companies that primarily act as agents for
the buying and selling of securities (e.g.

stocks, shares, and similar financial instruments) on a commission or transaction

fee or Brokerage basis.
An agent that charges a fee or commission for executing buys and sell orders
submitted by an investor.
The firm that acts as an agent
for a customer, charge the
customer the commission
for its service. Roles similar to
that of a stockbroker include
investment advisor,
financial advisor and
probably many others. A
stockbroker may or may
not be also an investment advisor.
A stockbroker is a regulated professional broker who buys and sells shares and
other securities through market makers or Agency Only Firms on behalf of
investors.
Typically, a broker who receives an order from a customer will communicate with
a company employee located at a particular exchange, who will execute the order
at the exchange and report details of the transaction to the broker. Customers
typically keep their securities in an account with the broker. Brokers charge
customers commissions for conducting transactions and fees for maintaining their
accounts.

Some of the main characteristics of the brokerage industry include growth in e-

broking, decline in brokerage fees and growing derivative market and many more.
There are several national as well as local players in stock trading services which
are providing various services to their customers like online trading, portfolio
management system, stock broking etc.
They are helping the investors to take decision about where to invest because there
is lots of Investment Avenue available with investors. Some of them are as follows
working at the national level.
 5PAISA.COM: Online trading, live stock quotes and market research
 ANAGRAM CAPITAL: Stock broking, portfolio management and investment

banking services
 ANGLE BROKING: Stock-Broking and Wealth Management services
 ADVANI SHARE BROKERS: Share broking and market research services
 ANAND RATHI SECURITIES: Portfolio management, corporate finance,

equity & fixed income brokerage services
 BRESCON GROUP: Advisory and broking services
 CIL SECURITIES: Stock broking & merchant banking services
 CRN INDIA: Trends of stock market, trading tips, chat etc
 CHURIWALA SECURITIES: Stock trading, quotes and market analysis r
 DSP MERRILLLYNCH: Investment banking and brokerage services

 DALMIA SECURITIES : Stock broking & depository services
 EQUITY TRADE: Stock trading, company news & market research
 GANDHI SECURITIES : Stock broking and investment services
 GOGIAS CAPITAL SERVICES : Stock broking and market analysis
 HASMUK LALBHAI : Stock trading services
 IDAFA INVESTMENT : Stock broking services
 INDIA INFO LINE SECURITIES: stock broking, portfolio management and

investment banking services.
 INDIAN MARKET ACCESS : Offers stock broking, portfolio management

and investment banking services
 INVESTSMART INDIA : Personal finance advisory & online brokerage

services
 KISAN RATILAL CHOKSEY SHARE :Stock broking and e-trading services

Kotak Securities - Brokerage services & retail distributor of financial
securities
 MANUBHAI MANGALDAS SECURITIES : Stock broking and market

analysis
 MONEYPORE - Investment and broking services
 MOTILA OSWAL SECURITIES: Online trading, live BSE and NSE quotes

 NAVIA MARKETS :Stock broking, IPO and mutual funds services
 PARAG PARIKH: Stock broking and portfolio management
 PARSOLI CORPORATION :Investment management & stock trading

services
 PRATIBHUTI VINNIYOG : Stock broking services
 PRUDENTIAL: Investment management services
 QUANTUM SECURITIES: Offers broking and portfolio management

services.
 RELIGAR ENTERPRISES LIMITED : Stock broking services and

diversified financial services group with in multiple international locations
 SIVAN SECURITIES: offers services related investment banking & stock

broking with a focus on South India.
Lots of brokerage companies are moving towards consolidation with the smaller
ones becoming either franchisee for the larger brokers or closing operations. There
is an increasing demand for online trading due to consumer’s growing preference
for Internet as compared to approaching the brokers.
New forms of trading including T+2 settlement system, dematerialization etc. are
strengthening the retail brokerage market and attracting foreign companies to enter
the Indian industry Various alternative forms of investment including fixed
deposits with banks and post offices etc act as substitutes to retail broking products
and services.

OTHER SERVICES THAT THESE OF ONLINE TRADING PROVIDERS:
1. TRADING IN SHARES:
The service providers offer you various options while trading in shares. They give
out a list of services that are provided by the best of the Online service providers in
India.
CASH TRADING:
This is a delivery based trading system, which is generally done
with the intention of taking delivery of shares or monies.
MARGIN TRADING:
You can also do intra – settlements trading up to 4 times your available funds,
where in you take long buy/short sell positions in stocks with the intention of
squaring off the positions within the same settlement cycle.
SPOT TRADING:
When you are looking at an immediate liquidity option, “Cash on spot” may work
the best for you. On selling shares through “cash on spot”, money is credited to
your bank a/c the some evening and not on the exchange payout date. This money
can then be withdrawn from any of bank ATMs.
BTST:

Buy today sell tomorrow (BTST) is a facility that allows you to sell shares even
one day after the buy order date, without you having to wait for the without you
having to wait for the receipt of shares into your Demat account.
TRADING ON BSE/NSE:
Through some of the service providers, you can trade on both BSE and NSE.
2. INVESTING IN MUTUAL FUNDS:
Some of the Major Service providers bring you the same convenience while
investing in Mutual funds as well Hassle free and paperless investing.
Once you place a request for investing in a particular fund, there are non manual
processes involved. Your bank funds are automatically debited or credited while
simultaneously crediting or debiting your unit holdings.
You also get control over your investments with online order confirmations an
order status tracking. To get know the performance of your investments through
online updating of mutual India is one of the many emerging markets of the world
where derivatives have been introduced in the recent past. First stock exchange
showed their willingness in introducing trading futures and options. January 1996
the NSE started funds portfolio with current Net Asset Value (NAV).
3. DERIVATIVES: A derivative instrument broadly, is a financial contract whose

pay off structure is determined by the value of an underlying commodity,
security, interest rate, share price index exchange rate, oil price, and the like.

4. FUTURES AND OPTIONS: work on the scheme of such trading. In March

1996, it made a presentation to SEBI on its plans to commence trading in
futures and options.
Through on line service providers can now trade index based futures and index
based options on the NSE. In futures and options trading you can take buy/sell
positions in index or stocks contracts have a longer contract period of up to 3
months.
5. ON-LINE INITIAL PUBLIC OFFERS (IPO’s):
The network of exchanges is now used for conducting primary issues offer initial
public offer (IPO’s) subsequent issues by companies, private placements as well as
book building. The trading software adopts the principle of order driven market. So
this facility meets the requirements of the user, investor, and trading member.
THE MAIN HIGH LIGHT LIGHTS OF THIS NETWORK ARE:
 Provides facility to the issuers for on line issue of securities

 Provides an efficient retail distribution network
 Reduces the cost of the issue of securities
 Permits early trading in issues to help the investors liquidate their investment
should they so wish
 Allows real time markets response for the issue.
You could also invest IPO’s on line without going through the Hassle of filling
any application from/paperwork. Get an in depth analysis of new IPO’s issues
that are likely to hit the market and analysis on these, IPO calendar, recent IPO
listings, prospectus/offer documents, and IPO analysis are few of the features.
These are help you keep on top of the IPO market.

6. CONTENT FEATURES:
 There are a host of features on some of the internet trading service providers
that might help you to make informed investment decisions.
 These features include indices of major world markets, nifty future, ADR prices
of Indian Scrip’s and daily share prices all scrip’s
 Monthly and yearly high/lows etc are also listed breaking new, snap shot latest
developments in the market thought the day coupled with technical charts offer
interactive charting with advanced indicators.
THE MECHANICS OF NET TRADING IS AS FOLLOWS:
ADVANTAGES OF ONLINE SHARE TRADING:
Following are the important advantages of online trading:
 Independence and freedom due to access to the markets: This is conceivably

the greatest advantages of online brokerages. An investor with an internet
connection can know the real time stock quotes, historical stock price trends,
have a handle on market events, access vast amounts of economics and market
analysis, do research on firms, and interact with other investors via forums or
chat rooms. This in combination with time can transform even the most investor
with an active interest in investment into a knowledge able and powerful
investor.
 Internet as an information super highway: Information related to stocks,
company fundamentals, etc., which were once only available to licensed
brokers are now at the fingertips of anyone. Online brokerages are in constant
endeavor to bridge the gap between the investor and the market.

 Diverse range of investment products and choices: online brokerages are

offering more products to the consumer, so as to give the consumer a wider
choice and also to accommodate consumers that have niche tastes investors can
invest in stocks, bonds, mutual funds, mortgages, insurance, derivatives,
futures, options, etc., online through Single or multiple websites from their
home, which was something fictional before the online investment
phenomenon.
 TIME: Time is very precious, so you can save time from internet for share
trading, it also enables you to trade from anywhere imagine a person sitting in a
small touch in Rajasthan having a contact his broker in Mumbai to get a trade
through, now you can conveniently trade from anywhere using the tool of the
internet. “Investor who travel frequently also needs not miss out on trading
opportunities all your need is a computer, a modem (a device connecting a
computer to a telephone line), a Telephone line and Bang (sudden loud)” from
these material you can Trade on line in the bull Market and one way of ensuring
this is keeping a trade on the prices and place buy/sell orders.
 FLEXIBILITY: The sites offer you immense flexibility of trades at your

fingertips: want cancel your order you can do it in seconds. Want to modify the
order… does it easily. This flexibility is the greatest advantage of online
trading.
Twice a scenario here you placed an order to buy stock B at Rs.50 you keep
tracking the movement of the stock for and in a couple of minutes you find that
the prices are heading south. What do you do? Modify your order immediately
and put a buy at Rs.45 essentially you are cashing on the market opportunities.

Adopt this to the really replace the buy with a sell and interchange the figures
you are now getting on an extra profit of Rs.5
 ELIMINATION OF PHYSICAL BROKERS: This type of trading is no

contact with physically through internet only wants to contact with him. The
Broker has kept doing things at his place and it is pretty tiring to track window.
Get rid of your frustrations as you eliminate the middleman. Now it’s just you
and your DP, the custodian and the exchange through electronically connected
with each other.
 SPEED OF TRADE EXECUTIONS: Keeping time in mind, online trading is

much quicker as far as accessibility and availability to investments information
and execution of trades are concerned. Online brokerages have decreases the
time for total completion of a trade from the regular T+3 days to a matter of
minutes.
 STANDARDIZED PROCEDURE: This view also useful for get to know.

Suppose your Broker want to give you the money or shares it depends on your
position. When your order is accepted by the exchange, it will give you your
pay-in and payout dates so you can get know when you getting cash or shares to
be credited to your account.
 VALUE ADDED SERVICES: Service provides offer a variety of trading

option like BTST (buy today sell tomorrow) gives you the advantage to two
short-term positions in the market and two advantages of price fluctuations.

This is very useful for when you want to cash in on news specific developments
margin trading allows on investors to buy stock without paying the entire
purchase price. You are required to pay just margin.
 HUMAN TOUCH STILL AVAILABLE IF NECESSARY: service providers

combine off-line as well as online services. They give you the personal touch
added to e trading thus combining structured advice and fast trades. It helps you
to avoid getting carried away in a boom.
 ONE STOP SHOP: bank statements and transactions statements can be viewed
at the click of a button you have to seen behind the bank executives to get your
monthly statements.
 INFORMED RESEAECH: Service providers carry stock analysis for your

reference. This helps you to making the right choices. All of us cannot afford to
here analysis to review the stocks and companies from these information i.e.
sites that provide research could be useful.
 FLEXIBILLITY OF TIMING: the market hour is 10 am to 3.30 pm you can

buy/sell the shares and can place orders before start of a trading session.
 SECURITY ISSUES: Given all of the above, clients were skeptical to go

online simply because of security reasons. Now, these fears can be rested with

encryption technology at its zenith, the major brokerages sites are intrusion
tested with highest levels of encryption. Furthermore all communications
between the browser and the network, occurring in the “secure sockets layer”,
are encrypted.
OTHER ADVANTAGES:
 Check the trading history: Demat account balance and bank account balance at
any time.
 Provide online tools like market watch, graphs and recommendations to do
analysis of stocks
 Set alert to inform you certain activity on the stock through Email or sms.
 Customer service through Email or chat.
DISADVANTAGES OF ONLINE SHARE TRADING (WEBSITE BASED):
 TECHNICAL RELIABILITY: The greatest disadvantage of online trading is

the inability of a network to be fail-safe. Computers in spite of the technological
advances are by no means perfect. There are various things that could go wrong
like failure to log on to the network, network blackout due to power failure,
server cash resulting in site freeze. Site freeze can happen on extremely
demanding day’s large amounts of orders going over the networks.
 LIMITED KNOWLEDGE: Elimination of broker could mean trouble. If you

are not warren buffet (and we are not saying that your broker is) it could places
risky to enter the capital of one without the structured advice. Expertise and
experience helps to some extent. In a bull phase, money making is not a

difficult task when you make a quick buck you start feeling like a market genius
you get carried away and may make some mistakes that could be more than
your risk appetite.
DATA ANALYSIS AND INTERPRETATION
INTRODUCTION:
Internet share trading has been generalized. The traditional system of open outcry
has been replaced by ‘screen based trading’. The stock exchanges have setup their
terminals in major cities across the country. The basic purpose is to ensure the
accessibility of trading system and stock exchanges index to all those who seek
investment in capital market. The investors can quote their orders at specified
prices from their places to carry on the transactions. The order placed is further
compared with order seeked and the transactions are tallied virtually with
conformity of both parties. This current system still is not accessible to many cities
in the country and hence is violent.
The government and stock exchanges need to analyze and study awareness and
attitude of investors towards online share trading. The attitude of investors is the
function of their reactions to risk, return, safety, and liquidity. The awareness has
major influence from technology awareness and the extent of trading through
online. Such a study enables the stock exchanges to take the measures to build
awareness and attitude towards capital market.

The questionnaire is prepared in accordance with the objectives laid down for the
study. It is designed to collect the primary data for the analysis of ‘investors’
perception.
The data of the project is collected through questionnaire, which tries to analyze
investor’s attitude and perception towards online share trading in Bangalore city.
Table No. 4.1
Table showing the no. of respondents who has invested a part of their income in
trading.
No. of respondents Percentage

Yes 35 70%
No 15 30%
Analysis

The firm should understand the customer needs and align their organisation to
fulfill those needs to be best positioned to attract as well as retain their customers.
Also, the firm should assess its core competencies and choose an appropriate
business model that leverages these competencies and fulfills the customer needs.
And may be investor’s relatively big size of the family and commitments towards
it. So any income would be spent towards the family thus leading to part of their
minimal savings.
Graph 4.1
Graph showing respondents who has a invest a part of their income

trading

INTERPRETATION:
In the survey it was found that 70% of the respondents are ready to take risk in
share market and remaining 30% respondents are not ready to take risk.
Table No. 4.2
Table showing the objectives of investing in Shares, Bonds, Mutual Funds etc.
No. of Percentag
respondents e
30 60%
To earn high project
To meet future needs 20 40%
To meet emergency - 0
If any other purpose - 0

ANALYSIS:-
In survey it was found that 60% of the respondents say the objective of investing in
shares, bound & mutual funds is to earn high profit & 40% of the respondents say
that to meet future needs. This may be because of their preference of safety of
investments.
Graph 4.2
Graph showing the objectives of investing in Shares, Bonds, Mutual Funds etc.

INTERPRETATION:
As per graph 60% of respondents are getting more income and try to get more
return on without taking risk remaining 40% respondents are future need.
Table No. 4.3
Table showing the investment option you are aware of

Field / other deposits 08 16
Insurance 12 24
Equity market 12 24
Bonds 0 0
Mutual fund 15 30
Others 3 06

ANALYSIS
In the Survey it was found that the majority of the respondents that is up to 16%
one aware of equity market & 24% of respondents one aware of mutual funds &
30% of respondents, One aware of fixed deposits & 06% of respondents, One
aware of insurance & 24% of respondents one aware of others.
Graph -4.3
Graph showing the investment option you are aware of
INTERPRETATION:

Majority of 17%and 10% of the investors consider other deposits and insurance
respectively to be the most prospective investment avenue in the future. This may
be due to the investor’s preference for safety of their investments. Mutual funds
Government bonds and other deposits are considered as less prospective
investment avenues. The investors have started sensing that these avenues yield
less returns comparatively.
Table - 4.4
The tables showing that investing know the online trading & now to buy & sell
shares in online
yes 45 90%
No 05 10%
ANALYSIS:-

Survey was conducted to know whether the respondents are aware of

online trading or not? In the survey it was found that 90% of the respondents
know to buy & sell share in outline trading and 10% of the respondents are not.
Graph -4.4
Graph showing that investing know the online trading & now to buy & sell shares
in online

INTERPRETATION:
A majority of 90% of the investors accepted to internet as a means of investment

planning and advisory services. Internet is the latest channel that is available to a
service provider to conduct business. Only 10% 0f the respondents were not
accepted internet as a means of investment planning and advisory services.
Table 4.5
The table showing the No. of respondents who can give better advice for
investment in online trading.
Share Brokers 17 33%

Magazine 05 10%
TV channels 13 27%
Friends & relations 08 16%
News paper 7 14%

ANALYSIS:-
In the survey it was found that majority of the respondent feel that share brokers
and TV channels can give better advice for investment in online trading up to 60%
and remaining 40% of respondents can get advice from magazine, TV Channels
and Newspapers.
Graph-4.5
Graph showing the No. respondents who can give better advice for investment in
online trading.

INTERPRETATION:
The majority of the investor are getting more knowledge for share brokers so they
are traded in online trading i.e.33% through share brokers because they given
better advice to buy & sell of shares through online. And remaining investor is
getting advice are magazine, TV channels, Friends &Relations and News papers.
Table – 4.6
The table showing the number of respondents would you like to invest in online
trading?


yes 41 83%
No 09 17%
ANALYSIS:
In the survey it was found that 83% of the would like to invest in online trading
and 17% of the investors are not interested to invest in online trading.
Graph –4.6
The graph showing the number of respondents would you like to invest in online
trading?

INTERPRETATION:
In the survey it was found that 83% of the respondents are would like to invest in
online trading because they want to get more knowledge about share market by
using online trading. And online is a latest channel i.e. available to a service
provider to conduct a business. Only the 17% of the respondents were not accepted
internet as a means of investment planning and advisory services.
Table – 4.7
The table showing the number of respondents for factors influence for investing in online trading

Returns 35 70%

Liquidity 05 10%
Tax concession 10 20%
More investment 0 0
ANALYSIS:-
In the survey it was found that the majority of respondent that is up to 70%
respondents like to invest in online trading for returns, 20% for tax concession and
10% for liquidity.
Graph –4.7
The graph showing the number of respondents for factors influence for investing in
online trading

INTERPRETATION:
In the survey it was found that the majority of respondents are trading purpose is to
get more return what they have invested and 20% of respondents are liquidity
purpose others are tax concession and the investors invested for a secure future
which was the least amongst all. This is because of the conservative nature of the
Indian investors.
Table – 4.8
Table showing the no of respondents are more preferred to invest.

Long term investment 16 33%
Short term investment 34 67%
ANALYSIS:-
In the survey it was found that about 67% of the respondents preferred to invest in
short term investment & 33% of the respondents preferred to invest in long term
investment.
Graph –4.8

Graph showing the no of respondents are more preferred to invest.
INTERPRETATION
In the survey it was found that about 67% of the respondents are invested in short
term because of they want to get money in short period to full fill their financial
commitment. And others are having more money and they are not much financial
commitment
Table – 4.9

Table showing the Stock exchange at which internet trading are commonly
done.

Stock
exchange
NSE 30 60%
BSE 20 40%
Total 50 100%
ANALYSIS:-
The above table indicates that 40% of respondents trade with BSE and remaining
60% of respondent trade with NSE.
Graph –4.9
Graph showing the Stock exchange at which internet trading are commonly done.

INTERPRETATION:
The above graph indicates that 40% of respondents trade with BSE and remaining
60% of respondent trade with NSE. Because of NSE is compare to BSE is
contains less business sectors so the investor are going to invest more in
NSE.

Table – 4.10
The table showing investors trading habits.
Trading habits No. of Percentage

respondents
Regular 25 50
Occasionally 07 14
Weekly 10 20
Monthly 08 16
Others 00 00
Total 50 100
ANALYSIS:-
In the survey it was found that 50% of investors are trading regularly, 16% of the
investors trading weekly, 20% of the investors trading monthly and 14% of
investors trading occasionally.
Graph –4.10

The graph showing investors trading habits.
INTERPRETATION:
In the survey it was found that 50% of investors are trading regularly because of
they are not committed to the other work. And private sector workers are trading
weekly. Others are doing monthly. Because the peoples are highly committed with
the personnel business so the more peoples are trading in monthly.
FINDINGS, SUGGESSIONS AND RECOMMENDATIONS

Findings:
 In the survey it was found that Majority of the respondents would like to invert
their income in trading.
 In the survey it was found that investors’ objective of investing in shares, bonds
& mutual funds is to earn high profit & to meet their future needs.
 It is found in the survey that Majority of the respondents are aware of equity
market, mutual funds etc.
 It is found in the survey that all most all the respondents i.e., up to 90% are
aware of online trading.
 It is found in the survey that through share brokers, friends & relations, T.V.
channels they will get better advice for investing in online trading.
 In the survey it is found that majority of the investors prefer to invest in short
term investment.
 In the survey it was found that the service provided by the BMA Wealth
Creators investment satisfactory.
 The online share trading popularity is depending upon the extent of technology
awareness and trading habit.
SUGGESSIONS:

 Most of the respondent are not aware of internet share trading so

government should make efforts to educate people on this.
 The stock exchange most establish there “operating Branches” across the
country so as to easily accessible to the investors.
 In advancer city there is limited internet service providers so exchanges
should establish branches in all district level also.
 Many internet share trading sites do not offer facility to apply for IPO’s
online they need to be provided by all.
 The internet usage cost should come down so that more and more people
encourage using internet for trading.
OBSERVATIONS:

 Most of the investors prefer fixed deposits rather than shares. So

comparative advantages of investing in stock market should be clearly
explained.
 As most of the investors are not aware about mutual funds, bonds, the
company should recommend the investors about mutual funds and bonds.
 Awareness about online trading should be increased through
 Publishing articles in regional language conducting seminars
 Conducting seminars
 Advertisements should be done in regional languages.
 Increasing promotional activities
 Online education.
 Educating the investors by supplying some materials regarding online

trading and its benefits and leading capital market research analysis.
 To attract new investors to share market improve in the portfolio investment,
which gives move return and less risk, and by giving better advice to
investors through online about share market and bonds.
 Advisors should give proper information to the investors about investing
shares in online trading.
 Emerging changes should be informed, communicated to the investors
periodically. Changes should be published in newspaper, magazines.
Newsletters etc.

CONCLUSION
 The country economies development is resorted in to variety of aspects that

tend to improve and speed up the process of development. In this context,
contribution of the capital market is consents. The role capital market is
omniscient as it bridges the gap between the capital deficiencies and capital
surplus. In order to ensure the transparency so as to enable the investors to
speed up their process of investing, the stock exchanges are restoring to
screen based train
 Online trading plays a vital role in the economy by mobilizing savings and
investing them in capital market, thus establishes a link between savings and
capital market. Now slowly more and more investors are attracted towards
online trading for high returns, tax concession etc.
 The trading outcry system failed to provide transparency, hence for the only
resort to opt was technology infrastructure to the share trading, thus,
facilitating the open up of BOLT in the country. The process can succeed
when it is properly communicated to the targets. In this direction, the project
focused to study the awareness level and perception of investors towards
online share trading.
 Awareness of IST is increasing in people day by day. Some people feel that
there are security and integrity issues with IST. Facility numbers of daily
trade have increased at NSE and BSE at the same time. Many internet sites
provide real time data of shares to the investors at their finger tips. Internet
trading brokerage charges are less compared to the reading through brokers
as no manual intervention is required.
BIBLIOGRAPHY

1. BOOKS REFFERED:
Security Analysis and Portfolio Management.(6th edition)………

Punithavathy Pandian.
Financial Management, (6th edition)……………………………... Prasanna

Chandra
←
Research Methodology……………………………………David .R. Cooper
and Schindler
2. WEBSITES VISITED:
 www.bmawc.com
 www.icicidirect.com
 www.nseindia.com
 www.economictimes.com
APPENDIX

Dear Sir / Madam,
I am BALAKRISHNA.N studying in final year M.B.A in SRN ADARSH

College, Bangalore. As a part of academic program I am pursuing a project work
on the topic entitled "PERCEPTION OF INVESTOR TOWARDS ONLINE
TRADING"0. Hence, I kindly request you to spare few minutes in answering the
following questions.
The information provided by you will be used only for academic purpose. I hope
you will co-operate for this.
DATE : BALAKRISHNA.N
PLACE:
INVESTOR QUESTIONNAIRE
1) Name:
2) Address:
3) Age :
4) Qualification:
(a) Post Graduate (b) Graduate
(c) Under Graduate (d) others
5) Occupation:
(a) Service (b) Business
(c) Self employment (d) others
6) Do you currently invest a part of your income in trading?

(a) Yes. (b) No
7) What is your objective of investing in Shares, Bonds and Mutual Funds etc?
(a) To earn high profit (b) To meet future needs
(c) To meet emergency (d) If any other purpose
8) Tick the investment option you are aware of: -

(a) Fixed / other Deposits (b) Insurance
(c) Equity market (d)Bonds
(e) Mutual Fund (f) Others
9) Do you know online Trading and how to buy and sell shares in online?
(a) Yes (b) No
10) Who can give better Advise for investment in online Trading?
(a) Shares Brokers (b) Magazine
(c) T.V. Channels (d) News Papers

(e) Friends & Relations
11) Would you like to invest in Online Trading?

(a) Yes (b) No
12) What factors influence you for investing in online trading?

(a) Returns (b) Liquidity
(c) Tax concession (d) More investment option
13) How often do you trade?
(a) Regular (b) Occasionally
(c) Once in a week (d) once in a month
(e) Other time
14) Do you trade at?
(a) NSE (b) BSE
15) Which more preferred to invest?
(a) Long Term Investment b) Short term Investment
16) You’re Opinion about the survey.

__________________________________________________________
__________________________________________________________

______________________________________________________

Perception of Investors Towards Online Trading: Introdution

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Perception of Investors Towards Online Trading: Introdution

Hochgeladen von

Copyright:

Verfügbare Formate

Perception of Investors towards online Trading

Online trading is a buying and selling of stocks, through internet in an area of

The project is an attempt to identify the current investment trends amongst

All the respondents were contacted personally which consisted of individual

Maharani’s Arts & Commerce College For Women, Mysore Page 1

Maharani’s Arts & Commerce College For Women, Mysore Page 2

The neat is used as a medium of trading in internet trading. Orders are

Maharani’s Arts & Commerce College For Women, Mysore Page 3

 The client receives an order conformation message with order number

Online trading is a buying and selling of stocks, through internet in an area of

On its recognition as a stock exchange under the securities contract (regulation)

(a) National Stock Exchange (NSE)

Maharani’s Arts & Commerce College For Women, Mysore Page 4

Maharani’s Arts & Commerce College For Women, Mysore Page 5

SECURITIES AND EXCHANGE BOARD OF INDIA

SEBI, which was a earlier established as an administrative body in April 1988,

The SEBI can take following measures to fulfill its objectives:-

 Regulate business in stock exchanges and other securities market.

Maharani’s Arts & Commerce College For Women, Mysore Page 6

Highlights of the guidelines issued by SEBI are summarized below.

 At least 60% of each kind of securities issued by company must offer to

ONLINE SHARE TRADING IN INDIA

Online refers to the network of computers/mobile phones/other electronic devices

Maharani’s Arts & Commerce College For Women, Mysore Page 7

BASICS OF ONLINE SHARE TRADING IN INDIA

Stock Trading: The main two methods of trading systems are:

Traditional trading system:

Maharani’s Arts & Commerce College For Women, Mysore Page 8

Online Trading System:

The internet is used as a medium of trading in online trading. Orders are

Maharani’s Arts & Commerce College For Women, Mysore Page 9

MAJOR PLAYERS OFFERING ONLINE TRADING SERVICES IN

1. THE MAJOR INTERNET TRADING SERVICES PROVIDERS IN

 MOTILAL OSWAL SECURITIES

Maharani’s Arts & Commerce College For Women, Mysore Page 10

2. THINGS TO DO BEFORE OPENING INTERNET SHARE TRADING

Maharani’s Arts & Commerce College For Women, Mysore Page 11

3. MAJORE PRE-REQUISITES TO DO INTERNET SHARE TRADING:

 A BAND ACCOUNT: Any bank should be having an alliance with the

THE PROCEDURE OF THE DEPOSITORY ACCOUNT

Maharani’s Arts & Commerce College For Women, Mysore Page 12

 Your signature and photograph must be authenticated by an

STANDARD DOCUMENT REQUIRES OPENING AN INTERNET

I. PROFF OF RESIDENCE: (Address proof)

Maharani’s Arts & Commerce College For Women, Mysore Page 13

 Photo ration card

III. SYSTEM ORDER ROUTING (ORS):

Maharani’s Arts & Commerce College For Women, Mysore Page 14

 News and research report

“PERCEPTION OF INVESTOR TOWARDS ONLINE TRADING”

STATEMENT OF THE PROBLEM

Maharani’s Arts & Commerce College For Women, Mysore Page 16

“Perception of individual investors towards online trading Bangalore – A

OBJECTIVES OF THE STUDY

 To know the perception of investors towards online trading.

a) Sample size: The study is based on 50 respondents, of which it includes

Maharani’s Arts & Commerce College For Women, Mysore Page 17

The selection of respondents is based on simple random sampling. Information was

Maharani’s Arts & Commerce College For Women, Mysore Page 18

SCOPE OF THE STUDY

The research on a study of investor’s preference towards online market helps to

The scope extends to various classes of investors being classified as employees,