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CHAPTER-1

INTRODUCTION

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INTRODUCTION

Stock exchange is an organized market place where securities are traded. These securities
are issued by the government, semi-government bodies, public sector undertakings and
companies for borrowing funds and raising resources. Securities are defined as any monetary
claims (promissory notes or I.O.U) and also include shares, debentures, bonds and etc., if these
securities are marketable as in the case of the government stock, they are transferable by
endorsement and alike movable property. They are tradable on the stock exchange. So is the case
shares of companies.

Under the Securities Contract. Regulation Act of 1956, securities' trading is regulated by
the Central Government and such trading can take place only in stock exchanges recognized by
the government under this Act. As referred to earlier there are at present 23 such recognized
stock exchanges in India. Of these, major stock exchanges, like Bombay Stock Exchange
National Stock Exchange, ANGEL BROKING LTD, Calcutta, Delhi, Chennai, Hyderabad and
Bangalore etc. are permanently recognized while a few are temporarily recognized. The above
act has also laid down that trading in approved contract should be done through registered
members of the exchange. As per the rules made under the above act, trading in securities
permitted to be traded would be in the normal trading hours (9.15 A.M to 3.30 P.M) on working
days in the trading ring, as specified for trading purpose. Contracts approved to be traded are the
following:

A. Spot delivery deals are for deliveries of shares on the same day or the next day as the payment
is made.

B. Hand deliveries deals for delivering shares within a period of 7 to 14 days from the date of
contract.

C. Delivery through clearing for delivering shares with in a period of two months

from the date of the contract, which is now reduce to 15 days.(Reduced to 2

days in demat trading)

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D. Special Delivery deals for delivering of shares for specified longer periods as

may be approved by the governing board of the stock exchange.

Except in those deals meant for delivery on spot basis, all the rest are to be put through
by the registered brokers of a stock exchange. The securities contracts (Regulation) rules of 1957
laid down the condition for suchtrading, the trading hours, rules of trading, settlement of
disputes, etc. as between the members and of the members with reference to their clients.

NEED FOR THE STUDY

In outcry the broker has to buy or sell securities for which he has received the

orders for this, the broker or his authorized representatives goes to the stock

exchange. Basically the broker shouts while buying or selling the securities. The

floor of the stock exchange is divided in to a number of market also 'post pit' or

wing based on particular securities dealt there.

The scope of manipulation, Inaudibility and also speculation and malpractice is more, in order to
overcome the above problems. online trading came in to existence. Hence the need to study the
advantages of online trading system and its importance in making the market operations and
smooth while retaining the flexibility of conventional trading practices.

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SCOPE OF THE STUDY

The scope of the study is limited to ON-LINE trading mechanism of stock broking firm in
particular ANGEL BROKING LTD. Hyd.

IMPORTANCE OF THE STUDY

Stock exchange is an integral part of capital market it is the most perfect type market for
securities whether govt or semi govt bodies or other public bodies also for shares and debentures
issued by joint stock enterprises. Stock exchange provides liquidity to the listed company they
give quotations to listed companies and help in trading and raising funds from the market. Stock
exchange provides ready marketability and unequalled of ownership of stocks, shares and
securities. Stock market in India is more than a centaury old and has been functioning effectively
through the medium of recognized stock exchange the stock market which is an integral part of
the capital market has been major impact on the functioning of the economy. In turn, the
agriculture industries growth and performance of corporate sector in particular , reflecting the
fundamentals in the economy would be influenced the tone of capital and stock markets, and
since the

capital market is playing major role in Indian economy from the past several years. The
present scenario to complete and survive the regional stock exchange would require sound
infrastructure and trading system as per international standards, due to the following reasons.

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OBJECTIVES

1) To study about online trading procedure followed in ANGEL BROKING Ltd.

2) To study how online trading system helps in smooth market operation while
retaining the flexibility of conventional trading practices.

3) To compare the transaction changes of similar firms.

RESEARCH METHODOLOGY

Data source: The data source utilized to under the project is both primary and secondary data.

Secondary data: The secondary data is collected from various sources like the books and
magazines brochures and material provided by ANGEL BROKING LTD.

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CHAPTER-2

REVIEW OF LITURATURE

THEORETICAL FRAMEWORK

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Review Of Literature

David Whitely has started that the use of the internet is taking off among private investors in
stocks and shares. The internet can make available to the private investors the minute
information. The use of online brokerage services automates the process of buying and selling
and hence allows a reduction of commission charges. Also the commodity being traded is
intangible; the ownership of stocks and shares can be recorded electronically so that there is no
requirement for physical delivery.

Antony Saunders and Marci‟s Million Cornett has stated that, the major stock markets currently
start functioning at 9.30 a.m., Eastern standard time and closes at 4.00 p.m. Eastern standard
time. Extended, hours trading involve any securities transaction that occurs outside these regular
trading hours. Almost all extended hours trading are processed through computerized Alternative
Trading System, [ATS], also known as Electronic Communications Network [ECNS]. ECNS are
computerized systems that automatically match orders between buyers and sellers and serve asan
alternative to traditional market making and floor trading. They are also the major vehicles for
extended hours trading.

the report is aimed to research the reason for P&G marketing decision of being sponsor of
Shanghai EXPO. Therefore I do this research from some subjects. To the P&G itself, the
marketing is important. In the Marketing: An Introduction ( Scottish Qualifications Authority,
2006), it is said that the marketing means that “selling goods that don’t come back to customers
who do—at a profit which satisfied shareholders—using means which satisfy other
stakeholders”.(P17) and it was divided into four Ps: Product, Price, Promotion and Place as the
marketing tools. (P19) As one successful marketing, it depends on the marketing mix and how
they interact with each other to give customers the right product, at the right price, available in
the right place( shops/online) with the right information(promotion) (P19). What’s more,
according to the product line, Philip Kotle said that it is a group of products that are closely
related because they function in a similar manner, are sold to the same customer groups, are
marketed through the same types of outlet, or fall within given price ranges.(P148), the product
line of P&G is not single, it involves a large range of products. Referring to the product life cycle
which is all products have limited period of popularity in the marketplace has been developed
into the well-known theory, it has four stages, they are introductory, growth, maturity and

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decline( P165), to the P&G, it is stayed in the third stage, it has 163 years history, from the start
to now, it developed from a soapmarket (P&G. 2001). In mordern times, it built its own branding
and has its branding effect, through the EXPO, it can expand its image and products to the
customers all over the world, letting people know more about the P&G.

• Nidhi Walia and Ravinder Kumar [1] proposed that online trading is all about cost saving.
However, majority of Indian investors have not realized its benefits so it only targets the
educated investors.

• Sarika Srivastava [2] examined the impact of internet on online trading. She remarked on the
availability of high speed internet that can remove all hassles related to the field as it is a major
problem.

• Dr. A Abdhul Rahim [3] discovered the pitfalls related to online trading. He suggested that
investors should be protected from all hassles and problems so as to remain confident while
trading online.

• Madan Lal reviewed certain facts related to online brokers. He stressed upon the importance of
online brokers and the problems they face while trading.

• Nidheesh KB [4] reviewed upon the role of the NSE and BSE in online trading and about the
regulations on trading by these Stock Exchanges about how they regulate the trade account of
investors and various brokers.
• Brad M Barber and Terrance Odean [5] studied the deep relationship between the investor and
his major weapon, the internet, suggesting that a combination of internet and shareholders voting
could become a new tool for organisations promoting special society welfare like corporate
social responsibility, environmental actions and consumer help.

• Arwinder Singh et al. [6] claimed that online trading is highy beneficial and cheap in terms of
money and time. Certain alterations are however required to make it more fruitful.

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• Yannis Bakos et al. [7] stated that online trading is on a rising track and is gaining its
momentum very fast.

• Allen [8] shared his thoughts and stated the process which goes simultaneously in the business
during online transactions. The ordered items get dispatched after identification process
immediately. Softwares used in application process by the online traders [9].

• HILL stated there are many options in online trading to access every corner of real world in the
online trading business. The emerging trends of online options have exploded over the recent
years and is now being popularised well. The internet has fuelled a booming business of small
investors throwing money at the derivatives market. The investors who have the skills of daily
trading can expand their finance array. For an amateur investor who is ready to learn how to
trade stock options the derivatives market can be enticing, but also frightening [10].

Brad M. Barber and Terrance Odean (2002) analyzed 1,607 investors who switched from phone
based to online trading during the 1990s. Those who switched to online trading perform well
prior to going online, beating the market by more than 2% annually. After going online, they
trade more actively, more speculatively, and less profitably than before—lagging the market by
more than 3% annually.

Reductions in market frictions (lower trading costs, improved execution speed, and greater ease
of access) do not explain these findings. Overconfidence—augmented by self attribution bias and
the illusions of knowledge and control—can explain the increase in trading and reduction in
performance of online investors. They found that investors who choose to make investments
online are better performers than those who do not go online before the switch but worse
performers after the shift. The idea is that overconfidence induces them to switch but then
excessive trading after the switch dissipates their profits.

Haroun Alryalat, Yogesh Kumar Dwivedi, Jasna Kuljis, and Ray J. Paul (2006) analyzed the
effect of online and traditional trading on effective market performance on the NASDAQ. The
purpose of this paper was to present a critical analysis on the competition between online (ECN)

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and traditional (Market Maker (MM)) trading on the NASDAQ stock exchange. Online stock
trading mechanisms at the exchanges are often a hybrid of dealer and auction markets. Different
aspects of trading execution, which is the most commonly used market centre at present, were
analyzed. This leads to a discussion on: (1) the path that executes order is organized and (2) its
impact on the effective market performance, trading cost and investor behaviour.

In the Indian context, online trading can be rightly called as a recent phenomenon, and even till
day online trading is not much popular among investors for which a list of factors can be blamed.
This fact is clearer from the information available that where numbers of stock exchanges in
India have grown from 7 exchanges in 1946 to total 23 stock exchanges till 2011, only two stock
exchanges are providing online share trading. Over the past two years, the value of all trades
executed through internet on NSE has grown from less than Rs. 100 Cr. to over Rs. 700 Cr. in
June 2005.Online trading is gaining momentum with trading volume growing by 150 % per
annum.

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INTRODUCTION TO ONLINE TRADING

Gone are the days of trading on the floor. Technology has changed the landscape of the
stock markets. The look of the stock exchanges has undergone metamorphic changes in the
recent years. Prior to online trading, regional stock exchange was playing a very important role
in capital markets, as they were local investors. Regional SE, which was unable to interact with
other SEs started developing this own screen based trading and connecting to other scrip's which
were not available with them. This also helped in accessing the quotes and other market
information from other stock exchange which proved vital in the functioning of the system as a
whole.

The trading network is depicted in given below NSE has main computer which is
connected through Very Small Aperture Terminal (VSAT) installed at its office. The main
computer runs on a fault tolerant STRATUS mainframe computer at the Exchange. Brokers have
terminals (identified as the PCs in the given picture) installed at their pre ANGEL BROKING
LTDs which are connected through VSATs/ leased lines/modems. An investor informs a broker
to place an order on his behalf. The broker enters the order through his PC, which runs under
Windows NT and sends signal to the satellite via VSAT/leased line/modem. The signal is
directed to mainframe computer at NSE via VSAT at NSE's office. A message relating to the
order activity is broadcast to the respective member. The order confirmation message is
immediately displayed on the PC of the broker. This order matches with the existing passive
order(S) otherwANGEL BROKING LTD it waits for the active orders to enter the system. On
order matching, a message is broadcast to the respective member.

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TRADING NETWORK

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TRADING PROCEDURE BEFORE ON-LINE

OUTCRY SYSTEM

The broker has to buy or sell securities for which he has received the orders. For this, the
broker or his authorized representatives goes to the stock exchange. This method is called the
open outcry system. Basically the brokers shout while buying or selling the securities. The floor
of the stock exchange is divided into a number of markets also known as ‘post pit’ or wing based
on particular securities dealt there.

In the post pit or wing, the broker using ‘open outcry’ method makes an offer or bid
price. For making the necessary bargain, he quotes his purchase or sale price, also known as
offer or bid price. The dealer, to whom the price is quoted, quotes his own price when the
quotation of the dealer suits the broker, he may lose the bargain. If he is not satisfied with the
quote price, he may turn to some other dealer. On the close of the bargain, the dealer as well as
the broker makes a brief note of the particulars of the deal. Such notes are made on some pad and
on it the number of shares, the price agreed upon, the name of the party, what membership
number etc., are noted.

DISADVANTAGES OF OUTCRY SYSTEM:

 It lacks transparency.
 The scope of manipulation, speculation and mal practice is more.
 Signal were more important in the outcry system any member who could not interpret the
buy/sell signal correctly often landed himself in disaster situation.
 In audibility was another disadvantage of the outcry system.
 Due to the above disadvantages of the outcry system the ANGEL BROKING has shifted
from outcry system to online trading.

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MANUAL TRADING

Trading procedure before introduction of online trading:

Trading on stock exchanges is officially done in the trading ring. In the trading ring the
space is provided for specified and non-specified sections, the members and their authorized
assistants have to wear a badge or carry with them an identity card given by the exchange to
enter the trading ring. They carry a sauda book or confirmation memos, duly authorized by the
exchange and carry a pen with them. The stock exchanges operations are floor level are technical
in nature .Non-members are not permitted to enter in to stock market. Hence various stages have
to be completed in executing a transaction at a stock exchange .The steps involved in this method
of trading have given below:

Choice of broker:

Sell shares and transact business, have to act through member brokers only. They can
also appoint their bankers for this purpose as per the present regulations.

Placement of order:

The next step is the prospective investor who wants to buy shares or the investors, who wants
to place order for the purchase or sale of securities with a broker.

The order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid
delay, it is placed generally over the phone. The orders may take any one of the forms such as At
Best Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open
Order, Stop Loss Order.

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Execution of order or contract:

Orders are executed in the trading ring of the BSE. This works from 14:30 to 2.30 P.M
on all working days Monday to Friday, and a special one-hour session on Saturday.

The members or the authorized assistants have to wear a badge given by the exchange to
enter into the trading ring. They carry a sauda Block Book or conformation memos, which are
duly authorized by the exchange when the deal is struck; both broker and jobber make a note in
their sauda block books. From the sauda book, the contract notes are drawn up and posted to the
client. A contract note is written agreement between the broker and his clients for the transaction
executed.

Drawing Up and Bills:

Both sale and purchase bills are prepared along with the contract note and it is posted
on the same day or the next day. This in a purchase transaction, once the shares are delivered to
the client effects payment for the purchases and pays the stamp fees for transfer, a bill is made
out giving the total cost of purchase, including other expenses incurred by the broker in the price
itself. With this, the process ends.

DEMATERLIZATION:

Dematerialization is the process by which physical certificates of an investor are


converted to an equipment number of securities in electronic form and credited in the investor
account with his DP. In order to dematerialize the certificates, an investor has to first open an
account with a DP and then request for the Dematerialization Request Form, which is DP and
submit the same along with the share certificates. The investor has to ensure that he marks
“Submitted for Dematerialization” on the certificates before the shares are handed over to the DP
for demat.

Dematerialization can only be done to those certificates, which are already registered in
your name and belong to the list of securities admitted for Dematerialization at NSDL.Most of
the active scrip’s in the market including all the scrip’s of S&P CNX NIFTY and BSE SENSEX
have already joined NSDL. This list is steadily increasing.

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Briefly, the process is as follows: after completion of transfer, the investor gets the
option to dematerialize such shares. Investors willing to exercise this option sends a Demat
request along with the option letter sent by the company to his DP. The company or its R&T
agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in
transit.

Dematerialized shares do not have any distinctive or certificate numbers. These shares
are fungible-which means that 110 shares of a security are the same as any other 110 shares of
the security. Odd lot shares certificates can also be dematerialized.

Dematerialization normally takes about fifteen to thirty days. To get back


dematerialized securities in the physical form, request DP for Dematerialization of the same is
made. Dematerialization is the process of converting electronic shares in to physical shares.

BENEFITS OF DEMAT:

1. It reduces the risk of bad deliveries, in turn saving the cost and wastage of time
associated with follow up for rectification. This has lead to reduction in brokerage to the
extent of 0.5% by quite a few brokerage firms.
2. In case of transfer of electronic shares, you save 0.5% in stamp duty. You avoid the cost
of courier / notarization.
3. You can receive your bonuses and rights issues into your DA as a direct credit, this
eliminating risk of loss in transit.
4. You can also expect a lower interest charge for loans taken against Demat shares as
compared to loans against physical shares.
5. There is no lost in transit, thus the overheads of getting a duplicate copy in such
circumstances is reduced.
6. RBI has also reduced the minimum margin to 25% for loans against dematerialized
securities as against 50% for loans against physical securities.

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THE TRADING RING:

Trading on stock exchanges is officially done in the ring for a few hours from 11.00 A.M
to 2.30P.M. Trading before or after official hour is called KERB TRADING. In the trading ring
space is provided for specified and non-specified sections. The members of their authorized
assistants have to wear a badge or carry with them identify cards given by the exchange to enter
the trading ring. They carry a Sauda book or confirmation memos duly authorized by exchange.
The stock exchanges operations at floor level are highly technical in nature. Non-members are
not permitted to enter into stock market. Hence, various stages have to be completed in executing
a transaction at a stock exchange. The steps involved in the methods of trading have been given
below:

A.CHOICE OF BROKER:

The prospective investor who wants to buy shares or the investor who wants to sell his
shares cannot enter into hall of the exchange and transact business. They have to act through
only member brokers. They can also appoint their bankers for this purpose. Since, bankers can
become members of stock exchange as per the present regulations. So, the first task in
transacting business on stock exchanges is to choose a broker of repute or banker. Such people's
can ensure prompt and quick execution of a transaction at the possible price.

At present there are 4500 authorized brokers in ANGEL BROKING LTD.

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CORPORATE HIERARCHY

The Trading member has the facility of defining a hierarchy amongst its users of the NEAT
system. The hierarchy of ANGEL BROKING LTDs:

CORPORATE MANAGER

BRANCH - 1 BRANCH - 2

DEALER - 1 DEALER - 2 DEALER - 11 DEALER - 12

The users of the trading system can logon as either of the user type. The significance of
each type is explained below:

A. Corporate Manager:The corporate manager is a term assigned to a user placed at the


highest level in a trading firm. The facility to set Branch order value limits and user order value
limits is available to the corporate manager.

B. Branch Manager:The branch manager is term assigned to a user who is placed under the
corporate manager. The branch manager can set user order value limits for each of his branch.

C. Dealer: Dealers are users at the lower most level of the hierarchy. A dealer can view and
perform order and related activities only for oneself.

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OBJECTIVES OF ON-LINE TRADING:

 Reduce and eliminate operational inefficiencies inherent in manual system.


 Increased trading capacity in stock exchanges.
 Improve market transparency, eliminate unmatched trades and delayed reporting.
 Provides for online and offline monitoring, control and surveillance of the markets.
 Promote fairness and speedy matching.
 Ensure smooth market operations using technology while retaining the flexibility of
conventional trading practices.
 Setup various limits rules and controls centrally.
 Provide brokers with their data on electronic media interface with the brokers back office
system.
 Provide public information on scrip prices, indices for all users of the system.
 Provide analytical data for use of stock exchange in analysis and reporting
 To face stiff competition from other stock exchange.
 Consolidate trader's data and interface with clearing and settlement.

PLACEMENT OF ORDER:

The next step in planning of order for the purchase or sale of Securities with the broker.
The order is usually by telegram, telephone, letter, fax etc., or in person. To avoid delay it is
placed generally over the phone. The orders may take any one of the forms such as at best order,
limit order, immediate or cancel order, discretionary order, limited discretionary order, open
order and stop loss order.

ENTRY OF ORDER INTO THE BOOKS:

After receiving the order, the member enters them in his books and the purchase and sale orders
are distributed among his assistants to handle them separately in non-specified and odd-lots.

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EXECUTION OF ORDER:

Big brokers transact their business through their authorized clerk. Small ones out their business
personally. Orders are executed in the trading ring of the ANGEL BROKING LTD.Thisworks
from 12:00 noon to 2:00 p.m discretionary order on all working days from Monday to Friday and
a special hour session on Saturday.

The floor of the stock exchange is divided into number of markets (pits) according to the
nature of security deal in. The authorized clerk/broker goes to the pit and jobbers offer two way
quotes for the scrips they deal in. they act as market makers and provide liquidity to the market.
The system has been designed to get the bet lids and offers from the jobber's book as well as the
best buy and sell orders from the book. If the quotation is not acceptable to the brokers, he may
make a counter bid/offer. Ultimately the bargains may be closed at a price mutually acceptable to
both the parties. In case the quotation is not acceptable to him, the broker may go to another
dealer and make a bargain. All bargains on the stock exchanges are settled by word of mouth and
there is no written contract signed immediately by the parties concerned. Once the transaction is
finalized, the deals are recorded in a Chaupri Rough notebook or transaction note or
confirmation memos. Soudha block books or confirmation memos are provided by the stock
exchange. The details are recorded in these books also. The prices at which different scrips are
traded on a particular day published on the next day in the newspapers. An authorized
representative of the stock exchange is also present in the hall to supervANGEL BROKING
LTD the trading.

PREPARATION OF CONTRACT NOTES

Usually, the authorized clerks enter the particulars of the business transacted during a particular
day in `Kacha Sauda Book' they are transferred to 'Pucca Sauda Book', which are maintained
separately for the ready delivery contracts. Then the broker / authorized clerk prepares a contract
note. A contract note is a written agreement between the broker and his client for the transaction
executed. It contains the details of the contract made for the purchase/sale of Securities, the
brokerage chargeable, name of the company, number of shares bought/sold, net rate, etc., it is
prepared in a prescribed from and a copy of it is also sent to the client.

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PLACING ORDER WITH THE BROKER:The next step is placing an order for the
purchase/sale of securities with the broker. The order is usually placed over telephone, fax. It can
also take the form of telegram or letter or in person. The order placed may be any of the
tbllowing varieties (largely classified on the basis of price limits that it imposes.).

❖AT BEST ORDER (OR) BEST RATE ORDER: "Buy 1000 XYZ ltd.", it does not

specify any price. It means buy XYZ Ltd. Securities at the prevailing market price. These are
executed very fast as there is no price limits.

❖LIMIT ORDER:"Buy 100 XYZ Ltd. At Rs 100", it is an order for the purchase of shares

at a specified price by the client.(Rs 100)

❖LIMITED DISCRETIONARY ORDER:"Buy 1000 XYZ Ltd., around Rs.100". it

gives discretion to the broker. The price can be a little above Rs 100. How much discretion is
implied depends on how the broker and client define around.

❖OPEN ORDER:It is an order to buy or sell without fixing any time or price limit on the

execution of the order.

❖STOP LOSS ORDER:"Buy 100 XYZ Ltd. @ Rs 12 to stop Rs 10". It means buy 100

XYZ Ltd securities at the market rate of Rs. 12 but if on the same day the price falls to Rs. 10
immediately sell of the securities /shares. Thus an attempt is made to limit the loss of sudden
unfavorable shift in the market.

❖NET RATE ORDER:"Buy 1000 XYZ Ltd. @Rs.30 net "would mean that the client is

willing to buy 1000 XYZ Ltd. For no more than Rs.30 per security inclusive of brokerage
payable to the broker. Net rate is purchase or sale rate minus brokerage.

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❖MARKET RATE ORDER: Market rate is net rate plus brokerage for purchase and net

minus brokerage for sale. So, "Buy 1000 XYZ Ltd. (ORs.30 market- would mean that the client
is willing to pay Rs.30 plus brokerage for each security of XYZ Ltd.

CLEARING HOUSE

The exchange has a clearing house as a part of its Market Operations Department to
collect the securities from all members and distribute to each member, all the securities that are
due to him in respect of every settlement. The whole of the operations of the clearing house are
computerized. CH is like are bank where all the members of ANGEL BROKING LTD maintain
their accounts. CH acts as a member between the buyer and seller. It gets a record of all the
transactions (buying and selling) done by a particular week and process these transactions and
directs the members to deliver the shares or make payment on the pay-in day.

On the payout day, the CH gives the delivery and the payment to the members according
to their respective positions. There are 5 counters in the ANGEL BROKING LTDs, CH where
bad deliveries, auction, odd-lot shares transaction, spot transaction etc.., are dealt in respect of all
the transactions done from Monday to Friday all the shares will have to be delivered through the
ANGEL BROKING LTDs CH as per the settlement program field, which is generally, a
Saturday on next.

NORMAL TRANSACTION: In case of regular transaction, shares are deposited in


clearing house on Tuesday and Wednesday. Payout will be on Thursday,deliveries will also be
on Thursday.

STOCK MARKET TRADING ON INTERNET

The major events that will take place in the Indian Capital Market are introduction of
index-based futures trading on internet. Trading on internet means that the investor's will
actually buy and sell the stocks on-line through the net. A committee was setup by SEBI to
develop regulatory parameters for use internet trading. SEBI approved the report on the

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committee. SEBI decided that internet trading could take place in India within the existing legal
framework through use of order routing system, which will route order from client to brokers,.
For trade execution on registered stock exchanges. The broad also took note of the recommended
minimum technical standards for ensuring safety and security of transaction between clients and
brokers, which will be forced by the respective stock exchanges.

ADVANTAGES OF INTERNET TRADING

 It will help in reducing transaction costs particularly for overseas and remote located
investors.
 It will provide real time quotes and on-line trading facility at a much cheaper cost.
 Facility of transaction business from the terminal of the investors and will help him
making rational judgment or decisions. It will bring down the brokerages fees and
increases the trading volumes.
 Quick response in transaction i.e. giving the order verification and acknowledgement.
 It allows transparent companies of services and easy price discovery.
 It is easy enough to set up either as individual account for margins trading or settle
transactions by credit card.
 It is easy for brokers to monitor and maintain online accounts and the possibility of miss-
trading is less.
 Surveillance is easy as there is very less scope for speculation
 The investor is provided with best offer
 Trading procedure is easy and fully automated.

Easier transaction processing.

Profit in time: Investor can make profits by selling shares when the going is good. They do not
have to instruct their brokers on the cut off price to sell shares. Ease and transparency: Since the
broking, bank and demat account are all electronically connected, all transaction get updated,
demat account shows the latest stockholding statement while the bank account shows the balance

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amount after buying or selling of shares. Precaution: Check for hidden costs of broker's age.
Beware of net seamstress. Never double click the mouse during execution of trade avoids cyber
cafes and change password regularly. Less fees: shares traded online require no human
intervention to match buys and sells. This means that commission costs are cut dramatically for
the frequent investor.

PROBLEMS OF ONLINE TRADING

 All the stock exchanges in India were mechanized in the year 1994 November. That was
the year when the stock exchanges introduced screen based trading across the country.
 While on line trading gives you speed and price advantage, there is some risk and
disadvantage to entering orders on-line. The page alerts you to any pitfalls you should
watch out for if you want to use the internet to trade stocks.
 If you do commit to trading online, you must be careful when you enter stock orders. It is
easy to make mistakes, but the market and your brokers may not be sympathetic. Once an
order is submitted, there may be nothing you can do to take it back if you made a
mistake. The various types of orders you enter can be confusing.
 Individuals are restricted to first hand financial guidance. This simply means that the
individual is himself/herself alone to make the decisions.
 Tax (sales tax and value added tax) evaluation becomes an issue, especially when you are
trading internationally.
 Changes are that one has no idea who is dealing with on the other end, so it is advisable
to gather all the possible information about the party one is dealing with. In short are full
knowledge is to be known.
 Online trading as left individual open to too much intbrmation. This is harmful since it
leaves brokerages wide open to sensitive data.

When network crashes there will be problems and delays due to a large influx of traffic and
rapid online trading criteria. For instance on 27th Oct 1997 there was a one day crash, which
caused online trading on the New York Stock Exchange to stop and brokers were unable to
conduct business.

24
If you are going to trade online, you were obviously the one making all the trading choices.
To make your trading decisions, you need to research your stocks and constantly pay attention to
market news. This will require some time, as you pursue your sources of market information and
use online tools

ONLINE TRADING BENEFITS

Advent of online trading can shift the trading power from stock brokers to individual
investors. The e-trading concept ensures that the investor, howsoever small, could be a more
active participant in the decision rather than leaving his portfolio at the sole discretion of his
broker. Online trading provides.

BEST PRICE FOR INVESTORS:Online trade offers the best price for the buying and
selling transactions of the investors, by ensuring proper matching of their orders within the
communications network itself. Also due to the high level of transparency with regard to display
of information the investors are able to get the best quote for the shares.

BROKERAGE IS THE LOWEST:As the process of online trade is thoroughly


automated the transaction costs are low, also with competition among the online service
providers the brokerage charges are at their lowest in India.

LIQUIDITY TO THE INVESTORS:When online trade and online banking are


available, liquidity of the investments are very high as it is only a click away to disinvest and
release the funds. Conversely, if the investor spots some opportunity to invest, he could
immediately allocate money from his savings account and make his transactions.

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. All these stages were subject to inspection, thus bringing in transparency into the
system.

25
HASSLE FREE TRADING:Online trading integrates the bank, the brokerage firm and the
stock accounts (demat account) which lead to easy and paperless trading for the client.

CHAPTER-3

INDUSTRY PROFILE

&

COMPANY PROFILE

26
A. INDUSTRY PROFILE

FINANCIAL MARKET

Financial markets are helpful to provide liquidity in the system and for smooth
functioning of the system. These markets are the centers that provide facilities for buying and
selling of financial claims and services. The financial markets match the demands of investment
with the supply of capital from various sources. According to functional basis financial markets
are classified into two types.

They are:

 Money markets (short-term)


 Capital markets (long-term)

According to institutional basis again classified in to two types. They are

 Organized financial market


 Non-organized financial market.

The organized market comprises of official market represented by recognized institutions,


bank and government (SEBI) registered/controlled activities and intermediaries. The
unorganized market is composed of indigenous bankers, moneylenders, individual professional
and non-professionals.

27
MONEY MARKET:

Money market is a place where we can raise short-term capital.

Again the money market is classified in to

 Inter bank call money market


 Bill market and
 Bank loan market Etc.

28
CAPITAL MARKET:

29
Capital market is a place where we can raise long-term capital.

Again the capital market is classified in to two types and they are

 Primary market and


 Secondary market.

E.g.: Shares, Debentures, and Loans etc.

PRIMARY MARKET:

Primary market is generally referred to the market of new issues or market for
mobilization of resources by the companies and government undertakings, for new projects as
also for expansion, modernization, addition, diversification and up gradation. Primary market is
also referred to as New Issue Market. Primary market operations include new issues of shares by
new and existing companies, further and right issues to existing shareholders, public offers, and
issue of debt instruments such as debentures, bonds, etc.The primary market is regulated by the
Securities and Exchange Board of India (SEBI a government regulated authority). Function:The
main services of the primary market are origination, underwriting, and distribution. Origination
deals with the origin of the new issue. Underwriting contract make the shares predictable and
remove the element of uncertainty in the subscription. Distribution refers to the sale of securities
to the investors. The following are the market intermediaries associated with the market:

1.Merchant banker/book building lead manager

2.Registrar and transfer agent

3.Underwriter/broker to the issue

4.Adviser to the issue

5.Banker to the issue

6.Depository

Investors' protection in the primary market:

30
To ensure healthy growth of primary market, the investing public should be protected.
The term investor protection has a wider meaning in the primary market. The principal
ingredients of investors' protection are:

 Provision of all the relevant information


 Provision of accurate information and
 Transparent allotment procedures without any bias.

SECONDARY MARKET

The primary market deals with the new issues of securities. Outstanding securities are
traded in the secondary market, which is commonly known as stock market or stock exchange.
"The secondary market is a market where scrip's are traded". It is a market place which
provides liquidity to the scrip's issued in the primary market. Thus, the growth of secondary
market depends on the primary market. More the number of companies entering the primary
market, the greater are the volume of trade at the secondary market. Trading activities in the
secondary market are done through the recognized stock exchanges which are 23 in number
including Over The Counter Exchange of India (OTCE), National Stock Exchange of India and
Interconnected Stock Exchange of India. Secondary market operations involve buying and
selling of securities on the stock exchange through its members. The companies hitting the
primary market are mandatory to list their shares on one or more stock exchanges in India.
Listing of scrip's provides liquidity and offers an opportunity to the investors to buy or sell the
scrip's.

The following are the intermediaries in the secondary market:

1. Broker/member of stock exchange -- buyers broker and sellers broker


2. Portfolio Manager
3. Investment advisor
4. Share transfer agent
5. Depository
6. Depository participants.

STOCK MARKETS IN INDIA:


31
Stock exchanges are the perfect type of market for securities whether of government and semi-
govt bodies or other public bodies as also for shares and debentures issued by the joint-stock
companies. In the stock market, purchases and sales of shares are affected in conditions of free
competition. Government securities are traded outside the trading ring in the form of over the
counter sales or purchase. The bargains that are struck in the trading ring by the members of the
stock exchanges are at the fairest prices determined by the basic laws of supply and demand.

Definition of a Stock exchange:

"Stock exchange means any body or individuals whether incorporated or not, constituted for the
purpose of assisting, regulating or controlling the business of buying, selling or dealing in
securities." The securities include:

 Shares of public company.


 Government securities,Bonds.

History of Stock Exchanges:

The only stock exchanges operating in the 19th century were those of Mumbai setup in 1875 and
Ahmedabad set up in 1894. 'these were organized as voluntary non-profit-marking associations
of brokers to regulate and protect their interests. Before the control on securities under the
constitution in 1950, it was a state subject and the Bombay securities contracts (control) act of
1925 used to regulate trading in securities. Under this act, the Mumbai stock exchange was
recognized in 1927 and Ahmedabad in 1937. During the war boom, a number of stock exchanges
were organized. Soon after it became a central subject, central legislation was proposed and a
committee headed by A.D.Gorwala went into the bill for securities regulation. On the basis of the
committee's recommendations and public discussion, the securities contract (regulation) act
became law in 1956.

Functions of Stock Exchanges:

32
Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed
companies, they help trading and raise funds from the market. Over the hundred and twenty
years during which the stock exchanges have existed in this country and through their medium,
the central and state government have raised crores of rupees by floating public loans. Municipal
corporations, trust and local bodies have obtained from the public their financial requirements,
and industry, trade and commerce- the backbone of the country's economy-have secured capital
of crores or rupees through the issue of stocks, shares and debentures for financing their day-to-
day activities, organizing new ventures and completing projects of expansion, diversification and
modernization. By obtaining the listing and trading facilities, public investment is increased and
companies were able to raise more funds. The quoted companies with wide public

interest have enjoyed some benefits and assets valuation has become easier for tax and other
purposes.

Various Stock Exchanges in India:

At present there are 23 stock exchanges recognized under the securities contracts (regulation),
Act, 1956. Those are:

1.Ahmedabad Stock Exchange Association Ltd.

2.Bangalore Stock Exchange

3.Bhubaneshwar Stock Exchange Association

4.Calcutta Stock Exchange Cochin Stock Exchange Ltd.

5.Coimbatore Stock Exchange

6.Delhi Stock Exchange Association

7.Guwahati Stock Exchange Ltd

8.Hyderabad Stock Exchange Ltd.

9.Jaipur Stock Exchange Ltd

10.Kanara Stock Exchange Ltd

33
11.Ludhiana Stock Exchange Association Ltd

12.Madras Stock Exchange Madhya Pradesh Stock Exchange Ltd.

13.Magadh Stock Exchange Limited

14.Meerut Stock Exchange Ltd.

15.Mumbai Stock Exchange

16.National Stock Exchange of India

17.OTC Exchange of India

18.PuneStockExchange

19.Uttar Pradesh Stock Exchange Association

20.Vadodara Stock Exchange Ltd.

Out of these major stock exchanges were:

NSE

The National Stock Exchange of India Limited has genesis in the report of the High Powered
Study Group on Establishment of New Stock Exchanges, which recommended promotion of a
National Stock Exchange by financial institutions (FI's) to provide access to investors from all
across the country on an equal footing. Based on the recommendations, NSE was promoted by
leading Financial Institutions at the behest of the Government of India and was incorporated in
November 1992 as a tax-paying company unlike other stock exchanges in the country. On its
recognition as a stock exchange under the Securities Contracts (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 and operations
in Derivatives segment commenced in June 2000NSE's mission is setting the agenda for change
in the securities markets in India. The NSE was set-up with the main objectives of :

• Establishing a nation-wide trading facility for equities and debt instruments.

34
• Ensuring equal access to investors all over the country through an appropriate communication
network.

• Providing a fair, efficient and transparent securities market to investors using electronic trading
systems.

• Enabling shorter settlement cycles and book entry settlements systems, and

Meeting the current international standards of securities markets.The standards set by NSE in
terms of market practices and technology, have become industry benchmarks and are being
emulated by other market participants. NSE is more than a mere market facilitator. It's that force
which is guiding the industry towards new horizons and greater opportunities.

BSE

The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The
Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the
Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making
Association of Persons (AOP) and is currently engaged in the process of converting itself into
demutualised and corporate entity. It has evolved over the years into its present status as the
premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have
obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts
(Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for
trading in securities, debt and derivatives upholds the interests of the investors and ensures
redresses of their grievances whether against the companies or its own member-brokers. It also
strives to educate and enlighten the investors by conducting investor education programmers and
making available to them necessary informative inputs.

A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who
are from the broking community (one third of them

retire ever year by rotation), three SEBI nominees, six public representatives and an Executive
Director & Chief Executive Officer and a Chief Operating Officer.

35
The Executive Director as the Chief Executive Officer is responsible tbr the clay to-day
administration of the Exchange and the Chief Operating Officer and other Heads of Department
assist him. The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to
constitution of the Executive Committee of the Exchange. Accordingly, an Executive
Committee, consisting of three elected directors, three SEBI nominees or public representatives,
Executive Director & CEO and Chief Operating Officer has been constituted. The Committee
considers judicial & quasi matters in which the Governing Board has powers as an Appellate
Authority, matters regarding annulment of transactions, admission, continuance and suspension
of member-brokers, declaration of a member-broker as defaulter, norms, procedures and other
matters relating to arbitration, fees, deposits, margins and other monies payable by the member-
brokers to the Exchange, etc.

Regulatory Frame Work Of Stock Exchange

A comprehensive legal framework was provided by the "Securities Contract Regulation


Act, 1956" and "Securities Exchange Board of India 1952". Three tier regulatory structure
comprising

 Ministry of finance
 The Securities And Exchange Board of India
 Governing body

Members of the stock exchange: The securities contract regulation act 1956 has provided
uniform regulation for the admission of members in the stock exchanges. The qualifications for
becoming a member of a recognized stock exchange are given below:

• The minimum age prescribed for the members is 21 years.

• He should be an Indian citizen.

• He should be neither a bankrupt nor compound with the creditors.

• He should not be convicted for fraud or dishonesty.

• He should not be engaged in any other business connected with a company.

36
• He should not be a defaulter of any other stock exchange.

• The minimum required education is a pass in 12th standard examinations.

STOCK EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of
government of India. It was later made statutory body by the SERI act 1992.according to this act,
the SEBI shall constitute of a chairman and four other members appointed by the central
government. With the coming into effect of the securities and exchange board of India act, 1992
some of the powers and functions exercised by the central government, in respect of the
regulation of stock exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI

• To protect the interest of investors in securities.

• Regulating the business in stock exchanges and any other securities market.

• Registering and regulating the working of intermediaries associated with

securities market as well as working of mutual funds.

• Promoting and regulating self-regulatory organizations.

• Prohibiting insider trading in securities.

• Regulating substantial acquisition of shares and take over of companies.

• Performing such functions and exercising such powers under the

Provisions of capital issues (control) act, 1947and the securities to it by the

Central government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK


EXCHANGES): Board of Directors of Stock Exchange has to be reconstituted so as to

37
include non- members, public representatives and government representatives to the extent of
50% of total number of members.

• Capital adequacy norms have been laid down for the members of various stock exchanges
depending upon their turnover of trade and other factors.

• All recognized stock exchanges will have to inform about transactions within 24 hrs.

TYPES OF ORDERS:

Buy and sell orders placed with members of the stock exchange by the investors. The orders are
of different types.

Limit orders: Orders are limited by a fixed price. E.g. 'buy Reliance Petroleum at Rs.50.'Here,
the order has clearly indicated the price at which ithas to be bought and the investor is not willing
to give more than Rs.50.

Best rate order: Here, the buyer or seller gives the freedom to the broker to execute the order
at the best possible rate quoted on the particular date for buying. It may be lowest rate for buying
and highest rate for selling.

Discretionary order: The investor gives the range of price for purchase and sale. The broker
can use his discretion to buy within the specified limit. Generally the approximation price is
fixed. The order stands as this "buy BRC 100 shares around Rs.40".

Stop loss order:The orders are given to limit the loss due to unfavorable price movement in
the market. A particular limit is given for waiting. If the price falls below the limit, the broker is
authorized to sell the shares to prevent further loss. E.g. Sell BRC limited at Rs.24, stop loss at
Rs.22.

Buying and selling shares:To buy and sell the shares the investor has to locate register
broker or sub broker who render prompt and efficient service to him. The order to buy or sell
specifying the number of shares of the company of investors' choice is placed with the broker.
The order may be of any type. After receiving the order the broker tries to execute the order in
his computer terminal. Once matching order is found, the order is executed. The broker then

38
delivers the contract note to the investor. It gives the details regarding the name of the company,
number of shares bought, price, brokerage, and the date of delivery of share. In this physical
trading form, once the broker gets the share certificate through the clearing houses he delivers
the share certificate along with transfer deed to the investor. The investor has to fill the transfer
deed and stamp it. The stamp duty is one of the percentage considerations, the investor should
lodge the share certificate and transfer deed to the register or transfer agent of the company. If it
is bought in the DEMAT form, the broker has to give a matching instruction to his depository
participant to transfer shares bought to the investors account. The investor should be account
holder in any of the depository participant. In the case of sale of shares on receiving payment
from the purchasing broker, the broker effects the payment to the investor.

B. COMPANY PROFILE:

39
Angel Broking's tryst with excellence
in customer relations began in 1987. Today, Angel has emerged as one of the most respected
Stock-Broking and Wealth Management Companies in India. With its unique retail-focused
stock trading business model, Angel is committed to providing 'Real Value for Money' to all its
clients.

The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange
(NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is
also registered as a Depository Participant with CDSL.

Our Business

• Equity Trading

• Commodities

• Portfolio Management Services

• Mutual Funds

• Life Insurance

• IPO

• Depository Services

• Investment Advisory

• Angel Group

• Angel Broking Ltd.

40
• Angel Commodities Broking Ltd.

• Angel Securities Ltd.

CONCEPT:

ANGEL BROKING LTD has been promoted by 14 Regional stock exchanges to provide cost-
effective trading linkage/connectivity to all the members of the participating Exchanges, with the
objective of widening the market for the securities listed on these Exchanges. ANGEL
BROKING LTD aims to address the needs of small companies and retail investors with the
guiding principle of optimising the existine, infrastructure and harnessing the potential of
regional markets, so as to transform these into a liquid and vibrant market through the use of
state-of-the-art technology and networking.

The participating Exchanges of ANGEL BROKING LTD in all about 4500 stock brokers, out of
which more than 200 have been currently registered as traders on ANGEL BROKING LTD. In
order to leverage its infrastructure and to expand its nationwide reach, ANGEL BROKING LTD
has also appointed around 5300 Dealers across India other than the participating Exchange
centers. These dealers are administratively supported through the regional offices of ANGEL
BROKING LTD at Mumbai, Chathisgarh, Gandhi nagar, panjim, gurgaon, Bangalore, Cochin,
indore, New delhi, Jalandhar, jaipur, Chennai, lacknow, Kolkata, and Hyderabad. ANGEL
BROKING LTD has also floated a wholly-owned subsidiary, ANGEL BROKING LTD which
has taken up corporate membership of the National Stock Exchange of India Ltd. [NSE] in both
the Capital Market and Futures andOptions segments and The Stock Exchange, Mumbai In the
Equities segment, so that the traders and dealers of ANGEL BROKING LTD can access other
markets in addition to the markets and their local market. ANGEL BROKING LTD thus
provides the investors in smaller cities a one-stop solution for cost-effective and efficient trading
and settlement in securities.

With the objective of broad basing the range of its services, ANGEL BROKING LTD has started
offering the full suite of DP facilities to its Traders, Dealers and their clients.

Angel Broking Limitedis one of the leading and professionally managed stock broking firm
involved in quality services and research. Angel Broking Limited is a corporate member of The

41
Stock Exchange, Mumbai.The membership of the company with The Stock Exchange Mumbai
was originally in the name of Mukesh R. Gandhi, which was eventually turned into a corporate
membership in the name of Angel Broking Limited.Angel Broking Limited is managed by Mr.
Dinesh Thakkar and he is well supported by Mr. Mukesh Gandhi, a fifteen years veteran in the
market.

The group is well supported by a professional and qualified research team and efficient
operations and back office team, which comprises of highly dedicated and qualified individuals.
Angel has an in-house, state of art research department.Angel believes in reaching out to the
customer at the farthest end rather than by reaching out to them. The company in its endeavour to
give its client the best has opened up several branches all over Mumbai, which are efficiently
integrated with the Head Office. Angel Broking Limited is primarily into retail stock broking,
with a customer base of retail investors, which has been increasing at a compounded growth rate
of 100% every year. The company has huge network sub-brokers in Mumbai and other places
outside Mumbai, registered with SEBI, who act as chanel partners for the company. The
company presently has a total staff strength of around 150 employees who are spread
accordingly across the head office and all the branches. Angel has empowered its physical
presence throughout India through various

strategies which it has been adopting efficiently and effectively over a period of time, like
opening up of branches at various places, tie-ups with various agencies and sales agents, buy-
outs of smaller regional outfits and appointment of sub-brokers and franchisees. Moreover Angel
has been tapping and including high net-worth and self-employed individuals it its vast array of
clients.Angel has always strived in the direction of delivering ultimate client satisfaction and
developing stronger bonds with its customers and chose partners. Angel has a vision to introduce
new and innovative products and services regularly. Moreover Angel has been one among the
pioneers to introduce the latest technological innovations and integrate it efficiently within its
business.

42
Business plan

A business plan will then enable an organisation to achieve its objectives. The business plan
must be set within a time frame and set out how the organisation, and the various components of
the organisation will work towards meeting required objectives. Responsibility for delivering
various parts of the plan will be allocated to key individuals, and performance targets will be
established which enable the plan to be delivered. The business will create a series of policies,
programmes and budgets to enable it to achieve planned targets. It is also essential from the
outset to clarify how the plan will be evaluated on an ongoing basis.

OBJECTIVES

 Create a single integrated national level solution with access to multiple markets for
providing high cost-effective service to millions of investors across the country.
 Create a liquid and vibrant national level market for all listed companies in general and
small capital companies in particular.
 Optimally utilize the existing infrastructure and other resources of
 participating Stock Exchanges, which are underutilized now.
 Provide a level playing field to small Traders and Dealers by offering an opportunity to
participate in a national markets having investment-oriented business.
 Reduce transaction cost.
 Provide clearing and settlement facilities to the Traders and Dealers across the Country at
their doorstep in a decentralized mode.
 Spread demat trading across the country

SAILENT FEATURES

Network of intermediaries:

As at the beginning of the financial year 1987-88. 548 intermediaries (207 Traders and 341
Dealers) are registered on ANGEL BROKING LTD. A broad of members forms the bedrock for

43
any Exchange, and in this respect, ANGEL BROKING LTD has a large pool of registered
intermediaries who can be tapped for any new line of business.

Robust Operational Systems:

The trading, settlement and funds transfer operations of ANGEL BROKING LTD are
completely automated and state-of-the-art systems have been deployed. The communication
network of ANGEL BROKING LTD, which has connectivity with over 400 trading members
and is spread across india, is also used for supporting the operations of ANGEL BROKING
LTD. The trading software and settlement software, as well as the electronic funds transfer
arrangement established with HDFC Bank and ICICI Bank, gives ANGEL BROKING LTD the
required operational efficiency and flexibility to not only handle the secondary market functions
effectively, but also by leveraging them for new ventures.

Skilled and experienced manpower:

ANGEL BROKING LTD has experienced and professional staff, who have wide experience in
Stock Exchanges/ capital market institutions, with in some cases, the experience going up to
nearly twenty years in this industry. The staff has the skill-set required to perform a wide range
of functions, depending upon the requirements from time to time.

Aggressive pricing policy:

The philosophy of ANGEL BROKING LTD is to have an aggressive pricing policy for the
various products and services offered by it. The aim is to penetrate the retail market and
strengthen the position, so that a wide variety of products and services having appeal for the
retail market can be offered using a common distribution channel. The aggressive pricing policy
also ensures that the intermediaries have sufficient financial incentives for offering these
products and services to the end-clients.

44
Trading, Risk Management and Settlement Software Systems:

The ODIN and BACK OFFICE software developed on the Microsoft NT platform, with
consultancy assistance from Microsoft, is the most contemporary of the trading and settlement
software's introduced in the country. The applications have been built on a technology platform,
which offers low cost of ownership, facilitates simple maintenance and supports easy up
gradation and enhancement. The software's are so designed that the transaction processing
capacity depends on the hardware used; capacity can be added by just adding inexpensive
hardware, without any additional software work.

Vibrant Subsidiary Operations: ANGEL COMMODITIES LTD AND ANGEL


SECURITIES LTD the wholly owned subsidiary of ANGEL BROKING LTD, is one of the
biggest Exchange subsidiaries in the country. On any given day, more than 250 registered
intermediaries of ANGEL BROKING LTD traded from INDIA across the length and breadth of
the country.

45
CHAPTER-4

ANALYSIS OF DATA

46
ANALYSIS OF THE STUDY

Most of the stock trading companies charge a fixed amount per Rs. 100.

Angel brokingThe company charge Rs.0.01% for Intraday and Rs.0.1% for delivery based
transactions.

For intraday based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.01%) 10
Services Tax (12.36% on brokerage) 1.23
STT (security transaction tax) 0.25% on transaction value 125
Net Amount 99864.0
Table No.1

For Delivery based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.01%) 100
Services Tax (12.36% on brokerage) 12.36
STT (security transaction tax) 0.25% on transaction value 250
Net Amount 99637.64
Table No.2

47
INDIA INFOLINE Ltd

The company charges Rs.0.02% for Intraday and Rs.0.2% for delivery based transactions

For Intraday based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.02%) 20
Services Tax (12.36% on brokerage) 2.47
STT (security transaction tax) 0.25% on transaction value 125
Net Amount 99852.53
Table No.1

For Delivery based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.02%) 200
Services Tax (12.36% on brokerage) 24.72
STT (security transaction tax) 0.25% on transaction value 250
Net Amount 99525.28
Table No.2

48
Angel broking Ltd

The company charges Rs.0.03% for Intraday and Rs.0.3% for delivery based transactions

For Intraday based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.03%) 30
Services Tax (12.36% on brokerage) 3.70
STT (security transaction tax) 0.25% on transaction value 125
Net Amount 99841.3
Table No.1

For Delivery based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.03%) 300
Services Tax (12.36% on brokerage) 37.08
STT (security transaction tax) 0.25% on transaction value 250
Net Amount 99412.92
Table No.2

49
ICICI

The company charges Rs.0.03% for Intraday and Rs.0.3% for delivery based transactions

For Intraday based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.03%) 30
Services Tax (12.36% on brokerage) 3.70
STT (security transaction tax) 0.25% on transaction value 125
Net Amount 99841.3
Table No.1

For Delivery based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.03%) 300
Services Tax (12.36% on brokerage) 37.08
STT (security transaction tax) 0.25% on transaction value 250
Net Amount 99412.92
Table No.2

50
India Bulls

The company charges Rs.0.15% for Intraday and Rs.0.2% for delivery based transactions

For Intraday based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.15%) 150
Services Tax (12.36% on brokerage) 18.54
STT (security transaction tax) 0.25% on transaction value 125
Net Amount 99706.46
Table No.1

For Delivery based transactions

Particulars Rupees
Transaction value Rs,100000
Deduct:
Brokerage (0.2%) 200
Services Tax (12.36% on brokerage) 24.72
STT (security transaction tax) 0.25% on transaction value 250
Net Amount 99525.28
Table No.2

51
For Intraday

Particulars Angel INDIA SHARE INDIA ICICI


Broking INFOLINE KHAN BULLS
Ltd LTD LTD
Transaction 100000 100000 100000 100000 100000
value
Brokerage 10 10 40 30 20
Service tax 1.23 3.7 4.95 3.7 2.47
STT 125 125 125 125 125
NetAmount 99864 99841.3 99830.5 99841.3 99852.53
Table No.1

120000

100000

80000
Transaction value
60000 Brokerage
Service tax
40000
STT
20000 NetAmount

0
Angel INDIA SHARE KHAN INDIA BULLS ICICI
Broking Ltd INFOLINE LTD
LTD

Interpretation:

Though the transaction value is same for ANGEL BROKINGLtd, HDFC,Religar,Geogit


& Ventura Securities Ltd, but the net amount benefited to the customer is obtained from ANGEL
BROKING LTD. The reason, the brokerage charges are less. Also it is to be noted that the
service tax is charged on brokerage amount.

52
For Delivery

Particulars Angel INDIA SHARE INDIA ICICI


Broking INFOLINE KHAN BULLS
Ltd LTD LTD
Transaction 100000 100000 100000 100000 100000
value
Brokerage 100 200 300 300 150
Service tax 12.36 24.72 37.08 37.08 18.54
STT 250 250 250 250 250
NetAmount 99637.64 99525.25 99412.92 99412.92 99581.46
Table No.2

100%
90%
80%
70%
NetAmount
60%
STT
50%
40% Service tax

30% Brokerage
20% Transaction value
10%
0%
Angel Broking INDIA SHARE KHAN INDIA BULLS ICICI
Ltd INFOLINE LTD LTD

Interpretation:

Though the transaction value is same for ANGEL BROKINGLtd, HDFC,Religar,Geogit


& Ventura Securities Ltd, but the net amount benefited to the customer is obtained from ANGEL
BROKING LTD. The reason, the brokerage charges are less. Also it is to be noted that the
service tax is charged on brokerage amount.

53
CHAPTER-5

FINDINGS

SUGGESTIONS

CONCLUSION

54
FINDINGS OF THE STUDY

Raday net amount (99864M) is highest for ANGEL BROKING Ltd, when compared to
HDFC,Religar,Geogit &Ventura Securities Ltd

The online in ANGEL BROKING LTD is introduced to reduce and eliminate all the
discrepancies that arANGEL BROKING LTD out of manual trading system. It has been
developed to computerize the trading activity of the broker. With the computerization of the
trading activity, the number of transaction and the volume of trading have increased to a great
extent. ANGEL BROKING LTD is dealing in both BSE and NSE.

The turnover of ANGEL BROKING LTD has gone up during 1998 with the introduction of
online trading system. The trading of ANGEL BROKING LTD of the first day was Rs. 37.00
crores.

Now the companies are also taking orders on phone call. Only ANGEL BROKING LTD is not
in phone order. Trading in Z securities is not available. (Z securities are those securities which
are not traded regularly). Bank account for instant transfer is also not available, which all the
companies dealing with online trading are giving instant bank a/c. all companies are giving
offline option while ANGEL BROKING LTD is not giving any offline options. Portfolio

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SUGGESTIONS

 The competitors of ANGEL BROKING Ltd Viz., HDFC Religare, Geogit &Ventura
Securities Ltd should decrease the brokerage charges to attract the customers.
 Company should increase awareness about the company's products & service offered by
them in the market.
 Company should maintain good relation with the customers and respond quickly to the
queries asked by the customers
 The company should give demonstration to customers so that they can get complete
knowledge about online trading.
 Company should try to minimize the rejections by taking care while filling the
application form.
 The company should increase branch offices in Hyderabad & other areas in A.P.

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CONCLUSION

New ideas are to be implemented to catch the customers. The strategy of giving more benefits to
the high end customers is very useful. All the positive points are used to get the business for the
firm.

But again if any one wants to take risk & earns a lot he can go for shares. Because stock market
is a volatile market. Anything & everything can happen to this market. But then again if anyone
study the market well he can earn a lot.

Again like every coin has its two sides, similarly every financial instrument has its own features,
its advantage & disadvantage. So finally it is the investor himself/herself has to decide where to
invest.

57
BIBLOGRAPHY

BOOKS REFERRED TITLE:

• E.Gordon, K. Natrajan, 2016, Financial markets and services , 10th Edition, Himalaya
publishing House, Mumbai.

• Zvi Bodie, Alex Kane, Alan J. Marcus, Pitabas Mohanty 2017, Investments, 10th
Edition, MC.Graw Hill Education India Pvt. Ltd. Noida ,Uttar Pradesh.

BOOKS REFERRED TITLE:

 Financial Market and Services


 Financial Management

NEWS PAPERS :

 Economic times
 Times of India
 Business Standard

MAGAZINES :

 Business Today
 Business World
 Business India

WEBSITES :

 www.onlinetrading.com
 www.indiainfoline.com
 www.nseindia.com
 www.bseindia.com
 www.sebi.gov.in
 www.google.com

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