Stock Exchange (BSE)

VEDANTA COLLEGE OF
MANAGEMENT & INFORMATION

TECHNOLOGY
STOCK MARKET
September 01, 2017
TAGLINE OF THE PROJECT
"The value of a stock is the present value of all its future free cash flows. Do not rely
on any valuation methodology that does not reconcile with this concept."
PROJECT: STOCK MARKET
ACKNOWLEDGEMENT
I take the opportunity of submitting this thesis to express my deep regards towards those
who have offered their invaluable assistance and guidance in the hour of need.
I sincerely acknowledge with a deep sense of gratitude and show regards to Mr. Harsh of
M/s. Vedanta College of management & Information technology, for knowledge share during the
initial phase of the project. I highly obliges to him for their guidance, advice and co-operation
while assignment.
I would also like to thank to Mr. Girish for his kind support, guidance throughout this
process and allowing me to go ahead with this project.
I admit that co-operation and morality are keywords to success.
REPORT PRESENTER:
SIGNATURE :
DATE :
NAME : MR. OMKAR ADSUL (Student of college, roll no. : 01)
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INDEX
Sr. No. Description Page no.
1 Cover page 01 to 01
2 Acknowledgement 02 to 02
3 Index 03 to 03
4 Introduction 04 to 05
5 History of stock market in India 06 to 19
6 Terminology in stock market 20 to 21
7 14 most interesting facts about Stock Markets 22 to 23
8 15 Most valuable stock Markets in the world 24 to 25
9 Principles of Stock Market 26 to 29
10 Functions of stock Market in economy 30 to 31
11 Features of stock Market 32 to 33
12 Risk & Rewards 34 to 36
13 Stock market working diagrams 37 to 41
14 Types of trading in Indian share market 42 to 46
15 DEMAT Account 47 to 49
16 SEBI 50 to 50
17 Performance of BSE & NSE in August 2017 51 to 52
18 Few records of earning by stocks in India 53 to 53
19 Successes & Failure stories of Stock Market 54 to 61
20 Bibliography 62 to 62
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INTRODUCTION
PURPOSE
 The purpose of this report is to demonstrate the stock market (working, feature &
functions, needs & expectations of the interested parties).
GOALS
 To get the maximum knowledge of the activities occurring in “stock market”.
 To understand the stock exchange market
 To study the changing trends in the markets.
 To give appropriate description of the stock exchange for the understanding of the common
man.
 To solve misconceptions relating to stock markets
Definition of stock Market:

 A stock Market is an exchange where stock brokers & traders can buy or sell shares of
stock, bonds & other securities.
 A stock Market is an institution, organization, or association which hosts a market where
stocks, bonds, options and futures, and commodities are traded.
Share
 A share represents the smallest recognized fraction of ownership in a publicly held
business. Each such fraction of ownership is represented in the form of a certificate known
as a share certificate. The breaking up of total ownership of a business into small
fragments, each fragment represented by a share certificate, enables them to be easily
bought and sold.
General Purpose of stock Market:

 Stock market levels the playing field so that average earners can invest the same way as
rich financiers.
 On the other hand, entrepreneurs have an easy means of financing their projects without
having to get into debt or handing over the control of their companies to venture
capitalists.
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Exchange management:
 Made some attempts in this direction, but this did not materially alter the situation. In view
of the less than satisfactory quality, of administration of broker-managed exchanges, the
finance minister in March 2001 proposed demutualization of exchanges by which
ownership, management and trading membership would be segregated from each other.
 The regulators are working towards implementing this. Of the 23 stock exchanges in India,
two stock exchanges viz., OTCEI and NSE are already demutualised. Board of directors,
which do not include trading members, manages these.
 These are purest form of demutualised exchanges, where ownership, management and
trading are in the hands of three sets of people.
 The concept of demutualisation completely eliminates any conflict of interest and helps the
exchange to pursue market efficiency and investors interest aggressively.
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HISTORY OF STOCK MARKETS IN INDIA:
 The first organised stock Market in India was started in 1875 at Bombay and it is stated to
be the oldest in Asia.
 In 1894 the Ahmadabad Stock Market was started to facilitate dealings in the shares of
textile mills there.
 The Calcutta stock Market was started in 1908 to provide a market for shares of plantations
and jute mills.
 Then the madras stock Market was started in 1920.
 At present there are 24 stock Markets in the country, 21 of them being regional ones with
allotted areas.
 Two others set up in the reform era, viz., the National Stock Market (NSE) and Over
the Counter Exchange of India (OICEI), have mandate to have nation-wise trading.
 They are located at Ahmadabad, Vadodara, Bangalore, Bhubaneswar, Mumbai,
Kolkata, Kochi, Coimbatore, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kanpur,
Ludhiana, Chennai, Mangalore, Meerut, Patna, Pune, and Rajkot.
 The Stock Exchanges are being administered by their governing boards and
executive chiefs.
 Policies relating to their regulation and control are laid down by the Ministry of
Finance. Government also Constituted Securities and Exchange Board of India
(SEBI) in April 1988 for orderly development and regulation of securities industry
and stock exchanges.
 In November 1992, NSE (National Stock Exchange) was established as the first
electronically traded Stock Exchange in India. After a few years of operations, the NSE has
become the largest stock exchange in India. BSE also automated the systems in 1995 but it
never caught up with NSE Spot Market turnover.
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There are two leading stock exchanges in India which help us trade are:
1. National Stock Exchange: NSE incorporated in the year 1992 provides trading in the
equity as well as debt market. Maximum volumes take place on NSE and hence enjoy
leadership position in the country today.
2. Bombay Stock Exchange: BSE on the other hand was set up in the year 1875 and is the
oldest stock exchange in Asia. It has evolved in to its present status as the premier stock
exchange. 17 At BSE you will find some scripts listed that are not available on NSE. Also
BSE has the largest number of scripts which are listed.
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Introduction to BSE:
 As we read in the history of Indian stock exchange; the stock exchange, Mumbai, popularly
known as "BSE".
 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 has converted 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 Government 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 redressal 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
programmes 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 every year by rotation), three SEBI nominees, six public
representatives and an Executive Director & Chief Executive Officer and a Chief Operating
Officer.
 The Executive Director as the Chief Executive Officer is responsible for the 18 day-to-day
administration of the Exchange and he is assisted by the Chief Operating Officer and other
Heads of Department the Exchange has inserted new Rule in its Rules, Bye-laws &
Regulations 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.
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BSE is the largest stock exchange in India and Asia as well. BSE Sensex is calculated out of 30
stocks on daily basis.
BSE Hours of Operation
Beginning of the Day Session 8:00 - 9:00
Login Session 9:00 - 9:15
Trading Session 9:15 - 15:30
Position Transfer Session 15:30 - 15:50
Closing Session 15:50 - 16:05
Option Exercise Session 16:05 - 16:35
Margin Session 16:35 - 16:50
Query Session 16:50 - 17:35
End of Day Session 17:35
The hours of operation for the BSE quoted above are stated in terms of the local time in Mumbai,
India (also known as Bombay). This translates into a standard time zone UTC/GMT +5:30.
Bombay Stock Exchange Profile:

Address: Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400001
Telephone 91-22-22721233/4
Web Site www.bseindia.com/
Trading Hours Monday - Friday, 9:55 am - 3:30 pm IST
Holidays Bakri-Id, Republic Day, Good Friday, Ambedkar Jayanti, Independence Day, Ganesh
Chaturthi, Dasera, Diwali (Laxmi Poojan), Diwali (Bhaubeej), Ramzan Id, Guru Nanak Jayanti.
Securities: Stocks, bonds, derivatives
Key Staff:
 Chairman : Dhirendra Swarup
 MD & CEO : Ashishkumar Chauhan
 Public Interest Director : Sumit Bose, Sethuratnam Ravi
 Shareholder Director : Shriprakash Kothari, Usha Sangwan, Rajashree
Sabnavis, Ronald Schiwin
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Appointment history of the key staff
 Appointed Shri Dhirendra Swarup, Public Interest Director as the Chairman

of the Board of Directors of the Company w.e.f. July 31, 2017.
 Shri Sudhakar Rao ceased to be Public Interest Director and Chairman with
effect from June 28, 2017.
 Mr. Roland Schwinn is appointed as a Shareholder Director in place of Mr.
Thomas Bendixen with effect from 13th June, 2017.
 Shri Sumit Bose is appointed as Public Interest Director with effect from
19th May, 2016.
 Justice Vikramajit Sen is appointed as Public Interest Director with effect
from 19th May, 2016.
 Dr. Sanjiv Misra ceased to be Public Interest Director with effect from 22nd
April, 2016.
 Shri S. Ramadorai ceased to be Public Interest Director with effect from 8th
March, 2016.
 Shri Sethurathnam Ravi is appointed as Public Interest Director with effect
from 05th February, 2016
 Shri S. H. Kapadia ceased to be Public Interest Director with effect from 5th
January, 2016, due to his sudden demise.
 Dr. Sriprakash Kothari is appointed as Shareholder Director with effect from
4th September, 2015.
 Smt. Rajeshree Sabnavis is appointed as Shareholder Director with effect
from 4th September, 2015.
 Smt. Usha Sangwan is appointed as Shareholder Director with effect from
 Dr. Krishnaswamy Kasturirangan is appointed as Public Interest Director
with effect from
23rd January, 2015
 Shri Dhirendra Swarup is appointed as Public Interest Director with effect
from 3rd November, 2014
 Shri Andreas Preuss ceased to be Shareholder Director with effect from 1st
August, 2014.
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 Shri Keki Mistry ceased to be Shareholder Director with effect from 14th
August, 2014.
 Shri Thomas Bendixen is appointed as Shareholder Director with effect from
BSE computerized its trading and settlement activities by following a three-phased approach.
Phase I:
The primary objective of this phase was the real time dissemination of price data through
the Display Information Driver System (DIDS). DIDS was commissioned in November 1992 to
disseminate bids, offers, actual rates of transactions and indices on a real time basis.
Phase II:
In 1994, settlement related daily transactions inputs and outputs were uploaded and
downloaded from the TWS in the brokers’ offices.
Phase III:
Commissioned on March 14, 1995. Although, screen based trading started with 818 scrips,
by the 70th day of its commissioning, all scrips-exceeding 5000 had been put on the BOLT
system. The BOLT system was commissioned with the Himalya K 10,000 central trading computer
hardware. Since then the hardware has been upgraded to the Himalya K 20,000 system. The
system provides for a response time of two seconds and can handle more than two hundred
thousand trades in a day.
Disclosure & Listing Norms

Companies who wish to raise money from capital market follow guidelines relating to
disclosure, laid down by the Securities and Exchange Board of India. Some of the disclosure norms
are:
 Details of other income if it constitutes more than ten percent of total income.
 All adverse events affecting the operations of the company.
 Any change in key managerial personnel.
 Risk factors specific to the project and those which are external to the company.
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The listing requirements with the Exchange call for further disclosure by companies to
promote public confidence. Important disclosures are:
 The company is required to furnish unaudited half-yearly financial results in the
prescribed Performa.
 The company must explain to the Stock Exchange any large variation between
audited and unaudited results in respect of any item.
 When any person or an institution acquires or agrees to acquire any security of a
company which would result in his holding five percent or more of the voting capital
of the company, including the existing holding the Exchange must be notified within
two days of such acquisition by the company or by authorized intermediary or by the
acquirer.
 Any take-over offer made either voluntarily or compulsorily to a company requires a
public announcement by both the offeror and the offeree company.
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Indices
The Exchange compiles four indices, which are based on market capitalization. The first
index to be compiled was the BSE Sensitive Index with 1978-79 as the base year. It comprises of
equity shares of 30 companies from both specified and non-specified securities groups. The
companies have been selected on the basis of market activity. Subsequently, a more broad based
index, BSE National Index with 1983-84 as base year, was compiled. This index is made up of 100
scrips, 98 of which are quoted on Bombay. This index also includes prices on the other major
stock exchanges of Delhi, Calcutta, Ahmedabad and Madras. If scrip is actively quoted on more
than one Exchange the average price of the scrip is used in the compilation of the index.
It was felt that the sensitive index-the most popular indicator of market movement-had
become oversensitive to a handful of scrips. With divestment of Public Sector Unit (PSU) equity by
government and a sharp increase in the number of companies listed over the last few years, it
was felt that a new index, which is more representative of the recent changes and is more
balanced is necessary. The BSE-200, which was introduced in May 1994, consists of equity shares
of 200 companies, which have been selected on the basis of market capitalization, volume of
turnover and strength of the companies' fundamentals. 1989-90 has been chosen as the base
year for BSE-200.
As the presence of the foreign investors grew, a need was felt to express the index values
by taking into account the Rupee-Dollar conversion rate. Consequently, dividing the current Rupee
market value by Rupee-Dollar modifies the BSE-200 conversion rate in the base year. This index,
which indicates the movement of the market in dollar values, is called the Dollex.
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Companies registered in BSE
Exchange ticker
Sr. No. Company name
(Code)
1 532921 Adani Ports & SEZ
2 500820 Asian Paints
3 532215 Axis Bank
4 532977 Bajaj Auto
5 532454 Bharti Airtel
6 500087 Cipla
7 533278 Coal India
8 500124 Dr. Reddy's Laboratories
9 500180 HDFC Bank
10 500182 Hero MotoCorp
11 500696 Hindustan Unilever
12 500010 Housing Development Finance Corporation
13 532174 ICICI Bank
14 500209 Infosys
15 500875 ITC
16 500247 Kotak Mahindra Bank
17 500510 Larsen & Toubro
18 500257 Lupin
19 500520 Mahindra & Mahindra
20 532500 Maruti Suzuki
21 532555 NTPC
22 500312 Oil and Natural Gas Corporation
23 532898 Power Grid Corporation of India
24 500325 Reliance Industries
25 500112 State Bank of India
26 524715 Sun Pharmaceutical
27 532540 Tata Consultancy Services
28 500570 Tata Motors
29 570001 Tata Motors DVR
30 500470 Tata Steel
31 507685 Wipro
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Introduction to NSE:
 The National Stock Exchange (NSE) is India's leading stock exchange covering 364 cities
and towns across the country. NSE was set up by leading institutions to provide a modern,
fully automated screen-based trading system with national reach. The Exchange has
brought about unparalleled transparency, speed & efficiency, safety and market integrity.
 It has set up facilities that serve as a model for the securities industry in terms of systems,
practices and procedures. NSE has played a catalytic role in reforming the Indian securities
market in terms of microstructure, market practices and trading volumes.
 The market today uses state-of-art information technology to provide an efficient and
transparent trading, clearing and settlement mechanism, and has witnessed several
innovations in products & services viz. demutualisation of stock exchange governance,
screen based trading, compression of settlement cycles, dematerialisation and electronic
transfer of securities, securities lending and 19 borrowing, professionalization of trading
members, fine-tuned risk management systems, emergence of clearing corporations to
assume counterparty risks, market of debt and derivative instruments and intensive use of
information technology.
 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 (FIs) 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 2000. NSE's
mission is setting the agenda for change in the securities markets in India.
 The NSE was set-up with the following objectives:
 Establishing a nation-wide trading facility for equities, debt instruments and hybrids
 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,
 Meeting the current international standards of securities markets.
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 The standards set by NSE in terms of market practices and technologies have become
industry benchmarks and are being emulated by other market participants. NSE is more
than a mere market facilitator.
 Till the advent of NSE, an investor wanting to transact in a security not traded on the
nearest exchange had to route orders through a series of correspondent brokers to the
appropriate exchange. This resulted in a great deal of uncertainty and high transaction
costs. One of the objectives of NSE was to provide a nationwide trading facility and to
enable investors spread all over the country to have an equal access to NSE.
 NSE has made it possible for an investor to access the same market and order book,
irrespective of location, at the same price and at the same cost. NSE uses sophisticated
telecommunication technology through which members can trade remotely from their
offices located in any part of the country. NSE trading terminals are present in 363
cities and towns all over India.
 NSE has been promoted by leading financial institutions, banks, insurance companies and
other financial intermediaries
 NSE is one of the first demutualised stock exchanges in the country, where the ownership
and management of the Exchange is completely divorced from the right to trade on it.
Though the impetus for its establishment came from policy makers in the country, it has
been set up as a public limited company, owned by the leading institutional investors in the
country.
 From day one, NSE has adopted the form of a demutualised exchange - the ownership,
management and trading is in the hands of three different sets of people. NSE is owned by
a set of leading financial institutions, banks, insurance companies and other financial
intermediaries and is managed by professionals, who do not directly or indirectly trade on
the Exchange.
 The NSE model however, does not preclude, but in fact accommodates involvement,
support and contribution of trading members in a variety of ways. Its Board comprises of
senior executives from promoter institutions, eminent professionals in the fields of law,
economics, accountancy, finance, taxation, etc; public representatives, nominees of SEBI
and one full time executive of the Exchange.
 While the Board deals with broad policy issues, decisions relating to market operations are
delegated by the Board to various committees constituted by it. Such committees include
representatives from trading members, professionals, the public and the management. The
day-to-day management of the Exchange is delegated to the Managing Director who is
supported by a team of professional staff.
Page 16 of 62
Companies registered at NSE:
Company Name ISIN Code Company Name ISIN Code
AUTOMOBILE MEDIA & ENTERTAINMENT
Amara Raja Batteries Ltd. INE885A01032 D.B.Corp Ltd. INE950I01011
Apollo Tyres Ltd. INE438A01022 Den Networks Ltd. INE947J01015
Ashok Leyland Ltd. INE208A01029 Dish TV India Ltd. INE836F01026
Bajaj Auto Ltd. INE917I01010 Eros Intl Media Ltd. INE416L01017
Bharat Forge Ltd. INE465A01025 HT Media Ltd. INE501G01024
Bosch Ltd. INE323A01026 Hathway Cable & Datacom Ltd. INE982F01036
Eicher Motors Ltd. INE066A01013 Inox Leisure Ltd. INE312H01016
Exide Industries Ltd. INE302A01020 Jagran Prakashan Ltd. INE199G01027
Hero MotoCorp Ltd. INE158A01026 Navneet Education Ltd. INE060A01024

Network18 Media & Investments
MRF Ltd. INE883A01011 INE870H01013
Ltd.
Mahindra & Mahindra Ltd. INE101A01026 PVR Ltd. INE191H01014
Maruti Suzuki India Ltd. INE585B01010 Sun TV Network Ltd. INE424H01027
Motherson Sumi Systems Ltd. INE775A01035 TV Today Network Ltd. INE038F01029
TVS Motor Company Ltd. INE494B01023 TV18 Broadcast Ltd. INE886H01027
Tata Motors Ltd DVR IN9155A01020 Zee Entertainment Enterprises Ltd. INE256A01028
Tata Motors Ltd. INE155A01022
Page 17 of 62
CONSUMER GOODS METALS

Britannia Industries Ltd. INE216A01022 APL Apollo Tubes Ltd. INE702C01019
Colgate Palmolive (India) Ltd. INE259A01022 Coal India Ltd. INE522F01014
Dabur India Ltd. INE016A01026 Hindalco Industries Ltd. INE038A01020
Emami Ltd. INE548C01032 Hindustan Zinc Ltd. INE267A01025

GlaxoSmithkline Consumer
INE264A01014 JSW Steel Ltd. INE019A01038
Healthcare Ltd.
Godrej Consumer Products Ltd. INE102D01028 Jindal Steel & Power Ltd. INE749A01030
Godrej Industries Ltd. INE233A01035 MOIL Ltd. INE490G01020
Hindustan Unilever Ltd. INE030A01027 NMDC Ltd. INE584A01023
I T C Ltd. INE154A01025 National Aluminium Co. Ltd. INE139A01034
Jubilant Foodworks Ltd. INE797F01012 Orissa Min Dev Co Ltd. INE725E01024
Marico Ltd. INE196A01026 Ratnamani Metals & Tubes Ltd. INE703B01027

Procter & Gamble Hygiene & Health
INE179A01014 Steel Authority of India Ltd. INE114A01011
Care Ltd.
Tata Global Beverages Ltd. INE192A01025 Tata Steel Ltd. INE081A01012
United Breweries Ltd. INE686F01025 Vedanta Ltd. INE205A01025
United Spirits Ltd. INE854D01016 Welspun Corp Ltd. INE191B01025
PHARMA IT
Aurobindo Pharma Ltd. INE406A01037 HCL Technologies Ltd. INE860A01027
Cadila Healthcare Ltd. INE010B01027 Infosys Ltd. INE009A01021
Cipla Ltd. INE059A01026 Justdial Ltd. INE599M01018
Divi's Laboratories Ltd. INE361B01024 KPIT Technologies Ltd. INE836A01035
Dr. Reddy's Laboratories Ltd. INE089A01023 MindTree Ltd. INE018I01017

Glaxosmithkline Pharmaceuticals Oracle Financial Services Software
INE159A01016 INE881D01027
Ltd. Ltd.
Glenmark Pharmaceuticals Ltd. INE935A01035 Tata Consultancy Services Ltd. INE467B01029
Lupin Ltd. INE326A01037 Tata Elxsi Ltd. INE670A01012
Piramal Enterprises Ltd. INE140A01024 Tech Mahindra Ltd. INE669C01036
Sun Pharmaceutical Industries Ltd. INE044A01036 Wipro Ltd. INE075A01022
Page 18 of 62
FINANCIAL SERVICES FINANCIAL SERVICES
Allahabad Bank INE428A01015 Axis Bank Ltd. INE238A01034
Andhra Bank INE434A01013 Bank of Baroda INE028A01039
Bank of Baroda INE028A01039 Canara Bank INE476A01014
Bank of India INE084A01016 Federal Bank Ltd. INE171A01029
Canara Bank INE476A01014 HDFC Bank Ltd. INE040A01026
IDBI Bank Ltd. INE008A01015 ICICI Bank Ltd. INE090A01021
Oriental Bank of Commerce INE141A01014 IDFC Bank Ltd. INE092T01019
Punjab National Bank INE160A01022 IndusInd Bank Ltd. INE095A01012
State Bank of India INE062A01020 Kotak Mahindra Bank Ltd. INE237A01028
Syndicate Bank INE667A01018 Punjab National Bank INE160A01022
Union Bank of India INE692A01016 State Bank of India INE062A01020
CONSTRUCTION Yes Bank Ltd. INE528G01019
DLF Ltd. INE271C01023
Delta Corp Ltd. INE124G01033
Godrej Properties Ltd. INE484J01027

Housing Development and
INE191I01012
Infrastructure Ltd.
Indiabulls Real Estate Ltd. INE069I01010
Oberoi Realty Ltd. INE093I01010
Phoenix Mills Ltd. INE211B01039
Prestige Estates Projects Ltd. INE811K01011
Sobha Ltd. INE671H01015
Unitech Ltd. INE694A01020
Page 19 of 62
TERMINOLOGY IN STOCK MARKET

1) Averaging Down: This is when an investor buys more of a stock as the price goes down.
This makes it so your average purchase price decreases.
2) Bear Market: This is trading talk for the stock market being in a down trend, or a period of
falling stock prices. This is the opposite of a bull market.
3) Beta: A measurement of the relationship between the price of a stock and the movement
of the whole market. If stock XYZ has a beta of 1.5, that means that for every 1 point move
in the market, stock XYZ moves 1.5 points and vice versa.
4) Blue Chip Stocks: These are the large, industry leading companies. They offer a stable
record of significant dividend payments and have a reputation of sound fiscal management.
The expression is thought to have been derived from blue gambling chips, which is the
highest denomination of chips used in casinos.
5) Bull Market: This is when the stock market as a whole is in a prolonged period of
increasing stock prices. Opposite of a bear market.
6) Broker: A person who buys or sells an investment for you in exchange for a fee (a
commission). Here is Tim’s favorite broker. (LINK)
7) Day Trading: The practice of buying and selling within the same trading day, before the
close of the markets on that day. This is what Tim typically does, although he does have a
long-term portfolio as well. Traders that participate in day trading are often called “active
traders” or “day traders.”
8) Dividend: this is a portion of a company’s earnings that is paid to shareholders, or people
that own hat company’s stock, on a quarterly or annual basis. Not all company’s do this.
9) Exchange: An exchange is a place in which different investments are traded. The most
well-known in the United States are the New York Stock Exchange and the Nasdaq.
10) Execution: When an order to buy or sell has been completed. If you put in an order to sell
100 shares, this means that all 100 shares have been sold.
11) Hedge: This is used to limit your losses. You can do this by taking an offsetting position.
For example, if you hold 100 shares of XYZ, you could short the stock or futures positions
on the stock.
12) Index: An index is a benchmark which is used as a reference marker for traders and
portfolio managers. A 10% may sound good, but if the market index returned 12%, then
you didn’t do very well since you could have just invested in an index fund and saved time
Page 20 of 62
by not trading frequently. Examples are the Dow Jones Industrial Average and Standard &
Poor’s 500.
13) Initial Public Offering (IPO): The first sale or offering of a stock by a company to the
public, rather than just being owned by private or inside investors.
14) Margin: A margin account lets a person borrow money (take out a loan essentially) from a
broker to purchase an investment. The difference between the amount of the loan, and the
price of the securities, is called the margin.
15) Moving Average: A stock’s average price-per-share during a specific period of time. Some
time frames are 50 and 200 day moving averages.
16) Order: An investor’s bid to buy or sell a certain amount of stock or option contracts. You
have to put an order in to buy or sell 100 shares of stock.
17) Portfolio: A collection of investments owned by an investor. You can have as little as one
stock in a portfolio to an infinite amount of stocks.
18) Quote: Information on a stock’s latest trading price. This is sometimes delayed by 20
minutes unless you are using an actual broker trading platform.
19) Rally: A rapid increase in the general price level of the market or of the price of a stock.
20) Sector: A group of stocks that are in the same business. An example would be the
“Technology” sector including companies like Apple and Microsoft.
21) Spread: This is the difference between the bid and the ask prices of a stock, or the amount
someone is willing to buy it and someone is willing to sell it.
22) Stock Symbol: A one-character to three-character, alphabetic root symbol, which
represents a publically traded company on a stock exchange. Apple’s stock symbol is AAPL.
23) Volatility: This refers to the price movements of a stock or the stock market as a whole.
Highly volatile stocks are ones with extreme daily up and down movements and wide
intraday trading ranges. This is often common with stocks that are thinly traded, or have
low trading volumes. This is also common with the stocks that Tim trades.
24) Volume: The number of shares of stock traded during a particular time period, normally
measured in average daily trading volume.
25) Yield: This usually refers to the measure of the return on an investment that is received
from the payment of a dividend. This is determined by dividing the annual dividend amount
by the price paid for the stock. If you bought stock XYZ for $40-a-share and it pays a
$1.00-per-year dividend, you have a “yield” of 2.5%
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14 MOST INTERESTING FACTS ABOUT STOCK MARKETS
1) Bombay Stock Exchange (BSE) in India has the highest number of listed companies in
the world with an estimated 5689 companies. National Stock Exchange (NSE) of India
has around 1750 companies.
2) The most expensive stock in world is the Warren Buffet’s Hathaway, Class A, which is
priced at USD 2,13,330 per share. The reason for such a high price is that the company
doesn’t split the shares.
3) The oldest stock exchange in the world is Amsterdam Stock Exchange, which was
established in 1602 by Dutch East India Company dealing with the printed stocks and
bonds.
4) The NYSE MKT LLC earlier known as American Stock Exchange (AMEX) was originally
New York Curb Exchange until 1953. Because brokers used to trade their things standing
by the curb of the New York City.
5) In India, out of 22124.14 INR billion household savings, only 2% goes as investment into
equities. People in India are more inclined to invest their money in gold, banks and in
real estate.
6) The terms “Bear” and “Bull” are thought to be originated from the way of attacking by
each animal, with the bull thrusting its horn up in the air, while a bear swiping
downwards. Historically, the middleman used to speculate on the future price of the
bearskins by selling them which they yet had to receive from the tappers, with the
expectation that the price will drop. They used to call the middleman as bear jobbers and
in short “bears” which is known to describe the downturn in the market. As bull was
assumed to be opposite of the bear at that time so it was termed as the upward
movement of the market.
7) Historically, on an average the market declines mostly in the month of September. The
three leading indicator DJIA (Dow Jones), S&P 500 (Standard and Poor) and NASDAQ
have seemed to be performing poorly in this month. One of the reasons for this is that
the trading volume declines in summer as the investors take time for vacation and once
they return to work, they exit positions they had build up.
8) The financial bubbles, dot com bubbles we had come across in the stock market aren’t
the first things that happened. Way back in 1711, the share prices of South Sea
Company collapsed as they were in the midst of a huge bubble.
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9) October is considered as the jinxed month as the two worst stock market crashes in
history occurred in this month. The first occurred in 1929 with a 25 percent declined in
the share prices, and by 1932 the value of shares was just 20% of the value of shares in
1929! The next crash occurred in 1987 October when the stock market declined by one
fourth!
10) In the year 2006, one third of the all stocks traded in US and European Union was traded
through Algorithmic Trading, a trading system heavily reliant on the mathematical
formulas and high speed algorithms and computer programming. And by 2008, almost
around 80% of trading was being done by algorithms, however due to various
regulations the trading volume via algorithms in percentage terms declined after 2008.
11) The Dow Jones Industrial Average (DJIA), a priced weighted average of 30 significant
stocks traded on NYSE and NASDAQ was created by Wall Street Journal editor and Dow
Jones & Company cofounder Charles Dow. However, it is named after Dow and one of his
associates, Edward Jones.
12) The highest-volume day on the NYSE (New York Stock Exchange) was on January 4,
2001, when 2,129,445,637 shares traded. The lowest volume was on March 16, 1830,
when only 31 shares traded.
13) Till the year 2000, markets in US, London and Paris were trading on prices which were in
fractions and not in decimals. But after year 2000, this changed and all these markets
moved to decimals. This made it easier for an average investor to better understand the
value of stocks.
14) The Securities Exchange Commission (SEC) in United States of America (USA) was
created in 1934 by the Securities Exchange Act to regulate the securities market,
prevent fraud and enforce laws that require companies to provide full disclosure
regarding their financial information.
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15 MOST VALUABLE STOCK MARKETS IN THE WORLD
1. New York Stock Exchange (INR 18.8 trillion)

The NYSE's value is not only the highest on earth, but is worth almost three times as much
as its nearest competitor, the NASDAQ. Companies listed include many of the world’s
largest like Apple, Facebook, and Google.
2. NASDAQ — INR 7.5 trillion

Second, but second by a long way, is the NASDAQ. Short for National Association of
Securities Dealers Automated Quotations, the New York-based exchange includes eBay,
Kraft, and Microsoft on its benchmark NASDAQ 100 index.
3. Japan Exchange Group — INR 4.9 trillion

The biggest exchange outside of the USA, the Japan Exchange Group controls Japan's world
famous Nikkei 225, the index often cited as the stock bellwether for the entirety of Asia.
Consumer goods firms like Nikon, Olympus, and Konica are some of the most famous
companies listed by the JEG.
4. Shanghai Stock Exchange — INR 3.9 trillion

China's largest stock exchange based in the country's financial centre, Shanghai, counts
brewer Tsingtao, Air China, and Sinopec as constituents.
5. London Stock Exchange — INR 3.6 trillion

Probably the most famous exchange in Europe, the London Stock Exchange, in the heart of
the city, includes the blue-chip FTSE 100, the smaller, but still significant FTSE 250, and
the AIM index of small cap stocks.
6. Euronext — INR 3.4 trillion

Euronext group, headquartered in Amsterdam, holds many of Europe's most prominent
national indexes under its auspices. This includes France's CAC 40, Belgium's BEL 20.
7. Shenzhen Stock Exchange — INR 3.2 trillion

Despite being worth INR 3.2 trillion, the SSE, located in the south-eastern city of Shenzen,
is only China's second largest exchange.
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8. Hong Kong Stock Exchange — INR 3.1 trillion

Hong Kong has a reputation as one of the globe's most prominent financial centres, so it is
unsurprising that its key stock exchange is worth more than INR 3 trillion.
9. TMX Group — INR 1.9 trillion

TMX, the biggest exchange group in Canada, is based in Toronto. One of its constituents,
the Toronto Stock Exchange is home to all five of Canada's largest banks.
10. Deutsche Boerse — INR 1.7 trillion.

Deutsche Boerse group contains Germany's prime index, the DAX 30, featuring many of
Europe's biggest companies, including Deutsche Bank and Siemens. It is set to merge with
the London Stock Exchange.
11. National Stock Exchange of India — INR 1.6 trillion

One of two Indian stock exchanges to feature on this list, worth marginally less than it’s
counterpart the Bombay Stock Exchange. State Bank of India is one of the most
prominent companies to feature.
12. SIX Swiss Exchange — INR 1.5 trillion

Swiss exchange group SIX hosts two of the world's largest pharmaceutical firms, Roche
and Novartis, as well as food and drink giant Nestle.
13. Korea Exchange — INR 1.4 trillion.

Korea Exchange and its main constituent, the KOSPI, includes companies like tech giant
Samsung, and car firm Kia. It is based out of South Korea's capital, Seoul.
14. Australian Securities Exchange —INR 1.3 trillion

The biggest stock market in Oceania, the ASX features many huge mining firms, including
giant Aussie firm BHP Billiton
15. NASDAQ Nordic Exchanges — INR 1.28 trillion

NASDAQ Nordic operates a series of exchanges in northern Europe, including the
Copenhagen, Stockholm, and Helsinki exchanges. Volvo and clothing giant H&M are both
listed on NASDAQ's Nordic exchanges.
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PRINCIPLES OF STOCK MARKET
Warren Buffett is widely considered one of the greatest investors of all time, but if you were to
ask him whom he thinks is the greatest investor, he would probably mention one man: his
teacher, Benjamin Graham. Graham was an investor and investing mentor who is generally
considered the father of security analysis and value investing.
His ideas and methods on investing are well documented in his books "Security Analysis" (1934)
and "The Intelligent Investor" (1949), which are two of the most famous investing texts. These
texts are often considered requisite reading material for any investor, but they aren't easy reads.
In this article, we'll condense Graham's main investing principles and give you a head start on
understanding his winning philosophy.
Principle 1: Always Invest with a Margin of Safety
Margin of safety is the principle of buying a security at a significant discount to

its intrinsic value, which is thought to not only provide high-return opportunities, but also to
minimize the downside risk of an investment. In simple terms, Graham's goal was to buy assets
worth INR 1 for 50 cents. He did this very, very well.
To Graham, these business assets may have been valuable because of their stable earning
power or simply because of their liquid cash value. It wasn't uncommon, for example, for Graham
to invest in stocks where the liquid assets on the balance sheet (net of all debt) were worth
more than the total market cap of the company (also known as "net nets" to Graham followers).
This means that Graham was effectively buying businesses for nothing. While he had a number of
other strategies, this was the typical investment strategy for Graham.
This concept is very important for investors to note, as value investing can provide
substantial profits once the market inevitably re-evaluates the stock and ups its price to fair
value. It also provides protection on the downside if things don't work out as planned and the
business falters. The safety net of buying an underlying business for much less than it is worth
was the central theme of Graham's success. When chosen carefully, Graham found that a further
decline in these undervalued stocks occurred infrequently.
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While many of Graham's students succeeded using their own strategies, they all shared
main idea of the "margin of safety”.
Principle 2: Expect Volatility and Profit from It
Investing in stocks means dealing with volatility. Instead of running for the exits during
times of market stress, the smart investor greets downturns as chances to find great investments.
Graham illustrated this with the analogy of "Mr. Market," the imaginary business partner of each
and every investor. Mr. Market offers investors a daily price quote at which he would either buy
an investor out or sell his share of the business. Sometimes, he will be excited about the
prospects for the business and quote a high price. Other times, he is depressed about the
business's prospects and quotes a low price.
Because the stock market has these same emotions, the lesson here is that you shouldn't
let Mr. Market's views dictate your own emotions, or worse, lead you in your investment decisions.
Instead, you should form your own estimates of the business's value based on a sound and
rational examination of the facts. Furthermore, you should only buy when the price offered makes
sense and sell when the price becomes too high. Put another way, the market will fluctuate,
sometimes wildly, but rather than fearing volatility, use it to your advantage to get bargains in the
market or to sell out when your holdings become way overvalued.
Here are two strategies that Graham suggested to help mitigate the negative effects of market
volatility:
1. Dollar-Cost Averaging
 Dollar-cost averaging is achieved by buying equal dollar amounts of investments at
regular intervals.
 It takes advantage of dips in the price and means that an investor doesn't have to be
concerned about buying his or her entire position at the top of the market.
 Dollar-cost averaging is ideal for passive investors and alleviates them of the
responsibility of choosing when and at what price to buy their positions.
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2. Investing in Stocks and Bonds

 Graham recommended distributing one's portfolio evenly between stocks and bonds as
a way to preserve capital in market downturns while still achieving growth of capital
through bond income.
 Remember, Graham's philosophy was first and foremost, to preserve capital,
and then to try to make it grow. He suggested having 25% to 75% of your
investments in bonds and varying this based on market conditions.
 This strategy had the added advantage of keeping investors from boredom, which
leads to the temptation to participate in unprofitable trading (i.e. speculating).
Principle 3: Know What Kind of Investor You Are
Graham advised that investors know their investment selves. To illustrate this, he made
clear distinctions among various groups operating in the stock market.
Active vs. Passive
Graham referred to active and passive investors as "enterprising investors" and "defensive
investors".
You only have two real choices:
The first choice is to make a serious commitment in time and energy to become a good
investor who equates the quality and amount of hands-on research with the expected return.
If this isn't your cup of tea, then be content to get a passive (possibly lower) return, but
with much less time and work. Graham turned the academic notion of "risk = return" on its
head. For him, "work = return". The more work you put into your investments, the higher your
return should be.
If you have neither the time nor the inclination to do quality research on your investments,
then investing in an index is a good alternative. Graham said that the defensive investor could get
an average return by simply buying the 30 stocks of the Dow Jones Industrial Average in equal
amounts. Both Graham and Buffett said that getting even an average return, such as the return of
the S&P 500, is more of an accomplishment than it might seem. The fallacy that many people buy
into, according to Graham, is that if it's so easy to get an average return with little or no work
(through indexing), then just a little more work should yield a slightly higher return. The reality is
that most people who try this end up doing much worse than average.
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In modern terms, the defensive investor would be an investor in index funds of both stocks
and bonds. In essence, they own the entire market, benefiting from the areas that perform the
best without trying to predict those areas ahead of time. In doing so, an investor is virtually
guaranteed the market's return and avoids doing worse than average by just letting the stock
market's overall results dictate long-term returns. According to Graham, beating the market is
much easier said than done, and many investors still find they don't beat the market.
Speculator vs. Investor

Not all people in the stock market are investors. Graham believed that it was critical for
people to determine whether they were investors or speculators.
The difference is simple: an investor looks at a stock as part of a business and the
stockholder as the owner of the business, while the speculator views himself as playing with
expensive pieces of paper, with no intrinsic value. For the speculator, value is only determined by
what someone will pay for the asset. To paraphrase Graham, there is intelligent speculating as
well as intelligent investing; the key is to be sure you understand which you are good at.
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FUNCTIONS OF STOCK MARKET IN ECONOMY:

1. Providing a ready market
The organization of stock Market provides a ready market to speculators and investors in
industrial enterprises. It thus, enables the public to buy and sell securities already in issue.
2. Providing a quoting market prices
It makes possible the determination of supply and demand on price. The very sensitive
pricing mechanism and the constant quoting of market price allow investors to always be
aware of values. This enables the production of various indexes which indicate trends etc.
3. Providing facilities for working
It provides opportunities to Jobbers and other members to perform their activities with all
their resources in the stock Market.
4. Safeguarding activities for investors
The stock Market renders safeguarding activities for investors which enable them to make a
fair judgment of securities. Therefore directors have to disclose all material facts to their
respective shareholders. Thus innocent investors may be safeguard from the clever
brokers.
5. Operating a compensation fund
It also operates a compensation fund which is always available to investors suffering loss
due the speculating dealings in the stock Market.
6. Creating the discipline
Its members controlled under rigid set of rules designed to protect the general public and
its members. Thus this tendency creates the discipline among its members in social life
also.
7. Checking functions
New securities checked before being approved and admitted to listing. Thus stock Market
exercises rigid control over the activities of its members.
8. Adjustment of equilibrium
The investors in the stock Market promote the adjustment of equilibrium of demand and
supply of a particular stock and thus prevent the tendency of fluctuation in the prices of
shares.
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9. Maintenance of liquidity
The bank and insurance companies purchase large number of securities from the stock
Market. These securities are marketable and can be turned into cash at any time. Therefore
banks prefer to keep securities instead of cash in their reserve.
This it facilities the banking system to maintain liquidity by procuring the
marketable securities.
10. Promotion of the habit of saving
Stock Market provides a place for saving to general public. Thus it creates the habit of thrift
and investment among the public. This habit leads to investment of funds incorporate or
government securities.
The funds placed at the disposal of companies are used by them for productive purposes.
11. Refining and advancing the industry
Stock Market advances the trade, commerce and industry in the country. It provides
opportunity to capital to flow into the most productive channels. Thus the flow of capital
from unproductive field to productive field helps to refine the large scale enterprises.
12. Promotion of capital formation
It plays an important part in capital formation in the country. Its publicity regarding various
industrial securities makes even disinterested people feel interested in investment.
13. Increasing Govt. Funds
The govt. can undertake projects of national importance and social value by raising funds
through sale of its securities on stock Market.
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Features of stock Market:

1. Market for securities:
Stock Market is a market, where securities of corporate bodies, government and semi-
government bodies are bought and sold.
2. Deals in second hand securities:
It deals with shares, debentures bonds and such securities already issued by companies.
In short it deals with existing or second hand securities and hence it is called secondary
market.
3. Regulates trade in securities:
Stock Market does not buy or sell any securities on its own account. It merely provides
the necessary infrastructure and facilities for trade in securities to its members and
brokers who trade in securities. It regulates the trade activities so as to ensure free and
fair trade
4. Allows dealings only in listed securities:
In fact, stock Markets maintain an official list of securities that could be purchased and
sold on its floor. Securities which do not figure in the official list of stock Market are
called unlisted securities. Such unlisted securities cannot be traded in the stock Market.
5. Transactions effected only through members:
All the transactions in securities at the stock Market are affected only through its
authorised brokers and members. Outsiders or direct investors are not allowed to enter
in the trading circles of the stock Market. Investors have to buy or sell the securities at
the stock Market through the authorised brokers only.
6. Association of persons:
A stock Market is an association of persons or body of individuals which may be
registered or unregistered.
7. Recognition from Central Government:
Stock Market is an organised market. It requires recognition from the Central
Government.
8. Working as per rules:
Buying and selling transactions in securities at the stock Market are governed by the
rules and regulations of stock Market as well as SEBI Guidelines. No deviation from the
rules and guidelines is allowed in any case.
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9. Specific location:
Stock Market is a particular market place where authorised brokers come together daily
(i.e. on working days) on the floor of market called trading circles and conduct trading
activities. The prices of different securities traded are shown on electronic boards. After
the working hours market is closed. All the working of stock Markets is conducted and
controlled through computers and electronic system.
10. Financial Barometers:
Stock Markets are the financial barometers and development indicators of national
economy of the country. Industrial growth and stability is reflected in the index of stock
Market.
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RISK AND REWARD
Sadly, retail investors might ends up losing a lot of money when they try to invest their
own money. There are many reasons for this, but one of those comes from the inability of
individual investors to manage risk. Risk/rewards a common term in financial vernacular, but what
does it mean? Simply put, investing money into the investment markets has a high degree of risk,
and if you're going to take the risk, the amount of money you stand to gain needs to be big.
If somebody you marginally trust asks for a INR 50 loan and offers to pay you INR 60 in
two weeks, it might not be worth the risk, but what if they offered to pay you INR 100? The risk of
losing INR 50 for the chance to make INR 100 might be appealing.
That's a 2:1 risk/reward, which is a ratio where a lot professional investors start to get
interested. A 2:1 ratio allows the investor to double their money. If that person offered you INR
150, then the ratio goes to 3:1.
For example:
Assume that you did your research and found a stock you like. You notice that XYZ stock is
trading at INR 25, down from a recent high of INR 29. You believe that if you buy now, in the not-
so-distant future, XYZ will go back up to INR 29 and you can cash in. You have INR 500 to put
towards this investment, so you buy 20 shares. You did all of your research, but do you know
your risk/reward ratio? If you're like most individual investors, you probably don't.
Before we learn if our XYZ trade is a good idea from a risk perspective, what else should we
know about this risk/reward ratio? First, although a little bit of gut feeling finds its way in to most
investment decisions, risk/reward is completely an objective. It's a calculation and the numbers
don't lie. Second, each individual has their own tolerance for risk. You may love bungee jumping,
but somebody else might have a panic attack just thinking about it.
Next, risk/reward gives you no indication of probability. What if you took your INR 500 and
played the lottery? Risking INR 500 to gain millions is a much better investment than investing in
the stock market from a risk/reward perspective, but a much worse choice in terms of probability.
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The Calculation
The calculation of risk/reward is very easy. You simply divide your net profit (the reward)
by the price of your maximum risk. Using the XYZ example above, if your stock went up to INR 29
per share; you would make INR 4 for each of your 20 shares for a total of INR 80. You paid INR
500 for it, so you would divide 80 by 500 which give you 0.16. That means that your risk/reward
for this idea is 0.16:1. Most professional investors won't give the idea a second look at such a low
risk/reward ratio, so this is a terrible idea. Or is it?
Let's Get Real
Unless you're an inexperienced stock investor, you would never let that INR 500 go all the
way to zero. Your actual risk isn't the entire INR 500.
Every good investor has a stop-loss or a price on the downside that limits their risk. If you
set a INR 29 sell limit price as the upside, maybe you set INR 20 as the maximum downside. Once
your stop-loss order reaches INR 20, you sell it and look for the next opportunity. Because we
limited our downside, we can now change our numbers a bit. Your new profit stays the same at
INR 80, but your risk is now only INR 100 (INR 5 maximum loss multiplied by the 20 shares that
you own), 80/100= 0.8:1. This is still not ideal.
What if we raised our stop-loss price to INR 23, risking only INR 2 per share or INR 40 loss
in total? 80/40 is 2:1, which is acceptable. Some investors won't commit their money to any
investment that isn't at least 4:1, but 2:1 is considered the minimum by most. Of course, you
have to decide for yourself what the acceptable ratio is for you.
Notice that to achieve the risk/reward profile of 2:1; we didn't change the top number.
When you did your research and concluded that the maximum upside was INR 29 that was based
on technical analysis and fundamental research. If we were to change the top number, in order to
achieve an acceptable risk/reward, we're now relying on hope instead of good research. Every
good investor knows that relying on hope is a losing proposition. Being more conservative with
your risk is always better than being more aggressive with your reward. Risk/reward is always
calculated realistically, yet conservatively.
The Steps:
To incorporate risk/reward calculations into your research, follow these steps:
 Pick a stock using exhaustive research.
 Set the upside and downside targets based on the current price.
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 Calculate the risk/reward.

 If it is below your threshold, raise your downside target to attempt to achieve an
acceptable ratio.
 If you can't achieve an acceptable ratio, start over with a different investment idea.
Once you start incorporating risk/reward, you will quickly notice that it's difficult to find good
investment or trade ideas. The pros comb through, sometimes, hundreds of charts each day
looking for ideas that fit their risk/reward profile. Don't shy away from this. The more meticulous
you are, the better your chances of making money.
The Bottom Line
Finally, remember that in the course of holding a stock, the upside number is likely to change
as you continue analysing new information. If the risk/reward becomes unfavourable, don't be
afraid to exit the trade. Never find yourself in a situation where the risk/reward isn't in your
favour.
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TYPES OF TRADING IN INDIAN STOCK MARKET

Types of trading with explanation:
1. Intraday Trading:
 Most commonly practiced among retail traders in the Indian stock market, positions
are squared off before the closing hours of the market. Intraday trading philosophy
is that overnight exposure is risky.
 Traders book profits or losses quickly and do multiple trades every day. It suits
people who are least bothered about fundamentals or the things that are considered
important to be a successful investor in the long-run.
 To them, it’s all about money management, timing entries & exits and position sizing
appropriately. You can either be jobbing or trading the momentum. Intraday trading
involves taking on additional leverage to generate higher returns.
 They are always looking to make higher ROIs than other trading formats. It is also
among the most aggressive types of trading styles. Intraday trading format thrives
on high volatility as the numbers of opportunities go up during such times.
 A successful intraday trader understands the importance of consistency and the
power of compounding returns on a short-term basis. If consistency is maintained,
then returns can be compounded on a monthly or quarterly basis.
 Intraday trading is only suitable for those who can dedicate a fair amount of time
tracking the movements of stock markets regularly.
2. Swing Trading:
 The principal difference between intraday trading and swing trading is the
timeframe. Swing traders attempt to predict the short-term fluctuation in stock
prices overnight. So positions can last anywhere from 1 day to a few weeks.
 The leverage used by Swing traders is generally lesser than intraday trading. Due to
overnight risk, stockbrokers in India charge SPAN + Exposure margins. In a way, it
enables traders more firepower to withstand overnight price movements and hold
positions for longer hence trying to book higher profits per trade.
 Most technical traders and chartists fall in this category. If you like to analyse short-
term price movements using technical analysis, then this is your ball game.
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 True swing trading also involves a great deal of money flow analysis. If this is what
you like doing then stick to this trading style. It is rewarding and the price
movements are more predictable.
 However, risk management will need to be more sophisticated. In this style, you
must be able to ignore minor intraday fluctuations without breaking a sweat or
getting worried. However, most swing traders also do intraday trading so it is one
style which can be merged but, it is important to draw a line somewhere and focus
on specializing in one particular trading style.
 I must point out that you will require more capital to swing trade in comparison to
intraday trading because of diversification and also that overnight trades require
more margins.
 Ideally, you should also keep some buffer capital and not be 100% invested at all
times to account for the volatility and avoid margin calls of any sort. To know the
exact margins required to trade in derivatives, check out our Margin Calculators.
3. Positional Trading:
 This is a type of trading style which ignores the minor short-term fluctuations that
swing traders are fully focused on. Positional trading involves lesser leverage than
swing trading. The holding timeframe of each trade is higher as these traders
anticipate a big piece movement in the coming future.
 Timing the market is not the top priority for this category of traders as they are
willing to weather the storm and wait out a few months to see a large gain.
 Their focus is usually a hybrid of technical and fundamentals. To be able to hold
positions for a longer time period, they feel like they have to be sure of what’s
happening within the company.
 They’re usually looking for the underlying stock to gain more than 20% in the near
future. Positional traders have the aptitude and inclination to lean more towards
investing in the long run. In India, positional traders will either have to trade futures
by maintaining a safety margin or invest in equity without leverage.
 Point to note: It is hard to be short for too long unless futures contracts are rolled
over. But it does include a time premium for next month contracts.
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4. Options strategies:
 Is your thought process very objective and mathematical? If you like outcomes to
be more defined and measured, then trading options strategies may be your thing.
The most difficult part about this is to formulate the strategies.
 It takes quite some time to become proficient and start making your own strategies
and implement them seamlessly which is why there are very few options trading
specialists in India.
 After understanding the crux of the problem, we launched Options Strategies
Lab to help traders choose from over 43 different options strategies based on
individual market outlook and preferences.
 It is apt for those traders who are looking to clock a fixed and more predictable rate
of annual return. Due to the lack of knowledge and awareness, Indian retail traders
are gambling by buying far OTM options in bait to get outsized returns.
 Don’t get me wrong, it is possible and many traders have earned exorbitantly high
amounts of money doing so (1000% returns in 2 months etc.) but the real question
is, is it sustainable?
 If it is not sustainable then one ought to focus on what can work and what has a
higher probability of happening. If you use options strategically, it is very scale able
and requires much lesser attention than all other formats of trading primarily
because the risk is defined. Learn How to Trade Options the Right Way!
5. Trading based on technical analysis:

 Almost all kinds of trading activity revolve around technical analysis because of its
diversity and different approaches to analyse demand and supply in the stock
market.
 As long as you know how to apply it, you can be a day trader, swing trader or
positional trader. The underlying knowledge required is similar. However, it may not
be fully relevant in the following trading styles and the concept of analysing
opportunities is completely different.
 Almost all traders including institutional ones, banks etc. use technical analysis skills
to gauge market and to foretell the future prospective of the Indian stock market.
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6. Trading based on money flows:

 It is based on FII Inflows, DII flows in and out of stocks, Open Interest analysis,
promoter deals, stake sales, gross delivery data, Index rebalancing etc. More often,
than not, this data is vital to identify the near term trends in the stock market.
 Many professional traders give such information first priority and then back it up by
technical analysis of stocks and indices. If you are the kind who likes analysing
money flows, then this type of trading can be rewarding.
 Such information is especially useful if you are a swing trader. This information is
also useful to analyse the short term sentiment of participants.
 For instance, advance decline ratios fluctuating before RBI meeting is enough to
suggest that this method is very useful in gauging the near term future.
7. Event Based Trading:

 Trading based on some events that have occurred or ones that are about to occur is
a type of trading style in itself.
 Events can range from good earnings results of companies, change in government
policies, geopolitical events, mergers & acquisitions, company restructuring, change
in price of raw materials, one time dividends, natural calamities, new innovations
etc. The concept in this kind of trading is to identify trading opportunities based on
events.
 It does require a fair understanding on fundamentals and technical analysis. You
might wonder how technical analysis is relevant, but I must remind you that stock
markets anticipate events before they occur.
 So suppose an event is already priced in, it’s best to change your stance. Technical
analysis helps identify this quite easily. If you like doing research and wait for such
game changing opportunities, then you should make it worth it.
8. Quantitative trading:
 It is often misunderstood as high frequency trading and automated algorithmic
trading but in reality it isn’t. Quantitative analysis is analysing stocks based on
statistical performance.
 For instance, if International Energy Agency (IEA) forecasts that the price of Brent
Crude Oil will be headed downwards due to the supply glut expected in Saudi Arabia.
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 The quant program analyses historical patterns when such news has occurred and
the impact it has had on oil prices and other correlated asset classes and presents it
with a risk/reward ratio based probability so that you can take a good trading
decisions.
 Quantitative trading does not necessarily need to be HFT or even algorithmic order
execution. It just means that the method of analysing stocks is based on computer
models to increase efficiency. It definitely requires knowledge of programming, a
good trading capital and computing speed.
 Most Importantly, the right knowledge of markets to be able to analyse data
correctly. No amount of programming will give you the desired results if you lose
focus of the markets. It is better to learn about markets thoroughly before you
attempt this.
9. Arbitrage Trading:
 Arbitrage is only reserved for the prop trading firms and institutional traders as it
requires great network speed and does not require superior analysis skills.
 The yields for vanilla arbitrage are not lucrative anymore and strategies have gotten
more advanced involving some element of risk.
 There are many different kinds of risk arbitrage models which can only be exercised
by institutions or large traders due to the sheer complexity of information
acquisition, and risk management skills.
 Only enter the field if you’re obsessed with no risk profits. Otherwise, you might get
bored soon.
10. High-Frequency Trading:
 High-frequency trading is all about SPEED. The strategies have all got to do with
manipulating bids and offers (Bid/ask) at a rapid pace. This breed is looking to make
the smallest profits per trade and do hundreds or thousands of transactions in a day.
Currently, institutions and hedge funds compete in this space in the microseconds.
As we speak, it has got less to do with brains and more to do with speed so it is not
recommended at all. If this is what you want to do, then try starting your own fund
or joining one as a programmer. These are fully automated so there is no value for
analysis. Only order execution.
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DEMAT ACCOUNT
Definition:
In India, shares and securities are held electronically in a dematerialized (or Demat)
account, instead of the investor taking physical possession of certificates. A Demat
account is opened by the investor while registering with an investment broker (or sub-
broker).
Working principle:
Demat account in simple terms is like a savings account, Demat Account share get
electronically saved, in saving account money gets electronically saved. In India, shares
and securities are held electronically in a dematerialized or Demat account, instead of the
investor taking physical possession of certificates.
Use of Demat account:

A demat or 'dematerialised' account holds shares in electronic form, thus saving you
the bother of holding shares in paper form. A depository is similar to a bank. It holds
shares, which belong to investors, in electronic form. The investor has to open
an account with the depository, through a Depository Participant.
A trading account is used to place buy or sell orders in the stock market. The demat
account is used as a bank where shares bought are deposited in, and where shares sold
are taken from. Trading account with Kotak Securities helps you trade seamlessly in the
stock market.
Opening of account:
Opening a demat account.
Step 1: To open a demat account; you have to approach a depository participant
(DP), an agent of depository, and fill up an account opening form.
Step 2: Along with the account opening form, you must enclose photocopies of some
documents for proof of identity and proof of address.
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Benefits of Demat account:

 Safe and convenient way of holding securities.
 Easy and instant transfer of securities.
 If the securities are held in Demat account, No stamp duty is charged on transfer of
securities.
 Risk of losing physical stock Certificates, thefts and bad delivery of Shares is
eliminated.
 Less paperwork required in transactions.
 Single shares can be bought or sold through a demat account.
 Address change once recorded with DP gets registered with all companies, the stocks of
which are held by investor. 8. Dividend and credits are automatically released.
Benefit to the Company:
The depository system helps in reducing the cost of new issues due to lower printing
and distribution costs. It increases the efficiency of the registrars and transfer agents and
the Secretarial Department of the company. It provides better facilities for communication
and timely services with shareholders, investors, etc.
Benefit to the Investors:
The depository system reduces risks involved in holding physical certificates, e.g.,
loss, theft, mutilation, forgery, etc. It ensures transfer settlements and reduces delay in
registration of shares. It ensures faster communication to investors. It helps avoid bad
delivery problems due to signature differences, etc. It ensures faster payment on sale of
shares. No stamp duty is paid on transfer of shares. It provides more acceptability and
liquidity of securities.
Benefits to Brokers:
It reduces risks of delayed settlement. It ensures greater profit due to increase in
volume of trading. It eliminates chances of forgery, bad delivery. It increases efficiency of
trading, profitability and confidence in investors.
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Disadvantages of the Demat System:

The disadvantages of dematerialization of securities can be summarized as follows:
 Trading in securities may become uncontrolled in case of dematerialized securities.
 It is compulsory for the capital market regulator to keep a close watch on the trading in
dematerialized securities and to check that trading does not act as a detriment to
investors.
 The role of key market players in case of dematerialized securities, such as stock-
brokers, needs to be supervised as they have the capability of manipulating the market.
 Multiple regulatory frameworks have to be followed, including the Depositories Act,
Regulations and the various By-Laws of various depositories.
 Additionally, agreements are entered at various levels in the process of
dematerialization. Investors may find the process complicated.
Procedure for trading @ Demat account:
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SEBI (SECURITIES AND THE EXCHANGE BOARD OF INDIA)
The SEBI, that is, the Securities and the Exchange Board of India, is the national regulatory
body for the securities market, set up under the securities and Exchange Board of India act, 1992,
to “protect the interest of investors in securities and to promote the development of, and to
regulate the securities market and for matters connected therewith and incidental too.”
SEBI has its head office in Mumbai and it has now set up regional offices in the
metropolitan cities of Kolkata, Delhi, and Chennai. The Board of SEBI comprises a Chairman, two
members from the central government representing the ministries of finance and law, one
member from the Reserve Bank of India and two other members appointed by the central
government.
As per the SEBI act, 1992, the power and functions of the Board encompass the regulation
of Stock Exchanges and other securities markets; registration and regulation of the working stock
brokers, sub-brokers, bankers to an issue (a public offer of capital), trustees of trust deeds,
registrars to an issues, merchant bankers, under writers, portfolio managers, investment advisors
and such other intermediaries who may be associated with the stock market in any way;
registration and regulations of mutual funds; promotion and regulation of self- regulatory
organizations; prohibiting Fraudulent and unfair trade practices and insider trading in securities
markets; regulating substantial acquisition of shares and takeover of companies; calling for
information from, undertaking inspection, conducting inquiries and audits of stock exchanges,
intermediaries and self- regulatory organizations of the securities market; performing such
functions and exercising such powers as contained in the provisions of the Capital Issues (Control)
Act,1947 and the Securities Contracts (Regulation) Act, 1956, levying various fees and other
charges, conducting necessary research for above purposes and performing such other functions
as may be prescribes from time to time.
SEBI as the watchdog of the industry has an important and crucial role in the market in
ensuring that the market participants perform their duties in accordance with the regulatory
norms. The Stock Exchange as a responsible Self-Regulatory Organization (SRO) function to
regulate the market and its prices as per the prevalent regulations. SEBI and the Exchange play
complimentary roles to enhance the investor protection and the overall quality of the market.
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PERFORMANCE OF BSE & NSE IN AUGUST 2017

BSE Performance:
A/D
Sector Market-Cap % Chg Advance Decline
Ratio
Automotive 10,92,400 -0.78% 0.5 36 72
Banking & Financial Services 28,41,606 -1.18% 0.48 98 204
Cement & Construction 4,53,948 -0.86% 0.41 35 85
Chemicals 5,16,016 -0.48% 0.52 67 129
Conglomerates 1,22,023 -1.49% 0.6 6 10
Consumer Durables 53,045 -1.00% 0.33 4 12
Consumer Non-durables 5,69,926 -0.97% 0.52 15 29
Engineering & Capital Goods 6,82,985 -0.94% 0.45 62 137
Food & Beverages 3,26,199 -1.18% 0.46 39 84
Information Technology 11,73,839 -0.66% 0.43 44 102
Manufacturing 3,64,622 -1.36% 0.51 142 276
Media & Entertainment 1,47,994 -0.91% 0.43 16 37
Metals & Mining 7,31,975 -1.01% 0.52 44 85
Miscellaneous 2,95,003 -0.95% 0.59 89 150
Oil & Gas 12,94,754 -1.49% 0.14 3 21
Pharmaceuticals 6,78,836 -1.26% 0.34 34 99
Retail & Real Estate 2,68,216 -0.93% 0.22 13 60
Services 2,96,789 -0.83% 0.67 54 81
Telecommunication 3,47,286 -1.78% 0.22 7 32
Tobacco 3,50,902 -0.69% 0.5 2 4
Utilities 4,18,088 -1.35% 0.59 10 17
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NSE Performance:
A/D
Sector Market-Cap % Chg Advance Decline
Ratio
Automotive 10,84,484 -0.82% 0.37 22 60
Banking & Financial Services 28,19,198 -1.18% 0.32 42 133
Cement & Construction 4,49,082 -1.05% 0.39 26 67
Chemicals 5,00,031 -0.49% 0.48 34 71
Conglomerates 1,22,195 -1.57% 0.27 3 11
Consumer Durables 51,171 -1.17% 0.38 3 8
Consumer Non-durables 5,68,838 -0.98% 0.27 6 22
Engineering & Capital Goods 6,68,636 -0.88% 0.37 34 93
Food & Beverages 3,16,346 -0.98% 0.43 23 54
Information Technology 11,68,764 -0.76% 0.36 26 72
Manufacturing 3,26,897 -1.33% 0.37 53 144
Media & Entertainment 1,46,049 -0.76% 0.35 11 31
Metals & Mining 7,25,784 -1.01% 0.36 22 61
Miscellaneous 2,83,687 -1.00% 0.55 47 85
Oil & Gas 12,93,948 -1.55% 0.16 3 19
Pharmaceuticals 6,71,279 -1.27% 0.16 11 70
Retail & Real Estate 2,65,612 -0.91% 0.18 8 45
Services 2,77,249 -0.99% 0.43 23 54
Telecommunication 3,46,439 -1.69% 0.12 3 25
Tobacco 3,50,790 -0.78% 0.33 1 3
Utilities 4,20,749 -1.48% 0.35 6 17
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FEW RECORDS OF EARNING BY STOCKS IN INDIA

a. A company, named as Symphony that soared 90,677 per cent to Rs 1,180 on December 5,
from the price of a chocolate toffee at Rs 1.30 that the stock quoted on December 29,
2006. So an investment of Rs 10,000 in the stock in December 2006 would have become
Rs 90.77 Lac today; a 3-BHK flat at the price of a toffee.
Net profit of the company has grown at a CAGR of over 50 per cent over the past 10
years. The company's bottom-line has grown from Rs 2.20 Cr. in 2006-2007 to Rs 123 Cr.
in 2015-16.
b. Ajanta Pharma is another stock in the list, which has jumped 19,057 per cent in last 10
years. Adjusted share price of the company increased from Rs 9.85 in December 2006 to
Rs 1,886.95 this December. For the financial year ended March 31, 2016, the company
reported a net profit of Rs 410.90 Cr. against Rs 309.86 Cr., Rs 233.88 Cr., Rs 112.11 Cr.
and Rs 77.26 Cr. reported for FY15, FY14, FY13 and FY12, respectively.
c. Among other top wealth creators on BSE, the share prices of DFM Foods BSE 0.28 %,
Caplin Point BSE -0.69 % Labs and Vinati Organics have risen 14,997 per cent, 14,076 per
cent and 13,073 per cent, respectively, in last 10 years.
d. Among others, Relaxo Footwear, Mayur Uniquoters, Tasty Bite, La Opala RG, Manappuram
Finance, Capital Trust and Eicher Motors have soared between 6,000 per cent and 10,000
per cent during this period.
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SUCCESSES & FAILURE STORIES OF STOCK MARKET

Success stories of professional/semi-professional investors (written by individual investor) are as
follows;
1. Rakesh Jhunjhunwala
 Rakesh Jhunjhunwala, also known as, “India’s Warren Buffet” and “The Big Bull’, is one
of the most renowned and successful stock market investors in India.
 The son of an income tax officer, Rakesh joined the stock market after completing his
degree in chartered accountant. Starting with the initial investment of only Rs 5,000,
currently he is sitting on a huge net worth of around Rs 15,000 crores.
 Jhunjhunwala today manages the privately owned asset management firm “RARE
Enterprises”. The name RARE is derived from the initials of his name and his wife’s
name. That is- ‘Ra’ from his name (Rakesh) and ‘Re’ from his wife’s name (Rekha). He
is also the chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt.
Ltd.
 From the very start, Rakesh Junjhunwala’s ‘risk and reward’ taking ability along with
impressive imagination & wisdom earned him great profits.
 His first ever large income was from selling 5000 shares of Tata Tea which he had
previously bought for Rs. 43 per share and selling them at Rs. 143. His later career was
marked by his buying of six crore shares of Titan in 2003 at an average price of around
Rs 3. The stock is still in his portfolio and currently trading at Rs 530.
 Rakesh jhunjhunwala follows the idealogy of Warren buffet and believes in long term
investment. He strongly advocates the growth of India and it’s rising economy. Mr.
Jhunjhunwala is also confident in learning from mistakes. He often says- ‘Mistakes are
your learning friends. The idea is to keep these mistakes small.’
Note: According to forbes 2016, Rakesh jhunjhunwala is India’s 53rd richest person.
Net worth : 2.4 Billion USD
Born : 5 July, 1960 (Age 57), Mumbai India
Education : Chartered Accountant
College : University of Mumbai, The Institute of Chartered Accountants of India
(ICAI)
Occupation : Owner of rare enterprises, investor, Film Producer & trader
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2. Radkhakishan Damani
 Radkhakishan Damani, also known as ‘Mr white and white’, because of his simple
dressing- white shirt and white trousers, is an investor and owner of D-mart. He is
also the mentor of billionaire investor Rakesh Jhunjhunwala. RK Damani is known for
his low profile and he rarely makes appearance in public events or press conferences.
 On 21st March, 2017 i.e. the listing day of Avenue supermart (parent company of D-
markt), the stock price rose more than double, from the offer price of Rs 299 and
ended up 116% upwards to Rs 648. In the IPO of Avenue Superpart, RK Damani made
around Rs 6100 crores in just two days.
 RK Damani owns 52% stake in Avenue Supermarts, and Bright Star Investments – his
investment company, holds another 16% stake.
 RK’s journey in Indian stock market is truly inspiring. He was not always involved in
stock market. He started his career as a trader in ball bearing, with no intentions to
enter the stock market. However, his future has something else reserved for him.
 At an age of 32, post his father’s death, RK was forced to close down his ball bearing
business and had to join his brother in the stock broking business, which was inherited
from their father.
 RK Damani had no idea of what to do in the stock market then. His knowledge to stock
market was very limited and can be considered next to zero when he entered. He made
few mistakes initially by speculating the stock prices. However, he soon understood
that the market is a heaven for those who wants to make great fortune in life.
 As he was invloved in stock broking, he also understood that he can’t make lots of
money just by watching other people invest. Finally, he started investing for the long
term. Gradually, his judgement began getting right, and within the next couple of years
he was standing as one of the most successful investors in the market.
 RK Damani’s strategy is quite simple- Invest for long term, like 5 to 10 years. RK
always sees the future prospects of the company before investing and invests only if
the product has a potential far ahead in the future.
Net worth : 7.1 Billion USD
Age : 59
Occupation : Investor, Stockbroker, Trader and the Founder & Promoter of Dmart
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3. Ramesh Damani
 Ramesh Damani, the investment guru and one of the most successful stock market
investors in India, started his journey to riches in 1990’s, when sensex was 600
points. He holds a bachelor’s degree in commerce from HR College, Mumbai and a
master’s degree in Business Administration from California State University.
 Ramesh Damani works at privately owned Ramesh s Damani Finance Pvt Ltd.
 The son of a successful stock investor, Ramesh Damani became a member of the
Bombay Stock Exchange (BSE) in 1989. Initially, Ramesh planned his carrear as a stock
broker. However, later he started enjoying picking winning stocks and switched to
become a long term investor.
 Ramesh Damani’s first famous investment was ‘Infosys’. Coming from a techie
background in US, he knew that Infosys has great future potentials. So, when infosys
became public in 1993, he invested Rs 10 lakhs in it. By 1999, this investment has
given him more than 100 times return.
 The investment philosophy of Ramesh Damani is easy and simple to understand. He is
a long term investor and suggests not investing for short term gain. Further, he advises
everyone to make an exit strategy clear before making investment in any stock. He
further adds that the economy of a market is hard to predict; however if you have
researched the stock carefully, and had made a good strategy, then you can can easily
make fortunes in stock market.
Net worth : 800 Crores (1.24 Billion USD)
Age :61
Education : HR College, Mumbai (Bachelor’s degree in Commerce)
California State University (Master’s Degree in Business Administration)
Occupation :Founder at Ramesh s Damani Finance Pvt Ltd
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4. Sujata Burla
 Her life took an ugly turn on June 9, 2001. On a pilgrimage to Shirdi, where the Sai
Baba temple in Maharashtra is located, from Hyderabad, she met with an accident.
 Four months later, the doctors and physiotherapists treating her told her she could not
walk for the rest of her life. The accident had turned her into a paraplegic. It meant
Sujata was immobile below the shoulders. She was just 21.
 Soon people who she thought were her friends abandoned her and Sujata was left
alone. Compounding her tragedy was her father’s death in March 2004. Not one to be
easily cowed down by her circumstances, she started learning about the stock markets
that year.
 Now she trades like a pro and earns anywhere between Rs 200,000 and Rs 250,000
every month. On a day like Wednesday, September 19, 2007, when the Nifty was up
186 points, Sujata made a cool Rs 600,000 in a single day. She has still not sold her
position.
 “I expect the Nifty to touch 4800 in the next two, three trading days. I will sell my
position then,” Sujata told this correspondent in a telephone conversation from her
home in Hyderabad.
 Sujata moves around in a wheelchair and does not regret this fact. Financial
independence is what she strove for and that is exactly what she has got through sheer
determination and discipline.
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Failure stories of professional/semi-professional investors (written by individual investor) are as

follows;
1. Anish Pillai
 I am software professional with dreams and ambitions to make it big in whatever I do,
be it my job or any other activities that I undertake.
 I am a semi-active player in the stock market, too; my major area of activity was
margin calls (for those who don't know it means to invest some money with the broker
or and trade for an amount which is n times the deposited amount) and delivery.
 For instance, if I pay Rs 10,000 as margin to my broker, he allows me to trade for an
amount, say four times the money I have deposited, that is Rs 40,000.
 I never used to encash the profits in margin calls, but would retain the profit in terms of
stocks (bought 500 shares of company X @ Rs 100 = Rs 50,000; on the square off day
if the rate is say 125, I would sell of only 400 shares so as to pay up the broker and
would happily keep the remaining 100 shares as profit).
 I did well on my job initially; I started with a capital of Rs 30,000 and after couple of
months I added Rs 20,000 to that; that was the last time I transferred amount to my
broker.
 One of my wise decisions was to buy RNRL at Rs 40 keeping it for long; when it was at
Rs 159 I bought another set of 200 shares.
 RNRL went up to Rs 245 in the regular market and was happy to see my investment
tripled in just 8 months. I was simply amazed by the performance of RNRL and the
profits I made from it.
 In the mean time I used to trade in other shares like Ispat, NTPC, PFC, IDBI, DCW,
Supreme Petroleum etc.
 Some companies gave me good returns and some gave me huge blows. The bottom
line: end of the season after trading for a value of almost Rs 17,00,000 and paying a
brokerage of almost Rs 14,000-17,000 I made profits of only Rs 10,000.
 In the second week of January I had a considerably big capital loss.
 I believed in my friend's tip for investing in shares of a bank. I bought the shares when
it was in the Rs 175-185 range and the tip was it will hit a price target of Rs 230-240 in
a period of 30 days.
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 I never traded in bank stocks, but somehow my homework indicated that all the banks
were doing well for quite some time then. So I invested in it. With In a week's time the
share prices dropped by Rs 12-14 and my kitty were shrunk by another Rs 15,000.
 To, mitigate this loss; I relied upon my most trusted stock (I still trust it and believe
that it will do well). I bought another 2,000 shares of RNRL at Rs 215 on last trading
day of second week of January with the hope that a rise of Rs 10- 15 per share will help
me cover my short-term losses. I had just 25 per cent of that amount in my broker's
account so I owed him about Rs 4.3 lakhs.
 For a couple of days it was doing good but when the international market fall started I
was helpless; just followed the wait and watch principle. On one single day (January 21
to be precise) I saw the profits that I had earned in the last six months evaporating
quickly; the next day it was the turn of my capital and by noon that day my capital was
fully gone. Now, I was in debit balance of about Rs 20,000.
 On January 22, the scariest day of my trading experience, I was hoping that the market
will recover and I will at least get my capital back.
 In the very first minutes of trading, the stock price of RNRL had fallen by other Rs 30-
35. Oh my good, I lost one lakh rupees in a minute. Gone in sixty seconds! I was in
tears. I could not console myself.
 After discussing the matter with my friends and parents I finally decided that taking the
delivery of those stocks and retaining them for 3-6 months was the best option. I may
be able to cover the losses, I thought if the markets recover in another couple of
months.
10 stocks to make young investors crorepatis
 I had to count on my trusted friends and well-wishers, who helped arrange the funds in
a notice of just four hours. Thanks guys, I owe you all big time!
 Having said all that, I want to say something to traders like me, who can neither time
the market nor have trusted contacts in the market to guide them.
 Always keep your portfolio diversified in terms of sectors/companies
 Don't let any stock to make up more than 15-20 percent of your portfolio
 Don't get into margin trading, if you cannot predict the market behaviour. It's a
very lucrative opportunity. But it is a very dangerous game. No one can predict
when it will rip you off your holdings.
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 The funds you invest in markets should be a part of the residual amount of your
income after you meet all your expenses. So that you can hold on patiently at
times like this when the market conditions are not good.
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2. Chirag Gupta
 Imagine investing about Rs 11,250 in the stock market and getting a return of Rs 6.08
lakh in a span of five minutes.
 But when the broker sends you the contract note, the securities transaction tax (STT)
for the trade is over Rs 24 lakh -- almost four times the profit -- and it's not a printing
mistake.
 It happened with 27-year-old management student Chirag Gupta.
 When about five minutes were left for the markets to close, Gupta saw that he could
buy Nifty call options at 5 paise per unit and make a profit of around Rs 2.75 a unit.
 He bought options that Nifty will close above 8,600 and it closed at 8,602.75.
 Gupta bought all the Nifty lots (3,000) he could in the short span of time.
 One Nifty lot has 75 units.
 Later, he realised that his broker had deducted over Rs 24 lakh from his trading
account for STT.
 Gupta's mistake: He let the option expire.
 The calculation of STT is different if a trader squares off the position before expiry and
if he lets the contract expire.
Page 61 of 62
BIBLIOGRAPHY:
 First steps to investing A Beginner’s Guide publish by Government of India Ministry of
Corporate Affairs (Under the aegis of Investor Education and Protection Fund)
 The Intelligent Investor by Benjamin Graham
 Security Analysis (Sixth Edition) by Seth A. Klarman, James Grant, Bruse Greenwald &
others.
 Common stocks & Uncommon Profits by Philips A. Fisher
 Various Investopedia websites
 Economic Times of “Times of India” (online webpages).
 Journals, Government reports, Reports collected by institutions, Newspapers,
Reference books, Magazines, etc.
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VEDANTA COLLEGE OF

MANAGEMENT & INFORMATION

TAGLINE OF THE PROJECT

I admit that co-operation and morality are keywords to success.

NAME : MR. OMKAR ADSUL (Student of college, roll no. : 01)

Sr. No. Description Page no.

Definition of stock Market:

General Purpose of stock Market:

HISTORY OF STOCK MARKETS IN INDIA:

leadership position in the country today.

BSE has the largest number of scripts which are listed.

Bombay Stock Exchange Profile:

Appointment history of the key staff

 Appointed Shri Dhirendra Swarup, Public Interest Director as the Chairman

Disclosure & Listing Norms

Companies registered in BSE

Companies registered at NSE:

Company Name ISIN Code Company Name ISIN Code

AUTOMOBILE MEDIA & ENTERTAINMENT

Amara Raja Batteries Ltd. INE885A01032 D.B.Corp Ltd. INE950I01011

Apollo Tyres Ltd. INE438A01022 Den Networks Ltd. INE947J01015

Ashok Leyland Ltd. INE208A01029 Dish TV India Ltd. INE836F01026

Bajaj Auto Ltd. INE917I01010 Eros Intl Media Ltd. INE416L01017

Bharat Forge Ltd. INE465A01025 HT Media Ltd. INE501G01024

Bosch Ltd. INE323A01026 Hathway Cable & Datacom Ltd. INE982F01036

Eicher Motors Ltd. INE066A01013 Inox Leisure Ltd. INE312H01016

Exide Industries Ltd. INE302A01020 Jagran Prakashan Ltd. INE199G01027

Hero MotoCorp Ltd. INE158A01026 Navneet Education Ltd. INE060A01024

Maruti Suzuki India Ltd. INE585B01010 Sun TV Network Ltd. INE424H01027

Motherson Sumi Systems Ltd. INE775A01035 TV Today Network Ltd. INE038F01029

TVS Motor Company Ltd. INE494B01023 TV18 Broadcast Ltd. INE886H01027

Tata Motors Ltd. INE155A01022

Company Name ISIN Code Company Name ISIN Code

CONSUMER GOODS METALS

Colgate Palmolive (India) Ltd. INE259A01022 Coal India Ltd. INE522F01014

Dabur India Ltd. INE016A01026 Hindalco Industries Ltd. INE038A01020

Emami Ltd. INE548C01032 Hindustan Zinc Ltd. INE267A01025

Godrej Industries Ltd. INE233A01035 MOIL Ltd. INE490G01020

Hindustan Unilever Ltd. INE030A01027 NMDC Ltd. INE584A01023

I T C Ltd. INE154A01025 National Aluminium Co. Ltd. INE139A01034

Jubilant Foodworks Ltd. INE797F01012 Orissa Min Dev Co Ltd. INE725E01024

Marico Ltd. INE196A01026 Ratnamani Metals & Tubes Ltd. INE703B01027

United Breweries Ltd. INE686F01025 Vedanta Ltd. INE205A01025

United Spirits Ltd. INE854D01016 Welspun Corp Ltd. INE191B01025

Aurobindo Pharma Ltd. INE406A01037 HCL Technologies Ltd. INE860A01027

Cadila Healthcare Ltd. INE010B01027 Infosys Ltd. INE009A01021

Cipla Ltd. INE059A01026 Justdial Ltd. INE599M01018

Divi's Laboratories Ltd. INE361B01024 KPIT Technologies Ltd. INE836A01035

Dr. Reddy's Laboratories Ltd. INE089A01023 MindTree Ltd. INE018I01017

Lupin Ltd. INE326A01037 Tata Elxsi Ltd. INE670A01012

Piramal Enterprises Ltd. INE140A01024 Tech Mahindra Ltd. INE669C01036

Sun Pharmaceutical Industries Ltd. INE044A01036 Wipro Ltd. INE075A01022

Company Name ISIN Code Company Name ISIN Code

FINANCIAL SERVICES FINANCIAL SERVICES

Allahabad Bank INE428A01015 Axis Bank Ltd. INE238A01034

Andhra Bank INE434A01013 Bank of Baroda INE028A01039

Bank of Baroda INE028A01039 Canara Bank INE476A01014

Bank of India INE084A01016 Federal Bank Ltd. INE171A01029

Canara Bank INE476A01014 HDFC Bank Ltd. INE040A01026

IDBI Bank Ltd. INE008A01015 ICICI Bank Ltd. INE090A01021

Oriental Bank of Commerce INE141A01014 IDFC Bank Ltd. INE092T01019

Punjab National Bank INE160A01022 IndusInd Bank Ltd. INE095A01012

State Bank of India INE062A01020 Kotak Mahindra Bank Ltd. INE237A01028

Syndicate Bank INE667A01018 Punjab National Bank INE160A01022