BENEFITS OF ONLINE BROKING

1) Less Costly: The most significant advantage of the online broking is the cost reduction in the brokerage. Due to the power of the Internet one has the privilege of becoming the clients of really large brokerages with the benefits of enjoying the low charges hithelio before enjoyed only by the big players. As the DP account has got linked to the trading account most players do not charge a minimum transaction cost thus truly allowing one to buy a single share and achieve meaningful rupee price averaging whatever be your buying power.

2) Peace of Mind: One can never have complete peace of mind but online investing does away with the hassles of filling up instruction slips, visits to the broker for handing over these slips and consequent costs.

3) Keeping Records: The site one trades on keeps a record of all transactions down to unexecuted orders and cancelled orders thus keeping one abreast of all your transactions 24 hours a day. No paperwork means more time at ones disposal for research and analysis.

4) Access to Information and investment Tools: Most online investing sites have a wealth of information for their registered members. This includes research reports, results, analysis and even gossip and the buzz in the market. 5.) Unparalleled Liquidity: The bank account linked with the trading account invariably has an A TM free. Most partner banks offer Internet banking as well. This results in ones money becoming available to him whenever he like from his trading account. Conversely in case he spot an opportunity in the market he can immediately allocate money from his Savings account to his trading account and make profits. 6.) Unparalleled Safety: Most sites are secure using 128-bit algorithms highest available commercially anywhere in the world. Moreover even if somebody broke in and tampered with ones account the money from the stocks he sold or the stock bought from the money in his account is in his account only.

7.) Reduces the settlement risk: This method of trading reduces the
settlement risk for the investor, as in this case no Short sale is possible i.e. the seller will not be able to sell the securities unless he has their actual possession. In the case of a demat account (required for an online transaction), when a seller wants to sell the securities, his demat account is checked by the Depository Participant before executing the sale transaction. This reduces the settlement risk for the buyer, who is assured of the delivery of the securities.

8.) Offers greater transparency: Online trading gives greater transparency to the investors by providing them an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and finally ending with a credit to the depository account of the investor. All these stages are subject to inspection, thus bringing in transparency into the system.

9.) Ease of trade: It is the ease of doing the trade through net, with a click of mouse, one can buy or sell any share that is dematerialized. Other than the abovementioned advantages, Internet trading provides some additional advantages to the investors, brokers and also helps the nation to channelize the resources. Net trading would increase competition in the market hence increase in the bargaining power of the investors. The entire communication between the investor, broker and exchange would take place within milliseconds

PROBLEMS OF ONLINE BROKING

So, the main problems of online trading are as follows: 1.) "Server not found": This may appear on ones screens when he is desperately trying to get out of an unprofitable position. Some of the online sites are providing a telephone number for use in case their sites are overloaded or their server down. 2.) Connectivity of the Broker with NSE: Recently ICICI Direct had a connectivity problem with the NSE for two and half-hours during trading hours. This problem is rare but be alive to its possibility. 3.) Cyber attack: In the event of a malicious attack on the systems of ones broker he is protected only if the company is taking proper precautions against such attacks and if proper backup is regularly been taken. He may like to choose a brokerage that has a stated security policy and contingency plan in place. 4.) Non-availability of a seamless interface: As a client one will access the NSE through a server of the online brokerage and this may involve queuing delays. If a number of client access the server the server takes its own time sending the orders to the NSE server. He must check out the seamlessness of this interface before selecting an online brokerage. The faster the orders are processed the more seamless is the interface.

5.) Non- availability of personalized advice: If one likes to ask his broker "Aaj kya achcha lag raha hai" he may not be able to do so. If he wants advice on a particular stock in his portfolio he may not even be able to get that. 6.) Margin: If Internet trading alone is not fast and furious enough; many people are trading on margin. That is where the brokerage firm lends you money by leveraging his account, allowing him to buy a large amount of securities by putting up only a small amount of money. He may have forgotten what he read in the small print of his agreement, but the brokerage firm has the right to change the maintenance margin requirements without any warning or notice to him. In fact, the firm has the right to liquidate his securities holdings (and it can pick and choose which ones) without any notice to one if he fails to meet the margin call. And there he was leveraged to the hilt, hoping to hit a home run when he discovered that he is required to make a large deposit that he cannot make. The next thing one knows, the firm is selling off his securities at a point in time that is not the best for him. These are the perils of trading on margin. 7.) Little use of advisory services: The advisory services being promised by the brokers would be of little use to investors looking for an insight into the market. Many would not like to rely on research reports, which are there for all. So, net investors will have to do their own research and take their own decision, whether wild or wise. 8.) Increased charges: Some of the brokers are of the view that they would have to provide advisory services to the customers. But with increased volumes, they will have to follow the international practice of charging a little more than the normal charges from a customer looking for personal advice. PROCESS OF ONLINE TRADING An investor interesting in trading through Internet shall have to; firstly register himself with an Internet brokerage firm. Some formalities such as filling the account opening form of the e-broker, copies of identity proof, copy of residence proof are made to register him with the e-trader. Secondly, the investor would be required to open a bank account with a scheduled bank and sufficient balance should be kept in the account. Thirdly he would be required to open account with a depository participant because only dematerialized shares can be traded on Internet.

The client places an order via the net by logging on to his brokers site.

The broker accepts and executes the order and places it with the exchange.

The exchange accepts the order after checking the share limit for the day.

The broker makes the payment either directly via the clients bank account or pays through its own account and recovers it later from the client.

The exchange receives money and completes the settlement

The client is intimated about the settlement either through demat or via e-mail.

So, generally following steps are followed while doing the trading through the Internet: Step-1: Those investors interested in doing the trading over Internet system, that is, NEAT-ISX (NSE), should approach the brokers and register with the Stock Broker. Step-2: After registration, the broker will provide to them a login name, password and a personal identification number (PIN). Step-3: Actual placement of an order. Using the place order window as under can then place an order: (a) First by entering the symbol and series of stock and other parameters such as quantity and price of the scrip on the place order window. (b) Second, fill in the symbol, series and the default quantity. Step-4: It is the process of review. Thus, the investor has to review the order placed by clicking the review option. He may also re-set to clear the values. Step-5: After the review has been satisfactory; the order has to be sent by clicking on the send option. Step-6: The investor will receive an ``Order Confirmation'' message along with the order number and the value of the order. Step-7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a time lag of about ten seconds is there in executing the trade. Step-8:It is regarding charging payment, for which there are different modes. Some brokers will take some advance payment from the investors and will fix their trading limits. When the trade is executed, the broker will ask the investor for transfer of funds by the investor to his account.

TRADE & SETTLEMENT PROCESS

INTERNET SITE

BROKERS

BANK
SITE

DEPOSITORY

STOCK EXCHANGE

NET TRADING IN INDIA

In 2000, when the Securities and Exchange Board of India announced its regulations for Internet trading, net trading has become a reality. Kerala-based Geojit Securities has taken the lead, starting off the process in Bombay. The software was developed by NSE.IT, the infotech firm floated by the NSE. The first net transaction was a trade for 100 shares of Reliance executed by D R Mehta, chairman, SEBI, for A P Kurian, chairman, Geojit Securities. This is a step forward in bringing the capital markets closer to the investor. Compared to the Western countries, online trading is still in its infancy in India. Today, web trading has a share of over 40 per cent in United States, as high as 60 per cent in South Korea and 20 per cent in Britain. Now in India share of the online trading (nse) has increased to near about 13 per cent as compared to 10 per cent (approx.) in December 2004. In February 2005, daily turnover of net trading is near about 800 crore. According to a NSE official,There are the days when the daily turnover has even crossed the Rs. 1,000 crore mark. In India, some major E-trader like icicidirect, 5paisa, RELIGARE, hdfcsec, sharekhan, kotakstreet, geojitonline and karvy have been giving tough competition to traditional stock brokers by offering an easier, transparent and cost effective trading platform. Of late, some of the e-traders have been diversified into commodity trading in a bid to offer one-stop shop facilities to retail investors. Stock market analysts pointed out that the e-trading platform has a bright future going ahead. In India, e-traders have been charging a minimum one time nonrefundable deposit of Rs. 250 to Rs. 750, while the brokerage cost ranges from 0.20% to 0.85% for delivery based transactions and 0.035% to 0.10% for intra-day transactions. The buy or sell order are instantly routed to the Bombay Stock Exchange or the National Stock Exchange depending upon the investors preference for the exchange. The money gets instantly transferred from customers bank accounts for any buy order and shares are deposited into the demat account managed by the NSDL (National Securities Depositories Limited) or the CDSL (Central Depositories Services Limited) as all the three accounts- bank, demat and web trade- are interlinked electronically with each other.

NON-NET BROKING

INTERNET BROKING

Check with the broker about the price of shares Phase I that you wish to buy. Place the purchase order with the broker. Log on to the broker's website to check share prices and related information. Place a purchase order through authorised

The broker executes the purchase order through secure user id and password. Order is routed through the broker to the stocka stock exchange. exchange server and you get confirmation of Pay the broker through a cheque. The broker transfers the shares to your demat account (with a bank). the deal in a few minutes. The payment and delivery of shares is still done in the traditional way.

Phase II

In case you do not have a demat account, the (once payment on the Internet is allowed) shares are credited to the broker's account, in Payment amount will get deducted from your favour of the purchaser. online bank account (with which the broker has tied up). The purchased shares are credited to the online demat account in no time.

DIFFERENCE BETWEEN ON LINE AND OFF LINE TRADING

Nevertheless, with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. Offline trading has lost some popularity but it is still the main form of investing. Offline trading offers many benefits as well.

1.

The one benefit that an investor appreciates the most is that they are not

alone

when

making investment decisions. 2. There are experienced and professional brokerage companies that handle their

investments for them. 3. Investors are not faced with the challenge of making these vital investment decisions;

especially, if they do not have the experience 4.

necessary to make the appropriate investments. concerns. Not

Also, there is someone there to answer any questions that may cause

to mention, with offline trading mistakes are less likely to money away or stand by and

take place. No one wants to throw their

watch someone else throw their money away. It may be wise to hire a you feel you

professional to assist you in making the correct investment decisions if lack the knowledge necessary.

Points of difference between online trading and off line trading are as follows:

1.

Online trading is very expensive as compare to manual trading or offline

trading.

2.

Online trading consumes less time as compare to manual trading.

3.

Online trading has very helpful to finding the records easily but offline

trading

takes

more time to finding the records.

4.

In the help of online trading, there is no chance of any errors while doing communication .

the trading. in

offline trading there are some errors exist like barriers of

5. easily.

With the help of online trading, we know the international market rate of

share

very

The given flow chart clearly explains the process of online trading:

Login

Buy transcation
The system will check buying limits

Sell transcation
The system will check your dp account quantity

Orders accepted

Rejected orders would be communicated along with reasons

orders accepted

your order is transmitted to exchange for execution

pending buy orders would be displayed on your screen

on execution of your orders

pending sell orders would be displayed on your screen

you may edit your pending order

you may delete your pending order

you may edit your pending order

you may delete your pending order

flashed on your screen immediately on execution

conformationcoul d be send to your e-mail and mobile

contract note would be sent to by mail or hand delivery

SETTLEMENT PROCESS IN CM SEGMENT OF NSE

The settlement process begins as soon as members obligations are determined through the clearing process. The clearing banks and depositories provide the necessary interface between the custodians/clearing members (who clear for the trading members or their own transactions) for settlement of funds/securities obligations of trading members. The clearing corporation provides a major link between the clearing banks, clearing members and the depositories. This link ensures actual movement of funds and securities on the prescribed pay-in and payout day. The core processes involved in the settlement process are:

(i) Pay-in of Funds and Securities: The members bring in their funds/securities to the NSCCL. They make available required securities in designated accounts with the depositories by the prescribed pay-in time. The depositories move the securities available in the accounts of members to the account of the NSCCL. Likewise members with funds obligations make available required funds in the designated accounts with clearing banks by the prescribed pay-in time. The NSCCL sends electronic instructions to the clearing banks to debit members accounts to the extent of payment obligations. The banks process these instructions, debit accounts of members and credit accounts of the NSCCL.

ii) Pay-out of Funds and Securities: After processing for shortages of funds/securities and arranging for movement of funds from surplus banks to deficit banks through RBI clearing, the NSCCL sends electronic instructions to the depositories/clearing banks to release pay-out of securities/funds. The depositories and clearing banks debit accounts of NSCCL and credit settlement accounts of members. Settlement is complete upon release of pay-out of funds and

securities to custodians/members. Settlement is deemed to be complete upon declaration and release of pay-out of funds and securities. Exceptions may arise because of short delivery of securities by CMs, bad deliveries or company objections on the pay-out day. (The detailed explanation of securities and funds settlement follows in the later section). NSCCL identifies short deliveries (discussed later) and conducts a buying-in auction on the day after the pay-out day through the NSE trading system. The delivering CM is debited by an amount equivalent to the securities not delivered and valued at a valuation price (the closing price as announced by NSE on the day previous to the day of the valuation). If the buy-in auction price is more than thevaluation price, the CM is required to make good the difference. All shortages not bought-in are deemed closed out at the highest price between the first day of the trading period till the day of squaring off or closing price on the auction day plus 20%, whichever is higher. This amount is credited to the receiving member's account on the auction pay-out day.

The settlement process for transactions in securities in the CM segment of NSE is presented in below Figure.

NSE

DEPOSITRIES

8 6

NSCCL

CLEARING BANKS

2 5 10

3 4

CUSTODIANs/CMs

11

Explanations:

1. Trade details from Exchange to NSCCL (real-time and end of day trade file). 2. NSCCL notifies the consummated trade details to CMs/ custodians who affirm back based on the affirmation, NSCCL applies multilateral netting and determines obligations.

3. Download of obligation and pay-in advice of funds/securities 4. Instructions to clearing banks to make funds available by pay-in time. 5. Instructions to depositories to make securities available by pay-in-time. 6. Pay-in of securities (NSCCL advises depository to debit pool account of custodians. Ms and credit its account and depository does it. 7. Pay-in of funds (NSCCL advises Clearing Banks to debit account of custodians/CMs and credit its account and clearing bank does it). 8. Pay-out of securities (NSCCL advises depository to credit pool account of Custodians/CMs and debit its account and depository does it). 9. Pay-out of funds (NSCCL advises clearing Banks to credit account of custodians/CMs and debit its account and clearing bank does it). 10. Depository informs custodians/CMs through DPs. 11. Clearing Banks inform custodians/CMs.

THE EMERGENCE OF ONLINE TRADING IN INDIA

The Indian trader is being fancied by the democratized world of online trading or also known as e-broking. The regular and attractive advertisements in the print media and electronic media have added to this fancy world But as we compare to the Western countries, in India online trading has not still grasped the market , but has done a very important amount of progress in the past years and the future of online trading is bright. That is why many new companies are coming into this form of business structure and the existing companies are changing to this new format besides offline and other traditional forms of business. With only a mere share of 10% online trading a combined gross turnover of around Rs.

12000-13,000 crores handled by the BSE and NSE together there is a much greater scope for online trading.

The various player whos offering and facilities is different according to the individual investors. This will help us understand what processes and strategies competitors have adopted to attract and retain investors and satisfy their investments needs.
At present some of the dominant players in the online trading market of share market are

ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading and trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, Mutual Funds and Bonds.

Type of Account ICICIDirect offers 3 different online trading platforms to its customers: Share Trading Account Share Trading Account by ICICIDirect is mainly for buying and selling of stocks in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin Plus Trading, Spot Trading, Buy Today Sell Tomorrow and Call and Trade on phone. They also provide installable application terminal based application for high volume trader. Wise Investment Account Along with MF and IPO investing in BSE and NSE, Wise Investment account also provide options to invest in Mutual Funds, around 19 Mutual Fund companies and bonds. ICICI Direct offers various options while investing in Mutual Funds like Purchase Mutual Fund, Redemption and switch between different schemes, Systematic Investment plans, Systematic withdrawal plan and transferring existing Mutual Funds in to electronic mode. This account also provides facility to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICIDirect.com website is the primary tool to invest in Mutual Funds, IPOs, Bonds and stock trading. Active Trader Account

Active Trader account gives more personalized investment options to the investors. It allows investor to use online and offline stock trading. It also provides with independent market expertise and support through a dedicated Relationship Manager from ICICI. Active Trader also provides commodity trading.

Brokerage and fees Account opening fees : Rs 975/- (non-refundable) Brokerage: ICICIDirect.com brokerage varies on volume of trade and inclusive of demats transaction charges, service taxes and courier charges for contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.75% on delivery based trades.

Advantages of ICICIDirect

3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICI and very well integrated. This feature makes ICICI the most interesting player in online trading facility. Unlike most of the online trading companies in India which require transferring money to the brokers pool or towards deposits, at ICICI Direct you can manage your own demat and bank accounts through ICICIdirect.com.. Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from one website. General Insurance is also available from ICICI Lombard. Trading is available in both BSE and NSE.

Disadvantages of ICICIDirect Getting access to ICICIDirect.com website during market session can be frustrating.

ICICI Direct brokerage is high and not negotiable. Not all stocks are available under Margin Plus Facility for linking account of ICICI Bank Only

Reliance Money, A group company of Reliance Capital Limited, is the financial services division of the Rs 10'000 Crore Reliance Anil Dhirubhai Ambani Group. Reliance Money has over 22 lakhs customers and more than 10'000 branches in around 5000 cities in India. Company is among the largest broking and distribution house of financial products and having share of more than 3% of total stock market volume at BSE & NSE. RelianceMoney.com enables its customer to invest & manage most of the services provided by Reliance Money including Equity (Stock) Trading, Commodity Trading, Derivatives, Mutual Fund Investment, IPO Investment, Life Insurances, General insurances, Money Transfer, Forex exchange, Gold Coins and Credit Cards Services. Company recently entered in to Wealth Management with tools like investment in equity-linked portfolio management services, structured products, insurance and mutual funds. The Reliance Money stock trading websites uses special security features Security Token which makes online trading more secure without complexity.Stock Trading through RelianceMoney.com is available for BSE and NSE stock exchanges. Offline trading is also available through Reliance Money partners in more than 5000 city across India and through phone by dialing 022-39886000. The investment options available with Reliance Money online portal are as below: Equity (Stock) Trading at BSE, NSE and NSE F&O IPO Investment Derivatives Trading Forex Trading Commodity Trading (Gold, Silver, Crude etc....) at MCX, NCDEX and NMCE. Mutual Fund Investment Life & General Insurance

 'Pure Swiss' Gold Coins (99.99% pure, 24 carat)

Trading platforms

Reliance Money provides 3 different trading platforms for equity trading: 1. Insta Trade 2. Fast Trade 3. Easy trade

Reliance Money Technical Analysis (A paid service)

Reliance Money offers a simplified, automated, sophisticated technical analysis to Indian retail broking consumers with the help of Recognia's Technical Analysis tools. Recognia, a Canada based company, has proprietary pattern recognition technology capable of recognizing patterns in the price charts of any publicly traded financial instrument including stocks, bonds, funds, commodities, currencies and indexes. The technical services are available for introductory free 7-day trial period to Reliance Money users. Post the trail period, this service is available to users at a nominal subscription of Rs. 99 for 3 months/ Rs. 179 for 6 months/ Rs. 299 for a year, i.e., less than Re 1 a day.

Reliance Money Brokerage and fees:

Reliance Money offers lowest brokerage rates in today's online stock trading industry in India. The brokerages are as low as 0.075% for delivery based trading and 0.02 for now delivery. For more detail about Reliance Moneys brokerage and fees visit the below section of this webpage.

Advantages of Reliance Money

 Extra security features with 'Security Token', which is the most secure and tested technology in computer world. Simple, easy and fast online stock trading.

Almost all investment options are available under one account including Equity Trading, Derivatives, Forex, Commodity, IPO, Mutual Funds and Insurance. Branches are available in all major cities and the number is growing.

Disadvantages of Reliance Money Customer Service is not that good.

Sharekhan is online stock trading company of SSKI Group, provider of India-based investment banking and corporate finance service. Sharekhan is one of the largest stock broking houses in the country. S.S. Kantilal Ishwarlal Securities Limited (SSKI) has been among Indias leading broking houses for more than a century. Sharekhan's equity related services include trade execution on BSE, NSE, Derivatives, commodities, depository services, online trading and investment advice. Trading is available in BSE and NSE. Along with Sharekhan.com website, Sharekhan has around 510 offices (share shops) in 170 cities around the country. Share khan has one of the best state of art web portal providing fundamental and statistical information across equity, mutual funds and IPOs. You can surf across 5,500 companies for in-depth information, details about more than 1,500 mutual fund schemes and IPO data. You can also access

other market related details such as board meetings, result announcements, FII transactions, buying/selling by mutual funds and much more.

Type of Account Sharekhan Classic account Allow investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, demat and digital contracts, Real-time portfolio tracking with price alerts and Instant credit & transfer. Online trading account for investing in Equities and Derivatives Free trading through Phone (Dial-n-Trade) Two dedicated numbers for placing your orders with your cellphone or landline. Automatic funds transfer with phone banking (for Citibank and HDFC bank customers) Simple and Secure Interactive Voice Response based system for authentication get the trusted, professional advice of our telebrokers After hours order placement facility between 8.00 am and 9.30 am

Integration of: Online trading + Bank + Demat account Instant cash transfer facility against purchase & sale of shares Investments and trade confirmations by e-mail Single screen interface for cash and derivatives

Sharekhan Speed Trade account This accounts for active traders who trade frequently during the day's trading session. Following are few popular features of SpeedTrade account. Single screen interface for cash and derivatives Real-time streaming quotes with Instant order Execution & Confirmation Hot keys similar to a traditional broker terminal

 Alerts and reminders Back-up facility to place trades on Direct Phone lines

Brokerage: Some stock trading companies charge direct percentage while others charge a fixed amount per Rs 100. Sharekhan charges 0.5% for inter day shares and 0.1% for intra day or you could say Sharekhan charges 50 paise per Rs 100.

Advantages of Sharekhan: Online trading is very user friendly and one doesn't need any software to access. They provides good quality of services like daily SMS alerts, mail alerts, stock recommendations etc. Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc., so investor not really needs to open an account with a particular bank as it can establish link with most modern banks.

Disadvantages of Sharekhan: They charge minimum brokerage of 10 paisa per stock would not let you trade stocks below 20 rs. (If you trade, you will loose majority of your money in brokerage). Lots of hidden rules and charges. They do not provide facility to book limit order trades during after-hours. Classic account holders cannot trade commodities. Cannot purchase mutual funds online.

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, was set up in 1994. Kotak Securities is a corporate member of both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Currently, Kotak Securities is one of the largest broking houses in India with wide geographical reach.

Kotak securities online trading, is the online trading portal of the Kotak Securities Ltd, the leading stock broking house of India. The online division of Kotak Securities Limited provides services like internet broking services, online IPO and mutual fund investments.
ACCOUNT TYPES:

Kotak offers different account types according to users requirement:

Kotak Gateway Kotak securities gateway account opens the gateway to a world of investing opportunities for beginners. Kotak gateway user can trade anywhere, anytime using internet. Kotak also offers call and trade facility. They provide sms alert, research report, free news and market updates. Best feature of Kotak gateway is call and trade facility. Anybody can activate Kotak securities gateway account with any amount between Rs 20,000 to 5, 00,000. This can be in form of cash deposit or the value of the shares

you buy. Brokerage will be charged based on the account type. For intraday trading brokerage is .06% both sides for less then 25 lakhs and .023% for more then 25 crores.

Kotak Privilege Circle This is the premium account for its users. Along with kotak gateway account benefits they provides independent market expertise and support through a dedicated relationship manager and a dedicated customer service desk which provides assistance in opening accounts, handling day-to-day problems, and more. They provides KEAT premium which is an exclusive online tool that lets you monitor what is happening in the market and view your gains and losses in real-time. One can activate Kotak securities privilege circle account with any amount more than Rs. 10, 00,000/- as margin, by way of cash or stock. For intraday trading brokerage is .06% both sides for less then 25 lakhs and .03% for more then 25 crores.

Kotak High Trader This is the best offer for daily trader or intraday traders. This is an Auto Square Off product where you can enjoy the benefits of intra-day trading. Trader can get the 6 times exposure on the margin. They provide all the benefits which kotak gateway and privilege account provides. Trader can apply paper free order for IPO. One can activate Kotak securities high trader with any amount less than Rs 5, 00,000/- as margin, by way of cash or stock. The minimum brokerage that is applicable in the Kotak high trader account is 4 paisa on delivery and 4 paisa in the cash segment.

Kotak Freeway Frequent trader use this account type because freeway account enables its users to trade as many times as they like - at a fixed brokerage.

One can activate Kotak securities freeway with any amount less than Rs. 1, 25,000/- as margin, by way of cash or stock. They charge fixed brokerage of Rs.999/- a month and on delivery transaction brokerage is .59% on less then 1lakhs and .18% on more then 2 crores.

Kotak Flat This product is best suited for the needs of the Indian retail investor who actively invests through the internet. Kotak flat introduces the international trend of charging brokerages on per trade basis. Brokerage rate works up to 0.18% on delivery trades and 0.018% for intraday trades.

Kotak Assist This account most suits to long term investors. This account provides Complete assistance on all your financial investment.

Brokerage and Account opening fees:

A trading account in Kotak requires you to have a minimum of Rs.1000 to start with, the bank account to have a minimum of Rs.2500. Brokerage: For Intra-day trading, Kotak brokerage is around 0.05%. For delivery trading, Kotak brokerage is around 0.45%.

Advantages of Kotak Securities Limited

 Kotak provides a Call & Trade facility to its customers wherein they can place and track their orders through phone when they are away from home. They provides daily SMS alerts, market pointers, periodical research reports, stock recommendations etc. Kotak provides exclusive online tool to monitor what is happening in the market and also investor can view gains/losses in real-time.

Disadvantages of Kotak Securities Limited

In online trading sometimes delay comes. So it can be frustrating

Indiabulls is India's leading Financial Services and Real Estate Company having presence over 414 locations in more than 124 cities. Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock Exchange, Luxembourg Stock Exchange and London Stock Exchange.

TYPE OF ACCOUNT Indiabulls Equity Trading Account Indiabulls Equity Trading Account is standard Online trading account from India bulls and along with online trading it also provides priority telephone access that gives you direct access to your Relationship Manager and full access to 'Indiabulls Equity Analysis'. Power Indiabulls Power Indiabulls trading terminal is the most advanced new generation trading platform with great speed. This trading terminal is built in JAVA.

Power Indiabulls is extremely reach in features including Live Streaming Quotes, Fast Order

Entry and execution, Tic by Tic Live Charts, Technical Analysis, Live News and Alerts, Extensive Reports for Real-time Accounting. Brokerage and fees: Account opening fees: Rs 1200/- (One time, non-refundable) as below: 250/- Equity Trading Account opening charge 200/- Demat Account opening charge 750/- Software changes

Advantages of Indiabulls

Brokerage is less compare to other online trading companies.

Provide trading terminal 'powerbulls', a java based software. It's very fast in terms of speed and execution.

Disadvantages of Indiabulls

Faces lots of complaints regarding portal breakdown.

Motilal Oswal Financial Services (MOSL), a leading brokerage firm, has exhibited robust and consistent growth in both institutional and retail broking. An established brand name and extensive

geographic network covering 1,339 locations in over 426 cities and towns would provide it ample opportunities to cross-sell products and services. It has also forayed into related businesses like investment banking, private equity and asset management. We believe the stock offers quality exposure to the domestic equity broking and financial services market, which has impressive growth potential.

Strong competitive positioning

MOSL is one of the leading stock broking firms in India with a rapidly growing client base and wide distribution network. A respected research presence and extensive reach has resulted in robust growth in its retail business. The company also has a strong institutional equity business. It has consistently improved its market share in terms of traded volumes on the stock exchanges

Diversifying into related businesses

MOSL has forayed into related business like investment banking, private equity and asset management. Though all these business are linked to capital market, we believe the move would bring in various diversification benefits for the company going forward

Customized investment management services

MOSL offers customized investment management services to its retail clients. These services include planning, advisory, execution and monitoring a range of investment products. It also provides wealth management services.

The company has classified its clients into three segments Mass Retail, Mid-Tier Millionaire and (PCG) Private Client Group. According to the needs of each segment, products and services are offered through the companys business locations and online channels. MOSL has a discretionary portfolio management business. The company is seeking to build this business rapidly. The target customer segment for wealth management business would largely be the HNW (high net-worth) segment. The growing client bases of its broking and distribution businesses would be a captive source for cross-selling these products. MOSL has recently launched a separate branded product (Purple) for catering to the needs of this segment.

Strategy adopted by Motilal Oswal

Religare Securities Ltd is a Ranbaxy promoter group company, is one of Indias largest and fastest growing integrated financial services institutions. The company offers a large and diverse bouquet of

services ranging from equities, commodities, insurance broking, to wealth advisory, portfolio management services, personal finance services, Investment banking and institutional broking services. Religares retail network spreads across the length and breadth of the country with its presence through more than 900 locations across more than 300 cities and towns. Having spread itself fairly well across the country and with the promise of not resting on its laurels, it has also aggressively started eyeing global geographies.

Unique features and benefits of trading through Religare: Trade Reward Trade Rewards is a unique offering from Religare that gives you dual benefits of hassle free investment experience online and an opportunity to earn while you invest with us. Zero Brokerage: Break the shackles. Get freedom from brokerage and avail zero brokerage on your trades through us. Exposure up to 20 times on your margin: Allowing you the freedom to trade without hassles throughout the day without having to worry about your cash margin. You can get exposure (on cash

Segment) as high as 20 times for intraday trades. Of course conditions apply on above two. Interest on cash margin:

Even while you are waiting to make your next trade or online investment, your unutilized cash does not lie idle with us. You earn interest on your unutilized cash margin.

The indiaInfoline group, comprising the holding company, India Infoline Limited and its whollyowned subsidiaries, straddle the entire financial space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, portfolio management services, Mutual Funds, Life Insurance, Fixed Deposits, Gold Bonds and other small savings instruments to loan products and investment banking. Website of India Infoline for trading is www.5paisa.com. The company has a network of 976 business locations (branches and Sub-brokers) spread across 365 cities and towns. Today it has more than 800000 clients

Trading Platform

5Paisa offers 2 different online trading terminals to its customers:

Investor Terminal (IT)

Investor Terminal is 5Paisa's equity trading terminal for low volume trader. This is web based terminal and could access from anywhere. This product provides limited features in comparison of Trader Terminal, which is another product provided by 5Paisa.

Trader Terminal (TT)

Trader Terminal is for high volume equity traders. Trader Terminal provides high volume trading with powerful interface and fast order execution.

Brokerage and Account opening fees:

Account opening fees Rs 500/- onetime non refundable Brokerage Brokerage:

5 paisa offers charge only 5 paisa for Rs100 of intraday trade done, which is 0.05% brokerage. In case of in delivery trade, they charge an additional 0.20% for back office and securities handling.

So these are the key players of the Indian online trading market

Brokerage Comparison Sheet of key player of the Indian market Brokerage for Delivery* (%) Brokerage for Intraday trading* (%) .05-.02 Account opening charges (Rs) AMC (Rs) 300

Online Broker

IL&FS investsmart

.50-.15%

950/-

ICICIdirect Indiabulls Religare Sharekhan Kotak Securities Motilal Oswal Reliance Money IndiaInfoline

0.75 - 0.25 0.50 - 0.25 0.30 - 0.20 0.50 - 0.03 0.59 0.18 0.50 - 0.30 0.50 - 0.10 0.50 - 0.25

0.375 - 0.125 0.10 - 0.50 0.03 - 0.02 0.10 - 0.03 0.06 0.03 0.15 - 0.03 0.03 - 0.01 0.10 - 0.05

975/900/500/750/750/500/750/555/-

500/NIL NIL 300/350/-

300/200/NIL

Comparison of Allied Services

Third Party Product* YES Buy/Sell Online/Offline BOTH

Online Broker

Bank Alliance

HSBC,CITI.HDFC, IL&FS investsmart IDBI,AXIS

ICICIdirect Reliance Money Sharekhan Indiabulls

ICICI

Yes

ONLINE

ICICI, IDBI, HDFC, UTI, SBI Axis, ICICI, BOI, Indian Overseas Bank, Yes Bank, HDFC, IDBI, IndusInd, PNB ICICI, HDFC,Axis,IDBI

Yes

ONLINE

Yes

ONLINE

Yes

BOTH

Religare Motilal Oswal Kotak Securities IndiaInfoline

SBI Kotak Mahindra, HDFC, Citibank, UTI, ICICI Axis, Citi, HDFC, ICICI

Yes Yes

BOTH OFFLINE

Yes

ONLINE

Yes

BOTH

*Third party products includes Mutual Funds, Fixed Deposits (corporate), Insurance, etc.

Earlier the organizations which provided the facility of online trading was not safe enough to invest but some of the changes in the past years in the Indian share market have created the interest of trading in the shares by the people. Broadly we can classify three important factors which have contributed to the development of online trading in IndiaFirstly the major step was taken by the National Stock Exchange (NSE) in the year 1994 which allowed the electronic trading and seeing to this various other stock exchanges in India followed soon. This helped in making the fast, accurate and transparent transactions saving a lot of time then the traditional method of trading. The investors were also saved by the clutches of the fraud brokers at the times when the clients were not aware of the true prices of the shares.

Secondly, in the year 1996 the dematerialization of the shares came (also known as DEMAT) which avoided the online presence of shares in an electronic form avoiding them from theft, pilferage or from other losses like counterfeiting and frauds regarding share transfer. The third step was the rapid growth of computer education and learning of internet by the people. With the evolving of internet the online trading became a hit and the investors became confident in investing just with a click of a mouse.

With the happening of such events the ratio of trading has improved a lot. As it takes less time people praise this technology for trading purposes. Some people who traded rarely now even trades 2-3 times every day as it provides edge of researching about companies on the internet. The number of small investors is increasing on the daily basis that trades on the internet.If a person invests or trades in equities, derivatives, commodities etc through the use Internet it is known as online trading enabling the investor to connect electronically to buy or sell stocks, derivatives etc with the other investors. This can be done with the help of online service providers like investsmart, indiaInfoline etc. A person can access a stockbroker's website through an PC connected to Internet and can place his orders. The benefits are-

A person can see the latest market movement through streaming quotes. Reduces time lag due to self-execution and instant confirmation. Empowers traders to have a complete control over their trading decisions. A person can access his accounts and related information on the Website. Provides greater convenience of trade as a person can trade from home or other convenient location. It is cheap in terms of cost associated and offers reduction in overheads A trader can view the historical charts on his computer.

The Internet revolution has changed the way to communicate and the way to do business in todays society bringing us closer and closer to vital sources of information. It provides us with means to directly interact with service-oriented computer systems tailored to our specific needs; therefore, we can serve ourselves better by making our own decisions.

This new access by the online trading customers to low-cost transactions and cutting-edge, real-time market information that formerly belonged only to brokers has opened up extraordinary new investment opportunities as well as a crucial need for state-of-the-art information.

Today the investors use the Internet Client-Server technology to buy and sell the securities at an instant at any point of time. People investing online have reached the proportions. Online trading allows an investor to buy and sell shares on the exchange through Internet and helps in the direct control of his investments.

QUESTIONAIRE
(To understand the perception of customer toward online trading)

NAME AGE MOBILE

_______________________________________________________________________ ______________________________ GENDER ____________________________

_______________________________________________________________________

OCCUPATION _______________________________________________________________________ Q.1 What is your education qualification?

higher Secondary senior secondary Graduate Post Graduate professional degree holder

Q.2 What is your annual income?

Below 100000 1,00,000 2,00,000 2,00,000 3,00,000 3,00,000 4,00,000 Above 4,00,000

Q.3 What percentage of your monthly household income could be available for investment?

Less than 5% 5% to 10% 10% to 15% 15% to 20% More than 20%

Q.4 Where do you often invest your money?

Equity Mutual fund Insurance

 Term deposits Others

Q.5 What is the primary objective of your investment?

Capital appreciation Source of income Retirement planning Wealth preservation Education funding /others

Q.6 Do you owe a Computer?

Yes No
Q.7 To operate a computer is easy for me

Strongly agree Agree Cant say Disagree Strongly disagree

Q.8 online trading is a secure way of trading

Strongly agree Agree Cant say Disagree Strongly disagree

Q.9 online trading is easy and fast way of trading?

Strongly agree Agree Cant say Disagree Strongly disagree

Q.10 At what time do you trade?

Office Hours Non Office Hours Free Time

Q.11 Introduction of online trading helped to attract the new Investors thus increasing the trading volumes at Stock Market?

Strongly agree Agree Cant say Disagree Strongly disagree

Q.12 What factor would you consider before choosing an account in a brokerage house ?

Tick the appropriate option according to your choice on the scale of 1 to 5 (Where 1 is Most important to 5 for least important)

S.NO. 1 2 3 4 5 6 7 8 9 10 11

PRODUCT ATTRIBUTES
Variety of products offered Time to open an account Brokerage charged Customer services Software Research reports Efficiency at peak hours Customer relationship Compliance system Infrastructure Brand

1 1 1 1 1 1 1 1 1 1 1

2 2 2 2 2 2 2 2 2 2 2

3 3 3 3 3 3 3 3 3 3 3

4 4 4 4 4 4 4 4 4 4 4

5 5 5 5 5 5 5 5 5 5 5

12 13 14 15 16 17 18 19 20 21

Trading Calls/sms Effective execution Regular delivery of contract notes Market exposure Recording confirmation Access to back office Comprehensive stock trading portal Employees skill Helpline services Guidance

1 1 1 1 1 1 1 1 1 1

2 2 2 2 2 2 2 2 2 2

3 3 3 3 3 3 3 3 3 3

4 4 4 4 4 4 4 4 4 4

5 5 5 5 5 5 5 5 5 5