Jessica Varma, CUIM 1321250- Finance (2013-15)

Exposure to Discount Brokerage Trading Platform at

Tradejini


LIVE PROJECT REPORT

By


Jessica Yvonne Varma
(1321250)


Under the guidance of


T. S. Ramachandran
Head of Dept. Finance
Christ University Institute of Management
Bangalore






Christ University Institute of Management
2014


Jessica Varma, CUIM 1321250- Finance (2013-15)

INTRODUCTION
Online discount broking is a new concept that has started to gain popularity in India for the
past few years. Some of the well-known discount brokerage firms in India are Zerodha,
RKSV Securities, Tradejini, Compositedge, etc. Zerodha Stock Broking Ltd. was one of the
first firms to introduce this new concept in India in 2010.
Discount brokerage as a concept began in the US in the late 1990s and early 2000s, and now
dominates the business there.
One of the major benefits of trading using discount brokers are that it helps in churning the
high value traders portfolio aggressively intra-day, as it allows them to keep most of the
gains they make. It breaks the traditional barrier of percentage brokerage.
ABOUT TRADEJINI
Tradejini is a discount broker and it is a new entrant in brokerage area. It was incorporated in
2012. It was started by are Mr. Kishore Kumar J and Mr. Dinesh Kumar M. The founders
have over 30 years of experience in the stock market operations and have been successful
investors. Their main corporate office is at Bangalore, Jayanagar.
They provide whole gamut of investment options in almost all the Indian exchange. They are
a member of NSE, BSE, MCX-SX and provide full-fledged Demat service through CDSL. It
also provide trading in currency, commodities and Mutual funds.
LEARNINGS:-
1) Membership at Tradejini:
NSE Cash Market / Futures or Options / Currency
BSE Cash Market / Futures or Options
MCX Commodities
MCX-SX Cash Markets / F or O / Currency
Major trading happens on NSE products.
2) Major difference between a Traditional/ Fully fledged Broker and a Discount Broker.
Jessica Varma, CUIM 1321250- Finance (2013-15)


3) Brokerage:
Equity delivery 0.1% or Rs.20 whichever is less, for one executed order.
Equity Intraday 0.01% or Rs.20 whichever is lower, for one executed order.
Futures Equity/Currency/commodities per order Rs.20 per executed order or
0.01% of Turnover whichever is lower
Options Equity/Currency - RS.20 per executed order
4) Fund Transfer:
Atom gateway
Traditional Broker
Higher Brokerage.
Almost 50 times the
discount brokerage.
Provide more value added
services like advisory
support.
More interaction with
customers. Investors
depend on advisory
support.
Usually more number of
branches. They require
more rental and employee
expenses
Customers can have no
knowledge of trading
process.
Discount Broker
Lower, fixed Brokerage
per order
Provides only the platform
and customer service
support.
Customer interaction is
less. Generally retail
investors and High
frequency traders
Less number of branches
required. Save on
infrastucture expenses.
Customers are normally
aware of trading process.
Jessica Varma, CUIM 1321250- Finance (2013-15)

Bank a/c of client is not linked but mapped so that it can only transfer funds
between that a/c and the broker.
Tradejini has tie up with 25 banks for fund transfer through the Atom payment
gateway. This is an instant transfer method.
Per fund transfer charge is = Rs.9 + service charge, irrespective of fund amount.
(Max fund transfer = Rs.5, 00,000)
If customer does not have account in any of the 25 banks, they can make a third party
payment through either NEFT/RTGS. It takes around 2 to 4 hours maximum.
Next payment method is through cheque deposit. It takes about 2 3 days. For record
purpose, a scanned copy of the cheque leaf has to be sent prior to trading.
Cash is not acceptable. Only after amount is reflected in trading account, the limit
shall be updated and trading is possible.
No trading can be done of credit basis.
5) Derivatives:-
In currency futures: 4 currencies are traded: USD, Yen, Euro and Pound.
In currency options: only trading between USD and INR.
All lots have 1000 currencies each.
Commodities are two types: Agri and Non- Agri commodities. Only Non- Agri is
traded at Tradejini.
There are two types of trading: Delivery trading and Intraday trading.
6) Margins:-
For intraday trading, there are two types of margin options:-
MIS (Margin Intraday Square off)
Where broker assigns a margin of exposure say 5 to 10 times. That means, if a client
has 100Rs. and the share price is 20rs. If he has a margin exposure of 10 times, he can
buy up to (100/20)* 10 = 50 shares.
Cover Order: Clients get more leverage, up to 20 times exposure. But the broker
provides a risk management tool of compulsory stop-loss order. With this, a limit is
kept, say 5-6% as acceptable loss beyond this the stop-loss order is triggered and
order is stopped. The client has the flexibility to place the stop-loss order within the
specified limit.
For delivery trading, margin is on a cash and carry basis that is full amount paid for
exposure.
Jessica Varma, CUIM 1321250- Finance (2013-15)

Each day at 3.15pm, the cut off time or square off time starts in intraday, where the client can
either convert intraday to delivery basis with enough required funds or square off the trading.
For futures- Clients pay a fixed percentage of margin to enter into a futures contact.
Margin includes Span/ Exposure margin calculated by NSE on a daily basis.
In Futures Intra-day, exposure is given on margin amount. Here it is 2.5%. And daily
mark to market
At any time client should maintain 70% of margin. If margin goes below this, the broker
will automatically square off.
7) There are three product types:-
CNC- Cash and Carry
MIS- Margin Intraday Square off
NRM Only for F/O and MCX Normal.
8) Trading Timing:
For NSE/ BSE - 9.15am to 3.30pm.
For currency 9am to 5pm. (Closed during bank holidays)
For MCX 10am to 11.30pm (April to Oct) or till 11.55pm (Oct to April)
9) Trading Platform:-
There are two trading platforms:

Trading Platforms
NEST Trader
Default Platform
All 3 products (NSE, BSE
& MCX)
Fund transfer available
only on this.
NSE Now
Available on Mobiles &
Tabs
No commodity products