Professional Documents
Culture Documents
CHAPTER - I
INTRODUCTION
• B 2 B – business to business:
Online business selling to other businesses. Example
eSteel.com is a steel industry exchange that creates an
electronic market for steel producers and users.
At first B2B e-commerce primarily involved inter-business
exchanges, but a number of other B2B business models have
developed, including e-distributors, B2B service providers’
matchmakers, and infomediaries that are widening the use of
B2B e-commerce.
• B 2 C – business to consumer:
Online business selling to individual consumers.
Example amazon.com is general merchandise that sells
consumer products to retail consumer. Grown exponentially
since 1995, and is the type of e-commerce that most
consumers are likely to encounter.
• C 2 C – consumer to consumer e-commerce:
Consumer selling to other consumers. Example
eBay.com creates a market space where consumers can
auction or sell goods directly to other consumers.
E-commerce provides a way for consumers to sell to each
other, with the help of an online market such as auction site
eBay.
• P 2 P Peer-to-Peer e-commerce:
Use of peer-to-peer technology, which enables internet
users to share files and computer resources directly without
having to go through a central web server, in e-commerce.
Examples Gnutella is a soft ware application that permits
consumers to share music with one another directly, without
intervention of a market maker as in C2C e-commerce.
Definition of Online Trading on the web:
As per the web the sale of goods or services over the
Internet. Customers must enter and submit their credit card
details online; the sale will often proceed without the retailer
and customer ever having personal contact.
Internet has changed the pace of all activities in all over the world.
The share trading has also been affected with the winds of the changes.
Now the complicated procedure of share trading in share market has
become very easy because of the usage of the Internet in this type of
trading. The customers are getting the trading accounts through which
they can trade in the market. And for paying the money also they have no
need to go anywhere, the money will be debited or credited to customer’s
account automatically. So in the online trading the customers can by
sitting in the home only, trade in the share market.
NSE:
BSE:
Investment benefits
world.
DISADVANTAGES:
EFFECTIVENESS:
Easy
Economic
Independence
Competitive brokerage
Internet safety:
The safety of transaction on the Internet depends on the encryption
system used. The better this transaction system, the more difficult for any
person to back the site.
Secondly, customers can to ensure the safety of the transaction online.
They normally gets a secured user ID and pass word, the secrecy of
which is to be maintained by customers only.
Thirdly, if the transaction system requires no manual intervention,
customers further improve the safety of the transactions. This enables the
elimination of the possibility of any manual intervention. This means
orders are directly send to the exchanges, ensuring that the customers get
the best right price.
Security of money:
In systems where the broking, banking and demat accounting are
completely integrated, customer’s money remain in his own bank
account, and does not get transferred to the broker’s pool.
Easy:
The experience of trading through Internet depends a great deal on
the type of product offered by the site. Say, for example one of the issues
bothering customers may be tiered of the paper work after every trading
Independence:
Many of those customers, who have chosen to trade shares online
today, had at one point of time been trading through offline brokers. They
took a change to go online trading and trade shares. After realizing the
speculative trades. The only additional cost for investors opting for the
Net trading route is that of the computer, modem and Internet connection.
Other Services:
Internet has brought to retail investors, what was till sometimes ago
the sole prerogative of large brokerage houses, high net worth
individuals. For example, at ICICIDirect.com one can access multitude of
resources to arrive his stock picks.
Reliable research with an enviable track record is available for
customers. An investor can now access ICICIDirect.com and do his
technical analysis to know what other leading brokers think about a
company, whether it is a buy or a sell.
An investor can access live news from international news agencies
such as Rulers, CNBC, read about what the leading CEOs think about the
state of economy and capital market.
CHAPTER - II
RESEARCH METHODOLOGY
Introduction:
Sources of Data:
1. Primary Data
2. Secondary Data
1. Primary Data:
collected. In this study, primary data are collected by the use of two
types of methods:
i. Questionnaire
ii. Interviews
In this study questionnaires are used to collect the data from the
respondents, since where the questionnaires are not adequate,
researcher has used personal interview method for collecting data to
draw the effective conclusion.
2. Secondary Data
These are the data collected from various sources, used in addition
to the primary data in the research. The various sources are the
government publications, research organizations, journals, newspapers,
websites etc.
Research has mainly one instrument for collecting the primary data, i.e.
questionnaire. Here the questionnaire has been made much easy to
understand and answer, and hence clearly it takes lesser time to respond.
Sampling Design:
2) Judgment sampling
Sample Unit:
Sample Size:
Sampling Procedure:
Shares:
Bonus shares:
Demat:
Demat is the abbreviation for the dematerialization. In this the
shares are kept in the electronic form. In other words Demat means
dematerialization it means from physically form converted into
electronically form.
Demat shares introduced in 1998 earlier days is transaction only
physically like bonds.
Remat:
Remat is the abbreviation for dematerialization. In this electronic
shares are transferred in to the physical form.
Cash Trading:
This is delivery based trading system. This is generally done with
the intention of taking delivery of shares on monies.
Margin Trading:
Customers can also do an intra-trading up o four times their
available funds. Where in they take in long buy/short sell position in
stokes with the intension of squaring of the position within the same
settlement cycle.
Spot Trading:
When customers are looking at an immediate liquidity option,
‘cash on spot’ may work best for them. On selling shares through ‘cash
on spot’, money is credited to their bank account the same evening and
not on the exchange payout date.
T + 2 settlements:
T (Trading day) + 2 settlement means the settlement of transaction
will be taken place after 3 days from day of transaction. It is controlled by
Government of India under SEBI (Securities Exchange Board of India).
BTST:
Buy Today Sell Tomorrow (BTST) is a facility that allows
customers to sell shares even on day after the buy order date. Without
this, they have to wait for the receipt of shares into their demat account.
Call Trade:
Call Traded allows customers to call on a local number in their city
and trade on the Telephone through customer Service Executives.
Call in Advance:
The amount received from the shareholders before a call is made is
known as calls paid in advance or calls in advance.
Calls in Arrears:
When a call is not paid by the members within the date specified in
the call notice, the amount of call unpaid on the shares is called calls in
arrears.
Surrender of shares:
Surrender of shares means the return (i.e. giving back) of shares by
a shareholder to the company voluntarily for cancellation. It is a shortcut
to the long and cumbersome procedure of forfeiture of shares.
Market Order:
Customers can trade by placing market orders during market hours
that allow them to trade at the best obtainable price in the market at the
time of execution of the order.
Limit Order:
This allows customer to place a buy/sell order at a price defined by
them. The execution can happen at a price more favorable than the price,
which is defined by them. They can place limit orders during holidays
and non-marketing hours too.
Respondent Profile:
Bangalore.
CHAPTER - III
PROFILE OF NSE/BSE
BSE and NSE are the two leading stock exchanges in India. BSE
was established in 1875 and is the oldest in Asia. The NSE was
established as a corporate body in 1993, with the primary objectives of
ensuring nationwide electronic trading, high level of transparency and
faster settlement circle.
The NSE has been playing a catalytic role and has significantly
contributed to the reforming of the secondary market in India in terms
of micro-structure; market practices, trading volumes and use of state
of the art technology. The use of satellite communication technology
for trading, using Very Small Aperture Terminals (VSATs), enabled
NSE to rapidly expand across the length and breadth of the country.
Subsequently, after the BSE was granted the required site permissions,
it expanded its trading facilities to the remote corners of the land.
NSE:
TATA Consultancy Services, a division of Tata Sons Ltd. was
selected as the prime contractor and system integrator by the NSE to
provide a total turnkey solution for the money markets and capital
markets floor less trading system.
The aim was to enable NSE to provide nationwide electronic
trading with highest transparency in the market place. Using the client
server architecture, fault-to-learn computing and in-memory database,
Tata Consultancy Services, solution gave NSE high visibility and impact.
For the year 2004-05 the National Security Clearing and Settlement
System (NSCS) processed settlements for over 172 million trades with a
turnover of around Rs 5, 08,121 crores. In the year 2004-05 nearly 2
million contracts were traded on NSE Future and Option system, with a
national turnover of Rs. 1, 01,925 crores. Here approximately 818
companies listed in NSE.
NSE has the option for trading of securities in both Cash Trading
and Future trading. Hence, while dealing with securities an investor can
negotiate with the price listed in the NSE index.
BSE:
The stock Exchange Mumbai, popularly known as the Bombay
stock Exchange limited is the oldest stock exchange in Asia with a rich
heritage. It was established as “The Native Shares & Stock Brokers
Association” in July 1875 with 22 share brokers. It is the first stock
exchange in the country to obtain permanent recognition in 1956 from the
Government of India under the securities contracts (Regulation) Act
1956.
BOLT, i.e. BSE’s online trading system is designed and developed
by CMC Ltd., now a Tata Group company. This screen based trading
system manual entry method of trading in the ring, and went line on
March 1995. This enabled BSE to provide floor-less and fully automated
CM – Cash Market
F&O – Future and Option Market
* At the end of Financial Year
** Trading value for Future and Option Segment compiled from June
2008
This growth shows the potential of this segment. This is preliminarily
derived by the increasing penetration of computers, significant decline
in the Internet charges, and convenience of usage and customer
Regional Institute of Co-operative Management, Banashankari II Stage,
BANGALORE. - 23
-
“A STUDY ON ONLINE TRADING OF SHARES”.
With Net trading it make little different, where the investor is,; e-
broker gives him real time quotes and a chance to react immediately.
SEBI functions:
Regional Institute of Co-operative Management, Banashankari II Stage,
BANGALORE. - 24
-
“A STUDY ON ONLINE TRADING OF SHARES”.
Exchanges).
Promoting investors education and training of intermediaries.
Securities Market.
Prohibiting insider trading in securities.
To ensure investor protection.
SEBI Guidelines:
Highlights of the guidelines issued by SEBI are summarized
below.
At least 60% of each kind of securities issued by company must
CHAPTER - IV
But this kind of access also has dangers. While the average person
can now buy stock, participate in the forex market, buy bonds, and
purchase shares in mutual funds, the average person is certainly not
guaranteed success in those investments. The information is provided
here is designed to help familiarize the beginning investor with of the
most basic concepts of the stock market and stock market trading. Stock
market trading system or form of analysis for your investing strategy.
Client:
This technique offers the best price for the buying and selling
transactions of the investors, by ensuring proper matching of their
orders within the communication network itself.
Online trading integrates the bank, the brokerage firm and the
demat accounts, which leads to easy and paperless trading for the
client.
Trading on the net, gives even the smallest retail investor access
to information that earlier was available only to the big traders.
(These conditions shall be apply on and effective from the date of this
agreement)
Definition:
CHAPTER - V
Based on the primary data collected the analysis has been made the
following data.
PTICULARS NO OF PERSENTAGE
RESPONDEENTS
Male 40 80 %
Female 10 20 %
Total 50 100 %
CHART NO-1
20%
80%
1 2
PARTICULARS NO OF PERCENTAGE
RESPONDENTS
Less Than 25 Years 7 14 %
25 – 35 Years 10 20 %
35 – 45 Years 15 30 %
45 – 55 Years 10 20 %
55 & above 8 16 %
Total 50 100 %
CHART NO- 2
20 15
15 7 10 10 8
10 30%
5 14% 20% 20% 16%
0
Less Than 25 – 35 35 – 45 45 – 55 55 &
25 Years Years Years Years above
Series1 Series2
PARTICULARS NO OF PERCENTAGE
RESPONDENTS
Under Graduate 12 26 %
Graduate 18 36 %
Post Graduate 20 40 %
Others 0 0
Total 50 100 %
CHART NO- 3
q u a lific a tio n s o f in v e s to rs
25 20
18
20 S e rie s 1
15 12
10
5 0
0
U n d e r G ra d u a t e P o s t O t h e rs
G ra d u a te G ra d u a te
PARTICUALARS NO OF PERCENTAGE
RESPONDENTS
Business men 20 40 %
Salaried Employee 10 20 %
Retired Employee 6 12 %
Professional 10 20 %
Student 4 8%
Others 0 0
Total 50 100 %
12%
20%
B us ines s m en S alaried E m ploy ee
Retired E m ploy ee P rofes s ional
S tudent O thers
TOTAL 50 100 %
By the above table we can consider that 26% insurance, and 20% in
infrastructure, 22%in I Tithes are the major investments sectors in online
trading of shares.
CHAT NO-5
Analysis of Investments
10%
16%
22%
26%
20%
6%
PARTICULARS NO OF PERCENTAGE
RESPONDENTS
Less than 1 year 21 42 %
1-2 7 14 %
2-4 12 24 %
4-6 5 10 %
More than 6 Year 5 10 %
TOTAL 50 100 %
investing for less than 1 year, 14% for 1-2 years, 24 % for 2-4 years, and
10 % each for 4-6 years and more than 6 years.
The proper mix of moderate risks and high returns are attracting the
investors to Online Trading of Shares.
CHART NO - 6
10%
10%
42%
24%
14%
PARTICULARS NO OF PERCENTAGE
RESPONDENTS
Regional Institute of Co-operative Management, Banashankari II Stage,
BANGALORE. - 40
-
“A STUDY ON ONLINE TRADING OF SHARES”.
28 %
News Papers 14
8%
Journals 4
18 %
T.V News 9
20 %
Internet 10
4%
Family & Friend 2
22 %
Brokers 11
TOTAL 50 100 %
CHART NO-7
22% 28%
4%
20%
18%
8%
NO OF 41 9 50
RESPONDENTS
PERCENTAGE 82 % 18 % 100 %
CHART NO 8
18%
82%
Yes NO
Time 14 14 19 0 50
Liquidity 13 19 13 4 1 50
Returns 19 10 13 8 0 50
Safety 16 19 8 5 2 50
Risk 19 10 21 0 0 50
Past 7 16 19 4 4 50
Performance
Marketability 9 7 18 16 6 50
Capital 11 16 14 4 5 50
Appreciation
CHART N0-9.1
Most Important
Time
10% 13%
Liquidity
8%
Returns
12%
6% Safety
Risk
18% 18% Past Perfomance
Marketablility
15%
Capital Appreciation
CHART N0-9.2
Very Important
Time
Liquidity
Returns
14% 13%
6% Safety
17%
15% Risk
9%
9% 17%
Past Perfomance
Marketablility
Capital Appreciation
CHART N0 - 9.3
Important
Time
Liquidity
Returns
11% 15%
Safety
14% 11%
11% Risk
15%
Capital
Appreciation
CHART N0 - 9.4
Un Important
Time
Liquidity
Returns
9% 7%
9%
Safety
35% 19%
Risk
12%
9%
Past Perfomance
0%
Marketablility
Capital Appreciation
CHART N0 - 9.5
Time
Liquidity
0%
0%
Returns
8%
Marketablility
Capital Appreciation
The effect of monsoon is seemed to be less on the online traders. And the
foreign exchange reserve gets the lowest concern from investors, since
our country has enough of it, i.e., second highest in the world.
CHART NO –10.1
Monsoon and
Agriculture
Inflation
Interest rates
12%
21%
13% Foregin Exchange
10% Reserve
13%
International
Changes in Capital
Market
CHART NO – 10.2
Very Important
Economic Growth
Monsoon and
Agriculture
Inflation
10%
Interest rates
10%
11% 12%
Political Situation
International
Changes in Capital
Market
CHART NO – 10.3
Important
Economic Growth
Monsoon and
Agriculture
Inflation
9% 12%
Interest rates
12%
13%
11%
Foregin Exchange
16% Reserve
11%
16%
Tax Rates
Political Situation
International
Changes in Capital
Market
CHART NO – 10.4
Un Important
Economic Growth
Monsoon and
Agriculture
Inflation
9% Interest rates
20%
16%
15% 6% Foregin Exchange
Reserve
16% 12% 6%
Tax Rates
Political Situation
International
Changes in Capital
Market
CHART NO – 10.5
Monsoon and
Agriculture
Inflation
0%
7% Interest rates
7%
29%
7%
Foregin Exchange
Reserve
29%
21%
Tax Rates
0%
Political Situation
International Changes
in Capital Market
50
Business Risk 9 15 5 10 5 6
50
Financial Risk 14 2 4 4 12 14
Default/Insolvency 50
Risk 5 3 9 8 15 10
CHART NO-11
C o n s id e r a tio n o f R is k F a c to r s b e fo r e
In v e s tm e n t
14
12
10
8
Scale
0
k
isk
k
Ris
Ris
k
Ris
lR
isk
k
t
rke
ss
Ris
ci a
e
yR
e
rat
Ma
an
sin
r
nc
we
st-
Fi n
Bu
lva
re
Po
Inte
so
ing
lt/In
as
fau
rch
De
Pu
F a c to r s
R a nk 1 R a nk 2 R a nk 3 R a nk 4 R a nk 5 R a nk 6
Marketing 15 16 9 10 0 50
The investors are well aware of any company before investing in it.
They know who are the promoters, the efficiency of the management of
the company, the types of technology it is adopting, its product range, its
marketing policies and practices, etc. Online traders give much
importance to the promoters of the company before investing into it. As it
can be seen in above table. Management of the company is also
considered as a very vital factor; as people like to invest in a company
with an efficient management. A company with a number of products in
its hand is also considered as a good one to invest in.
CHART NO -12
20
18
16
14
12 Most Important
Very Important
10 Important
Un Important
8 Not At All Important
0
Promoters Management Technology Product Marketing
Range
PARTICULARS NO OF PERCENTAGE
RESPONDENTS
Yes 36 72 %
No 14 28 %
TOTAL 50 100 %
CHART NO – 13
28%
Yes
No
72%
NO OF
RESPONDENTS 11 14 9 2 36
PERCENTAGE 31 % 38 % 24 % 7% 100 %
CHART NO – 14
T h e S t a g e o f L if e - c y c le o f t h e In d u s t r y P r e
In v e s t
31%
7%
38%
24%
P i o n e e r in g S Et ax gp ea n s io n S St at ag ge n a t io n SDt ae gc elin in g S t a g e
Particulars NO OF Percentage
RESPONDETS
No Income 10 20 %
Below Rs.1, 00,000 30 60 %
Rs.1, 00,000 to Rs.2, 00,000 6 12 %
Rs.2, 00,000 to Rs.3, 00,000 4 8%
Rs.3, 00,000 to Rs.4, 00,000 0 0
Rs.4, 00,000 & Above 0 0
Total 50 100 %
ANALIYSIS &INTERPRETATION:
Who are not satisfied in getting the online shares, so increasing the
awareness about Online Trading of Shares?
CHART NO – 15
No Income
0%
0% Below
8% 20% Rs.1,00,000
12% Rs.1,00,000 to
Rs.2,00,000
Rs.2,00,000 to
Rs.3,00,000
60% Rs.3,00,000 to
Rs.4,00,000
Rs.4,00,000 &
Above
Particulars NO OF Percentage
RESPONDENTS
Below Rs.10,000 30 75 %
Rs.10,000 to Rs.20,000 6 15 %
Rs.20,000 to Rs.30,000 4 10 %
Rs.30,000 to Rs.40,000 0 0
Rs.40,000 & Above 0 0
Total 40 100 %
Among the 40 respondents 75% were saving below 10,000., 15% are
Rs.10,000 to 20,000., 10% are Rs. 20,000 to 30,000., and No one is
saving are saving are Rs.30,000 to 40,000 and Rs.40,000 & above.
Maximum respondents are savings (30) in this scale of below 10,000.
CHART NO – 16
0%
10% 0% Below Rs.10,000 Rs.10,000 to Rs.20,000
15%
75% Rs.20,000 to Rs.30,000 Rs.30,000 to Rs.40,000
FREQUENCY 24 17 9 50
PERCENTAGE 48 34 18 100
CHART NO-17
18%
Absoulate Monopoly
48% Perfect Competition
34%
Imperfect Competition
FREQUENCY
14 18 11 7 0 50
PERCENTAGE
28 36 22 14 0 100
CHART NO-18
Importance of Momvement of
Share Prices in the BSE\NSE
Indexes
14%
18%
50%
11%
7%
0%
There for Shot term investors are popular because it has 60% of the
investment in Online Trading of Shares.
CHART NO-19
1 Month More
PARTICULARS 1 Week to 3 Within 6 Within than 1 TOTAL
Months Months 1 Year Year
NO OF
RESPONDENTS 9 14 17 8 2 50
PERCENTAGE
18 % 28 % 34 % 16 % 4% 100 %
But still investors are there who would like to hold the securities for
almost one year, and a negligible of them for more than one year. The fast
moving prices of securities and the updated information helps the online
traders to take quick and effective decision at right time
CHART NO-20
4%
18%
16%
28%
34%
PARTICULARS NO OF PERCENTAGE
RESPONDENTS
36 %
ICICI 18
24 %
HDFC 12
20 %
Peninsular capital market Ltd 10
8%
Motilal Oswal 4
12 %
Kodak 6
0
Tata td Waterhouse 0
TOTAL 50 100 %
ANALYSIS & INTERPRETATION:
Among the 50 respondents, 36 % are familiar with “ICICI”, 26 %
with “HDFC”, 20 % with “Peninsular capital market Ltd”, 8 % with
“Karvy”, 12 % with “Kotak”, and none with “Tata td Waterhouse”.
12% 0%
8%
36%
20%
24%
ICICI
HDFC
Peninsular capital market Ltd
Karvy
Kotak
Tata td Waterhouse
CHAPTER - VI
A) FINDINGS:
6. The majority of investors 42% are investing less than one year
have high returns and 4 – 6 years and above 6 years investors are
only 20%.
9. Risk (18%) and Return (18%) are both considered most important
factors while investing in shares because they are more effective
factors and capital appreciation are not at all important.
10. The growth rate of the economy 21% increases the participation in
13. Online traders give much importance to the promoters (23) of the
16. The majority investors 60 % are getting income form shares below
Rs. 1, 00,000. And respondents who are earning income above Rs.
100,000 (20%) are only 10.
19. Short term investors are more than the Long term investors because
they have fear that if they hold shares for long period then will
incur the loss.
21. In Bangalore, the online traders are aware of ICICI 36%, HDFC
the traditional investors, showing the need to inform them about it,
and educate them for the investments.
B) SUGGESTIONS
3. In the age group of above 55 years are invested very low they have
encourage to invest in online trading shares. Because the age group
includes retired employees.
6. Online traders should also take into account the “Monsoon and
Agricultural” factor before investing. Still large part of the earning
C) CONCLUSION:
at right time. Online traders do not like to hold their assets for a long
time. Preferably they dispatch them within six month.
The people who have not invested in share market earlier usually not
show interest in “Online Trading of Shares”. They are interested in the
traditional instruments of investments like insurance, Infrastructures, IT
etc. These investors need to make aware of “Online Trading of Shares”,
and educate them to make investments in this instrument. The proper mix
of moderate risks and high returns are attracting the investors to Online
Trading of Shares.