Академический Документы
Профессиональный Документы
Культура Документы
ONLINE TRADING
BY
MR. AJAY SINGH
T.Y.B.B.I
SEMESTER V
THAKUR COLLEGE OF SCIENCE & COMMERCE
MUMBAI
PROJECT GUIDE
PROF. PRITI AGGARWAL
UNIVERSITY OF MUMBAI
2009-2010
DECLARATION
SIGNATURE OF THE
STUDENT
AJAY SINGH
CERTIFICATE
Date:
Place: Mumbai
ON-LINE TRADING
Acknowledgement
This project was made possible, by the efforts of many people
would like to thank Prof. Priti Aggarwal my project guide for her
for their efforts and creativity which helped in giving final shape
INDEX
EXECUTIVE SUMMARY
Scope:
This project study covers the different genres of
networking, be they the traditional trading through online
or more relaxed.
Methodology:
This project provides a clear objective insight into
the phenomenon of online trading. This project has been a
primary data based project right since it conception.
Besides a minuscule number of statistics and research
Objective:
The objective of this project is to bring in to focus
the most innovative upcoming technology trading or
investing. So that more and more people are connected
each and every day as the world comes closer in a closely
knit networking.
Recommendations:
Going through the traditional meet and greet
routines for extending and enriching our networks can be
quite perfunctory and ineffective. Online trading has held
the helm for many ship on the brink of capsizing, many
success story has been written on the pages of online
trading networking. A budding entrepreneur needs
networking more than anything else; his ship is then
assured of smooth sailing even in the rough seas.
ABOUT
Trading
A trading is the process in which someone who buys and sells financial
instruments such as stocks, bonds and derivatives. Traders are professionals, casual
investors or speculators in financial instruments traded in the stock markets,
derivatives markets and commodity markets, comprising the stock exchanges,
derivatives exchanges and the commodities exchanges.
On Line Trading
The Information Technology has brought out revolutionary change in the
operations of stock exchanges in India. The traditional method trading without the
use of technology was time consuming and inefficient further, it imposed limits on
trading volumes and efficiency. To overcome those defects and to provide efficient
and transparent services, the NSE has introduced a national-wide ON-LINE fully
automated Screen Based Trading System (SBTS). Now, other stock exchanges have
been forced to adopt SBTS and today India can boast that almost 100% trading take
place electronic order matching.
Small beginning
Compared to the Western countries, ON-LINE trading is still in its infancy in
India. With trading turnover at around Rs. 10 crores per day from ON-LINE trading
compared to a combined gross turnover of around Rs. 9000-10,000 crores handled
by the BSE and NSE together, ON-LINE trading has a long way to go. With some
ten dotcom players, such as icicidirect.com, investsmart, 5paisa.com, India bulls, and
a host of brokers, such as kotakstreet, sharekhan, motilaloswal, Geojit Securities and
duttstock, entering the ON-LINE ring promises exciting times ahead.
Funny, that actually idea was first time used by a company making Beer
called "WIT beer" to help its shareholders trade its shares. That’s how "WIT
Capital" was born which is considered pioneer of this concept. It was made
mainstream and household name by a offshoot of Charles Schwab & Co called
There are other serious players like E*trade, DATEK ON-LINE etc. All this
companies ask you to start account with US $5000 and you can buy and sell
stock using these funds. They also issue you a check book which you can use
to make payments from this account. Or use their ATM card to withdraw cash
from your stock trading account.
Today practically every big name brokerage firm offers ON-LINE stock
trading as it reduces their costs. Earlier they had army of brokers on phone with
clients executing trade, which is done by computers accepting orders from
clients directly. This firm now offers human access to high net worth accounts, and
to rest at charge per trade.
Faster Trading
Accessible to All
Fully Transparent
The price conditions, quantity conditions etc. are puched into the
computers by the members themselves. So, the risk of error is very less moreover,
the trading is fully automated and screen-based and hence frauds can not enter
into the system
Dematerialisation:
Dematerialisation is the process by which a client can get physical
certificates converted into electronic balances maintained in its account with the DP.
Features:
Holdings in only those securities that are admitted for dematerialisation by NSDL
can be dematerialised.
Rematerialisation:
Rematerialisation is the process by which a client can get his electronic
holdings converted into physical certificates. The client has to submit the
rematerialisation request to the DP with whom he has an account. The DP enters the
request in its system which blocks the client's holdings to that extent automatically.
The DP releases the request to NSDL and sends the request form to the Issuer/ R&T
agent. The Issuer/ R&T agent then prints the certificates, despatches the same to the
Features:
The Exchange has a nation-wide reach with a presence in 417 cities and
towns of India. The systems and processes of the Exchange are designed to
safeguard market integrity and enhance transparency in operations. During the year
2004-2005, the trading volumes on the Exchange showed robust growth.
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 borrowing, professionalisation 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.
NSE and BSE, the 'big two' exchanges believe in updating and upgrading its
technology systems to keep delivering according to commitments and promises
made to its members, partners, and customers.
The telecommunications network uses the X.25 protocol and is the backbone
of the automated trading system. Each trading member trades on the NSE with other
members through a PC located in the trading member's office.
The trading members on the Wholesale Debt Market segment are linked to
the central computer at the NSE through dedicated 64 Kbps leased lines and VSAT
terminals. These leased lines are multiplexed using dedicated 2 MB optical-fiber
links. The WDM participants connect to the trading system through dial-up links.
BSE has deployed an On-Line Trading system (BOLT) on March 14, 1995. It
works on a Tandem S74016 platform running on 16 CPUs. The Tandem Himalaya
S74016 machines act as the backend to more than 8000 Trader Workstations
networked on Ethernet, VSAT and Managed Leased Data Network (MLDN). The
systems claim to handle up to two million trades a day.
With the help of MTNL, BSE has setup a MLDN Network comprising 300 2
Mbps lines and 1500 64 Kbps lines which connect all regional stock exchanges and
offices in Mumbai. Access to market related information through the trader
workstations is essential for the market participants to act on real-time basis and take
instantaneous decisions. BOLT has been interfaced with various information vendors
like Bloomberg, Bridge, and Reuters. Market information is fed to news agencies in
real time. The exchange plans to enhance the capabilities further to have an
integrated two-way information flow.
ICICI Direct
ICICI Direct has been our example throughout this article and they are
without doubt one of the best. They normally give you three accounts 1. savings, 2.
trading 3. DMAT. With these three accounts you are ready to go. Through their
extensive demo sections available ON-LINE at icicidirect, you can begin to trade
fairly easily.
Sharekhan
Headquartered in Mumbai, they have branches across the country and these
branches provide full fledged services to its members. Portal address is sahrekhan.com.
"SSKI, a veteran equities solutions company with over eight decades of experience
in the Indian stock markets" they state on their website. They also proclaim that
"they help you make informed decisions and simplifies stock investments". "In fact
Sharekhan runs India's largest chain of share shops with over hundred outlets across
213 cities!" according to them.
Geojit
They also have major operations in the United Arab Emirates. " Barjeel
Geojit Securities, LLC, Dubai, is a joint venture of Geojit with Al Saud Group
belonging to Sultan bin Saud Al Qassemi having diversified interests in the area of
equity markets, real estates and trading". They are headquartered in Kochi in Kerala.
They have a vast presence in Kerala and the rest of the country.
Motilal Oswal
They have a very impressive portal. Their site claims " Motilal Oswal
Securities is a leading research and advisory based stock broking house of India,
with a dominant position in both institutional and retail broking. Asiamoney Brokers
Poll 2005 has ranked us the best Indian brokerage firm." Rediff.com, in one of their
evaluation available on the web, rates Motilal highly for their response and customer
care.
HDFC
DEPOSITARY SYSTEM
It can be compared with a bank, which holds the funds for depositors. A
Bank – Depository Analogy is given in the following table:
BANK-DEPOSITORY – AN ANALOGY
BANK DEPOSITORY
Holds funds in an account Hold securities in an account
Transfers funds between accounts on the Transfers securities between accounts
instruction of the account holder on the instruction of the account holder
Facilitates transfer without having to Facilitates transfer of ownership
handle money without having to handle securities
Facilitates safekeeping of money Facilitates safekeeping of securities
Using innovative and flexible technology systems, NSDL works to support the
investors and brokers in the capital market of the country. NSDL aims at ensuring
the safety and soundness of Indian marketplaces by developing settlement solutions
that increase efficiency, minimise risk and reduce costs. At NSDL, we play a quiet
but central role in developing products and services that will continue to nurture the
growing needs of the financial services industry.
Upto March 2000, 680 companies made available their shares for demat. The
market value of dematerialised securities amounted to Rs. 8,188 crore. The number
of beneficial owners stood at 28,545.
Objectives of Depository
A depository enables the capital market to achieve the following objectives:
v/s
OF
ICICI Direct keeps track of the transactions, the settlement dates and stock
exchange rules, hence relieving you of the inconvenience of tracking stock exchange
trading calendars, settlement dates, writing cheques and Transfer Instructions For
Debit (TIFD). A multitude of resources like ON-LINE quotes, charts, news,
research, fundamental database and detailed analysis is just a click away to help you
make smarter and better decisions.
3-IN-1 concept
you can link multiple Demat accounts to your e-Invest accounts with a
maximum of 5 accounts but can't open more link more than one Bank accounts to
your e-invest accounts
Deposit a cheque/cash in your Bank Account by filling the pay-in slip in case
u don’t have any balance in account above minimum balance require in saving
account. In case of a cheque, the money should come into your Bank account as soon
as the cheque is cleared. Once you have funds in your bank account, you need to
allocate the required amount for trading. Alternatively you can sell some shares from
your Demat Account in the Cash Segment and use the money to purchase the shares
Sharekhan.com
SSKI GroupSharekhan is ON-LINE 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 India’s leading broking houses
for more than a century.
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.
ICICI DIRECT
C
Cash
C F
Futures P
Purchases
P
Redemptio
M
Margin
M O
Options
O
n
B
BTST
B S
SIP & SWP
S
Switch
S
Spot
S
i
in/out
Margin
T
Transfer in
T
P
Plus
P
Margin:
I In margin trading, you take buy/sell positions in stock(s) with the
intention of squaring off the position within the same settlement cycle. If, during the
course of the settlement cycle, the price moves in your favour (rises in case you have
a buy position or falls in case you have a sell position), you make a profit. In case the
price movement is adverse, you incur a loss. However, you also have the option to
take/give delivery of buy/sell position respectively if you have sufficient
cash/securities to do so.
Margin Plus:
Features:
Margin Plus in available for intra day trding in more than 60 stocks on ICICI
direct.com
Helps to limit your loss through a Stop Loss Order
Hedging the cash market position- ideal for low risk profile.
Taking advantage of arbitrage opportunity in equity and derivatives
Taking a view on stock/index for as long as 3 - month period - medium risk
profile.
Speculatives trading - high - risk profile
ICICI direct.com offer ON-LINE investment in Futures and Option, with benefits of
automated settlement and ON-LINE risk monitoring system.
Futures Trading
You can invest in mutual funds without the hassles of filling application forms or
any other paperwork. You need no signatures or proof of identity for investing.
Once you place a request for investing in a particular fund, there are no manual
processes involved. Your bank funds are automatically debited or credited while
simultaneously crediting or debiting your unit holdings. In case of investments from
the NRE account, the debit certificate is also submitted automatically to the Mutual
Fund so as to enable repatriation of sale proceeds subsequently.
IPOs
IPO is another way of investing in equity market through primary
market i.e., buying share from th company. Whenever a company comes out with an
initial public offerig the customers may choosse to apply for the shares. Based on
number of valid applications received, the company woul than allot the shares to the
applicants. The offline way of investing in an IPO is by filling physical appliation
forms, cheques, and submitting the forms through respective broker. With ICICI
direct.com all customer have to do is fill in number of share on site and submit.
8% GOI bonds
Equity Trading
1. Trading accounts
With a Sharekhan ON-LINE trading account one can buy and sell shares in
an instant. Any time, from anywhere.
Sharekhan offers two types of trading accounts to suit your trading habits:
Sharekhan Classic account and Sharekhan SPEEDTRADE account.
2. Trading services
Mutual funds:
Derivatives trading
Keep track of the derivatives market with "Derivatives Info Kit" and find out
which strike to buy/sell using Black & Scholes Option calculator
SHAREKHAN SERVICES
Equity
Trading
Derivatives
Trading
BROKERAGEs
TYPES OF ACCOUNT
1
.
Along with stock trading and IPO investing in BSE and NSE, wise
investment account also provide options to invest in Mutual Funds and Bonds
ON-LINE. ON-LINE Mutual funds investment allows investment allows
investor to invest on-line in around 19 Mutual Fund companies. ICICI direct
offers various options while investing in Mutual Funds like Purchase Mutual
Funds, 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. ICICI
Direct.com website is primary tool to invest in Mutual Funds, IPOs, Bonds and
Stock trading.
1. Classic account
Allow investor to buy and sell stocks ON-LINE 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.
2. SpeedTrade account
This accounts for active traders who trade frequently during the day's trading
session. Following are few popular features of SpeedTrade account:
Cash
Cash order can be used if the customer intend to transact in order to take
delivery of asset. Cash trading can also be termed as delivery based trading.
To Trade in Cash:
Allocate funds in the equity segment through “Modify Allocation”. This will
give the cutomer the limits to make their purchase.
Click on buy on the equity trading page
Select the Exchange i.e. NSE or BSE.
Put in the first 2 alphabets of the script name in which the customer wish to
trade and click on “Find Stock Code” to search for the relevent stock code.
Select “Market” if customer wishes to buy at the best-offered price in the
market.
Select “Limit” if customer wishes to quote the price at which customer want
to buy the script.
Click on “Buy Now” to go through with deal. Clicking on “proceed” on the
verification page, which will send the customer order, detail to the
exchange.
BTST
BTST (Buy today Sell tommorrow) is a facility that allows the customr or
trader to sell shares enver one day after the buy trade date without having to wait for
the receipt of share in to your demat account.
To order on BTST:
Once the customer buy shares of any company allowed to be sold under
BTST can be availed on “T+1” and “T+2” days.
The customer can get the lilst of stock allowed for trading under BTST
through “Stock list”.
Margin
With Margin Trading (Intra Day Trading) cutomers can do intra settlement
trading upt to 5 time with their available funds. Customers can also take buy/sell
position in stock with intention of squaring off the position withing the settlement
cycle.
Margin Plus
Driving License
Voter's ID
Passport
Photo credit card
Photo ration card
Utility Bill (Telephone, Electricity etc.)
Bank Statement
2. Proof of Identity
Driving License
Voter's ID
Passport
Photo ration card
3. PAN card
4. Two Photographs
CASE STUDY
Sharekhan, a sister concern of SSKI Investor Services Pvt. Ltd is a retail securities
and equities solutions provider.
The need
The company was growing its business at a fast pace and needed to have systems
that could support a large and growing user base in an efficient and reliable manner.
A moment's downtime will result in large financial losses and loss of faith among
customers, both critically bad for business.
The solution
The company deployed BEA's WebLogic solutions and ran its trading and risk
management functions on this platform.
The benefits
The platform has the business logic to interface with the various technology aspects,
and provides encrypted transactions. The various components of Web trade like bank
interfaces, depository participants, and broker accounts have been integrated into a
single scalable entity. This helps optimize the architecture and provide scalability.
NSE data center manager has trouble-free days and nights with StorageTek®
solutions.
Business issues at NSE
As the Indian economy grew, data at the National Stock Exchange of India (NSE)
was also growing at an increasing rate. Given the nature of the business, data
protection and high availability of the data are crucial. Downtime is unacceptable.
Coping with the growth of data backup needs and a shrinking backup window was
fast becoming a nightmare. To further complicate matters, NSE was faced with the
challenge of online backup of their Oracle databases. The existing backup process
involved 400 gigabytes of data to be backed up daily and 900 gigabytes for the
weekend, over multiple servers and across different platforms such as HP, NT and
Sun. This involved various types of backup media as well as a large number of
cartridges. Heavy manual intervention was required as the jobs were manually
queued and cartridges manually mounted. Additionally, intensive supervision was
required to ensure that the entire backup process was executed in a disciplined and
consistent manner. As a result, backup was a tedious and laborious process requiring
The solution
Business benefits
Today, NSE boasts of being the only stock exchange in India with a live disaster
recovery site. With a more efficient and reliable backup process, NSE is assured of
meeting the demands for high availability and business continuity, even with
growing data needs and shrinking backup windows.
Financial benefits
The solution reduced the number of cartridges used daily. More importantly, by
automating all its manual tasks, NSE has saved more than 50 percent of the hours
previously required in the backup process. NSE can now ensure higher productivity
and re-deploy its personnel for more efficient utilization while ensuring that backup
activity is carried out in a consistent, disciplined and reliable manner.
Technology benefits
THAKUR COLLEGE OF SCIENCE AND COMMERCE
ON-LINE TRADING
With SAN-based direct-connect technology and the use of automated tape backup,
NSE enjoys better throughput and more reliable backup avoiding issues such as LAN
network bandwidth bottlenecks and collision of data packets. NSE is able to
maintain a respectable backup window and restoration is systematic and fast. Guided
recovery for Oracle databases was also put in place. This solution allows the pooling
of tape drives to be shared among the multiple connected servers, across
heterogeneous platforms, and eliminates the need to back up servers individually.
NSE is able to seamlessly and efficiently manage its backup process and storage
devices from a single management console. The solution also provides the scalability
to increase storage capacity as NSE’s requirements grow.
The online trading system in use at the Stock Exchange, Mumbai, since 1995
India's oldest stock exchange, it's 30-share sensitive index (Sensex) of the most-
traded securities is indicative of the health of the country's securities markets, and is
the Indian equivalent of the Dow Jones index.
CMC took over the task of developing the software for computerised securities
trading knowing full well that it would be an extremely complicated job. No
software company in India had ever tried developing software for automated trading.
The BOLT system became operational in 1995. On March 14, 1995, 818 scrips were
transferred to the screen-based trading system. It is one of the few stock trading
CONCLUSION
Bibliography
Books Referred :
Financial Markets and Services -------- E Gordan, K Natrajan
by Himalaya
Publication
Financial Management ------------------- M.Y.Khan & P.K. Jain
Websites :
1. www.icicidirect.com
2. www.sharekhan.com
3. www.internet news.co.in