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In partial fulfillment of the requirements for the award of Degree of

Master of commerce

Submitted in



nancy chopra


No Endeavour can be successful without the active co-operation of the people concerned with it,
which was forthcoming, in full, during this study. It is extremely difficult to find words, which
can do justice to the sort of co-operation I got in the planning and execution of this study. And
no research is ever an individual effort. It is a contributory effort of many hearts, hands& heads.

This project comes out to be a great source of learning and experience. Lot of efforts has been
put by various people to make this project a success. This has greatly enhanced my knowledge
about the vast field of Indian capital market and investing in it.

I acknowledge my indebtness to Mrs. Pooja M. Kohli (Representative Director), Ms. Pooja

Sharma (Training Department Head), Mr. Vipan Mahajan (Depository Head), Mr. Rajinder Pal
(Margin Section), Mr. Sudhir Sharma (Head of Listing Department) and Mr. Prashant (Head of
Law Department) for their invaluable guidance and ingenuity to give my ideas a concrete shape.

Let me at the outset; express my deep sense of gratitude to MRS. payalDeepshikha (project
guides) for meticulous guidance, keen supervision, constant encouragement, constructive
criticism, friendly attitude and whole hearted help throughout the course of this project. His
unforgettable positive approach and analytical acumen made this project possible.

In preparing this project I have drawn on material from variety of books, journals, internet,
articles and the information given by the stock exchange.

Last but not the least, I thank my parents and friends who helped and assisted me in their various
capacities during the various activities.

Nancy chopra


Sr. no. Contents Page


Executive summary 5

Chapter-1 – Introduction to the subject 7

1.1 Theoretical foundation 7

1.2 Literature review 12

Chapter-2 – Introduction to the organization and the industry in which project is 14


2.1 Overview of industry 14

2.2 Entry in exchanges and trading 19

2.3 Types of trading 23

2.4 Derivatives 24

2.5 Profile of Ludhiana stock exchange 29

2.6 LSE Securities Ltd. brief profile 32

2.7 Departments of LSE 35

2.8 LSE’s history 46

2.9 Recent achievements and milestones 47

2.10 Product range or services offered by exchange 48

2.11 Financial status of the organization 49

2.12 Statistical profile or performance history of company 50

2.13 Future prospects/plans 52

2.14 SWOT analysis of LSE 52


Chapter-3 - Objectives of the study and research methodology 54

3.1 Objectives 54

3.2 Important details related with sources of data and methodology 54

3.3 Limitations of the study 56

Chapter-4 – Data presentation, analysis and interpretation 57

4.1 Interpretation of the questionnaire 57

Chapter-5 – Summary and conclusion 69

5.1 Summary 69

5.2 Conclusion 69

Appendix (Questionnaire, Abbreviations etc.) 70

Abbreviations 70

Questionnaire 70

Bibliography 74

Executive summary

“A good system must be able to cope with an extremely complex and dynamic

The booming Indian market has started showing its increasing development in the investment
cycle. An economy after years of waiting, watching and belt tightening, now witnessing the
desired change. Indian companies in various sectors ranging from cement to steel are building
their blue prints throughout the globe. The long term capital expenditure has been forecasted for
next five to seven years.

At this juncture of economic development, a project on analyzing Indian stock Market, Sensex
and Nifty is a timely decision. The analysis started with the search that why Sensex and nifty are
called heartbeat of Indian economy and their calculation methodology. The next phase of the
project went to searching the history of Indian capital market and the stock exchanges working
in India.

Objectives of the study:

 To understand the working of a stock exchange and understanding its operations and
their importance

 To understand the calculation and importance of Sensex and Nifty

 To study the products offered in capital market and estimating their risk and return

 To find out the most preferred security to invest

 To find out the factors on which markets respond


This research has a lot of importance for a person who wants to invest their money in Indian
capital market and earn significant returns. This study can guide them and can give an idea of
risk and return attached to various securities which are being offered in capital markets. This
study also helps in understanding the importance of sensex and nifty for India and help investors
and other persons the method of calculation of sensex and nifty.

Scope of the study:

The study is limited to the basic knowledge of the stock market and the types of trading in it.

The scope of the study covers the process of entering in the Indian capital market and trading in
shares, commodity and currency. The data is collected from Ludhiana Stock exchange which is a

reputed stock exchange is providing services since 1983. Further sample size for research work
is 50 which cannot represent all the investors of India or of Ludhiana.


 Majority of investors do not analyze financial performance or history of company before

investing in that company.

 Future and Options trading is most preferred by Indian investors followed by intra day

 Most of the investors invest in shares to get quick returns and not from the point of view
of capital appreciation and secure future etc.


1.1 Theoretical foundation

SENSEX & NIFTY- The Barometer of Indian Capital Markets


Stock Market performance is quantified by calculating an index using the benchmark scrip’s and
we all know that SENSEX is associated with Bombay Stock Exchange and NIFTY is associated
with National Stock Exchange, but what many do not know is how those indices are calculated
along with EPS and PE values.


SENSEX has been calculated since 1986 and initially it was calculated based on the Total
Market Capitalization methodology and the methodology was changed in 2003 to Free Float
Market Capitalization. Hence, these days, the SENSEX is based on the Free Floating Market cap
of 30 SENSEX Stocks traded on the BSE relative to the base value which is 100(1978-79) and it
is calculated for every 15 seconds.

Free Float Market Capitalization is defined as the value of all the shares available for public
trading excluding the promoter equity, holdings through FDI Route, Holdings by private
corporate, and holdings by Employee Welfare Funds. .

Why Free Flow Market Cap?

1. It depicts the market more rationally

2. It removes undue influence of government or promoter share holding, there by giving the
equal opportunity for companies to be in the SENSEX
3. Almost all the Indices world over are calculated by this methodology
4. It gives Fund managers more authentic information for benchmark comparisons.

How the SENSEX 30 Stocks are selected?

1. Listing History

2. Trading Frequency
3. Rank based on the Market Cap (Should be Among top 100)
4. Market Capitalization weight
5. Industry / sector they belong
6. Historical Record

How SENSEX is calculated?

The formula for calculating the SENSEX = (Sum of free flow market cap of 30 benchmark
stocks)*Index Factor

Index Factor = 100/Market Cap Value in 1978-79.

Where, 100 is the Index value during 1978-79.


Assume SENSEX has only 2 stocks namely SBI and RELIANCE. Total shares in SBI are 500
out of which 200 are held by Government and only 300 are available for public trading.
RELIANCE has 1000 shares out of which 500 are held by promoters and 500 are available for
trading. Assume price of SBI Stock is Rs.100 and Reliance is Rs.200. Then "free-Floating
Market Cap" of these 2 companies:

(300*100+500*200) = 30000+100000 = Rs. 130000

Assume Market Cap during the year 1978-79 was Rs.25000

Then SENSEX = 130000*100/25000 = 520.

The methodology in the example is exactly followed to calculate the SENSEX, only difference
being the inclusion of 30 stocks.


The National Stock Exchange (NSE) is associated with NIFTY and it is also calculated by the
same methodology but with two key differences.

1. Base year is 1995 and base value is 1000.

2. NIFTY is calculated based on 50 stocks.

Everything else remains the same in NIFTY Index calculation as well.


We all know Earnings per Share (EPS) are calculated for all the companies to show how
much a company generates the net profit for every outstanding share. Likewise EPS is
calculated for SENSEX as well so that we can have a better understanding about the market.

Let’s see how it is calculated. All you need for this calculation is EPS of all the 30 SENSEX
stocks along with their Free Float Adjustment Factor.

Example: Take HDFC Bank for the example. Present EPS for HDFC Bank is Rs. 44 and
Free Float Adjustment Factor is 0.85. Free Float Adjustment factor of 0.85 just means 85%
of the total outstanding shares are held by Non-Promoters and are available in the market for

Multiply the EPS with Adjustment Factor which is 44*.85 = 37.4. This 37.4 is the
contribution of HDFC Bank towards SENSEX EPS. Likewise we need to calculate for all 30
stocks and add it together to get the final value of SENSEX EPS which should be somewhere
around 980 these days. We can calculate NIFTY EPS in the same manner.


PE Ratio is calculated for companies which show what the investors are ready to pay for
every rupee of earnings. If we calculate the same thing by taking into account all the 30
SENSEX stocks, then we will end up with SENSEX PE.

How to calculate?

Consider the same HDFC Bank. Multiply the Market Price of HDFC Bank with number of
shares outstanding which should be equal to Market Capitalization.

Market Capitalization = Share Price * Total Shares

Then calculate the Net Profit by multiplying the EPS with Total Shares.

Do this for all the 30 SENSEX stocks.

SENSEX PE = Sum of Market Capitalization of 30 SENSEX Stocks divided by Sum of Net

Profit of all the 30 SENSEX Stocks.

At present the SENSEX PE is around 15 and it provides useful information about SENSEX.
Analysts predict the level of SENSEX using this number only. Suppose, SENSEX PE is 15
and SENSEX EPS is 980, then the Index = 14700. For example, if you believe, earnings of
the companies would grow at 10 percent this year, and then apply the same growth rate to
both SENSEX PE and SENSEX EPS to predict the SENSEX next year.

SENSEX PE and SENSEX EPS give some useful information about which way the market
might move. But it is not necessary that the information you get should hold true always. As we
know, Stock Market is a place, where no one can be right all the time.

Index Specification (sensex):

Base year 1978-79

Base index value 100
Date of launch 01-01-1986
Method of calculation Launched on full market capitalization method
and effective September 01, 2003, calculation
method shifted to free-float market
Number of scrip’s 30

Index Review Frequency

The BSE Index Committee meets every quarter to discuss index related issues. In case of a
revision in the Index constituents, the announcement of the incoming and outgoing scrip’s is
made six weeks in advance of the actual implementation of the revision of the Index.

Date Scrip’s Included Scrip’s Excluded

29.06.2009 Hero Honda Motors Ltd. Ranbaxy Laboratories Ltd.

12.01.2009 Sun Pharmaceutical Satyam Computers Ltd.

Industries Ltd.

28.07.2008 Sterlite Industries Ltd. Ambuja Cements Ltd.

Tata Power Co. Ltd. Cipla Ltd.

14.03.2008 Jaiprakash Associates Ltd. Bajaj Auto Ltd.

19.11.2007 DLF Ltd. Dr. Reddy's Laboratories


09.07.2007 Mahindra & Mahindra Ltd. Hero Honda Motors Ltd.

12.06.2006 Reliance Communiation Tata Power Ltd.

Ventures Ltd.

06.06.2005 National Thermal Power Hindustan Petroleum Corp

Corpn. Ltd. Ltd.
Tata Consultancy Services Zee Telefilms Ltd.

27.09.2004 Larsen & Toubro Ltd. Mahanagar Telephone

Nigam Ltd.

19.05.2004 Maruti Udyog Ltd. Larsen & Toubro Ltd.

10.11.2003 Bharti-Tele-Ventures Ltd. Castrol India Ltd.

HDFC Bank Ltd. Colgate Palomive ( India )
ONGC Ltd. Glaxo Smithkline Pharma.
Tata Power Company Ltd. HCL Technologies Ltd.
Wipro Ltd. Nestle ( India ) Ltd.

10.10.2002 HDFC Ltd. Reliance Petroleum Ltd.

31.05.2002 ICICI Bank Ltd. ICICI Ltd.

07.01.2002 HCL Technologies NIIT Ltd.

Hero Honda Motors Ltd. Mahindra & Mahindra

08.01.2001 Cipla Ltd. Novartis


10.04.2000 Dr. Reddy's Laboratories I.D.B.I

Reliance Petroleum Indian Hotels
Satyam Computers Tata Chem
Zee Telefilms Tata Power

16.11.1998 Castrol Arvind Mills

Infosys Technologies G. E. Shipping
Novartis Steel Authority of India

19.08.1996 Arvind Mills Ballarpur Inds.

Bajaj Auto Bharat Forge
BHEL Bombay Dyeing
BSES Ceat Tyres
Colgate Century Text.
Guj. Amb. Cement GSFC
HPCL Hind. Motors
ICICI Indian Organic
IDBI Indian Rayon
IPCL Kirloskar Cummins
MTNL Mukand Iron
Ranbaxy Lab. Phlips
State Bank of India Premier Auto
Steel Authority of India Siemens
Tata Chem Voltas

03.08.1992 Bharat Forge Zenith Ltd.

01.01.1986 Voltas Bombay Burmah

Peico Asian Cables
Premier Auto. Crompton Greaves
G.E.Shipping Scinda

1.2 Literature review

Purna Chandra Padhan

An understanding on the linkages between financial development and economic growth in

general and the stock market with economic activity in particular is imperative in emerging
economies. The objective of this paper is to find out the causal linkages between stock market

and economic activity in India. The notable finding of the paper is that both the stock price (BSE
Sensex) and economic activity (IIP) are integrated of order one, i.e. I (1). The Johansen-Juselius
co-integration tests suggest the existence of one co-integrating vector. This rules out spurious
relations and suggests the presence of at least one direction of causality. The TYDL model
suggests that there is bi-directional causality between stock price and economic activity during
the post-liberalization period, implying that a well-developed stock market could enhance
economic activity and vice-versa.

Aman Srivastava

Both the Indian stock exchanges have significant ARCH effects and it is appropriate to use
ARCH/GARCH models to estimate the process. The research found that both EGARCH (1, 1)
and EGARCH (1, 1)-M did good jobs in fitting the process for both exchanges. Because 1 a and
1 e are 0.9733 and 0.9716, which are close to 1, one can conclude that both markets will
fluctuate radically with new shocks and this is a sign of high risk in the markets. The study also
demonstrated that there are leverage effects in the markets. That means the investors in those
markets are not grown well and they will be heavily influenced by information (good or bad)
very easily. This can easily be seen in current turmoil in Indian stock market. The study also
found that the volatility of the Indian stock market exhibited features similar to those found
earlier in many of the global stock markets, viz., autocorrelation and negative symmetry in daily
returns. It was found that asymmetrical GARCH models do better than the ordinary least square
(OLS) models and the Vanilla GARCH models. Perseverance of shock could be explained the
time dependent risk premium. If it is found that the shock was of short term in nature, then the
investor would be reluctant from making any modification in their discounting factor while
calculating the present discounted value of the stock and therefore its price.

Neeta Tripathi

The foreign portfolio flows have become the important source for strengthening and improving
the functioning of the domestic capital markets. There is a general understanding that Indian
stock market is primarily driven by FIIs, we find that the FII flows in the BSE sensex companies
is about 34% of the total outstanding share, which is not significant as compared to the size of
our capital market. The figures at the macro level also suggest that the relative share of foreign
portfolio flows is marginal. According to the no. of transactions BSE occupied 6th position in
2006. In terms of listed companies BSE ranks first in the world. India has a turnover ratio of
94.2% which is quite comparable to the other developed markets like the U.S.A. and U.K. which
has turnover ratios of 129.1% and 141.9% respectively. According to Standard and Poor's Fact
book India ranked 17th in terms of market capitalization and 18th in terms of total value traded

in stock exchanges and 20th in terms of turnover ratio as on Dec. 2005. Further, share of
domestic financial institutions in these companies is declining since 2003 (except 2005-06)
while FIIs are occupying significant place. However, last one year quarter- end analysis gives
somewhat optimistic results for DFI. We must take appropriate steps to improve investors'
awareness in order to expand equity cult among the small savers. Recent trend of increased
investors' preference to participate in equity markets through mutual fund conduit would
enhance institutional investment in equity markets. The institutional and regulatory architecture
should facilitate this further as this would counterbalance and cushion the impact of the swings
in the stock prices.

Further, majority of the companies have FII stake in the range of 10-20% these figures suggest
that relative share of FIIs in Indian companies is marginal. The govt. should take concomitant
policy efforts in terms of improving financial regulation and corporate governance to encourage
individuals as well as institutional investment.


2.1 Overview of industry


A stock exchange, share market or bourse is a corporation or mutual organization which

provides "trading" facilities for stock brokers and traders, to trade stocks and other securities.
Stock exchanges also provide facilities for the issue and redemption of securities as well as other
financial instruments and capital events including the payment of income and dividends. The
securities traded on a stock exchange include: shares issued by companies, unit trusts and other
pooled investment products and bonds. To be able to trade a security on a certain stock
exchange, it has to be listed there. Usually there is a central location at least for recordkeeping,
but trade is less and less linked to such a physical place, as modern markets are electronic
networks, which gives them advantages of speed and cost of transactions. Trade on an exchange
is by members only. The initial offering of stocks and bonds to investors is by definition done in
the primary market and subsequent trading is done in the secondary market. A stock exchange is
often the most important component of a stock market. Supply and demand in stock markets is
driven by various factors which, as in all free markets, affect the price of stocks. There is usually
no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently
traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the

usual way that bonds are traded. Increasingly, stock exchanges are part of a global market for

History of Stock Exchanges in India:

In 1860, the exchange flourished with 60 brokers. In fact the 'Share Mania' in India began when
the American Civil War broke and the cotton supply from the US to Europe stopped. Further the
brokers increased to 250.

At the end of the war in 1874, the market found a place in a street (now called Dalal Street). In
1887, "Native Share and Stock Brokers' Association" was established. In 1895, the exchange
acquired a premise in the street which was inaugurated in 1899.

Indian Stock Exchange Growth


1946 1961 1971 1975 1980 1985 1991 1995

No. of Stock
7 7 8 8 9 14 20 23

No. of Listed
1125 1203 1599 1552 2265 4344 6229 8593

No. of Stock
Issues of Listed 1506 2111 2838 3230 3697 6174 8967 11784

Capital of Listed
270 753 1812 2614 3973 9723 32041 59583
Cos. (Cr. Rs.)

Market value of
Capital of Listed 971 1292 2675 3273 6750 25302 110279 478121
Cos. (Cr. Rs.)

Capital per
Listed Cos. (4/2) 24 63 113 168 175 224 514 693
(Lac Rs.)

Market Value of
Capital per
86 107 167 211 298 582 1770 5564
Listed Cos. (Lac
Rs.) (5/2)

value of Capital
358 170 148 126 170 260 344 803
per Listed Cos.
(Lac Rs.)



 It provides the trading platform where buyers and sellers meet to transact in securities.
 The stock exchange in India is under the supervision of the regulatory authority, the
Securities and Exchange Board of India
 It is the place where sale and purchase of existing securities is done.
 It enables an investor to adjust his holdings of securities in response to changes in
assessment about risk and return.
 It enables to meet the liquidity needs by providing market for sale of securities.
 Stock exchange is an association of individual members called member brokers.
 Stock exchanges are formed for the purpose of regulating and facilitating the buying and
selling of securities.
 Stock exchange operate with due recognition from the govt. under securities and contract
regulation act 1956.
 Stock exchange facilitates trading in securities of the public sector companies as well as
govt. securities.
 It acts as a host of intermediaries which assist in trading of securities and clearing and
settlement of trade.


S.no. Name of stock exchange Year of establishment Type of organization

1 Bombay stock exchange 1875 Voluntary non-profit
2 Ahmadabad stock exchange 1897 Voluntary non-profit
3 Calcutta stock exchange 1908 Public limited
4 M.P. stock exchange, Indore 1930 Voluntary non-profit
5 Madras stock exchange 1937 Co. limited by
6 Hyderabad stock exchange 1943 Co. limited by
7 Delhi stock exchange 1947 Public limited

8 Bangalore stock exchange 1957 Pvt. Converted into
public ltd. Co.
9 Cochin stock exchange 1978 Public limited
10 U.P. stock exchange Kanpur 1982 Public limited
11 Pune stock exchange 1982 Co. limited by
12 Ludhiana stock exchange 1983 Public limited
13 Jaipur stock exchange 1983 Public limited
14 Guahati stock exchange 1984 Public limited
15 Kannaar stock exchange 1985 Public limited
16 Magadh stock exchange 1986 Co. limited by
17 Bhuveneshwar stock 1989 Co. limited by
exchange guarantee
18 Vadora stock exchange 1990 N.D.

19 Meerut stock exchange 1991 N.D.

20 O.T.C.I (over the counter 1993 Pure demutualised

exchange of India),Mumbai
21 National stock exchange 1995 Pure demutualised

22 Coimbtoor stock exchange 1996 N.D.

23 Sikkam stock exchange 1997 N.D.


2.2 Entry in exchanges and trading

Entry in exchanges and trading through them can be classified under three headings:

• For companies

• For sub-brokers

• For investors

These all can be explained as:


 For companies: For entry in exchanges any company has to get listed in it. It involves all
the process of formation of the company. The main steps for a company to enter in stock
exchange are:

Initial Public Offer



There can be two kinds of public issues, namely:

• Initial Public Offer (IPO)

• Further Public Offer (FPO)


An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is
when an unlisted company makes either a fresh issue of securities or an offer for sale of its
existing securities or both for the first time to the public. This paves way for listing and trading
of issuer’s securities. The sale of securities can be through book building or normal public issue.


Further Public Offers are issued by companies or corporate bodies whose shares are already
being traded in the capital market and they are issuing fresh shares either to fund the expansion
of their existing business or to invest into other business activities.

 For sub-brokers: The main steps to become a sub-broker and to enter in exchange are:

National certification in finanacial


Membership requirements


The NCFM Programme

Taking into account international experience and the needs of the Indian financial markets,
National Stock Exchange introduced in 1998 a facility for testing and certification by launching
NSE's Certification in Financial Markets (NCFM).

NCFM is an online testing and certification programme. It tests the practical knowledge and
skills required to operate in the financial markets. Tests are conducted in a secure and unbiased
manner and certificates awarded based on merit of the candidate to qualify the on-line test.

The entire process of testing, assessing and scores reporting in the NCFM is fully automated.
The system is operated through an intranet facility by using a central World Wide Web server
with terminals located at each of the designated test centres to be used as an examination front
end. Communication between the central server and the test centres is achieved through
VSAT/leased line network.

The Test is also offered through the Internet to enable candidates outside the designated test
centres to take tests at their convenience. This allows flexibility in terms of testing centres, dates
and timing and provides easy accessibility and convenience to candidates.

The easy accessibility as well as flexibility involved in the NCFM programme has resulted in its
wider acceptance among market intermediaries, students and regulators.

Membership requirements (in LSE):

Individual Corporate

Age 21yrs. Directors must be of


Minimum directors N.A. 2

Educational Minimum +2 Directors must be +2

qualification passed

experience Minimum 3 years Minimum 3 years

experience in capital experience in capital
market market

Minimum Net worth 5 lacs 10 lacs


After completing the above requirements a person or a corporate becomes a sub-broker and
trading can be started.

 For investor: There are mainly two types of investors:

• Individual

• Non –individual

Categories under both types of investors:

Individual a/c’s Non – individual a/c’s

• Proprietorship a/c • Partnership a/c

• Minor’s a/c • Hindu undivided family a/c

• Corporate a/c

Formalities and Documents required:

Individual Non – individual

For Minor For sole- Corporate Partnership HUF


Guardian can Individual PAN PAN of company Bank proof of HUF’s PAN
sign and make (as ID proof) firm

PAN of minor Bank a/c Latest 2 years Partners Karta’s PAN

statement on balance sheet agreement
name of

Birth certificate Address proof Copy of Any authority Address proof of

(bills like Memorandum of letter karta
electricity and Association and
telephone) Articles of

Letter from Address proof Partnership Bank proof of

guardian (bank statement) firm’s PAN HUF

Board resolution Address proof of

partnership firm

Shareholding Partners PAN

pattern and address

All directors
PAN and their
address proof

DP proof


There are mainly three types of trading:

Trading type Payment methods

 Stocks Cash and derivatives

 Commodity Derivatives

 Forex Derivatives

 Stocks:

Share or stocks trading is very familiar as most of the trading is done in shares of the companies
listed in the exchanges whether BSE or NSE. More than 2000 companies are listed in both of
exchanges in which trading is done. Mainly sensex deals with 30 companies and nifty deals with
50 companies and both are weighted indices of these companies and show rise or fall in these
particular companies.

 Commodity:

The trading market of commodities was established before 1970 as a leading market in India.
Indeed, in the previous 1970s phase, the commodities' trading markets of India began to lose its
effervescence. This happened due to a number of restrictions and regulations from 1970s period,
which was introduced by the government into the commodity market, India.

Those restrictions acted as impediments in the pathway of smooth commodity trading

functioning. Recently, various restrictions have been eliminated, which were affecting the
trading market of commodities in India negatively. So, nowadays, commodities' trading, India
has once more started to mature at a swift pace.

 Forex:

The international currency market Forex is a special kind of the world financial market. Trader’s
purpose on the Forex to get profit as the result of foreign currencies purchase and sale. The
exchange rates of all currencies being in the market turnover are permanently changing under the
action of the demand and supply alteration. The latter is a strong subject to the influence of any
important for the human society event in the sphere of economy, politics and nature.
Consequently current prices of foreign currencies evaluated for instance in the US dollars
fluctuate towards its higher and lower meanings. Using these fluctuations in accordance with a
known principle “buy cheaper – sell higher” traders obtain gains. Forex is different in compare
to all other sectors of the world financial system thanks to his heightened sensibility to a large
and continuously changing number of factors, accessibility to all individual and corporative
traders, exclusively high trade turnover which creates an ensured liquidity of traded currencies
and the round - the clock business hours which enable traders to deal after normal hours or
during national holidays in their country finding markets abroad open.

2.4 Derivatives:

Primary market is used for raising money and secondary market is used for trading in the
securities, which have been used in primary market. But derivative market is quite different
from other markets as the market is used for minimizing risk arising from underlying assets.

A financial derivative is a product that derives value from the market of another product. Hence
derivative market has no independent existence without an underlying asset. The price of the
derivative instrument is contingent on the value of underlying assets.

Participants of Derivatives:

 Exchange, trading members, clearing members.

 Hedgers, arbitrageurs, speculators.
 Clearing, clearing bank.
 Financial institutions.
 Stock lenders and borrowers.

Operators in Derivative

Hedgers Speculato Arbitrage

r ur

Hedger: Hedgers use futures or options markets to reduce the risk associated with the price of
the asset. Thus, they are operations who want to eliminate the risk composing of their portfolio.

Speculators: They wish to be on future movements in the price of an asset. A speculator may
buy securities in anticipation of rise in price. If this expectation comes true he sells the securities
at a higher price and makes a profit. Usually the speculator does not take delivery of securities
sold by him. He only receives and pays the difference between the purchase and sale prices.

Arbitrageurs: They are in business to take advantage of discrepancy between prices in two
different markets. If for example, they see the future price of an asset getting out of line with the
cash price, they will take off setting positions in two markets to lock in profit



Derivatives FUTURE


FORWARDS: a forward contract is a customized contract between two entities, where

settlement takes place on a specific date in the futures at today's pre-agreed price.
FUTURES: a future contract is an agreement between two parties to buy or sell an asset at a
certain time the future at the certain price. Futures contracts are the special types of forward
contracts in the sense that are standardized exchange traded contracts.
A futures contract is a type of derivative instrument, or financial contract, in which two parties
agree to transact a set of financial instruments or physical commodities for future delivery at a
particular price. If you buy a futures contract, you are basically agreeing to buy something that a
seller has not yet produced for a set price. But participating in the futures market does not
necessarily mean that you will be responsible for receiving or delivering large inventories of
physical commodities - remember, buyers and sellers in the futures market primarily enter into
futures contracts to hedge risk or speculate rather than to exchange physical goods (which is the
primary activity of the cash/spot market). That is why futures are used as financial instruments
by not only producers and consumers but also speculators.

The consensus in the investment world is that the futures market is a major financial hub,
providing an outlet for intense competition among buyers and sellers and, more importantly,
providing a center to manage price risks. The futures market is extremely liquid, risky and
complex by nature, but it can be understood if we break down how it functions.

While futures are not for the risk averse, they are useful for a wide range of people. In this
tutorial, you'll learn how the futures market works, who uses futures and which strategies will
make you a successful trader on the futures market.


An options is the right, but not the obligation to buy or sell a specified amount (and quality) of a
commodity, currency, index or financial instruments to buy or sell a specified number of
underlying futures contracts, at a specified price on a before a give date in the future.







A glance at the rights and obligation of buyer and seller reveals that option contracts are
skewed. One way naturally wonders as to why the seller (writer) of an option would always be
obliged to sell/buy an asset whereas the other party gets the right? The answer is that writer of an
option receives, a consideration for

Undertaking the obligation: This is known as the price or premium to the seller for the option.

The buyer pays the premium for the option to the seller whether he exercise the option is not
exercised, it becomes worthless and the premium becomes the profit of the seller.


The two types of options are calls and puts:

A call gives the holder the right to buy an asset at a certain price within a specific period of time.
Calls are similar to having a long position on a stock. Buyers of calls hope that the stock will
increase substantially before the option expires.

A put gives the holder the right to sell an asset at a certain price within a specific period of time.
Puts are very similar to having a short position on a stock. Buyers of puts hope that the price of
the stock will fall before the option expires.

Participants in the Options Market

There are four types of participants in options markets depending on the position they take:

1. Buyers of calls

2. Sellers of calls

3. Buyers of puts

4. Sellers of puts

People who buy options are called holders and those who sell options are called writers;
furthermore, buyers are said to have long positions, and sellers are said to have short positions.

Here is the important distinction between buyers and sellers:

-Call holders and put holders (buyers) are not obligated to buy or sell. They have the choice to
exercise their rights if they choose.

-Call writers and put writers (sellers), however, are obligated to buy or sell. This means that a
seller may be required to make good on a promise to buy or sell.

Don't worry if this seems confusing - it is. For this reason we are going to look at options from
the point of view of the buyer. Selling options is more complicated and can be even riskier. At
this point, it is sufficient to understand that there are two sides of an options contract.

The price at which an underlying stock can be purchased or sold is called the strike price. This is
the price a stock price must go above (for calls) or go below (for puts) before a position can be
exercised for a profit. All of this must occur before the expiration date.

There are two main types of options:

• American options can be exercised at any time between the date of purchase and the
expiration date. The example about Cory's Tequila Co. is an example of the use of an
American option. Most exchange-traded options are of this type.
• European options are different from American options in that they can only be
exercised at the end of their lives.


Organization chart of Ludhiana stock exchange


Board of directors


Executive director or general manager

Surveillance Accounts

Maintenance Department Clearing

Legal Department
Know Your Client(KYC)

Listing Department
Computer Department EDP Section

Secretarial Membership


The Ludhiana Stock Exchange Association Limited Was established in 1983, with 220 members
by Sh. S.P. Oswal and Sh. B.M. Munjal leading industrial luminaries, to fulfil a vital need of
having a Stock Exchange has grown phenomenally. It switched from manual trading to screen
based trading on 18th November 1996 and number of listed companies increased from 160 in
90’s to 405 in 2004 of which 271 are non-regional companies.

The Stock Exchange has played an important role in channeling saving into capital for the
various industrial and commercial units of the State of Punjab and other parts of the country.


Name Designation Date of Appointment

Mr. Krishan Kant Puri Chairman 29.09.2007

Mr. Manoj Sarna Vice-Chairman 29.09.2007


Mr. Manjit Singh Sarna Member-Director 27.09.2008

Mr. Vishal Goomber Member-Director 27.09.2008

Mr. Lalit Kishore Member-Director 27.09.2008

Public Representative Director-
Dr. Anil Kumar Angrish 19.07.2007
Independent Director
Public Representative Director-
Mr. Vijay K. Bansal 12.03.2008
Independent Director
Public Representative Director-
Mr. Susheel Bhakoo 12.03.2008
Independent Director
Public Representative Director-
Mr. Pawan Kumar Garg 27.08.2008
Independent Director
Public Representative Director-
Dr. Prem Kumar 14.02.2009
Independent Director
Mrs. Pooja M. Kohli LSE-Representative Director 14.02.2009

Trading System :

On-line screen based trading system commenced at Ludhiana Stock Exchange on November

On – Line Trading Through VSATS :

With the objective to broad-base business opportunities to the investors and members, the
exchange has set up 37 trading terminals at remote sites in the State of Punjab , Delhi and union
territory of Chandigarh. Now from October 1999, trading through VSATS is being smoothly

Trading on bigger stock exchanges through subsidiary route

The exchange acquired the membership of NSE and BSE through its subsidiary LSE Securities
Ltd. with the objectives of providing an enabling mechanism to its member to its member
brokers of LSE Securities Ltd.

Trading at NSE and BSE commenced through the subsidiary route from September 2000 and
December 2000, respectively, and the trading in F&O segment of NSE commenced in February
2003 have been Rs.8000 crores and Rs.44 crores respectively.


At every Annual General Meeting, one third of the elected directors retire by rotation.
Administration of the exchange is managed by executive director who is assisted by the general
manager cum company secretary and a team twenty five advisory and standing committees
including the Investor Grievance Committee to assist the administration.

Corporate governanace

Although Ludhiana Stock exchange is not a listed company, yet it has followed the model of
corporate governance, ehich is evident from the composition of the statutory committees, the
investor grievance committee and audit sub-committee. The committee comprises of three
representatives and three broker members. It is headed by Shree Dinanath Sharma, Retd.
Additional sessions judge and under his leadership; the stock exchange is able to redressthe
investor grievances by following the corporate governance model. Sh. P.C. Goyal, chartered
accountant who is also a non broker, heads the audit committee. Brokers and non-brokers in
40:60 represent statutory committee.

Objectives of Ludhiana stock exchange

The main objective of LSE is the development of healthy, orderly and transparemt capital

 To channelize the saving into investment in capital market there by providing funds for
growth & expansion.
 To provide liquidity to the investors of the region by providing them with a secondary
market network.
 Disseminating information among investors thereby saving their interests.
 To maintain high standard of commercial honor & integrity.
 To promote and inculcate honorable practice and just & equitable principle of trade &
 To discourage and to suppress malpractice detrimental to the interest of investors at


 First regional stock exchange to give proposal of making subsidiary as broker of NSE &
BSE for survival of stock exchange and second to start operations like broker of NSE &
 First regional stock exchange to start trading in commodities market.
 First regional stock exchange to start courses on capital market, only BSE is
performing this sort of activities and NSE is also performing courses on capital market
only for members but LSE have started for outsiders also.


LSE Securities Ltd. was incorporated in January 2000 with a view to revive the capital markets
in the region and for taking full advantages of the emerging opportunities being provided by
expansion of bigger stock exchange like NSE and BSE. The company since its inception has
marched forward rapidly and achieved many milestones in a short span of time.

Objectives of the company

LSE Securities Ltd. is a subsidiary of the Ludhiana Stock Exchange Ltd. which was formed with
an objective to enhance business and investment opportunities for the investors of Ludhiana
stock exchange at large, through innovative products by encompassing a variety of activities
related to the market.

Corporate membership of NSE and BSE

SEBI, at the initiative of LSE, permitted smaller stock exchanges to trade on bigger stock
exchanges through their subsidiary companies. Ludhiana stock exchange floated its subsidiary
company, the LSE securities Limited, with the objective of obtaining trading rights on bigger
stock exchanges. It has obtained corporate membership of both BSE and NSE in the first half of
year 2000.

Trading at NSE and BSE

The LSE securities ltd. commenrced trading operation in capital market segments of BSE and
NSE in September 2000 and December 2000 respectively. The turnover of the company is
growing by leaps and bounds ever since its incorporation. There was encouraging response from

sub brokers especially at NSE counters. During the financial year 2001-2002, the company
recorded a turnover of rs.4610 crores and rs.2160 crores in “capital market” segment of NSE and

The average daily trading volumes on NSE, BSE cash market segment and F&O segment during
the months of January and February 2003 has been rs.8 crores, rs.18 crores and rs.44 crores.

F&O segment of NSE

The LSE securities ltd. commenced trading operations in future and options segment of NSE in
February 2002. The company became the first subsidiary of any regional Stock Exchange, which
commenced trading in “F&O” Segment of NSE has been very encouraging and volumes
generated in this segment soon exceeded those in “Capital Market” segment.
Trading Through V- SATS

The LSE Security Ltd. Has also provided facility to its sub-brokers for trading on NSE and BSE
through VSATS counters, which are located outside Stock Exchange Building. Presently, 23
sub-brokers of the company have been trading through VSAT on NSE and four on BSE.
Certification in Financial Market. In order to provide professional services to the investors of
LSE Security Limited through its sub-brokers, the company motivated its sub-brokers and its
staff to qualify the certification in financial markets conducted by NSE. As a result, the people
having qualified the said certification are operating 97 trading terminals for Capital Market
Segment and 44 for F&O segment.

Depository Participant Services- National Security Depository Limited (NSDL)

In order to further strengthens its services to sub-broken and investors, the Company applied for
the DP of CSDL. It started DP operations of CDSL; the company has been able to provide
delivery of shares to sub-brokers and investors on the day of payout, which in turn helps the sub-
brpkers to give timely deliveries to their clients. Introduction of CDSL operation has also
enabled the sub-brokers and investors of the Company to timely meet the pay in obligations of
securities purchased by the investors on BSE AND SOLD NEXT DAY ON NSE THROUGH
the company and vice-versa.

Risk Management system of LSE Securities Limited

• Deposit

Every member of LSE registered with SEBI as sub-brokers of LSE Securities Limited trading
through LSE Securities Limited on NSE has deposited an interest free security Deposit 1.50 lac
with the form of cash.

• Trading System

LSE Securities limited has been using CTCL based Neat. XS Trading Software developed by
NSE, IT for trading on NSE. The said trading software has the features like setting up of Intra
Day Trading Limits, Gross Exposure Limits and MTM Limits like setting up of Intra Day
Trading Limits, Gross Exposure Limits and MTM Limits.

The system has also the feature for viewing top “n”

Number of Sub-Brokers in order of MTM loss incurred by them at particular of time.

• Intra Day Trading Limits

Sub-brokers are allowed an Intra Day Trading limit of 33 times of their interest free Security
Deposit of Rs. 1.50 lac.

The sub-broker desirous of availing higher, limits are required to deposit additional capital in the
form of cash / FDRs.

• Gross Exposure Limits

Sub-brokers are an Intra Day Trading Limit of 8 times of their Interset Free Security Deposit of
Rs. 1.50 lac. The sub-broker desirous of availing higher limits is required to deposit additional
capital in the form of cash /FDRs.

It is important to mention here that validation by the systems done on the basis of orders input by
a sub-broker not on the basis of trades. As such, a sub-broker cannot exceed his Gross Exposure
Limit, at any point of time. As soon as a sub-broker reaches 100% of his Gross Exposure Limit,
his terminal is deactivated automatically by the system and for activation the concerned sub-
broker is required to deposit additional capital in the form of Cash /FDR.

• MTM Limit

The CTCL based Next XS trading System developed by NSE. IT limited also the feature of
setting up of MTM limits of the sub-brokers. LSF Securities Limited has fixed the MTM Limit
of the sub-brokers equivalent to the sum of their Interest free Security Deposit and additional
Capital. As soon as sub-broker reaches 100% of the allowable MTM Limit his Gross Exposure
Limit, his terminal is deactivated automatically by the system and for activation the concerned
sub-broker is required to deposit additional capital in the form of Cash /FDR.

• Day and Reports

1. LSE Securoties Limited generates a report detailing sub-broker wise open purchase
position, MTM loss, MTM gain and deposits available with the Exchange at the end of a
particylar trading day to monitor the overall positions of the sub-broker to take
preventive measures wherever required in the subsequent trading days.

2. LSE Securities Limited generates a report detailing sub-broker wise report detaining the
Mark-to-Market loss incurred by the sub-brokers during a specific period along with their
deposits available with the Exchange so as to monitor those cases closely where the
Mark-to Market Loss during a specific period are very high.

3. LSE Securities Limited also generates a report with regard to the trades executed
between its sub-brokers so as to check whether there have been any trades between the
sub-brokers of LSE Securities Limited especially illiquid scrip’s leading to creation of
artificial market so as to take preventive measures/actions at the end of subsidiary itself.

Action in case of delay in meeting obligations by the sub-brokers towards pay-in and margin

All the sub-brokers are required to meet their obligations towards pay-in and margin on T+1
day. In case any sub-broker fails to meet his obligations towards pay-in and/or margin on
T+1 day and then the terminal of the concerned sub-broker is deactivated on T+2 day and the
same is activated only on clearance of obligations with the reduced exposure limits fit by
LSE Securities Limited.

Since LSE Securities Limited is required to meet its obligations towards pay-in in T+2
day, the sub-brokers of LSE Securities Limited are required to meet their obligations
towards pay-in on T+1 day so as to avoid any default in pay-in by LSE Securities
Limited on NSE.













Brief explanation of all above departments is given as:


When the broken or outside client do not settle the claim in between themselves and move to the
legal courts, the legal department comes into the picture to fight for the cause of investors and
against the defaulting members. Legal department also assist the members, investors to settle
their disputes through the arbitration committee, investor grievance committee so that the dispute
may be settled at the earliest without incurring heavy dues or amount regarding court fee,
advocate fee etc. The main objectives of the legal department is to streamline and make
effective, the rules and regulation of the exchange and to see that the guidelines citcular and any
amendments in rules made by SEBI are enforced at the appropriate time so that future
complication may be reduced or avoided.

Whenever the point of law is involved, it is the duty of legal department to take the legal opinion
from senior advocate in accordance with the present law and circulate them amongst the
members for their benefits.

As the name, “Legal Department” suggests, it is clear that the department will solve every matter
involving legal work.

There are four committees under legal department:

• Arbitration committee

• Disciplinary committee

• Investor Grievance committee

• Default committee


The functions and duties of the secretarial department include maintenance of records of minutes

a) Meeting of Board of Director

b) Meeting of Various committee

c) Meeting of Members

d) Minutes of Annual General Meeting (AGM)

e) Minutes of Extra ordinary General Meeting (EGM)

These minutes are statutory requirements and are preserved by the secretarial department.

Another function of secretarial department is to send notices with the directions of

B.O.D. to the respective director to attend Board Meeting. It is also a duty of secretarial
department to insure that every meeting held is a “valid meeting” having the quorum required by
the law otherwise it would effect towards unlawfulness. The decision taken at such meeting
cannot be rectified in another meeting.

It also sends notices to members for attending various committee meetings. Notices
are also sent to members for attending annual general meeting and extraordinary general
meeting. The notices are prepared very carefully because these contain the agenda pertaining to
the meeting. Only the agenda shows the purpose of holding the meeting.

All this makes it necessary for the secretarial department to have a proper up dating data, up
dating of law and timely show of latest information so that the objective of its functioning are
properly accomplished. This department also deals with transfer of shares. In order to be a
member of stock exchange a person has to hold at least one share. If the member wishes to sell
his ticket, he has to intimate the secretarial department in advance. A notice is given thereafter in
newspaper for objection within 10 days of such a notice; the clients can lodge their claims. A 10
days notice is also displayed in the notice board of the exchange for objections to be raised by
the members.


Listing is one of the major functions of stock exchange wherein the securities of the companies
are enlisted for trading purpose. Any company incorporated under companies Act 1956, coming
out with an IPO (initial public offering), has to mandatory list its shares on a stock exchange.

The Listing Department of Ludhiana stock exchange deals with listing of securities, further
listing of issues like bonus and rights issues; post listing compliance of the companies which are
already listed with Ludhiana stock exchange. The Companies desirous of listing its securities on
the exchange have to sign a listing agreement with the stock exchange. The functioning of
department can be studied in the following parts:

1. For the purpose of listing, the company should have a minimum capital of Rs. 3.00

2. The Articles of association of the company should be in consonance with the norms
specified by the exchange.

3. The company has to forward an initial listing application along with fee to the exchange.

4. The draft prospectus has to be approved by the regional stock circulating the same.

5. The company then gas to file basis of allotment duty signed by the head manager and a
company official to the regional stock exchange.

6. The basis of allotment along with the total applications received successful/ rejected
application and reasons there to are verified by the Exchange.

7. The company then has to comply with all requirements mentioned in the listing

8. Before the date of opening of the issue the company has to deposit as security with
exchange 1% of [ Public offer * face value + premium (if any)]

9. In case of default, listing requirements, the company has to mainly comply with the
listing agreement e.g. timely submission of various documents like distribution schedule,
balance sheet, quarterly results etc.

The schedule of annual Listing fee and up front listing fee payable triennially is given below:

Paid up capital Annual Listing Fee (Rs.)

Up to 1 crores 7000

1 to 5 crores 10000

5 to 10 crores 18000

10 to 20 crores 36000

20 to 30 crores 54000

Above 50 crores 90000

Companies, which have paid up capital of more than Rs.50 crores, will pay additional fee of
Rs.2800 for every increase of Rs.5 crores or part thereof. The annual listing fees referred to
above would be applicable only if the exchange is a Regional Stock Exchange otherwise the fees
will be 50% of the fees indicated above.

No. of listed companies



271 Regional 132 Non-regional



205 88

This department deals with the membership of individual & corporate members, the trade in
market is done through the authorized members who have duly registered with concerned stock.


AGE LIMIT: To be member of exchange there is an age limit.


QUALIFICATION: To be a member of stock exchange

(a) Minimum qualification matriculation.

(b) Three years experience including written tests & interview.

(c) Person should not be declared bankrupt.

(d) Person should get sanction from SEBI or minister of finance.

(e) Net worth of member should be 5 lakhs.



• Company must be registered under section 322 of the company Act (director with
unlimited liability)

• Two copies of memorandum of Association & article of association.

• Qualification & proof of age at least 02 directors, who will deal in securities.

• Company should not be declared bankrupt.

• Net worth of company should be 10 lakhs.


The exchange has made special arrangement to handle investor’s complaints from investors and
follows up the complaints with company and member brokers to ensure satisfactory redressal.
Recording of complaints and monitoring of their redress are fully compturized.

Investor Protection Fund

The exchange has set up an I.P.F. in the month of January, 1990 for providing compensation to
individual investor in case of default by a member of exchange.

Investor services centre

The exchange has set up an I.S.C. in the premise of exchange, which provides information
related to capital market, the centre has a well-equipped library.

The exchange introduced a computer based stock-tel-system, to the investor and members of
general public such as prices of scrip; new listing etc. centre is also well equipped with a screen
for providing “live” rates of trading at LSE, BSE and NSE.


This department of LSE is regulating the activities related to the fields of electrical, mechanical
and civil engineering besides having other functions like that of security. Here are some
important aspects:

• Air-conditioning plant

• Electrification of building

• Maintenance of generators

• Maintenance of telephone exchange



The growing technicalities and the increasing workload have enhanced the importance of
computer dept. at L.S.E. now days. The computer section of stock exchange is the backbone of
this organization as it remains active all the time and is directly or indirectly involved in all the
activities of the exchange from beginning of the settlement period till its end. This department is
mainly referred as to “EDP SECTION” i.e. electronic data processing section. The computer
section of LSE prepares several reports namely:

1. Scrip wise statement of each member for each settlement period.

2. Scrip status report for each statement period.

3. Receive order detail statement.

4. Statement of transaction of each settlement period for each broker.

5. Difference bill statement.

6. Trail balance.

7. Supplementary Report.

8. Main Statement.

9. Bank entry statement.

Some of the above mentioned reports are given to the broken, some are kept by the stock
exchange for their own records, and last report is sent to bank.

Scrip wise Statement of Transaction:-

This statement is taken out from brokers and given to them. This report contains:

• Transaction date.

• Name of broker from whom shares are bought/sold...

• Net position.

Bank entry statement

This statement lists the amount to be debited or credited in each broker’s account. It contains:

• Serial number

• Broker name

• Account number

• Debit amount

• Credit amount

• Grand total


Accounts department deals with the maintainance of recordsregarding income and expenditure
of exchange. It prepares annual accounts of the exchange. Most of the work in accounts
department of LSE is done manually although computer is used for making tiral balance, income
and expenditure statement and balance sheets. The manual report of LSE is generally published
in August every year. The accounts department of LSE performs following functions:

 To make and receive payments to\from outside agencies which include companies listed
at LSE and brokers.

 To keep the record of all incoming and outgoing moneyand preparation of financial
statements at the end of year.

 To get their accounts audited from the third party.

Some of the accounting policies followed are:

• Accrual system of accounting is followed

• Fixed assets are stated at historical cost less depreciation

Depreciation is provided on w.d.v. method in accordance with schedule 15th of

companies act, 1956.

Sources of funds of LSE

• Initial listing fee from company i.e. Rs. 15,000

• Annual listing fee from companies.

• Membership fee from brokers at the beginning.

• Annual computer fee from brokers i.e. (Rs.5000)

• Annual Library Charges from brokers i.e.(Rs.200p.a.)

• Brokers’ contribution to investor protection fund (Rs.500p.a.)


• Fines and penalties from brokers.

• Maintenance charges Rs. 13.50 per sq feet per quarter from those membership
having rooms and those not having rooms are charged at the rate Rs. 1800/-p.a.

• Service charges from broker.

• Electricity charges Rs.300 p.a. per room members having room & those not
having room are charged @ Rs. 1200 p.a.

• Annual fee from broker i.e. Rs. 500 & their authorized representative i.e. Rs. 500
each. Broker members are allowed to have 4 authorized members.

• Interest earned on fixed deposits.

Billing of members is done on annual basis for annual fees and other above-method charges on
1st APRIL of each year and year are required to make payment in 180 days up to 30th
SEPTEMBER. Beyond that they are charged interest on due amount @ 12% P.A. still in case of
non payment. Broker members served a notice for 60 days, if the members fails to comply with
notice then he can be expelled.

Application of funds

• Salary given to employees.

• 5% of the listing fee given to SEBI each year.

• 20% for providing services to the investors.

• Expenditure in respect of share transfer.

• Expenditure on various function Board Meetings etc.

Administration expanses :-

• Electricity charges

• Security charges

• Telephone charges

• V-SAT charges

• Printing & other charges

• 1% of listing fees transferred annually to investor protection


• 20% of the listing fees is transferred annually to contingency fund for settlement.


It is necessary for every Stock Exchange to establish margin section in the exchange its basic
function is to collect different type of margin from brokers as per regulations given by SEBI.
The idea behind this section is :-

• To prevent the members from doing excessive speculative trading.

• To keep track of the members who are expected to default in future.

Function of margin section

1. To collect BMC, ABMC.

2. To keep a track on the members / brokers.

3. Collection of the margins.

4. Release of the margins.

Margin section is an important section. This section apart from dealing in securities and
regulatind the trading of brokers, keep a check on excessive trading in speculation. Margin is the
amount which is collected from the broker for the safety of transaction as the transaction is to be
finalized as per t+2 basis and t+1 basis in case of derivatives. In the mean time the rates may
fluctuate which may lead to default. So to make a transaction safe, daily margins are collented
from brokers. When a member gets registered in exchange and with SEBI then before starting
trading, he is supposed to deposit some money which is fixed by sebi as security. Now in se’s
rolling settlement prevails. If a member wants to trade with a higher limit, he has to deposit
additional base minimum capital.

Types of margins:

As we have discussed earlier margins collected from members to avoid the losses and to
provide security to the investors. There are different types of margins, which are imposed given
as follows:

Mark to Market Margin: The exchange collects this margin on daily bases, broker-wise 100%
national loss of each member for every scrip, calculated as the difference of his buying or selling

price and closing of that scrip at the end of the day. This is also called loss margin. The margin is
payable in cash or in bank guarantee.

Value at risk or VAR Margin: For the scrips in the compulsory rolling settlement 99% VAR
based margin system would be introduced w.e.f. July 02, 2001. The computation of this margin
is done by software developed by CHICAGO Stock Exchange.

Additional Margin: Thus margin is 12% would be levied over and above the VAR margin. This
margin is collected from brokers on T+2 basis.

Special Margin: The brokers will be required to deposit margin as per the percentage prescribed
by stock exchange in this regard from time to time.


This department carries out all activities relating to:

• The recruitment of the personnal, whenever and wherever a vacancy arises

• Maintenance of attendance registers

• Appointment or removal of floor clerks or authorized representatives of brokers

• Records of leaves and overtime of employees

• Promotion, demotion, resignation, conveyance allowance etc.


Clearing house takes care of pay-in and pay-out securities. At this time there is weekly
trading system (Monday to Friday) prevails. And securities are settled by rolling settlement.
Means pay-ill and pay-out of securities is settled on T+3 Basis would commence from 1April,
2002. SEBI decide the following activity schedule for exchanges for the T+3 rolling settlement.

Settlement cycle schedule:

Sr. Day Description of Activity Trade


1 T Trade Date

2 T+1 Custodial Confirmation

3 T+3 Securities and Funds pay in and pay-out

4 T+4 Auction of shortage in deliveries

5 T+6 Auction pay-in/pay-out as soon as possible



To fulfill the vital need for stock exchange in the region, the industrial tycoons of this region Sh.
S.P.Oswal and Sh. B.M. Munjal took serious steps to work out for the formation of Ludhiana
Stock Exchange. Hence as a result of their earnest efforts the Ludhiana stock exchange was
incorporated on 17th October, 1981 as a company limited by shares having an authorized capital
of rupees Ten Lakhs (500 shares @ Rs. 2000each). It was granted recognition by govt. of India
under section 4 of the securities contract act 1956 on 29th April 1983.

At the initial stage, its operations were started in a small building located at Feroze Gandhi
Market, Ludhiana. It has its own BILLETIN which is published every quarter.


Ludhiana Stock Exchange is one of the leading Stock Exchanges among the Regional Stock
Exchanges of the country, and has been providing trading platform for the investors situated in
Punjab, J&k, Himachal Pradesh & Chandigarh. At present, it has 357 listed companies and
among them, 231 are listed as regional companies. It had been generating significant amount of
the business in the secondary market. It recorded a peak turnover of Rs.9154 crores during the
year 2000-2001. The structural changes that took place in the recent past in the Capital Market of
the country had a negative impact on the trading volume of the Regional Stock Exchanges.
There has been a significant reduction of turnover during the financial year 2001-2002, but the
reduction in the turnover of the Exchange has been more than adequately compensated by
substantial rise in the turnover of LSE Securities Limited, a subsidiary of Ludhiana Stock


The management of the Stock Exchange apprehended that the smaller regional Stock Exchanges
would not be able to meet the challenges imposed by expansion of bigger Stock Exchanges like
NSE and BSE and might end up loosing their entire business to VSAT counters of the bigger
Stock Exchanges. In order to prepare for such an eventuality, Stock Exchange set up a broking
arm in the name of LSE Securities Limited (a Subsidiary Company of the Stock Exchange) in
January 2000 and built infrastructure and IT based sophisticated systems to enable its members
and investors to trade on NSE and BSE through the subsidiary route. The Stock Exchange was
thus able to convert the "threat" it faced from expansion of NSE and BSE into an opportunity for
its members and investors. As expected, there was a marked shift in the trading volumes from
the Stock Exchange to the NSE and BSE through the Subsidiary Company. This shift became
more prominent when SEBI introduced compulsory Rolling Settlement and banned the deferral
products like Badla, MCFS and ALBM w.e.f. July 2, 2001 causing thereby an end to arbitrage
opportunities between the Stock Exchange and NSE/BSE. Ultimately, there was complete shift
of trading from the Stock Exchange to the LSE Securities Limited in January 2002.


Date Achievements
Oct 1981 Incorporation of stock exchange
Aug 1983 Commencement of operations
Aug 1983 Shifting of operations to own building
Nov 1996 Online screen based trading
April 1998 Modified carry forward system (MCTS) and settlement guarantee
Nov 1998 Trading and settlement in demat scrips
Sep 1999 Trading at remote sites through VSAT counters
Jan 2000 Introduction of rolling settlement
Aug 2000 Commencement of online real time depository services
Dec 2000 Trading on NSE in CM segment (through LSE securities limited)
Sep 2000 Trading on BSE in CM segment (through LSE securities limited)
July 2001 Introduction of compulsory rolling settlement
January 2002 Complete shift of trading in CM segment from LSE to LSESL .
Feb 2002 Trading in F&O segment of NSE
April 2002 Rolling settlement cycle prevailing at LSE on T+3 basis
April 2003 Rolling settlement cycle prevailing at LSE on T+2 cycle
LTD., a subsidiary of LSE. Securities ltd.
March 2004 Introduction of MCX (multi commodity exchange of India) MCX
offers 14 different commodities such as steel, kapas, rubber,

blackpepper,oil soil seeds,precios metal etc.

March 2005 Sensex touches all time high of 6954
March 2007 Opening of DP branch at SIRSA Haryana

2.10 Product range or services offered by exchange

Capital Market: LSE Securities Ltd. is a leading broker of NSE and BSE and has been providing
capital market and derivatives services to the clients. You can avail the following services by
associating yourself to ourselves.

• Fundamental and Technical Research to guide you in Capital Creation.

• Efficient Execution through our term of experienced dealers.
• Transparent Dealings.
• Attractive Cost Structure.

Derivatives: Derivatives (Futures Options) are ideal instruments to protect your portfolio against
risk. You can trade with index movements, hedge and leverage your portfolio by limiting risk
but keeping your upside unlimited.

IPO's: IPO is the first offer from any corporate to public for the subscription for its shares. Our
clients can subscribe for IPO through us. exchange receive IPO applications from our customers
at our office only. For this it is associated with DSPML and Enam Securities Pvt. Ltd.

Depository Services: A depository can be defined as an institution where the investors can keep
their financial assets such as equities in the dematerialised form and transactions could be
effected on it.

Besides providing custodial facilities and dematerialisation, depositories are offering various
transactional services to its clients to effect buying, selling, transfer of shares etc. Depository
Services Cell provides the following services:

• Convert your physical holding into electronic holding (which is called

"dematerialisation" of securities).
• Keep custody of your holdings in electronic form.
• Transfer the shares in the electronic form from one account to another.
• Facilitate pledge of your electronic securities.

2.11 Financial status of the organization



NO. 31-03.2007 2006
a) Capital 1 602000 602000
b) Reserves and Surplus 2 169116351 168844708

TOTAL 169718351 169446708

a) Gross Block 147472085 147866376
b) Less: Depreciation 54667842 53186507
c) Net Block 92804243 94679869

2. INVESTMENTS 4 30897000 30897000

3. Deferred Tax Asset 154840 165779


a) Inventories 41769 56765
b) Sundry Debtors 4817922 4546327
c) Cash and Bank Balances 110577976 108499165
d) Other Current Assets 4414283 2902241
e) Loans and Advances 7404479 20648680
(A) 127256429 136653178
Current Liabilities 85510697 102615218
(B) 6
Net Current Assets (A-B) 41745732 34037960

(To the extent not written off or adjusted)
5. Profit and Loss Account 4116536 9666100

TOTAL 169718351 169446708

2.12 Statistical profile or performance history of company



MARCH 2007
Membership fee 301000 304000
Listing fee 1580750 2596882
Maintenance charges recovered 4139110 3949022
VSAT charges 442791 1682250
Profit on sale of fixed assets 41610 -
Other income 7 26896429 21887788
TOTAL 33401690 30419942

Personnel Expenses 8 3244349 3393952
Administrative and Other Expenses 9 17582470 22463633
Interest Paid - 114360
Contribution to customer protection fund 16680 41434
Loss on sale /discard of fixed assets 52653 3692020
Contribution to FISE 50000 50000
Balances written off 235775 447841
Depreciation and Amortisation 2588682 2825025
TOTAL 23770609 33028265

Profi/(Loss) for the year 9631081 (2608323)

Less Provision for taxation:
-Current Tax 2280000 1662000
-Fringe Benefit Tax 170000 28000
-Deferred Tax 9560 (165779)
-Deferred Tax Adustment 1379 -
Profi/(Loss) after tax 7170142 (4132544)
Balance brought forward from last account (9666100) -
Balance Available for
Appropriation (2495958) (4132544)
Less : Appropriations
Income of SGF transferred to Fund Account 1286978 1454884
(Refer Note 7 of Notes on
Transferred to Reserve for Investor Services Fund 333600 828672
Transferred to Capital Reserve - 3250000
Balance Carried to Balance Sheet (4116536) (9666100)

Earning Per Share (Basic & Diluted) 11.91 (6.86)

(Nominal Value of Share Re.1/-each)

As the organization has undergone from a huge change of demutualization and has to form a
subsidiary for its operations, it has suffered loss in its previous years but now performance of the
LSE is noe improving and exchange is now earning profits from its operations. As it can be seen
that Earning Per Share has been improved from (6.86) which was negative to 11.91 in just one
year. It can be said that exchange is able to make huge profits in future.

2.13 Future prospects/plans

To increase its presence in the region further, the company plans to open its branches of
Depository services in the major cities of the region. To start with, it has already opened its
branches at Jalandhar, Amritsar, Ferozepur, Sirsa (Haryana), Una (H.P.), Chandigarh. Also
having plans to open branches in Moga and Sangroor.


Strengths of LSE

• It has an ultra modern infrastructure.

• It possesses dedicated manpower
• The management is fair at LSE
• It is one of the premier stock exchanges in India
• It is a high technology drive exchange
• It is air-conditioned and fully computerized.
• It has in house depository participants.
Weaknesses of LSE

• It has no different products and services from other stock exchanges.

• At LSE there is no trading of regional and non- regional companies.
• Investors and traders are not interested to trade at LSE because of lack of depth.
• LSE is not able to compete NSE and BSE.

• The value of LSE’s ticket is Rs. 4 lac, which were Rs. 50 lacs in 1992. This is because of
no trading at LSE.
Opportunities for LSE

• LSE can introduce new products and services, which can benefit the exchange.
• The merger with another stock exchange can improve it.
• It can better utilize its assets by leasing.
• The subsidiary of LSE has a bright future at NSE and BSE.
Threats for LSE

• NSE and BSE both are biggest threats for LSE.

• Ban and Badla systems have shattered the LSE.
• Competition from other stock exchanges.
• SEBI’s rules and regulations.


3.1 Objectives:

 To understand the working of a stock exchange and understanding its operations and
their importance

 To understand the calculation and importance of Sensex and Nifty

 To study the products offered in capital market and estimating their risk and return

 To find out the most preffered security to invest

 To find out the factors on which markets respond

This chapter describes the research methodology adopted to achieve the objectives of the study.
It includes the scope of the study, research design, collection of data, analysis of data and
limitations of the study.

3.2 Important details related with sources of data and methodology

Scope of the study

The scope of the study is to get the first hand knowledge about the Customer perference about
Bonn food Industries in Ludhiana city. The scope is restricted to study the factors affecting the
preference of customer while purchasing Bonn food products in Ludhiana city only. This is done
to avoid perceptual bias and for providing objectivity to the study.

Research Design

The research design constitutes the blueprint for the collection, measurement and analysis of
data. It is the strategy for a study and the plan by which the strategy is to be carried out.

The research design of the project is descriptive as it describes data and characteristics
associated with the population having life insurance policy .Descriptive research is used to
obtain information concerning the current status of the phenomena to describe "what exists" with
respect to variables in a given situation.

Data Collection

Primary Data

Primary data is that data which is collected for the first time. It is original in nature in the shape
of raw material. For the purpose of collection of primary data, a well structured questionnaire
was framed which was filled by the respondents.

Secondary Data

Secondary data is the data which is already collected by someone. They are secondary in nature
and are in shape of finished product. Secondary data was collected so as to have accurate results.
Required data was collected from various books, magazines, journals and internet.

Sampling Design

Sampling refers to selecting some of the elements in a population by which one can draw
conclusions about the entire population.


Universe is the infinite number of elements which the researcher is targeting in his study. Since
the study is restricted to Ludhiana city the universe for the study consists of all the investors in


Population is finite number of elements which the researcher is going to target in particular area.
Investors of Ludhiana city forms the population for the study.

Sampling Unit

Sampling Unit is the single unit of the population. A single individual or corporate who is
investing forms a sampling unit in this research.


Extent refers to the geographical area where there is a scope of population. The extent of the
study is Ludhiana City.

Sampling Technique

The selection of the respondents was done on the basis of convenience technique based on the
non probability method of sampling.

Sample size

Sample size is the size of sample drawn from the population which is the true representative of
the research.

The number of respondents included in the study was 50 investors for convenience in evaluating
and analyzing the data and because of time and resource constraints.

3.3 Limitations of the study:

 Sample size taken is 50 which cannot represent all the investors if Ludhiana or of India.

 Trading in India is very much influenced by the activities of FII’s whose data is not

 Indian capital market is a vast concept and it has many functions which cannot be
explained in detail in this report.

 Most of the data collected is from Ludhiana Stock Exchange and other exchanges may
have some different policies and procedures.


4.1 Interpretation of the questionnaire

Q -1: Which type of investor are you?

individual 41
non individual 9

Sample size taken for the research was 50 out of which 41 respondents (82%) were individuals
and 9 (18%) was non-individuals. It depicts that majority of investors participating in stock
market are individuals.

Q -2: From how much time you are investing in securities other than bank deposits?

less than 1 year 10

1-3year 19
3-5year 14
More than 5 year 7

Majority of investors have started trding in the time span of 5 years as shown by results of
questionnaire. 19 startes trading from 1-3 years time span and 14 started trading from 3-5 years
timespan and 10 started trading at the fall of market from 21000 to 9000 levels in lue of earning

Q -3: How much percentage of your saving have you invested?

0-25% 24
25-50% 17
50-75% 7
more than 75% 2

The data collected from 50 respondents gave result that 24 respondents or 48% have invested 0-
25% of their savings or income in securities other than bank deposits to earn a better return on
their investment and 17 or 34% of respondents have invested 25-50% of their savings. All these
41 respondents are individual investors and rest of the respondents who have invested 50-100%
of their deposits are non-individuals. It clears the point that non-individual investors have more
capacity to invest and influence share market and movement of sensex and nifty.

Q -4: According to you which trading is least risky? (5 for the most and 1 for the least

shares 216
currency 76
commodity 184

shares 5*21 105

4*24 96
3*5 15

currency 1*28 28
2*19 38
3*2 6
4*1 4

commodity 5*12 60

4*21 84
3*9 27
2*5 10
1*3 3

According to the results of the survey done on 50 respondents, majority of the respondents have
ranked trading in shares as most risky trading type. The rank weight age given to trading in
shares is 216 which proves it to be most risky and second most risky trading type is trading in
commodities having rank weightage of 184. Least risky trading type is forex or currency trading
due to small fluctuations in the exchange rate of dollar.

Q -5: How much risk you can take on your investment?

upto 20% 28
20-40% 17
40-60% 5
morethan 60% 0

28 respondents in number or 56% are ready to take risk upto 20% of their investment and 17 or
34% of respondents are redy to take 20-40% risk on their investment. Only 5 respondents are of
the view that they can take 40-60% risk on their investment. No body in ready totake more than
60% risk on their investment. It depicts the risk bearing potential of investors is low in India.

Q -6: Rank the securities you assume as high return giving. (5 for high return and 1 for
least return)

shares 226
mutual funds 202
fixed deposits 71

shares 29*5 145

18*4 72
3*3 9

mutual funds 21*5 105

14*4 56
11*3 33
4*2 8


ULIPS 19*4 76
17*3 51
14*2 28

FD's 5*3 15
11*2 22
34*1 34

Most of the respondents ranked shares as highest return giving security which scores 226 ranaks
points. Mutual funds are on the second number because of the lower risk than shares and less
volatility in their net asset value. Mutual funds have scored 202 points. ULIPS are on third
number by getting 155 points because of their dual benefit of insurance and investment. Majority
of the respondents are of the view that fixed deposits give lowest return which have scored 71

Q -7: Do you think that Sensex and Nifty present true picture of Indian economy?

Yes 42
NO 8

42 or 84% of respondents are of the view that sensex and nifty present true picture of Indian
economy as the variations in sensex and nifty are because of the factors that influence economy
positively or negatively. Only 8 or 16% of respondents are of the view that sensex and nifty
donot present true picture of Indian economy because there is a lot of speculation and
manipulation in both of them.

Q -8: From where do you prefer to purchase shares?

primary market 12
secondary market 38

In this question preferences of investors was tried to judge that from where majority of investors
prefer to purchase shares of a company and from the results of the survey it shows that 12 or
24% of investors are investing in IPO’s for the primary allotment of shares and 38 or 76% of
investors donot prefer to purchase shares from primary market and they only purchase shares
from secondary market.

Q -9: How long you wish to invest in shares?

less than 6 months 28

6 months to 1 year 13
1-3 years 7
More than 3 years 2

The results of this question showed the investment time period preferd by investors in India
which is very clear by looking at the graph. 41 or 82% of investors invest in stock market for
less than 1 year. They change their investment to any other share of company in less than 1 year.
In India investment gains less than one year falls under short term capital gains which are
taxable @15% tax rate. Investment more than 1 year or long term investors are very few. 7 or
14% of investors invest in shares for 1-3 years and 2 or 4% of them for more than 3 years.

Q -10: Rank the factors responsible for manipulation of Sensex and Nifty? (1 for least and
5 for highest)

speculation 201
foreign investment 159
market sentiments 220
cash flow in economy 110

speculation 23*5 115

14*4 56
6*3 18
5*2 10
2*1 2

foreign investment 13*5 65

12*4 48
5*3 15
12*2 24
7*1 7

market sentiments 28*5 140

14*4 56
8*3 24

cash flow in economy 22*3 66

16*2 32
12*1 12

50 respondents gave their views about the factors responsible for manipulaton in sensex and
nifty and gave ranks to the factors mentioned in the questionnaire. With 32% wieghtage and
getting 220 points market sentiments are is on the top. Investors think that sentiments in India
play an important role in manipulation and logic is used very less. Speculation is on second
number getting 29% or 201 points. In India speculators have a big hand behind manipulation.
Foreign investment is on third number getting 159 points and cash flow in economy is on fourth
number getting 110 points.

Q -11: What are the objectives of investing in IPO ?

quick returns 27
capital appreciation 11
liquidity 3
secure future 9

The results of this question helped me to find out that why majority of investor invest in share
market rather than other securities and it is clear that it is quick returns that 27 investors out of
50 wants from shares having 54% of sample size. 11 want capital appreciation and 9 want secure
future and they are interested in investment more than 6 months. Only 3 respondents or 6%
invest in shares because of the high liquidity in it.

Q -12: Which trading type do you prefer?

cash 13

intra day 16
F&O 21

These three trading types are used in stock markets for trading but mainly investors prefer F&O
trading due to high returns attached to it but it is also the most risky one. 42% of investors prefer
F&O trading and 32% of investors deals in intra day trading for quick returns. The percentage of
cash trading is only 26% in the market. So it is clear that cash trading is not done by most of the
investors due to insufficient source of funds but other trades are preffered due to quik returns.

Q -13: Do you think that most of the Indian investors invest after studying the history or
financial position of the company including you?

strongly agree (5) 3

agree (4) 11
undecided (3) 8
disagree (2) 12
strongly disagree (1) 16

It is the only question when asked to investors they have different views. Moreover 16% of
respondents were undecided on this point. But majority of investors i.e. 56% are of the view that
nost of the Indian investors donot analyse the financial statements and history of companies
before investing. Very few i.e. 18% are of the view that investors analyse the performance of
companies before investing. It is clear from the results that people invest according to market
sentiments and for earning quick returns.


5.1 Summary:

This project os all about Indian capital market barometers sensex and nifty and how they present
the economy of India. This project also involves the method according to which sensex and nifty
are calculated. The procedures undergone for entering in sgare market by companies, investors
and sub-brokers are also explained. Moreover working of a stock exchange and departments in it
are also explaines thotroghly. Research is also undertaken to know the viewpoints of investors so
that it can help the others who are willing to enter in share market and want to invest in it.
Questionnaire was being filled by 50 respondents and results were taken on the basis of this
survey. The project also consists of interpretation of the questions which were asked to the

5.2 Conclusion:

A deep study is required to know the working and calculations of barometer of economy but in
this project a vast knowledge about Indian capital market is tried to write down on few pages. It
is clear from the survey undertaken and secondary data collected from various sources that
public interest in sensex and nifty is rising and more and more people are know investing in
shares and are trading in commodities and currency but people are more interested in making
quick returns from their investment rather than inveating for a long period which is also a cause
for manipulation in sensex and nifty. Atlast only one thing can be held true:

“Bulls make money, bears make money and only pigs get slaughtered.”



PE ratio: price earning ratio

IPO – Initial Public Offer

MFs – Mutual Funds

NSE – National Stock Exchange

SEBI – Securities and Exchange Board of India

FPO - Further Public Offering

BSE – Bombay Stock Exchange

LSE – Ludhiana Stock Exchange


(This questionnaire is purely for personal use for project making)

Name: Contact no. (Optional):

Gender: Occupation:


Q -1: Which type of investor are you?

 Individual

 Non - individual

Q -2: From how much time you are investing in securities other than bank deposits?

 Less than 1 year

 1-3 years

 3-5 years

 More than 5 years

Q -3: How much percentage of your saving have you invested?

 Less than 25%

 25-50%

 50-75%

 More than 75%

Q -4: Rank the trading according to you which trading is least risky?(5 for the most and 1 for the
least risky)

Securities Ranking




Q -5: How much risk you can take on your investment?

 0-20%

 20-40%

 40-60%

 More than 60%

Q -6: Rank the securities you assume as high return giving. (5 for high return and 1 for least


Mutual Funds

Unit Linked Insurance Plans

Fixed deposits

Q -7: Do you think that Sensex and Nifty present true picture of Indian economy?

 Yes

 No

Q -8: From where do you prefer to purchase shares?

 Primary market(Initial Public Offers)

 Secondary market (Stock Exchanges)

Q -9: How long you wish to invest in shares?

 Less than 6 months

 6 months to 1 year

 1-3 years

 More than 3 years


Q -10: Rank the factors responsible for manipulation of Sensex and Nifty? (1 for least and 5 for

Factors Ranks


Foreign investment

Market sentiments

Cash flow in economy

Q -11: What are the objectives of investing?

 Quick returns

 Capital appreciation

 Liquidity

 Secure future

Q -12: Which trading type do you prefer?

 Cash

 Short selling(intra-day)

 Future and options

Q -13: Do you think that most of the Indian investors invest after studying the history or
financial position of the company including you?

Strongly agree Agree Undecided Disagree

Strongly disagree

5 4 3 2 1

Thank you for your response.


Website pages:

• http://www.ehow.com/how_5184590_calculate-sensex.html

• http://www.traderji.com/technical-analysis/3012-know-all-about-sensex.html

• http://www.bseindia.com/about/abindices/bse30.asp

• http://www.bseindia.com/about/abindices/IdxCalcMt.asp

• http://www.yeahindia.com/c-india1.htm

• http://www.surfindia.com/finance/stock-exchanges-india.html

• http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1415584

• http://www.stockanalysisonline.com/2009/02/sensex-nifty-index-calculation.html

• http://www.isi-su.com/new/risktol2.htm

• http://www.bseindia.com/about/abintrobse/listsec.asp


• National Certificate for Security Market, published by BSE, Mumbai


Purna Chandra Padhan (2007), “International Journal of Social Economics”, Volume: 34,
Issue: 10, Page: 741 - 753

Srivastava Aman, (Oct-Dec, 2008),” Volatility of Indian stock market: an emperical evidence”,
Asia-Pacific Business Review

Tripathi Neeta, (Jan-March, 2008), “Foreign institutional investment flows in Indian

companies”, Asia-Pacific Business Review