A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

PREFACE

This project has been carried out while working as summer trainee in The BMA Wealth Creators Limited, Patna. All efforts have been made to know the Trading System Of Stock Exchange. All efforts have been made so that the information gathered is free from any biasness. Besides gathering information from the institutional guide, it has been my endeavor to gather information from the brokers and other trading staffs also. Many interesting facts have come out in course of investigation. Every endeavor has been made so that the result remains meaningful as well as fruitful. Further, I solemnly declare that all information furnished in this project is true to the best of my knowledge.

JITENDRA KUMAR KESHRI MBA 3rd Semester FMS, Sagar

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

ACKNOWLEDGEMENT

At the very outset, I take the opportunity to convey my heartiest gratitude to those persons whose cooperation, suggestions and support paved the way for the accomplishment of my work successfully. I am extremely grateful to Mr. Krishna Kumar, Regional Head, BMA Wealth Creators Limited, Patna for giving me the golden opportunity to pursue my summer internship programme in this esteemed organization. I extend my warm thanks to all the members of this office, who have extended their kind support whatever & wherever needed. I also extend my gratitude to the Faculty Of Management Studies, Dr. Hari Singh Gour University, Sagar (M.P.) because it is the endeavor of the faculty that has given me such a scope. Last but not the least, I am immensely grateful to my family members, who not only rendered sustained help, moral and encouragement but also provide me the necessary motivation for this work.

With regards JITENDRA KUMAR KESHRI

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

DECLARATION

I, Jitendra Kumar Keshri, hereby declare that the project report namely, Trading System Of Stock Exchange prepared by me is an original work, is the result of independent research carried out by me in partial fulfillment of the MBA program of FMS Dr. Hari Singh Gour University, Sagar (M.P.). To the best of my knowledge and belief, this research is an original piece of my work and is the sheer outcome of my efforts and has not been submitted to any other University or Institution for the award of any degree or diploma.

Signature of the student

JITENDRA KUMAR KESHRI MBA 3rd Semester FMS, Sagar

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

EXECUTIVE SUMMARY
Title of the project:
Trading System Of Stock Exchange

Name of the organization:

BMA Wealth Creators Limited

Organizational Guide:
Mr. Krishna Kumar (Regional Head)

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

List of Abbreviation
GOI Government of India IPO Initial Public Offerings NSE - National Stock Exchange BSE - Bombay Stock exchange CDSL Central Depository Services (India) Limited NSDL National Securities Depositories Limited SEBI Securities and Exchange Board of India SBTS Screen Based Trading System WAP Wireless Application Protocol BOLT - BSE On Line Trading (System) TWS - Trader Work Station CRSS - Compulsory Rolling Settlement Segment CC Clearing Corporation NSCCL National Securities Clearing Corporation SAT - Securities Appellate Tribunal

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Objectives of the study

(a) To have an idea about the various Trading System Of Stock Exchange. To gather some knowledge about the Trading System.

(b)

(c) (d)

To understand the Trading System in a better way. To understand the trends of trade in the stock market in the last few years.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Section A
Introduction

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Stock Exchanges in India

Introduction of Stock Exchange

A Stock Exchange is the single most important institution in the secondary market for providing a platform to the investors for buying and selling of securities through its member. It is a place where already issued securities of companies are bought and sold by investors. Stock Exchanges are an organized marketplace, either corporation or mutual organization, where members of the organization gather to trade company stocks or other securities. The members may act either as agents for their customers, or as principals for their own accounts. It also facilitates for the issue and redemption of securities and other financial instruments including the payment of income and dividends. Traditionally a stock exchange is an association of its members or stock brokers, formed for the purpose of facilitating the buying and selling of securities by the public and institutions at large and regulating its day to day operations. Of late however, stock exchanges in India are operating now with due recognition from Security and Exchange Board of India (SEBI)/ the Government of India under the securities contracts (Regulation) Act, 1956. There are 24 recognized stock exchanges in India, out of which one has not commenced its operations. Out of the 23 remaining stock exchanges, the trading volumes are recorded. Most of the regional stock exchanges have formed subsidiary companies and obtained membership of Bombay Stock Exchanges (BSE), or National Stock Exchange (NSE) or both. Members of these stock exchanges are now working as sub brokers of BSE / NSE brokers. Securities listed on the stock exchange(s) have following advantages: The stock exchange(s) provides a fair market place It exchanges liquidity There is continuous reporting of their prices Full information is available on the companies Rights of investors are protected

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

List of Stock Exchanges in India

Bombay Stock Exchange National Stock Exchange Interconnected Stock Exchange Regional Stock Exchanges o Ahmedabad Stock Exchange o Bangalore Stock Exchange o Bhubaneshwar Stock Exchange o Calcutta Stock Exchange o Cochin Stock Exchange o Coimbatore Stock Exchange o Delhi Stock Exchange o Guwahati Stock Exchange o Hyderabad Stock Exchange o Jaipur Stock Exchange o Ludhiana Stock Exchange o Madhya Pradesh Stock Exchange o Madras Stock Exchange o Magadha Stock Exchange o Mangalore Stock Exchange o Meerut Stock Exchange o OTC Exchange Of India o Pune Stock Exchange o Saurashtra Kutch Stock Exchange o Uttar Pradesh Stock Exchange o Vadodara Stock Exchange

Historical Background of Stock Exchanges

Earliest records of securities trading in India are available from the end of the eighteenth century. Before 1850, there was business conducted in Mumbai in shares of the East India Company, which were considered as securities for buying, selling\ & exchange. The shares of the Commercial Banks, mercantile bank & the Bank of Bombay were some of the prominent shares traded. In 1850, the Companies Act was passed & that heralded the commencement of the joint stock companies in India. It was the American civil war that helped Indian to establish broking business. The leading broker, Shri Premchand Roy Chand

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

designed & developed the procedure to be followed while dealing in shares. In 1874, the Dalal Street became the permanent place for meeting the brokers to conduct their business. The brokers organized an association on 9th July 1875 known as Native share 7 stock Brokers Association to protect the stock & interest of the native brokers. That was the foundation of the Stock Exchange, Mumbai. The Exchange was established with 318 members. The Stock Exchange, Mumbai did not have to look back as it started riding high in the ladder of growth. In January 1899, Mr. James M.Maclen, M.P inaugurated the Brokers hall. After the 1st World War, the stock exchange was housed properly at an old building near the Town Hall. In 1928 the present premises were acquired surrounded by Dalal Street, Bombay Samacher Marg and Hamman Street. At new building the present location was constructed and was occupied on 1st December 1930. In 1950, the regulation of business in securities and stock exchanges became an exclusively Central Govt. subject following adoption of the constitution of India. In 1956, the Parliament of India passed the Security Contract (Regulation) Act. To regulate the security market, SEBI was initially established on October 12, 1988, as an interim board under control of the Ministry of Finance, Govt. of India. In 1992 the SEBI Act came into existence. In 1992 Over the Counter Exchange of India (OTCEI) came into existence where securities of small companies are listed. In 1994, National Stock Exchange (NSE) came into existence, which brought an end to the open out cry system of trading securities which was in vogue for 150 years, and introduced Screen Board Trading (SBT) system. BSEs one line trading system was launched on March 14, 1995. Now the trading in securities is done using screen based trading system through duly authorized members of the exchange.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

ABOUT THE ORGANIZATION

Board Of Directors
Anubhav Bhatter Avinash Agarwal Shiv Kumar Damani Asit Kumar Ghosh
(Managing Director & CEO) (Director) (Director) (Director) (COO)

Saikat Ganguly
About BMA Wealth Creators

A premier financial services organization providing individual and corporates with customized financial solutions. We work towards understanding your financial goals and risk profile. Our expertise combined with thorough understanding of the financial markets results in appropriate investment solutions for you. At Wealth Creators we realize your dreams, needs, aspirations, concerns and resources are unique. This is reflected in every move we make with and for you. We have deep appreciation for the Value of building an everlasting relationship with YOU.

BMA WEALTH CREATORS LTD.

which holds corporate membership in National Stock Exchange Ltd, Bombay Stock Exchange Ltd. and Central Depositories Securities Ltd

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

BMA COMMODITIES PVT. LTD.

Which holds corporate membership in commodities exchange of NCDEX and MCX. It is also is SEBI approved AMFI registered Mutual Fund advisory and intermediary. We inherit the legacy of BMA group which has been one of the dominant entities in Ferrous and Ferro Alloy industry in India. The BMA Group has created its niche in by promoting successful ventures in the fields of coal mining, refractory, steel and Ferro alloy. The strive to achieve excellence and dynamic growth has been possible through optimum mix of technology, customer orientation, best business practices, forging alliances, high quality standards and proactive business culture. MISSION To be a premier financial supermarket providing integrated investment services. VISION To provide integrated financial services building investor wealth and confidence .

Product and Services

Equities & Equity Derivatives (NSE, BSE) Commodity Futures (MCX, NCDEX) Currency Futures (MCX SX) Depository Services (NSDL, CDSL) Mutual Funds (AMFI) Insurance Life and Non Life / Group Insurance (IRDA) IPOs Bonds and fixed Deposits Equity Broking

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

BMAWC, as a member of the National Stock Exchange and the Bombay Stock Exchange, offers you equity trading through a network of various offices across the country. It is our objective to offer you a range of services to suit your trading needs. Therefore, apart from investment activity, you can undertake day trading at both the above exchanges. Seamless Execution BMAWC provides unmatched flexibility and the power of choice to the clients for executing trades through multiple channels, viz., through our main office or branches, at any of our franchise centers or over telephone. A client may use any of these secured channels to communicate his/her orders, and he/she would be identified by his/her account code. We have endeavoured to design all our processes and systems with a client-centric focus to provide a client the convenience of transacting with us through the mode and channel of his/her preference.

Product and Services

Technical Analysis BMAWC has its own Equity Research team with rich experience in identifying and analyzing attractive investment opportunities with fundamental long-term growth potential. The team also has a division specializing in Technical Analysis, which offers technical tips for short term and day trading. Daily Analysis Outlines the days market outlook, latest domestic and international market developments, our call on the upcoming economic and market environment and highlights the stocks which we expect to outperform over the months ahead.

Derivatives Trading
BMAWC provides trading facilities in Equity Derivatives at National Stock Exchange (NSE) since 200 and over the years, been able to generate substantial revenues with rising volumes from wide scale participation of retail investors in this segment.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Depository Services
BMAWC is a depository participant with CDSL and NSDL. BMAWC offers a range of services including : Account opening facilities Dematerialization of physical shares Re-materialization Pledging

Financial Products Distribution

Product Basket Our Financial Products Distribution (FPD) desk handles all types of primary market investments you may require. Be it a Mutual Fund, Life Insurance, General Insurance , Bonds, Fixed Deposits of blue chip corporates or IPO's of Equities. A strong distribution channel across the country providing easy access to our clients is dispersed over several states. Mutual Funds Our team tracks the performance of Mutual Funds across the gamut of investor options and advises investors. In addition to tracking the key performing funds and analyzing the portfolios and maturity profiles of different funds, our FPD team is geared to advice investors on the available options / NFOs to best suit their investment needs.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Insurance
BMAWC is a leading intermediary in the LIFE and General Insurance market licensed by Insurance Regulatory and Development Authority of India. At BMAWC, we analyze the client's requirement and capacity to understand their risk exposure and then evaluate their insurance portfolio in terms of its adequacy to protect the same. Our focus is to develop cost effective and near foolproof insurance package for our clients. In the event of a claim, our team facilitates the process to ensure speedy settlements. BMAWC has professional relationships with major Life and non-life insurance companies in the country and is well poised to provide its clients a comprehensive risk management strategy.
(Reliance Life Insurance, Birla Sun Life Insurance, Apollo DKV Health Insurance, National Insurance Company and Reliance General Insurance are our Key Partners)

Bonds For investors who prefer risk-free returns without the tension of volatile markets, the best option is the GoI Savings Bond. These bonds have sovereign guarantee and thus give safe returns. Corporate Fixed Deposits BMA WC takes the help of its own Research Desk in order to choose and cater Fixed Deposits of blue chip corporates. IPO's In case of IPOs of Equities, PSL markets almost all the major issues that hit the Indian Capital Market. Customised Services And if you are interested in any of the above investments, we would be privileged to be of assistance to you to invest your money safely. All you have to do is to call your nearest

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

BMAWC Office and any of our team members will get in touch with you.

Competitive Strength
Regional management (regional hub and spoke topology) for retail operation Large and diverse distribution network Strong track record of high growth and profitability Strong risk management system Well established brand.

Existing Business Networks

BMA WEALTH CREATORS LTD has 25 strategically located own offices in India, with its headquarters in Salt Lake and 700 plus business outlets in all prime locations of India Eastern Region Southern Region Western Region Northern Region Kolkata Chennai Baroda Delhi Siliguri Burdwan Durgapur Cuttack Bhubaneswar Jamshedpur Tamluk Salem Bangalore Hyderabad Coimbatore Mumbai Pune Noida Kanpur Varanasi Lucknow

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Section B
Research Design

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Introduction : In this chapter, it is discussed in detail about the assigned topic, objective of the study, scope of the study, research methodology used i.e., data source, research design and limitation of the study are described.

Scope of Research:In this study, the Trading System Of Stock Exchange have been analyzed. It gives an idea about the various courses of conduct made in the stock market in trading and settlement part. And also, the various rules regulating trading and settlement have also been discussed here. Besides that, the trends of trade with the passage of time can also be known from the analysis.

Research Methodology:The research conducted in the above case is an Analytical one. Here information has been gathered from the related sources to analyze them in a suitable order. Moreover, some data have also been analyzed to know the market movement in a better way.

Data Source: The source of information is both primary and secondary. The secondary data has been taken through the help of internet to get the figures required for the research purpose.

Limitations of the study: A portion of the study has been conducted with the help of different data collected from secondary sources. So, there is a possibility of including few less accurate or appropriate information in the report. Secondly, the time limit of the training is only 8 weeks, within such a small time it is very uphill task to prepare a project on such an important and wide subject. Hence, the time period is also a limitation for the project.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Section C
About the topic

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Online Trading Systems

Online Trading Systems, was started to help you find the right trading system to make money in the market. We offer all different types of trading systems, from Futures Trading, Forex Trading, Stock Trading to Options Trading. Our Trading systems include day trading, swing trading and longer term trading systems. Online Trading Systems will continue to test and list various trading systems on our website. All Trading systems including Futures, Forex, Stocks and Options should be tested and verified before you use real money. Some trading systems will post actual accounts on their websites or newsletters. We still recommend you paper trade their trading system before using real money. Also realize the markets are always changing, and a trading system that has worked in the past might not work going forward. Another thing to consider is when you paper trade a trading system, you can make money with it, but due to slippage or your trading software the actual results once you go live will not be the same.

Online trading in India Online trading in India is the internet based investment activity that involves no direct involvement of the broker. There are many leading online trading portals in India along with the online trading platforms of the biggest stock houses like the National stock exchange and the Bombay stock exchange. The total portion of online share trading India has been found to have grown from just 3 per cent of the total turnover in 2003-04 to 16 per cent in 2006-07.

Facilities of the Online trading in India: The investor has to register with an online trading portal and get into an agreement with the firm to trade in different securities following the terms and conditions listed down on the agreement. The order processing is done in correct timings as the servers of the online trading portal are connected to the stock exchanges and designated banks all round the clock. They can also get updates on the trading and check the current status of their orders either through e-mail or through the

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

interface. Brokerages also provides research content on their websites, such that the clients can take their own decisions on stocks before investing.

Products and services of the Online trading in India: The major financial products and services of the Online trading in India are like equities, mutual funds, life insurance, general insurance, loans, share trading, commodities trading, portfolio management and financial planning.

National stock exchange and Bombay stock exchange: In spite of many private stock houses at present involved in online trading in India, the NSE and BSE are among the largest exchanges. They handle huge daily trading volumes, supporting large amounts of data traffic, and possessing a countrywide network. The automated online systems used for trading by the national stock exchange and the Bombay stock exchange are the NIBIS or NSE's Internet Based Information System and NEAT for the national stock exchange and the BSE OnLine Trading system or BOLT for the Bombay stock exchange.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Online Trading in India ::BMA Wealth Creators :: A1 Technology Online Trading :: Best online trading :: Bonanza Online Trading :: BullishIndian.com Online Trading :: Express Computer Online Trading :: Geojit Securities Online :: ICICI Online Trading :: Indiabulls Online :: India Insurance :: BSE India :: JV Financial Online :: Kotak Securities Online Trading :: Mansukh Securities Online Trading :: Quote.com Online Trading :: SHCL Online Trading :: STC Online Trading :: Technical Analysis Trading :: Union Bank of India Online Trading :: Best Online Trading

Software Demo
NobleTrading offers a variety of different trading software to fit our customer needs.

Omnesys
Omnesys technologies pvt. Ltd. Provides software for securities trading and is a leading provider of OMS for multi asset, multi venue trading system. Omnesys software provides market data and connectivity solutions to both the buy-side and sell-side firms.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Web Based Trading Platform

The Web Based trading platform is an advanced and flexible browser-based trading platform for Stocks, Options and Futures. The product combines direct access trading capabilities with an intuitive web-based platform. The Web platform is FREE with no monthly trade minimums. It Includes Charts, News, Stock Screener, Stock Calendar, Market Movers, Watch Lists and many more insightful tools for research. Click here for Screenshots Click to Demo this Software

NobleTrader Software
Trade US and Canadian Stocks, Options and Futures with the NobleTrader software. Full streaming direct access platform that includes charting, Level 2, Top 20 lists, times sales, option chains, range orders, trailing stop losses, and much more. Click here for Screenshots Click to Demo this Software

Lightspeed Trader
Lightspeed Trader, our flagship trading platform, delivers a featurerich direct market access trading system to the active trading community as well as to anyone who demands the highest quality market data and consistent performance. Click here for Screenshots Click to Demo this Software

InstaQuote
InstaQuote provides the active trader with powerful tools. A direct access platform designed to be fast, reliable and responsive. Access to all major ECNs, complete options trading suite including greeks and charts, batch order entry, alerts, top ten, portfolio analysis, news, charts and much more. Click here for Screenshots Click to Demo this Software

Lightspeed Forex
A next generation forex trading platform designed for active traders looking for an edge. ForexTrader Pro Desktop is a robust, feature rich platform. Advanced charting functionality allows you to spot trends in the market. Flip between multiple charts and trade setups, layer on technical studies, even visually track and trade directly on the charts. Customize your trading layouts to suit your style. Try our pre-set layouts or create and save your own. Tear-off windows to ensure that you're never far from your next trade, even when working in other programs. Click here for Screenshots & Videos

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Online share trading tips

Do not over trade - Do not put all your money in share market. Do not put all your money in single share or single sector - Put or divide your money in multiple shares or sectors. This may reduce the risk of heavy loss. Do not panic or fear - Think twice before making your trade/plan and once done stick to it, dont panic or fear. Accept Loss - If you trade is going against you and if you are not sure about your trade then immediately accept the loss and come out of your trade. It will save you from heavy loss. Right Opportunity - Do not fall in trade early, wait for right opportunity and then trade. Its very important. "Wait, Watch and then trade" you will get success. Everyday is not trading day - Do not force yourself to do trading everyday. Its wrong. If you are not sure about the market movement for that day then it always wise decision to be away from market and not to trade. Keep you greediness away - Most of the people loose in share market due to greediness. Get satisfied with whatever profit you get and come out of that trade and wait for next opportunity. Dont wait to take huge for that single trade.

Of course, online trading has many pros. There are several wonderful reasons to invest online and consider online trading.
1. Money saving opportunities The amount of money you save depends primarily on the online brokerage firm that you choose. No two firms are the same. There may be different regulations, similar to bank regulations. There are minimum deposits required that must be maintained. As mentioned above, this will depend on the online brokerage firm. 2. Instant online access You can gain instant access to your account, the value of your portfolio updates immediately before your eyes. 3. Enter online trades at anytime You can enter online trades at anytime and from anywhere. This is

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

very convenient if you live in a different time zone than the country you are trading in. Not to mention, it is especially fit for investors with busy schedules. 4. With online trading you are in charge You are in control of your investments. No sales pitches and no hassle. You decide where to invest your money. 5. No need to depend on broker First up of all you need not have to depend on any share broker for buying and selling of shares. Depending on broker may result in delay of buying and selling of shares which may in turn result in huge loss or less profit. If you are doing online share trading then you can execute your trades at any time because you are observing every movement of share market right in front of your computer screen. 6. All updates on your computer screen As you have internet connection with you will get all updates of government news, companies announcements, and corporate declaration etc during market hours. Its not so practically for your broker to provide you all the updates and news. So its very important point that you get all news, especially those news which affects share market right in front of your computer screen. Share Market always reacts to appropriate news 7. Independent for your trades On the other part you will get all information of your traders on your computer screen. You can view yourself your profits and losses done and depending on your current situation you can plan your further trades. In other words you are totally independent for your trades from your broker. You are boss of your self.

Problems online share trading

As there are couples of good advantages there are also some technical disadvantages. As every coin have two sides. Disconnection from Internet In online share trading there is the possibility that your internet connection may get slow or get stopped, this may result in disconnection from share market. At such critical times you have to call your executive

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

(from whom you opened your trading account) and place your order or square off your pending orders. Computer Problem If your computer stops functioning then this may also result in disconnection from share market at this time also you have contact your executive. Other Problem Other problems like electricity disconnection. Solution for this is inverter or batter backup. Above all technical problems which may exist at any time and they are beyond our control means not in control.

What is offline share trading

Trading done through share broker is called offline share trading method Nevertheless, with all the convenience of online trading there are still investors who prefer the old fashion way of offline trading. Offline trading has lost some popularity but it is still the main form of investing.

Offline trading offers many benefits as well:

1. The one benefit that an investor appreciates the most is that they are not alone when making investment decisions. 2. There are experienced and professional brokerage companies that handle their investments for them. 3. Investors are not faced with the challenge of making these vital investment decisions; especially, if they do not have the experience necessary to make the appropriate investments. 4. Also, there is someone there to answer any questions that may cause concerns. Not to mention, with offline trading mistakes are less likely to take place. No one wants to throw their money away or stand by and watch someone else throw their money away. It may be wise to hire a professional to assist you in making the correct investment decisions if you feel you lack the knowledge necessary.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Dont be led by market rumours or get into shady transactions. Do not sign blank Delivery instruction slip(s) while meeting security payin obligation

Section D

SWOT Analysis Of Indian Stock Market

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

SWOT ANALYSIS OF INDIAN STOCK MARKET

STRENGTH:
1. The very first strength of Indian stock market is its ability to provide high return. 2. SEBI a regulatory body of Indian stock market who protects the interest of the investors. 3. Large no. of securities which provides medium for investment. 4. Large no. of brokers who plays a role of facilitator for investment.

WEAKNESS:
1. The weak point of Indian stock market is its volatility i.e. High risk. 2. It is a kind of gambling where no guarantee of return and some time it depends on luck also.

OPPORTUNITY:
1. Stock market provides an opportunity to money lender and money seeker to invest and use money for their plan. 2. It provides an opportunity to the investor to be the owner of the company and contributes in the business decision of the company. 3. Stock market is a kind of indicator of the economic growth of the country where it provides an provides an opportunity to gain according to the inflation of the country or more than that.

THREATS:
1. There are many competitors of stock market such as Post office savings, Public provident fund, company fixed deposits, Fixed deposits with bank etc. which provides fixed and assured returns.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

LIMITATIONS OF STUDY
It is said, What is worth doing is worth doing best. In other words a person should aim at perfection. However in real life this is not always possible. Human have to work within the limitation set by the nature and society. That is to say even though every possible effort has been made to make this project report authentic and comprehensive however many constraints were also at play. The major limitations of the study are: Due to paucity of time and resources a countrywide survey was not possible. Hence only Chandigarh city has been taken for the study. Since a smaller sample was chosen so it may not be a true representative of the population under study. The possibility of the respondents responses being biased cannot be ruled out. Most of the study was restricted to Internet and published data because of the non availability of primary data. The information given by the respondents might be biased because some of them might not be interested to given correct information.. Some of the respondents could not answer the questions due to lack of knowledge.
Some of the respondents of the survey were unwilling to

share information.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Section F
Questionnaire & Interpretation

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

QUESTIONNAIRE
Dear respondent, I am a student of MBA, FMS Dr. HARI SINGH GOUR CENTRAL UNIVERSITY, SAGAR (M.P.) is conducting a research on Trading System of the Stock Market. I would be extremely thankful if you spare some time to answer the following questions. All the facts disclosed by you will be used for academic purpose only. PERSONAL PROFILE (A) Name: (B) Age:

Less than 20 years 20 40 years Greater than 40 years Less than Rs 20000 Rs 20000 Rs 40000 Greater than Rs 40000

(C) Gender: a) Male b) Female (D) Occupation: a) Service b) Profession c) Business d) Student (E) Income: (per month) (F) Qualification:

a) Matric b) Under Graduate c) Post Graduate Q1. Do you invest in share market? i) Yes ii) No

Q2. Out of the following, which type of instrument are you aware of? a) b) c) d) e) Shares Mutual Funds Debentures Bonds Derivatives

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Q3.Where have you been investing? a) b) c) d) e) Shares Mutual Funds Debentures Bonds Derivatives

Q4.At which rates do you want your investment to grow?

a) Steadily b) At an average rate c) At fast rate

Q5. How frequently do you invest?

a) Daily

b) Weekly c) Monthly d) Yearly

Q6. What percentage of your annual income do you invest in share market? a) Up to 10% b) 10-15% c) 15-20% d) More than 20%

Q7. By which source of information you came to know about particular option? a) b) c) d) e) f) Self Friends and Relatives Service providers and Consultants Newspapers, Magazines and Advertisements Agents Workshops & Seminars

Q8.Which factor do you consider before investing in share market? a) Capital Appreciation b) Maturity Period c) Safety of Principal d) Risk e) Return on investment f) Tax benefits g) Liquidity

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Q9. In your opinion, what would be the optimum strategy if stock market drops immediately after you invest in it? a) b) c) d) Cut your losses and transfer funds into secure investments Wait to see if investment improves Invest more funds to lower your losses expecting future growth Withdraw your funds and stop investing

Q10. Do you have any other investment policy? a) Yes b) No

Q11. Rate the satisfaction with the return generated by your investment option? Highly Satisfied (5) ______ ______ ______ ______ ______ Satisfied (4) ______ ______ ______ ______ ______ Neutral (3) ______ ______ ______ ______ ______ Dissatisfied Highly Dissatisfied (2) (1) _______ _________ _______ _________ _______ _________ _______ _________ _______ _________

a) b) c) d) e)

Shares Mutual funds Bonds Debentures Derivatives

Q12. Rate the satisfaction with the factors that was considered while investing? Highly Satisfied Neutral Dissatisfied Highly Satisfied Dissatisfied (5) (4) (3) (2) (1) a) Return on Investment ______ b) Tax Benefits ______ c) Capital Appreciation ______ d) Maturity Period ______ e) Risk ______ f) Safety of principal______ g) Liquidity ______ ______ ______ ______ _______ ______ _______ _________ _________

______ ______ _______ _________ ______ ______ _______ _________ ______ ______ _______ _________ ______ ______ _______ _________ ______ ______ _______ _________

THANKS FOR YOUR CO-OPERATION..

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

DATA ANALYSIS AND INTERPREATATION

1. Demographic Profile of investors

Table 1.0: Demographic Profile of investors Demographics Age Less than 20 years 20-40 Greater than 40 Qualification Matric Under Graduate Post Graduate No. of respondents Percentage of respondents 0 40 60 Total 100 0 50 50 Total 100 38 12 30 20 Total 100

0 20 30 Total 50 0 25 25 Total 50

Occupation Service Profession Business Student

19 6 15 10 Total 50

Income (per month) Less than Rs.20000 Rs.20000-40000 Greater than 40000 10 25 15 Total 100 Analysis & Interpretation: It was found that the major population of investors was greater than 40yrs and 60% was of 20-40 yrs. And 50% respondents were under graduate and 50% were post graduate. 35% of respondents were doing service. And majority of respondents i.e. 50% earn income between Rs.20000-40000 per month. It means majority of investors was greater than 40 years having income in between Rs 20000-40000. 20 50 30 Total 100

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 1. To know whether respondents invest.

Table No. 1.1 To know whether respondents invest. Investment Decision No. of Respondents Percentage of Respondents

Yes No Total

45 5 50 Figure No. 1.1 To know whether respondents invest.

90 10 100

Yes

No

10%

90%

Analysis & Interpretation: From the survey it was found that 90% respondents invest in the stock market and 10% who were non-investors.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 2. Awareness regarding types of Investment Instruments Table No. 1.2 Type of investment option the person is aware of Types of Investment Instruments Shares Mutual Funds Debentures Bonds Derivatives Total No. of Respondents 15 23 5 5 2 50 Percentage of Respondents 30% 46% 10% 10% 4% 100%

Figure No.1.2 Type of investment option the person is aware of

Shares Mutual Funds Debentures Bonds Derivatives

10% 10%

4% 30%

46%

Analysis & Interpretation Above pie-chart shows that 45% investors were aware of the mutual fund, 25% investors were aware of shares, 15% investors were aware of debentures, 10% investors were bonds. It means majority of persons aware about mutual fund whereas shares and debentures were of second importance.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 3 .To know the type of investment option the person has been investing Table No.1.3 Type of investment option the person has been investing

Investment alternative Shares Mutual Funds Debentures Bonds Derivatives Total

No. of Respondents 15 15 10 5 5 50

Percentage of Respondents 30% 30% 20% 10% 10% 100%

Figure No.1.3 Type of investment option the person has been investing
Shares Mutual Funds Debentures Bonds Derivatives

10% 10% 30%

20%

30%

Analysis & Interpretation: From the survey it was found that 30% respondents invest in Mutual funds, 25% invest in Shares and 20% invest in Debentures. Thus, it can be stated that maximum people invest in Mutual Funds whereas shares are having 2nd importance.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 4 .To know the rates at which the investment grow Table No.1.4 The rates at which the investment grow

Investment Growth Rate Steadily At an average rate At fast rate Total

No. of Respondents 0 5 45 50

Percentage of Respondents 0% 10% 90% 100%

Steadily

At an average rate

At fast rate

0% 10%

90%

Analysis & Interpretation: From the survey it was found that 90% respondents wants their investment grow at fast rate whereas only 10% respondents were in the favour of investment growth at average rate.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 5. To know the frequency of investment by the Respondents. Table No. 1.5 Frequency of investment
Frequency of Investment Daily Weekly Monthly Yearly Total No. of Respondents 0 10 24 16 50 Percentage of Respondents 0% 20% 48% 32% 100%

Figure No.1.5 Frequency of Investment Daily Weekly Monthly Yearly

0% 20% 32%

48%

Analysis & Interpretation: From the above table & chart it was found that 45 respondents invest monthly, 35 invest yearly and there were 20 respondents who invest daily. Thus, it can be stated that majority of the investors invest monthly in stock market.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 6 .To know the percentage of income that respondent invest annually Table No. 1.6 The percentage of income that respondent invest annually
Annual Income Invested Up to 10% 10-15% 15-20% More than 20% Total No. of Respondents 7 11 20 12 50 Percentage of Respondents 14% 22% 40% 24% 100%

Figure No. 1.6 The percentage of income that respondent invest annually Up to 10% 10-15% 15-20% More than 20%

24%

14%

22%

40%

Analysis & Interpretation: From the above table & chart, it was found that 40 respondents invest 1520% of their annual income, 24 respondents invest more than 20% of their annual income, 22 respondents invest up to 10-15% of their income and 14 respondents invest up to 10% of their income in different investment avenues. Thus, it can be concluded that majority of investors invest 10% to 20% of their monthly income.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 7. To know the respondents influence on Investment decision. Table No.1.7 The respondents influence on Investment decision
Sources Self Friends & Relatives Service providers & consultants Newspapers & Advertisement Agents Workshops & Seminars Total No. of Respondents 24 10 6 5 3 2 50 Percentage of Respondents 48% 20% 12% 10% 6% 4% 100%

Figure No.1.7 The respondents influence on Investment decision

Self Service providers & consultants Agents Friends & Relatives Newspapers & Advertisement Workshops & Seminars

6%
10%

4%

48% 12%

20%

Analysis & Interpretation: From the above table & chart, it was found that multiple aspects for investing influenced respondents.48% respondents take investment decision on the basis of their personal evaluation where as 20% respondents invest because of influence of friends & relatives, the consultants influences 12% respondent and the

advertisement influences 10% respondents. It can be stated that majority of the persons are influenced by their own while opting for investment tool.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 8. To Know The Factors That Were Considered While Investing. Table No. 1.8 The Factors That Were Considered While Investing

Investment Factors Return on investment Tax benefits Capital appreciation Maturity period Risk Safety of principal Liquidity Total

No. of Respondents 15 9 7 3 6 3 7 50

Percentage of Respondents 30% 18% 15% 6% 12% 6% 14% 100%

Figure No. 1.8 The Factors That Were Considered While Investing
Return on investment Capital appreciation Risk Liquidity Tax benefits Maturity period Safety of principal

6% 12% 6%

14%

30%

14%

18%

Analysis & Interpretation: From the survey it was found that the maximum respondents considered return on investment was most important factor, 18% respondents considered tax benefits as an important factor and 14% respondents considered capital appreciation as an important factor. It can be stated that majority of investors were consider return as an important factor while investing.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 9. To Know Investors Action In Case Of Stock Market drop. Table No. 1.9 The Investors Action In Case Of Stock Market drop
Investors preference in case of losses Transfer funds into secure investment Wait to see if investment improves Invest more funds Withdraw funds & stop investing Total No. of Respondents 15 20 13 2 50 Percentage of Respondents 25% 40% 30% 5% 100%

Figure No. 1.9 The Investors Action In Case Of Stock Market Drop
Transfer funds into secure investment Wait to see if investment improves Invest more funds

4% 26% 30%

40%

Analysis & Interpretation: From the survey it was found that maximum respondents would wait to see if their investment improves and start generating funds, 30% respondents would invest more funds, 25% respondents would transfer funds into secure investment and 5% respondents would stop investing. It can be stated that majority of investors would like to wait to see whether investment improves or they can invest more funds.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 10. To Know The Decision Regarding Other Investment Policy Table no. 1.10 The Other Investment Policy

Investment Decision

No. of Respondents

Percentage Respondents 98% 2% 100%

of

Yes No Total

49 1 50

Figure 1.10 The Other Investment Policy

Yes

No

2%

98%

Analysis & Interpretation: From the survey it was found that 98% respondents have the other investment policy where as 2% respondents do not have the other investment policy.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 11. To Know the Satisfaction Level Of Respondents With Their Investment Option Table no. 1.11 Important Factors for Choosing The Investment Option
Particulars Highly Dissatisfie d (1) Shares Mutual funds Bonds Debentures Derivatives 10 12 20 15 30 (2) 6 15 18 10 10 (3) 14 20 35 15 20 (4) 30 35 19 40 30 (5) 40 18 8 20 10 384 332 277 340 280 Dissatisfie d Neutral Satisfied Highly Satisfied Summated Score

Range Max. Score=100*5=500 Avg. Score=100*3=300 Min. Score=100*1=100 (Highly Satisfied) (Neutral) (Highly Dissatisfied)

Analysis & Interpretation: Most of the respondents have given the highest summated score to shares. And the second most important investment option is debentures which influenced the decision regarding investment. Other important factor is mutual fund coverage which has the 332 summated score. Return on derivatives get the 280 summated score.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011 Statement 12. Important Factors That Was Considered While Investing

Table No. 1.12 Important Factors That Was Considered While Investing

Particulars

Highly Dissatisfie d (1)

Dissatisfie d

Neutral

Satisfied

Highly Satisfied

Summated Score

(2) 0

(3) 4

(4) 30

(5) 66 462

Return on investment Tax benefits Capital appreciation Maturity period Risk Safety of principal Liquidity

0 0

0 0

18 20

48 40

34 40

416 420

40

30

20

355

5 10

10 20

20 40

35 20

30 10

375 300

15

15

20

30

20

325

Range:

Max. Score=100*5=500 Avg. Score=100*3=300 Min. Score=100*1=100

(Highly Satisfied) (Neutral) (Highly Dissatisfied)

Analysis & Interpretation: Most of the respondents have given the highest summated score to Return on investment. And the second most important factor is Capital appreciation which influenced the decision regarding investment. Other important factor is Tax benefit which has the 416 summated score.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

FINDINGS OF THE STUDY

Following findings were generated from the study:-

1. Maximum investors are aware of all the investment options. 2. Investors do not invest in a single avenue. They prefer different avenues and maximum investors prefer to invest in shares, mutual funds & debentures. 3. Maximum investors wants their investment grow at fast rate. 4. The investment decision of investors is influenced by their own decision and through friends & relatives. 5. Different factors considered by investors while investing are return, risk, tax benefits, capital appreciation and the most prominent factor is the return on any investment avenue. 6. Majority of investors invest 15-20% of their annual income. 7. Maximum investors invest on monthly basis. 8. The investors investing in different avenues are highly satisfied with the return generated by their investment option. 9. Maximum investors have other investment policies. 10. The most important factor is Return which influenced the

decision regarding investment.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Dont be led by market rumours or get into shady transactions. Do not sign blank Delivery instruction slip(s) while meeting security payin obligation

Section E
Conclusion

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Conclusion
Stock market is a place where the savers and the users if their funds come together in the market for finance, and the rules of supply and demand are applicable and also subject to Government regulation. In the trading, several transfers of funds and securities take place between various investors. And after this trading, the accounts of all those investors need to be settled within a specified time limit. SEBI has developed the rules and regulations to protect the common investors from market failures by fixing margins, capital adequacy of brokers, limits the turnover, indemnity insurance, on-line position monitoring etc. and most of the company is doing online trading because it helps them to be up-to-date from Stock Market.

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

Section F
Bibliography

A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM 2011

www.nseindia.com (website) www.bseindia.com (website) www.google.com (website) BSEs CERTIFICATION ON SECURITIES MARKET (BCSM) Securities Market (Basic) Module Work Book Research Methodology- Methods and Techniques (by C.R. Kothari) Financial Management (by Ravi M. Kishore)