sip final madhavi

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A

SUMMER TRAINING REPORT

ON

Investors Awareness Towards Online Trading In Raipur City

Submitted in partial fulfilment for the award of Master of Business Administration

From

Chhattisgarh Swami Vivekanand Technical University, Bhilai

Submitted by,

Madhavi Mishra

MBASemester 3rd

(Session 2011-2013)

Approved by Under the Guidance of

Mr. Manoj Sharma Mr. Manoj Sharma

Head Of Department Head Of Department

Shri Shankaracharya Institute ofProfessional Management and Technology,

Mujgahan, Raipur


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DECLARATION BY THE CANDIDATE

I declare that the thesis entitled Investors awareness towards online trading in Raipur city is

my own work conducted under the supervision of Mr. Manoj Sharma, Department of

Management Studies, Shri Shankaracharya Institute of Professional Management and

Technology, Raipur.

I further declare that, to the best of my knowledge, the report does not contain any part of any

work which has been submitted for the award of any degree either in this university or in any

other University/Deemed University/Institute, without proper citation.

Madhavi Mishra

Mr. Manoj Sharma

Head Of The Department


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ACKNOWLEDGEMENT

At the outset, I wish to express my sincere thanks to the almighty for showering his blessings on

me to complete this project. Success is not a destination but a journey- it is often said. I realized

it even better during course of creating this project. With this project I hope to develop a

futuristic view of industrys progress. I may not have come this far without help, guidance and

support of certain people who acted as guide, friend and torchbearers along the way.

Last but not least I like to thank my parents, my Friends & colleagues for their moral support for

completing this project work successfully

Madhavi Mishra


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CERTIFICATE FROM COMPANY


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TABLE OF CONTENT:

S.NO CHAPTER NAME PAGE NO

1 Introduction 6-7

2 Company Profile & Industry Profile 8-24

3 Literature Review 27-28

4 Research Methodology 29-31

5 Data Analysis and Interpretation 32-50

6 Suggestion 54

7 Conclusion 56

8 Limitation 57

9 Bibliography 58

10 Questionnaire 59-64


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INTRODUCTION ON ONLINE TRADING:

The actual definition of On-Line Trading is as explained below:

On-Line trading is service offered on the internet for purchase and sale of shares, in the

real world an investor places orders to stock brokers. Either verbally or in a written form (fax).

Internet is a world wide self governed network connecting several other smaller network and

million of computers and persons to merge sources of information. This technology is vast

distance accelerating the pace of business forms and revolutionizing the many companies are

managed, it allow direct links to anyone anywhere and any time to build up interactive

relationship.

A combination of time and space called the internet promises to bring un precendented

changed in our lives and business Internet or net is an inter connection of computer

communication network spanning the entire globe crossing all geographical boundaries it has re

defined the method of communication work study education, Business leisure health trade

banking commerce and what not it is virtually changing everything and we are living in dot.com

age.

Net being an interactive two way medium through various websites enables participation by

individually in business to business to consumer commerce visit to shopping arcades, games,

etc., in cyber space even the information can be copying, down loaded and retransmitted.

The use of internet has grown 2000 percent in last decade and is correctly growing 10 percent per

month in India growth of internet is of recent times.

It is expected to bring changes in every functional area of business activity including marketing

and financial services.

It offers stock trading at a lower cost, internet can change the nature and capacity of

stock broking business in India.


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E- COMMERCE:

Electronic Commerce is associated with buying and serving over computer communication

networks, it helps conduct traditional commerce through new way of transferring and processing

of information. Information is electronically transferred from computer to computer in an

automated way. E- Commerce refers to the paperless exchange to business information using

electronic dates interchange electronic technology, it is not only reduce manual process

and paper transaction but also helps organization more to a fully electronic environment and

change the way they operated PCs and networking attempts to introduce banks of the tools and

technologies required for electronic commerce.The computers are either workstation of

individual office work or serves where large database and information resides.

Networks connects both categories of computer the various operating system are the most basis

programmed with is a computer it manages the resources of the computer system in a fair and

efficient manner.

Now we can enter into the concept known as On Line Trading.

In the past investor had no option but contact their broker to get real time access to market

data, the net brings data to the investor On line and net broking enables him to trade on a click

of mouse, Now information has because easily accessible to both retail as well as big

investor.


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Company Profile

Introduction:-

Nirmal Bang Group is one of the largest retail broking houses in India, providing the investors

state of art services in capital markets in the country. The Group has memberships of Bombay

Exchange Limited, National Stock of India Limited, Multi Commodity Exchange of India

Limited, National Commodity and Derivatives Exchange Limited and is also a depository

participant of NSDL and CDS (I) L, the depositories of the country.

They started in 1986 under Late Shri Nirmal Bang as sub brokers but have grown steadily and

progressively since then. Their clients had contributed tremendously to their growth they

recognize and applaud that, they value their relationship with the customers and for their

convenience had all investing avenues under one roof.

Nirmal Bang consultant:-

As the flagship company of the NIRMAL BANG Group, NIRMAL BANG Private Limited has

always remained at the helm of organizational affairs, pioneering business policies, work ethic

and channels of progress.

NIRMAL BANG believes that they were best positioned to venture into that activity as a

Depository Participant. They were one of the early entrants registered as Depository Participant

with NSDL (National Securities Depository Limited), the first Depository in the country and

then with CDSL (Central Depository Services Limited). Today, It service over 1Lac customer

accounts in this business spread across over 350 cities/towns in India and are ranked amongst the

largest Depository Participants in the country. With a growing secondary market presence, it has

transferred this business to NIRMAL BANG SECURITIES PRIVATE LIMITED (NBSPL),

their associate and a member of NSE, BSE, MCX & NCDEX.

Nirmal Bang--- Early Days:-

The birth of NIRMAL BANG was on a modest scale in 1986. It began with the vision and

enterprise of a small group of practicing Chartered Accountants who founded the flagship


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company. NIRMAL BANG Securities Private Limited. It started with consulting and financial

accounting automation, and carved inroads. Since then, They have utilized their experience and

superlative expertise to go from strength to strengthto better their services, to provide new

ones, to innovate, diversify and in the process, evolved NIRMAL BANG as one of Indias

premier integrated financial service enterprise.

Thus over the last 20 years NIRMAL BANG has travelled the success route, towards building a

reputation as an integrated financial services provider, offering a wide spectrum of services. And

they have made this journey by taking the route of quality service, path breaking innovations in

service, versatility in service and finally totality in service. Their highly qualified manpower,

cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for

them the position of an emerging financial services giant enjoying the confidence and support of

an enviable clientele across diverse fields in the financial world.

Their values and vision of attaining total competence in their servicing has served as the building

block for creating a great financial enterprise, which stands solid on their fortresses of financial

strength - their various companies.

With the experience of years of holistic financial servicing behind them and years of complete

expertise in the industry to look forward to, they have now emerged as a premier integrated

financial services provider. And today, they can look with pride at the fruits of their mastery and

experience comprehensive financial services that are competently segregated to service and

manage a diverse range of customer requirements.

Business Focus:-

The focus of the business is the Customer Customer service, Customer education, Customer

support, Customer relations and last but not the least Customer acquisition. Trade execution

transparency, timely settlements, risk monitoring and superior service shall have topmost

priority, in the best interests of all concerned.

Vision Statement:-

To create valuable relationship and provide the best financial services most professionally


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Mission Statement:-

To work together with integrity and make our customer feel valued

Core Values:-

Respect our colleague and the business itself

Nirmal Bang Core Services:-

NIRMAL BANG is one of Indias leading broking houses providing a complete life-cycle of

investment solution

Services of Nirmal Bang:-

Nirmal Bang Services

Other ServicesOfflineOnline

Research Based

Investment

Investment and

TradingTraining and

Seminars

EQUITIESDERIVATIVES

COMMODITIES

Technology Based

Investment Tools

Integrated Demat

Facilit


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6 Distribution of Financial Services.

7.Research Based Advices.

8.Portfolio Management System.

NIRMAL BANG Securities Private Limited, one of the cornerstones of the NIRMAL BANG

edifice, flows freely towards attaining diverse goals of the customer through varied services.

Here, growth knows no limits and success recognizes no boundaries. Helping the customer create

waves in his portfolio and empowering the investor completely is the ultimate goal.

Stock Broking Services:-

We offer trading on a vast platform; National Stock Exchange, Bombay Stock Exchange, MCX

& NCDEX. More importantly, we make trading safe to the maximum possible extent, by

accounting for several risk factors and planning accordingly. We are assisted in this task by our

in-depth research, constant feedback and sound advisory facilities. Our highly skilled research

team, comprising of technical analysts as well as fundamental specialists, secure result-oriented

information on market trends, market analysis and market predictions.

To empower the investor further we have made serious efforts to ensure that our research calls

are disseminated systematically to all our stock broking clients through various delivery channels

like email, chat, SMS, phone calls etc.

Introduction:-

Mutual Funds: -Everybody talks about mutual funds, but what exactly are they? Are theylike shares in a company, or are they like bonds and fixed deposits? Will I lose all my money in

funds or will I become an overnight millionaire?


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A mutual fund is a pool of money that is invested according to a common investment objective

by an asset management company (AMC). The AMC offers to invest the money of hundreds of

investors according to a certain objective to keep money liquid or give a regular income or

grow the money long term. Investors buy a scheme if it fits in with their investment goals, like

getting a regular income now or letting the money accumulate over the long term. Investors pay asmall fraction of their total funds to the AMC each year as investment management fees.

Commodity: - Organized futures market evolved in India by the setting up of "Bombay

Cotton Trade Association Ltd." in 1875. In 1893, following widespread discontent amongst

leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade

Association, a separate association by the name "Bombay Cotton Exchange Ltd." Wasconstituted. A future trading in oilseeds was organized in India for the first time with the setting

up of Gujarati Vyapari Mandali in 1900, which carried on futures trading in groundnut, castor

seed and cotton. Before the Second World War broke out in 1939 several futures markets in

oilseeds were functioning in Gujarat and Punjab.

There were booming activities in this market and at one time as many as 110 exchanges were

conducting forward trade in various commodities in the country. The securities market was a

poor cousin of this market as there were not many papers to be traded at that time. The era of

widespread shortages in many essential commodities resulting in inflationary pressures and the


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tilt towards socialist policy, in which the role of market forces for resource allocation got

diminished, saw the decline of this market since the mid-1960s.

This coupled with the regulatory constraints in 1960s, resulted in virtual dismantling of the

commodities future markets. It is only in the last decade that commodity future exchanges have

been actively encouraged. However, the markets have been thin with poor liquidity and have not

grown to any significant level.

Derivative: - The emergence of the market for derivative products, most notably forwards,

futures and options, can be traced back to the willingness of risk-averse economic agents to

guard themselves against uncertainties arising out of fluctuations in asset prices. By their very

nature, the financial markets are marked by a very high degree of volatility. Through the use of

derivative products, it is possible to partially or fully transferprice risks by locking-in asset

prices. As instruments of risk management, these generally do not influence the fluctuations in

the underlying asset prices. However, by locking-in asset prices, derivative products minimize

the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-

averseinvestors.

Portfolio Management System: -

The Company has initiated the process of obtaining permission from SEBI for rendering PMS

Service to its clients. We are planning to start PMS Service to High Net Worth individual and

NRIs after obtaining the necessary regulatoryclearances.


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Industry Profile:-

History of stock broking industry:-

Indian Stock Markets are one of the oldest in

Asia. Its history dates back to nearly 200 years

ago. In 1887, they formally established in Bombay, the "Native Share and Stock Brokers'

Association" (which is alternatively known as "The Stock Exchange"). In 1895, the Stock

Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus, the Stock

Exchange at Bombay was consolidated. Thus in the same way, gradually with the passage of

time number of exchanges was increased and at currently it reached to the figure of 24 stock

exchanges.

This was followed by the formation of associations /exchanges in Ahmadabad (1894), Calcutta

(1908), and Madras (1937).

In order to check such aberrations and promote a more orderly development of the stock

market, the central government introduced a legislation called the Securities Contracts

(Regulation) Act, 1956. Under this legislation, it is mandatory on the part of stock exchanges to

seek government recognition. As of January 2002 there were 23 stock exchanges recognized by

the central Government. They are located at Ahmadabad, Bangalore, Baroda, Bhubaneswar,

Calcutta, Chennai, (the Madras stock Exchanges), Cochin, Coimbatore, Delhi, Guwahati,

Hyderabad, Indore, Jaipur, Kanpur, Ludhiana, Mangalore, Mumbai (the National Stock

Exchange or NSE), Mumbai (The Stock Exchange), popularly called the Bombay Stock

Exchange, Mumbai (OTC Exchange of India), Mumbai(The Inter-connected Stock Exchange of

India), Patna, Pune, and Rajkot. Of course, the principle courses are the National Stock

Exchange and the Bombay Stock Exchange, accounting for the bulk of the business done on the

Indian stock market.


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BSE (Bombay Stock Exchange):-

The Stock Exchange, Mumbai, popularly known as BSE was established in 1875 as "The

Native Share and Stock Brokers Association". It is the oldest one in Asia, even older than the

Tokyo Stock Exchange, which was established in 1878. It is the first Stock Exchange in the

Country to have obtained permanent recognition in 1956 from the Government of India under

the Securities Contracts (Regulation) Act, 1956.

A Governing Board having 20 directors is the apex body, which decides the policies and

regulates the affairs of the Exchange. The Governing Board consists of 9 elected directors, who

are from the broking community (one third of them retire ever year by rotation), three SEBI

nominees, six public representatives and an Executive Director & Chief Executive Officer and a

Chief Operating Officer.

NSE (National Stock Exchange):-

NSE was incorporated in 1992 and was given recognition as a stock exchange in April 1993. It

started operations in June 1994, with trading on the Wholesale Debt Market Segment.

Subsequently it launched the Capital Market Segment in November 1994 as a trading platform

for equities and the Futures and Options Segment in June 2000 for various derivative

instruments.


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MCX (Multi Commodity Exchange):-

MULTI COMMODITY EXCHANGE of India limited is a new order exchange with a

mandate for setting up a nationwide, online multi-commodity market place, offering unlimited

growth opportunities to commodities market participants. As a true neutral market, MCX has

taken several initiatives for users in a new generation commodities futures market in the process,

become the countrys premier exchange.

MCX, an independent and a de-mutualised exchange since inception, is all set up to introduce a

state of the art, online digital exchange for commodities futures trading in the country and has

accordingly initiated several steps to translate this vision into reality.

NCDEX (National Commodity and Derivative Exchange):-

NCDEX started working on 15th December, 2003. This exchange provides facilities to their

trading and clearing member at different 130 centers for contract. In commodity market the main

participants are speculators, hedgers and arbitrageurs.


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Facilities Provided By NCDEX:-

1.NCDEX has developed facility for checking of commodity and also provides awarehouse facility.

2. By collaborating with industrial partners, industrial companies, news agencies, banksand developers of kiosk network NCDEX is able to provide current rates and contracts

rate.

3. To prepare guidelines related to special products of securitization NCDEX works withbank.

4. To avail farmers from risk of fluctuation in prices NCDEX provides special services foragricultural.

5. NCDEX is working with tax officer to make clear different types of sales and servicetaxes.

6. NCDEX is providing attractive products like weather derivatives. 7. Why do people invest in the stock market?8. When you buy stock in a corporation, you own part of that company. This gives you a

vote at annual shareholder meetings, and a right to a share of future profits.

9. When a company pays out profits to the shareholder, the money received is called a"Dividend". The corporation's board of directors choose when to declare a dividend and

how much to pay. Older and larger companies pay a regular dividend; most new and

smaller companies do not.

10.The average investor buys stock hoping that the stock's price will rise, so the shares canbe sold at a profit. This will happen if more investors want to buy stock in a company

than wish to sell. The potential of a small dividend check is of little concern.

11.What is usually responsible for increased interest in a company's stock is the prospect ofthe company's sales and profits going up. A company who is a leader in a hot industry

will usually see its share price rise dramatically.


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Investors take the risk of the price falling because they hope to make more money. In the market

than they can with safe investments such as bank CD's or government bonds.

What is a stock market index?

In the stock market world, you need a way to compare the movement of the market, up and

down, from day to day, and from year to year. An index is just a benchmark or yardstick

expressed as a number that makes it possible to do this comparison. For e.g. S&P CNX Nifty is

the index of NSE and SENSEX is the index of BSE.

The price per share, like the market cap, has nothing to do with how big a company is.

The Securities Market consists of two segments, viz. Primary market and Secondary market.

Primary market is the place where issuers create and issue equity, debt or hybrid instruments for

subscription by the public; the Secondary market enables the holders of securities to trade them.

Secondary market essentially comprises of stock exchanges, which provide platform for

purchase and sale of securities by investors. In India, apart from the Regional Stock Exchanges

established in different centers, there are exchanges like the National Stock Exchange (NSE) and

the Over the Counter Exchange of India (OTCEI), who provide nationwide trading facilities withterminals all over the country. The trading platform of stock exchanges is accessible only

through brokers and trading of securities is confined only to stock exchanges.


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What is stock Broker?

A stock broker is one who invests other peoples money until its all gone.

-Woody Allen, American Film Maker

A stock broker is a person or a firm that trades on its clients behalf, you tell them what you

want to invest in and they will issue the buy or sell order. Some stock brokers also give out

financial advice that you a charged for. It wasnt too long ago and investing was very expensive

because you had to go through a full service broker which would give you advice on what to do

and would charge you a hefty fee for it.

There are three different types of stock brokers:-

Full Service Broker - A full-service broker can provide a bunch of services such as

investment research advice, tax planning and retirement planning.

Discount Broker A discount broker lets you buy and sell stocks at a low rate but

doesnt provide any investment advice.

Direct-Access Broker- A direct access broker lets you trade directly with the

electronic communication networks (ECNs) so you can trade faster. Active traders such

as day traders tend to use Direct Access Brokers.


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BENEFITS OF ONLINE TRADING TO INVESTORS

Some online brokerage firms reported 100+ per cent annual growth rates through the year2000. The increase was because of the benefits investors can gain from online investing.

These benefits include low transaction costs, speed, convenience, boundary spanning

abilities, and immediate access to financial information. According to, transaction costs

have been driven down because of the increased number of online brokerage firms. In

fact, the dramatic increase of online brokerage firms has led to increased competition and

lowered commissions that an investor must pay per trade.

Along with low transaction costs, the main strategy of online discount brokerages is thespeed and delivery of almost instantaneous transactions. In todays world of fast food and

24-hour service, investors cannot help but want the same type of fast service applied to

the financial industry. That is why many investors enjoy the conveniences e-brokerages

offer by allowing them to go online and complete transactions at almost any time during

the day or night. Time is saved because investors do not have to phone their broker

during normal business hours in order to complete their transactions.

Another benefit of online trading is its ability to span boundaries. Many investors areinterested in buying foreign stocks and with online trading systems in place; these

investors are drawn to its boundary spanning capabilities. This is also true for foreign

investors who want to invest in the U.S. market. Now, with the Internet, they have easier

access to make their overseas transactions.

A final benefit investors can derive from online trading is access to instantaneousinformation. Vakil and Lu (2005) stated that the Internet has given people access to

immediate financial information whenever they want it. They felt that the availability of

this financial information should lead investors to make better-informed choices. This

thought is also shared by Bhasin (2005-2006), especially since the information that is

now available to the average investor was once only available to people working in the

business of finance.


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BENEFITS OF ONLINE TRADING TO BROKERS/FINANCIAL PLANNERS

The investors are just one group affected by the development of online investing; another group

that has been influenced is the brokers/financial planners. With e-brokerages attracting twelve

million investors from 1994 to 2000, it may seem like traditional financial planners will soon be

extinct. However, this is not the case, as many people in the financial industry have witnessed

that the growth of online trading has created benefits for them as well. This includes increased

publicity, lower start-up costs, increased client base, ease of communication, and risk

management. The attention that has been given to online brokerages in terms of advertising has

encouraged more people to trade and thus, in the long run, this has created more business for the

financial markets in general. Financial planners feel that average people will be drawn into

trading online because of its novelty and then they will eventually realize that they need afinancial planner in order to help them get a comprehensive view of their finances.

A second benefit, according to Barber and Odean (2001), is that the fixed start-up costs of

opening an online brokerage are far lower than opening a traditional brokerage service.

Therefore, many brokers might consider putting a part of their services online, thus reduce their

staff costs. The staff costs can be reduced because it does not take as many personnel to run an e-

brokerage site as it does to manage a traditional brokerage firm

E-brokerages have also allowed brokers wider access to a variety of different people, therefore

increasing their client base and allowing them to offer many different types of services to their

customers. Ameritrade and E-Trade are examples of firms that have found new ways to deliver

traditional services and new services.

Another benefit to brokers is ease of communication. Many financial planners see the greatest

gift that the Internet has given them as allowing them to improve communication with their

clients. They appreciate the fact that the Internet has saved them money by reducing the costs ofcommunication and by making it easier to get information to their customers.One final benefit

that online trading has for brokers is that it makes risk management much easier. When an

investor places a trade online, the system first can check the investors bank account to make

sure that the individual has the funds available to make the trade and this lowers the credit and

payment risk that traditional brokers have had to deal with in the past.


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Growth of online trading

According to an article by Krishnamurthy B in 2005 after inception of online trading in India in

the year 2000 online trading is gained momentum with trading volumes growing by 150 per cent

per annum in the years 2005-2008 and it was more than approx. 200% in the year 2008 The

volume of all trades executed through the Internet on the National Stock Exchange had grown

from less than Rs 100 crores (Rs 1 billion) in June 2003 to over Rs 950 crores (Rs 7 billion) in

July 2008 which was a handsome growth in the year 2005in the starting of 2008 the growth of

online share was good but at the mid of the year when subprime crisis affected India including

all over the world, market of online trading got shrunk by more than 50%.

Now the growth of online trading is on its right track ,Indian stock market has been announced

the one of the Safe and stable market of the world, so here in India the online trading is growing

like anything in comparison to the whole world

At the end of July 2008, there were more than 168 registered brokers on the NSE and the number

of Internet trading subscribers to about 2.024 million. In the year 2010 India has 8 crores (80

million) internet user, the % of internet user is growing in each year.At the same time the number

of subscribers trading through the portal of Kotak Securities had gone up significantly by 150 per

cent and the number of online trading customers had grown from 30,000 to 75,000. And the

company expected to have at least 130,000 customers by the end of that fiscal. In the recent past

years of 2005 ICICIDirect and Indiabulls recorded an annual volume growth of 100 per cent and

Indiabulls had about 30 per cent of India's online trading volumes.

Today the total volume of online trade in India is about 29-31% of total trades. According to

brokers the better broadband connectivity across the country and wider awareness of equity as an

asset class will raise the online trade volumes to over 50% of total trade. In India the

demography is such that 75% of the population is under the age of 36 and more than 50% of the

75% is under age of 25 and this is another supporting factor.


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The Chief Executive of Reliance Money Ltd says that online investing is still at a nascent stage

in India and expects that Internet-based trading will eventually take about half of the total stock

market trading as like with developed markets such as the US. Philippines has the highest online

trade with about 55-60% execution of trade is online. The reason is because they had wider

Internet connectivity years before India. The biggest challenge in India remains better Internet

connectivity. The earlier Web-based technology used for Internet trading has been replaced by

specialized software which gives real-time global data streaming rates to trader helping investors

to analyze the market trends and helps in faster execution of trades. Earlier the investors made

trade calls over the phone which sometimes led to the delays. Example of the tools used in these

days online trading


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Online share trading in India was at a boom in the end of 2006 with daily-traded volumes more

than tripling from Rs 1,500 crores to Rs 5,000 crores in the last one year and terminals was set

up in small towns such as Rajkot, Hubli and Vijayawada .In that year the share of online trading

rose dramatically from 7% last year to 20% as a percentage of overall traded volumes. Due to

this factor the top five US brokerage firms decided to make a foray into India in the next year

driven by strategic interest. Also at that time non-metros accounted for half of the daily turnover

of online trading.Graph is showing the declining in the turnover of online trading in Indian stock

exchange during slowdown in economy due to subprime mortgage crisis


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Today is world of technology. So, the person who adopt it, get the success. So, online trading

means trading through electronic means. Online trading is the trading in which the investors who

are familiar with the use of computer and Internet they directly trade in stock market. They trade

any time at any place when the stock market is open. The cost of transaction is also reduce with

time. The investors have a large range of option for the trading. It is a paperless transaction so it

reduces the cost of company. There was a facility of live streaming quotes, which give exact

price of share which prevailing in the market at that time .

In the study conducted by Nidhi walia and Ravinder kumar (2007) examined the investors

preference for traditional trading and online trading. The major findings of the study were that

Indian investors are more conservative, they do not change easily and Indian traditional traders

still choose brokers for trading. But Internet traders are more comfortable with online trading

because of its transparency and complete control over the terminal. Another study by Sandeep

Srivastava, Surendra S Yadav and P K Jain (2008) on Derivative Trading in Indian Stock

Market: Brokers Perception found that high net worth individuals and proprietary traders

contribute to the major proportion of trading volumes in the derivative segment. The survey also

revealed investors are using these securities for risk management, profit enhancement, speculation

and arbitrage. It also emphasized to popularize option instruments because they may prove to be a

useful medium for enhancing retail participation.

Several earlier studies done regarding the characteristics of online traders in USA by Barber and

Odean (2002) found that young men are more likely to use the Internet for investing, and that

online investors tend to increase turnover and decrease their performance after switching to online

trading. Research conducted by Konari Uchida (2006) on the characteristics of Japanese online

investors found Japanese online investors prefer higher capital gains, choose low-volatility stocks

less often, use chart data more frequently, and are more likely to choose stocks to buy and sell

themselves.


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Research Methodology

Research methodology is a systematic way to solve the research problems. It refers to search for

knowledge, a scientific and systematic search for information. Marketing research is the

systematic design, collection, analysis and reporting of data and finding relevant to a specific

marketing design, collection, analysis and reporting of data and finding relevant to a specific

marketing situation facing the company.

Aim: - Investors awareness towards online trading

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 specifies the methods and procedures for conducting a particular study. The

type of research design applied here are DESCRIPTIVE as the objective is to check the

position of awareness in investors towards online tading in Raipur city. The objectives of the

study have restricted the choice of research design up to descriptive research design. This survey

will help the firm to know how the investors invest in the derivative segment & which factors

affect their investing behaviour.

Sample size: - 100.

Sample method used: - Survey.

Sampling instruments: - Questionnaire, face to face interview.


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[Type text]

NEED FOR THE STUDY:

The purpose into review the On-line Trading procedure a case study of On-Line trading at

Nirmal bang securities as the exchanges has changes its trading from the out cry mode to On-

Line trading 20th February, 1997 there is need to assets the performance of the capital market.

OBJECTIVES OF THE STUDY:

1) It is to analyze the change in trading after the exchange shifted from outcry to On-line

trading system.

2) To analyze conceptual frame work regarding On-line trading.

3) To evaluate about the latest development in the stock exchange trading system.

4) To analyze the investors awareness about On-line trading.

5) To bring out the investors expectations regarding on-line trading to be simplified further.

6) To offer suitable suggestions up on drawn conclusions.


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[Type text]


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[Type text]

18%

40%

42%

No. of Responses

Equity

Mutual fund

Bank

2) Investment option you preffered:

Method ofInvesting Equity Mutual fund Bank Real Estate

No. of Responses 19 41 44 5

TABLE 4.2

From the study it is clear that investment option preferred is as follows.

About 70% of respondents preferred the investment in mutual funds as well as bank deposits

due to the safely and investment planning by AMCs .A moderate number of respondent (about

22%) preferred to invest in stock market .Rest of 8% respondents preferred only real estate

investment.This data reveals that the common investor is keenly looking at safely of principal in

this volatile stock market.


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[Type text]

48

47

46.4

46.6

46.8

47

47.2

47.4

47.6

47.8

48

48.2

YES NO

YES

NO

3) Do you have DEMAT Account.

YES NO48 47

TABLE 4.3

This question reveals that the number of respondents opened DEMAT account so far of the

total respondents spread of half are towards DEMAT account which means only 48

respondents are investing electronic form of share and remaining people are invested in other

traditional investment options where there is no need of DEMAT account.


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[Type text]

24 24

23

24

22.4

22.6

22.8

23

23.2

23.4

23.6

23.8

24

24.2

PAN Card DEMAT A/c Bank A/c All options

4) For online trading what are the essential for an investor:

PAN Card DEMAT A/c Bank A/c All options

24 24 23 24

TABLE 4.4

Only 24 respondents are aware of total requirements for stock trading and investment

remaining 71 respondents does not have awareness on base requirement for stock market

investment and they are not actively investing in stock


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[Type text]

43%

36%

32%

34%

36%

38%

40%

42%

44%

Long term Short term

5) Are you a Long term investor or short term investor ?

Lon term Short term

43% 36%

TABLE 4.5

From the study it is clear that long term investor or short term investor.

43% of people preferred to invest in long term, which enables them to wealth

maximization. 36% of people preferred to invest in short term, by which they want to earn profit

from the fluctuations and volatilizing of stock market remaining 21% of respondents are

looking at their traditional investment avenues like bank deposits and real estate to have the

liquidity as safely.


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[Type text]

25

45

19

0

5

10

15

20

25

30

35

4045

50

1 year 1yr - 2 yrs 2yr 5 yrs

No. of respondents

No. of respondents

6) How long you are trading on-line.?

Method of 1yr 1yr-2yr 2yr-5yr Above5yr

No. of respondents 25 45 19 6

From the study it is clear that the how long people trading online. 74% of the respondents are long

term users of online trading mechanism. The period of their usage rates from 2 years to 5 years.

Hence the data reveals that many of the investors are fully aware of online trading

mechanism of various financial products.


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[Type text]

0

5

10

15

20

25

30

35

40

No Dont know If yes specify

7) Is there any difference between online trading and offline trading ?

TABLE 4.7

From the study it is clear that different between on-line trading & Off-line trading.19 respondents (i.e, 20%)

does not distinguish between online and offline trading about38% of respondents are not aware of any

differences of online and offline trading system And a major chance of respondents have clearly aware of

the differences between online trading and offline trading mechanism.


19 36 40


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[Type text]

48%

41%

11%

Yes

No

Not respondents

8) Are you aware of trading timings ?

TABLE 4.8

From the study it is clear that a ware of trading timings.About 52% of respondents are aware of

trading timings of stock exchanges. About 37% of respondents who are not trading only

thorough the brokers are not aware of trade timings at remaining 11% of respondents are not

responded for this questioner.Hence it is concluded that only the investors executing

transactions on their own computers are well aware of trading timings.

Yes No Not res ondents

46 39 10


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[Type text]

14

30

39

13

0

5

10

15

20

25

30

35

40

45

1995 1999 2000 Dont know

9) The On-line trading started in the year of

1995 1999 2000 Dont know

14 30 39 13

TABLE 4.9

On-line trading started in the year 1999. From the study shows that only 36% of

respondents are aware of the actual year of commencement of online trading in the country and

rest of 64% respondent are not aware of the fact.


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[Type text]

0

5

10

15

20

25

30

35

40

By own By personally meets the

broker for instruction

The phone instruction to

Broker

10) How do you access the On-line trading.

TABLE 4.10

From the study it is clear that access the On-line trading

About 37% of respondents are aware of access online trading by their own. About 355 of

respondents who are not aces online trading only through brokers for instructions and 25% of

respondents are also not aware only thorough phone instruction to broker.Hence it is concluded

that the only the investors executing transactions on their own computers so they are well

aware of accessing the online trading.

By ownBy personally meets thebroker for instruction

The phone instructionto Broker

36 34 25


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[Type text]

SEBI

23%

RBI

31%

NSDL &CSDL16%

ALL OF ABOVE

30%

11) Who will regulate the On-line Trading

SEBI RBI NSDL &CSDL ALL OF ABOVE

27 36 18 34

TABLE 4.11

From the study it is clear that regulate the On-line trading.Only 27% of respondents are aware

of total SEBI for stock trading and investment. Remaining 35% of respondents does not have

awareness of rules for basic requirement for stock market.


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[Type text]

24%

58%

18%

Received immediately

T+2 days

Dont know

12) In cash received immediately after placement of order.

Received

immediatelyT+2 days Dont know

23 55 17

TABLE 4.12

From the study it is clear that if cash received immediately after placement of order.About 57% of

respondents are aware of trading T + 2 days in stock market. Remaining 17% of respondent does

not have aware of T + 2 days.


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[Type text]

1 day

3 days

Trading week

13) The transaction will execute in

TABLE 4.13

From the study it is clear that transaction will execute in online trading.About 35% of respondents

are aware of transactions in online trading only 1 day. About 31% respondents are also aware of

transactions for requirement in online trading only 3 days about 28% of respondents are aware

of trading week transactions will execute. Hence it is conclude that investors are well known to

on executing the transactions only in one day to buy and sell the shares.

1 day 3 days Trading week

34 30 28


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[Type text]

36

30

24

0 5 10 15 20 25 30 35 40

Yes

No

Dont know

14) Is there any review system after placing the order:

Yes No Dont know

36 30 24

TABLE 4.14

From the study it is clear that review system after placing order.About 37% of respondents aware

of the review system after the placing orders in online trading. About 31% respondents does not

aware of review system after the placing the order. About 25% of respondents are not aware of

review system after the placing order.Hence it is concluded the investors are well known

review the system after the transactions of the placing the order.


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[Type text]

By e-mail directly

41%

By Post

35%

By Broker Email

24%

15) By which means you are getting confirmation of trading.

By e-mail directly By Post By Broker Email

35 30 20

TABLE 4.15

From the study it is clear that confirmation of trade. About the 37% respondents are aware of

confirmation of trading by e-mail directly. About 31% of respondents are aware of confirmation

of trading by post. About 21% of respondents are aware of confirmation of trading by broker

e-mail. Hence it is concluded that investors are well known that after placing the order they are

getting confirmation of trading by e-mail directly.


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[Type text]

43%

20%

37%Good

Not Convenient

Cant say

16) Do you feel online trading is move convenient that out cry method.

TABLE 4.16

From the study it is clear that On-line trading is convenient the outcry method. About 43% of

respondents are well known online trading is more convenient than outcry method. About 20% of

respondents are not convenient online trading. About 36% of respondents does not aware of online

trading and outcry method.Hence it is concluded that investor are executing transactions through

online trading only rather then outcry method.

Good Not Convenient Cant say

41 19 35


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[Type text]

20

25

49

0

10

20

30

40

50

60


17) Is there any limitation in quality of shares for placing a buying/ selling order.


20 25 49

From the study it is clear that limitation in quality of shares for placing buying / selling

order.About 21% respondent does not aware of limitations in quality of shares for placing

buying/selling orders. About 26% of respondents are not aware of limitations of quality of shares

for placing buying/selling order and major chance of respondents have clearly aware of the

limitations in quality of shares for placing buying/selling order mechanism.


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[Type text]

22%

23%

55%

No

Cant say

If yes, Specify

18) Is there any difference between common investor and institutional investor.

No Cant say If yes, Specify

21 22 52

From the study it is clear that different between common investor & institutional investor. About

22% of respondents does not aware of distinguished between common investor and

institutional investor. About 23% of respondents are not aware of any difference between

common investor & institutional investor and 54% of respondents majority have clearly aware

of the difference between common investor & institutional investoes


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[Type text]

SUMMARY OF ONLINE TRADING SYSTEM

1. Lack of transparency in the manual trading system lead to the development of onlinetrading SYSTEM.

2. It avoids procedural delay involves in the manual trading system and reduced cost. Facilititateseasy surveillance so that there is less scope for speculation.

3. Provides the investors with the best possible facilities services.4. Bring transparency in the operation of the exchange.5. Online trading is said to be dealing of securities on net, which forms a single location any6. where we can service investors across the country.7. Online trading facilities easy survivalance so that there are possible facilities.8. Trading on the Internet has opened opportunities for real investors, the information on

securities is available directly to the investors through online.

9. Now it provides secure depository system with an extensive network in dematerialized format.


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SSIPMT/MBA 3SEM/MADHAVI MISHRAPage 52


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SUGGESTION

Even through the exchanges were mechanized, there are to accessible to rural areas and

such the capital market should be made more rural friendly.

Investors lack the knowledge of online trading: SEBI should take steps to educate the

investors in this area.

RECOMMENDATION

1. The companies should come up with more and more innovative features in theirweb portals.

2. We came to know about most important factor about the product with the help offactor analysis, so we should go for change the product according to the customer

need.

3. We should also focus upon the value added services. Generally company doesclaim that if you will by the product you will get these benefits but company

doesnt provide the services here. So services always does matter when we talk of

ONLINE TRADING

4. Company should also look for the problem which customer generally face whenthey do trading (like problem of operating properly)

5. The customer should be educated regularly regarding the new technologies andtechniques of trading online and also other relevant information.

6. The companies should look after to develop more safe and secure ways oftransacting business online.

7. The companies should make maximum efforts to detect fraud cases and minimizethem


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CONCLUSION

The online trading is growing with a rapid pace with the rising level of education among

the customers. The other factors being that the Indian Investor nowadays wants to deal

himself in trading rather than depending upon other middlemen. They also consider the

factors like time saving in doing the online transactions, convenience etc. Although some

people feel that online trading is not secure but the people doing the trading online is

happy about the increasing security concerns among the companies.

The year 2008 has not been so good for the stock market and the Sensex and Nifty has

been dipping and affecting the business negatively for these companies but the same trend

reversed in 2009 - 2010. This is due to the fact that at these times people do not prefer to

open the DMAT and Trading accounts. So the companies have to reduce their account

opening fees to attract more and more customers.

Also people trade very less in the bearish market and the companys profits against

brokerage fees soars downwards. It is also a found fact that during the bearish market the

ratio of online trading becomes very less. Also there is an intense competition among the

companies and the companies come up with new and new promotion schemes such as

discounted and negotiable brokerages, Zero balance accounts, waiving a/c opening fee and

AMC etc. As the internet penetration is growing in India this business holds a huge

potential for growth.

Now if the existing company will have to capture the market they will have to look for the

innovation in their product as well as service mix.The mantra for success in the current

situation will be educating the customers about the benefits of online trading and the

amount of ROI that can be generated through it.


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LIMITATIONS OF THE STUDY-

Since the road to improvement is never ending, so this study also suffers from certainlimitations The study is confined to On-line trading procedure On-line problem of listing

are not covered due to time and to keep the study in manageable limits. The study reflects

the awareness of Raipur investors only.

. Some of them are as follows:

Because of illiteracy, it was a time consuming method in which continuous guidance

was required.

Questionnaire method involves some uncertainty of response. Cooperation on the part of

informants, in some cases, was difficult to presume.

It is possible that the information supplied by the informants may be incorrect. So, the

study may lack accuracy.


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OVERALL EXPERIENCE

The last two months has been a great learning experience for me because I came to knowabout many aspects of online trading which I didnt know in last 6 years of using the

online trading facilities. Some of the learning of mine is:

I improved my communication skills by learning how to talk to different kind of people as

it requires the different approach to handle each person.

I became aware about various aspects of working of stock exchange

I lear nt few things about back office work

I lear nt about the consumer perception about the stock market and online trading.

Patience was the thing I learnt the most as I have to approach various persons to whom I

had to explain same things again and again while approaching or calling them at regular

Intervals.


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Bibliography:-

Book Reference:-

Kothari C R - Research MethodologyVikas Publication2th

Edition

Malhotra K Naresh - Marketing ResearchPearson Publication8th

Edition

Philip Kotler, Kevin Lane Keller, Abraham Koshi, Mithleshwar Jha Marketing

ManagementPearson Publication13th

Edition

Web Reference:-

www.nirmalbang.com

www.bseindia.com

www.nseindia.com

www.mcx.com

www.ncdex.com
http://www.nirmalbang.com/http://www.nirmalbang.com/http://www.bseindia.com/http://www.bseindia.com/http://www.nseindia.com/http://www.nseindia.com/http://www.mcx.com/http://www.mcx.com/http://www.ncdex.com/http://www.ncdex.com/http://www.ncdex.com/http://www.mcx.com/http://www.nseindia.com/http://www.bseindia.com/http://www.nirmalbang.com/


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Questionnaire

Topic: - Investors Awareness Towards Online Trading in Raipur City.

Myself Madhavi Mishra student of MBA studying at Shri Shankaracharya Institute of

Professional Management & Technology, Raipur (c.g.). I have prepared this questionnaire

meant for educational purpose only.

No personal information will be disclosed in any form at anywhere.

Please mark ( ) your responses to the following:

Name :

Place :

Factor Category Tick

Age (Years)

25 and Below

2635

3645

Above 45

( )( )

( )

( )

Gender

Male

Female

( )

( )

Educational Qualification

Graduate

Postgraduate

Others

( )

( )( )

Employment status

Business Class

Salary Class

Professional

Others

( )

( )

( )

( )

Monthly Income

Below 10,000

10,00020,000

20,00030,000

30,000 - Above

( )

( )

( )


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1) Are you an Investor in stock market?

a)Yes b) No

2) Investment option you preferred ?

a)Method of Investing b) Equity c) Mutual fund d) Bank

e) Real Estate

3) Do you have Demat Account?

a)Yes b) No

4) For online trading what are the essential for an investor?

a)PAN Card b) DEMAT A/c c) Bank A/c d) All options

5) Are you a Long term investor or short term investor?

a) Long term b) Short term

6) How long you are trading on-line?

a)Method of Investing b) 1 year c) 1yr - 2 yrs d) 2yr5 yrs e) Above 5yrs

7) Is there any difference between On-line trading and Off-line trading?

a)No b) Dont know c) If yes specify

8) Are you aware of trading timings?

a)Yes b) No c) Not respondents

9) The On-line trading started in the year of

a)1995 b) 1999 c) 2000 d) Dont know


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10) How do you access the On-line trading?

a )By own b) By personally meets the broker for instruction c) The phone instruction

to Broker

11) Who will regulate the On-line Trading?

(a) SEBI b) RBI c) NSDL &CSDL d) ALL OF ABOVE

12) Is cash received immediately after placement of order?

a)Received immediately b) T+2 days c) Dont know

13) The transaction will execute in ?

a)1 day b) 3 days c) Trading week

14) Is there any review system after placing the order?

a)Yes b) No c) Dont know

15) By which means you are getting confirmation of trading?

a)By email directly b) By Post c) By Broker Email

16) Do you feel online trading is move convenient that outcry method.

a)Good b) Not Convenient c) Cant say

17) Is there any limitation in quality of shares for placing a buying/ selling order?

a)No b) Dont know c) If yes specify

18) Is there any difference between common investor and institutional investor?

a) No b) Cant say c) If yes, Specify

Thank You for your cooperation and support


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sip final madhavi

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