INTRODUCTION

DEFINITION:
An e-brokerage is a brokerage house that allows you to buy and sell stocks and obtain investment information from its Web site. Some e-brokerages are provided by traditional and well-established "offline" brokerage houses and a few are exclusively online only.

Tradition investing has experienced a revolution due to the rise of the e brokerage industry, which enables investors to use the Internet to conduct

secure trading. Two factors are contributing to the enormous growth of online investing. First, the Internet gives ready access to can offer raw data. Second, investment houses

transactions at lower prices than traditional methods by eliminating the

need for brokers or financial advisers. The online brokerage industry has yet to attract mainstream investors, who

represent 85 percent of the retail investment community. These investors prefer a combination of brokerage services, including not only online trading, but also financial advice and guidance.

NEED OF THE STUDY

1. To need to assess the performance of the capital market.

2. The present study to review the online trading procedure a case study of on line trading in NSE at Share khan securities Ltd, karimnagar.

3. The need for the study is to know the effectiveness of the online trading and study its online trading in NSE.

SCOPE OF STUDY

1. Online trading is an internal based investment activity which elimination of

association of a broker.

2. Now a days, there are many online trading companies working as portals for
the biggest stock business houses like the NSE (National Stock Exchange) & BSE(Bombay Stock Exchange).

3. The person has to get registered with the online portal and get in to an
agreement with the company to trade in different kinds of securities by accepting the terms and conditions.

RESEARCH METHODOLOGY

Primary Data:
The data collection of methodology is secondary data .A primary data is the data, which is collected a fresh and for the first time. The primary data includes the data is collected from the personal interaction with an authorized members, clerks of Share khan securities Ltd. Karimnagar.

Secondary data:
The secondary data is collected from broachers, and material data provided by Share khan securities Ltd. And the data collected from the various magazines of NSE, and various books relating to the online trading information in FIMS, and other related websites, topics.

LIMITATIONS
1. The study is confined to the trading procedures in the Share khan securities Ltd, Karimnagar.

2. The study is cover to all the procedures only exhaustive analysis, problems of listing, Management of trade.

3. The product is offering from Share khan is not competitive enough, with others market players, major of them as:-limit option,-company information,-earning centers, research report.

INDUSTRY PROFILE
STOCK MARKETS IN INDIA:
Stock exchanges are the perfect type of market for securities whether of government and semi-govt. bodies or other public bodies as also for shares and debentures issued by the jointstock companies. In the stock market, purchases and sales of shares are affected in conditions of free competition. Government securities are traded outside the trading ring in the form of over the counter sales or purchase. The bargains that are struck in the trading ring by the members of the stock exchanges are at the fairest prices determined by the basic laws of supply and demand.

DEFINITION OF A STOCK EXCHANGE:

Stock Exchange (also called Stock Market or Share Market) is one important constituent of capital market. Stock Exchange is an organized market for the purchase and sale of industrial and financial security. It is convenient place where trading in securities is conducted in systematic manner i.e. as per certain rules and regulations... The securities include: Shares of public company. Government securities. Bonds

HISTORY OF STOCK EXCHANGES

The only stock exchanges operating in the 19th century were those of Mumbai setup in 1875 and Ahmadabad set up in 1894. These were organized as voluntary nonprofit- marking associations of brokers to regulate and protect their interests. Before the control on securities under the constitution in 1950, it was a state subject and the Bombay securities contracts (control) act of 1925 used to regulate trading in securities. Under this act, the Mumbai stock exchange was recognized in 1927 and Ahmadabad in 1937. During the war boom, a number of stock exchanges were organized. Soon after it became a central subject, central legislation was proposed and a committee headed by A.D.Gorwala went into the bill for securities regulation. On the basis of the committees recommendations and public discussion, the securities contract (regulation) act became law in 1956.

Functions of Stock Exchanges:

Stock exchanges provide liquidity to the listed companies. By giving quotations to the listed companies, they help trading and raise funds from the market. Over the hundred and twenty years during which the stock exchanges have existed in this country and through their medium, the central and state government have raised crores of rupees by floating public loans. Municipal corporations, trust and local bodies have obtained from the public their financial requirements, and industry, trade and commerce- the backbone of the countrys economy-have secured capital of crores or rupees through the issue of stocks, shares and debentures for financing their day-to-day activities, organizing new ventures and completing projects of expansion, diversification and modernization. By obtaining the listing and trading facilities, public investment is increased and companies were able to raise more funds. The quoted companies with wide public interest have enjoyed some benefits and assets valuation has become easier for tax and other purposes.

OUT OF THESE MAJOR STOCK EXCHANGES WERE:

NSE (National Stock Exchange)

The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIs)to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000

NSE's mission is setting the agenda for change in the securities markets in India. The NSE was set-up with the main objectives of: Establishing a nation-wide trading facility for equities and debt instruments. Ensuring equal access to investors all over the country through an appropriate Communication network. Providing a fair, efficient and transparent securities market to investors using Electronic trading systems. Enabling shorter settlement cycles and book entry settlements systems, and Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology, have Become industry benchmarks and are being emulated by other market participants.NSE is more than a mere market facilitator. It's that force which is guiding the Industry towards new horizons and greater opportunities.

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 a voluntary non-profit making Association of Persons (AOP) and is currently engaged in the process of converting itself into demutualised and corporate entity. It has evolved over the years into its present status as the premier Stock Exchange in the country. It is the first Stock Exchange in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities Contracts (Regulation) Act 1956.The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives upholds the interests of the investors and ensures redresses of their grievances whether against the companies or its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education programmers and making available to them necessary informative inputs.

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. The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of the Exchange and the Chief Operating Officer and other Heads of Department assist him. The Exchange has inserted new Rule No.126 A in its Rules, Byelaws pertaining to constitution of the Executive Committee of the Exchange. Accordingly, an Executive Committee, consisting of three elected directors, three SEBI nominees or public representatives, Executive Director & CEO and Chief Operating Officer has been constituted. The Committee considers judicial & quasi matters in which the Governing Board has powers as an Appellate Authority, matters regarding annulment of transactions, admission, continuance and suspension of member brokers, declaration of a member-broker as defaulter, norms, procedures and other matters relating to arbitration, fees, deposits, margins and other monies payable by the member-brokers to the Exchange, etc.

BSE Facts:
BSE as a brand is synonymous with capital markets in India. The BSE SENSEX is the benchmark equity index that reflects the robustness of the economy and finance. It was the First in India to introduce Equity Derivatives First in India to launch a Free Float Index First in India to launch US$ version of BSE SENSEX First in India to launch Exchange Enabled Internet Trading Platform First in India to obtain ISO certification for Surveillance, Clearing & Settlement BSE On-Line Trading System (BOLT) has been awarded the globally recognized the Information Security Management System standard BS7799-2:2002. First to have an exclusive facility for financial training Moved from Open Outcry to Electronic Trading within just 50 days

BSE with its long history of capital market development is fully geared to continue its contributions to further the growth of the securities markets of the country, thus helping India increases its sphere of influence in international financial markets.

REGULATORY FRAME WORK OF STOCK EXCHANGE:

A comprehensive legal framework was provided by the Securities Contract Regulation Act, 1956 and Securities Exchange Board of India 1952. Three tier Regulatory structure comprising Ministry of finance The Securities And Exchange Board of India Governing body

MEMBERS OF THE STOCK EXCHANGE:

The securities contract regulation act 1956 has provided uniform regulation for the admission of members in the stock exchanges. The qualifications for becoming a member of a recognized stock exchange are given below: The minimum age prescribed for the members is 21 years. He should be an Indian citizen. He should be neither a bankrupt nor compound with the creditors. He should not be convicted for fraud or dishonesty. He should not be engaged in any other business connected with a company. He should not be a defaulter of any other stock exchange. The minimum required education is a pass in 12th standard examination.

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)

The securities and exchange board of India was constituted in 1988 under a resolution of government of India. It was later made statutory body by the SEBI act 1992. According to this act, the SEBI shall constitute of a chairman and four other Members appointed by the central government.

With the coming into effect of the securities and exchange board of India act, 1992 some of the powers and functions exercised by the central government, in respect of the regulation of stock exchange were transferred to the SEBI.

OBJECTIVES AND FUNCTIONS OF SEBI:

To protect the interest of investors in securities. Regulating the business in stock exchanges and any other securities market. Registering and regulating the working of intermediaries associated with Securities market as well as working of mutual funds. Promoting and regulating self-regulatory organizations. Prohibiting insider trading in securities. Regulating substantial acquisition of shares and take over of companies. Performing such functions and exercising such powers under the provisions Of capital issues (control) act, 1947and the securities to it by the central government.

SEBI GUIDELINES TO SECONDARY MARKETS: (STOCK EXCHANGES)

Board of Directors of Stock Exchange has to be reconstituted so as to include Non-members, public representatives and government representatives to the Extent of 50% of total number of members. Capital adequacy norms have been laid down for the members of various stock exchanges depending upon their turnover of trade and other factors. All recognized stock exchanges will have to inform about transactions within 24 hrs.

Present Trading Mechanism

The National system provides single, nation wide Securities. It enables investors in one part of the country to trade at the best quotes with an investors located in any other part of the country through the members of the stock exchanges and subsequently clears and settles the trade in an efficient and cost effective manner.

The primary objective of the stock market is to provide clear opportunity to the investors throughout the country to trade any securities irrespective of the size of the order or the broker through whom the order is routed. This provides the facility to execute the buy out any extra cost to the investors. There will be no trading floor in the exchanges. Instead, each trading member will have a computer at his own office any where in India which will be connected to the central computer system at the NSE through leased lines or VSATs (Very Small Aperture Terminal), for an interim transition period of six months and subsequently by satellite link. VSATs are relatively smaller dishes similar to dish antenna for cable T.V and have the benefit of not being very expensive. A satellite network makes it possible to connect almost all the parts of the nation quickly as it is easy to install, as against the ground lines. Such as dial up modems leased lines which are prone to disruptions, satellite links on other hands ensure high speed, availability and quality of the connection. This code of trading is known as On-line Trading.

COMPONY PROFILE
Company name Share khan ltd, this company establishment year in 1922, company headquarter is in Mumbai, nature of business is trading service provider. Company is provided some services to traders that are Depository services, Online Services and. Technical Research. In this company number of employees is above 3500. Company website is www.sharekhan.com. Company slogan is Youre Guide to financial jungle.

Vision &Mission
Vision: To be the best retail brokering brand in the retail business of stock marketing. Mission: To educated and empower the individual investor to make better investment better decision through the quality advice and superior services.

Company Description
Share khan Limited offers online security broking and portfolio services to institutions and large corporate houses as well as individual investors. Share khan Limited was formerly known as SSKI Investor Services Private Limited. The company is based in Mumbai, India.

Company Analysis
According to the Individual - Audited financial statement for the Year of 2011, total net operating revenues increased with 0.32%, from INR 478.56 tens of millions to INR 480.07 tens of millions. Operating result decreased from INR 173.4 tens of millions to INR 140.67 tens of millions which means -18.88% changes. The results of the period increased 32.41% reaching INR 247.29 tens of millions at the end of the period against INR 186.76 tens of millions last year. Return on equity (Net income/Total equity) went from 49.58% to 54.30%, the Return On Asset (Net income / Total Asset) went from 22.93% to 25.61% and the Net Profit Margin (Net Income/Net Sales) went from 39.03% to 51.51% when compared to the same period of last year. The Debt to Equity Ratio (Total Liabilities/Equity) was 212.07% compared to 216.17% of last year. Finally, the Current Ratio (Current Assets/Current Liabilities) went from 2.15 to 2.27 when compared to the previous year.

ACTIVITIES IN SHAREKHAN
EQUTIES & DERIVATIVES PORTFOLIO MANAGEMENT AND STRUCTURED PRODUCTS COMODITIES RESEARCH IPO, MUTUAL FUND DEPOSITORY SERVICES

DIFFERENT TYPES PRODUCTS & SERVICES OFFERED

EQUITY & DERIVETIVE TRANING DEPOSITORY SERVICES ONLINE SERVICES COMODITIES TRANING DAIL N TRADE PORTFOLIO MANAGEMENT SHARE SHOPS FUNDAMENTAL RESEARCH TECHNICAL RESEARCH

BRIEF ABOUT SHAREKHAN

Share khan is one of the top retail brokerage houses in India with strong online trading plat form. The company provides equity based products (research, equities, derivatives, depository, margin funding, etc.). It has one of the largest networks in the country with 1288 share shops in 325 cities. It is the retail broking arm of the Mumbai-based SSKI [SHANTILALSHEWANTILALKANTILALISWARNATHLIMITED] Group. Share khan bring saucer friendly online trading facility, coupled with a wealth of content that will help to stalk the right shares.

ACHIEVEMENT OF COMPANY
A rated among the top 20 wired companies along with Reliance, Infosys, etc. . by Business Today, January2004 edition. Awarded Top Domestic Brokerage House four times by Euro money and Asia money. Pioneers of online raiding in India amongst the top 3 online trading website from India. Most preferred financial destination amongst online broking customers. Winners of Best Financial Website award. Indias most preferred brokers with in 5years. Awaaz customers award.

SWOTANALYSIS
STRENGTHS It is a pioneer in online trading with a turn over of Rs.400 crores and more than 3000 peoples working in the organization. Employees are highly empowered and strong communication network. Number1 registrar and transfer agent and dealer of investment products in India Good co-operation between employees. WEAKNESS Localized presence due to insufficient investments for country wide expansion. High brokerage charges but now they have over come this by a new prepaid scheme in which brokerage is reduced to half. High employee turns over. Lack of awareness among customers because of non-aggressive promotional strategies (print media, news papers, etc).

OPPORTUNITIES
With the booming capital market it can successfully launch new services and raise its clients base. Marketing at rural and semi-urban areas. Increasing usage of online trading may boost a whole new breed of investors for trading in securities. As interest on fixed deposits with post office and banks are all time low, more and more small investors are entering into stock mark.

THREATS
Lack of sufficient branch-offices for speedy delivery of services. Increasing number of Competitors. Constant pressure to be cost competitive to meet customers expectations. Aggressive promotional strategies by close competitors may hamper ShareKhans acceptance by new clients.

Terms used in Report SENSEX The Sensex is an "index". An index is basically an indicator. It gives general idea about whether most of the stock shave gone up or most of the stock shave gone down. The Sensex is an indicator of all the major companies of the BSE. If the Sensex goes up, It means that the prices of the stocks of most of the major companies on the BSE have gone up and visa versa.

NIFTY
Nifty means National Index for Fifty Stocks. The Nifty is an indicator of all the major companies of the NSE. Sensex represent the top stocks of the BSE, the Nifty represents the top stocks of the NSE .The NSE-50 comprises 50 companies that represent 20 broad Industry groups with an aggregate market capitalization of a round Rs.1,70,000crs. All companies included in the Index have a market capitalization in excess of Rs500crs.

Besides Sensex and the Nifty there are many other indices. There is an index called the BSE Mid-cap Index. That gives an idea about whether the mid-cap stocks go up or down. Index for small or large cap. Index for the metal stocks. Index for the FMCG stocks. Index for the Automobile stocks etc.

BSE
The Bombay Stock Exchange (BSE) located on Dalal Street, Mumbai. The oldest stock exchange in Asia. The equity market capitalization US$1.63trillion-2010, 4th largest SE in Asia and the 8th largest in the world. Largest number of listed companies in the world. As of June2011, over5, 085.

NSE
The National Stock Exchange located at Mumbai, Maharashtra, India. Incorporated in November 1992 as a tax- paying company. In April 1993 , recognized as a stock exchange. It is the 9th largest stock exchange in the world by market capitalization. NSE has a market capitalization of around US$1.59 trillion and over1,552 listings. How Sensex is calculated? It is calculated using the free-float market capitalization method. First: Find out the free-float market cap of all the 30 companies that make up the Sensex! Second: Add all the free-float market caps of all the 30 companies! Third: Make all this relative to the Sensex base .The value youngest is the Sensex value! Free-float market cap of Rs.100,000Cr... the Sensex value is4000Then, for a free-float market cap of Rs.150,000Cr.. .the Sensex value will be.. the Sensex value will be 6000 if the free-float market cap comes to Rs.150,000Cr!

DEMAT Account
The term Demat account, refers to a dematerialized account. The Securities Exchange Board of India (SEBI) requires the investor to maintain a Demataccount. Shares and securities are held in electronic form instead of taking actual possession of certificates. Purchases and sales of securities on the Demat account are automatically made on cetransactions are executed and completed.

DEMAT Benefits
A safe and convenient way to hold securities. Immediate transfer of securities. No stamp duty on transfer of securities (0.5%onphysicalshares). Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, theft etc. Reduction in paperwork. No odd lot problem, even one share can be sold. Reduction in transaction cost. etc

Online trading
Buying and selling securities using the Internet or broker-provided proprietary software that works through the Internet. It reduces paper work. It reduces various costs involve(like Transaction cost). The online trading brings data to the invest or online and net broking enables him to trade on a click.

Key Executives for Share khan Limited

Mr. Tarun P. Shah Mr. Pathik Gandotra Mr. Jaideep Arora Mr. Shankar Vailaya Mr. Rishi Kohli Chief Executive Officer and Whole-Time Director Head of Research Whole-Time Director Whole-Time Director Vice President of Equity Derivatives

DEFINITION:
An e-brokerage is a brokerage house that allows you to buy and sell stocks and obtain investment information from its Web site. Some e-brokerages are provided by traditional and well-established "offline" brokerage houses and a few are exclusively online only.

TRADING IN THE STOCK EXCHANGE

THE CONVENTION DAY The broker has to buy or sell securities for which he has received the orders. For this, the broker or his authorized representatives goes to the stock exchange. This method is called the open outcry system. Basically the brokers shout while buying or selling the securities. The floor of the stock exchange is divided into a number of markets also known as post pit or wing based on particular securities dealt there. In the post pit or wing, the broker using open outcry method makes an offer or bid price. For making the necessary bargain, he quotes his purchase or sale price, also known as offer or bid price. The dealer, to whom the price is quoted, quotes his own price when the quotation of the dealer suits the broker, he may loose the bargain. If he is not satisfied with the quote price, he may turn to some other dealer. On the close of the bargain, the dealer as well as the broker makes a brief not of the particulars of the deal. Such notes are made on some pad and on it the number of shares, the price agreed upon, the name of the party, what membership number etc., are noted.

MANUAL TRADING
TRADING PROCEDURE BEFORE INTRODUCTION OF ONLINE TRADING

Trading on stock exchanges is officially done in the trading ring. In the trading ring the space is provided for specified and non-specified sections, the members and their authorized assistants have to wear a badge or carry with them on identity card given by the exchange to enter the trading ring. They carry a sauda book or confirmation memos, duly authorized by the exchange

and carry a pen with them. The stock exchanges operations are floor level are technical in nature .Non-members are not permitted to enter in to stock market. Hence various stages have to be completed in executing a transaction at a stock exchange .The steps involved in this method of trading have given below CHOICE OF BROKER:The prospective investor who wants to buy shares or the investors, who wants to sell shares and transact business, have to act through member brokers only. They can also appoint their bankers for this purpose as per the present regulations.

PLACEMENT OF ORDER:The next step is the placing order for the purchase or sale of securities with a broker. The order is usually placed by telegram, telephone, letter, fax etc or in person. To avoid delay, it is placed generally over the phone. The orders may take any one of the forms such as At Best Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open Order, Stop Loss Order.

DEMATERLIZATION: Dematerialization is the process by which physical certificates of an investor are converted to an equipment number of securities in electronic from and credited in the investor account with his DP. In order to dematerialization his certifies an investor has to first open an account with a DP and then request for the Dematerialization Request Form, which is DP and submit the same along with the share certificates. The investor has to ensure that he marks Submitted for Dematerialization on the certificates before the shares are handed over to the DP for demat. Dematerialization can only be done to those certificates, which are already registered in your name and belong to the list of securities admitted for Dematerialization at NSDL.

Most of the active scrips in the market including all the scrips of S&P CNXNIFTY and BSE SENSEX have already joined NSDL. This list is steadily increasing. Briefly, the process is as follows: after completion of transfer, the investor gets the option to dematerialize such shares. Investors willing to exercise this option sends a Demat request along with the option letter sent by the company to his DP. The company or its R&T agent would confirm the Demat request on its receipt from the DP to reduce risk of loss in transit. Dematerialized shares do not have any distinctive or certificate numbers. These shares are fungible-which means that 100 shares of a security are the same as any other 100 shares of the security. Odd lot shares certificates can also be dematerialized. Dematerialization normally takes about fifteen to thirty days. To get back dematerialized securities in the physical form, request DP for Re-materialization of the same is made. Re-materialization is the process of converting electronic shares in to physical shares.

ONLINE TRADING
Before getting in to the online trading we should know some things about the internet, ecommerce and etc.

What is Internet?

Internet is a worldwide, self-governed network connecting several other smaller networks and millions of computers and persons, to mega sources of information. This technology shrinks vast distances, accelerating the pace of business reforms and revolutionizing the way companies are managed. It allows direct, ubiquitous links to anyone anywhere and anytime to build up interactive relationships.

A combination of time and space, called the Internet promises to bring unprecedented changes in our lives and business. Internet or net is an inter-connection of computer communication networks spanning the entire globe, crossing all geographical boundaries. It has re-defined the methods of communication, work study, education, business, leisure, health, trade, banking, commerce and what not it is virtually changing every thing and we are living in dot.com age. Net being an interactive two way medium, through various websites, enables participation by individuals in business to business and business to consumer commerce, visit to shopping arcades, games, etc. in cyber space even the information can be copied, downloaded and retransmitted. The use of Internet has grown 2000 percent in last decade and is currently growing at 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 management and financial services. In offers stock trading at a lower cost. Internet can change the nature and capacity of stock broking business in India.

E-commerce
Electronic commerce is associated with buying and selling 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 of business information using electronic data inter change, electronic technologies. It not only automates manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated.

E-TRADING INTERFACE

INVESTOR

STOCK BROKERS

INVESTORS

SATELLITE LINK DEPOSITORY REGISTAR/COM PANY

DEPOSITORY PARTICIPANT

STOCK EXCHANGE

BANK

PCs and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstations of individual office works or serves where large databases and information reside. Network connects both categories of computers; the various operating systems are the most basis program within a computer. It manages the resources of the computer system in a fair and efficient manner. Now we can enter in to the concept known as online trading. In the past, investors had no option but to 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 become easily accessible to both retail as well as big investor. Once investors learn to research on line, they will demand more market information.

The actual definition of Online Trading is as explained below: Online trading is a service offered on the internet for purchase and sale of shares. In the real world you place orders on your stockbroker either verbally (personally or telephonically) or in a written form (fax). In online trading, you will access a stockbrokers website through your internet enabled PC and place orders through the brokers internet based trading engine. These orders are routed to the stock exchange without manual intervention an executed thereon in a matter of a few seconds. The net is used as a modem of trading in internet trading. Orders are communicated to the stock exchange through website.

In India
Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the ORS the client enters his requirements (security, quantity, price buy/sell) on brokers site.

OBJECTIVES
Internet trading is expected to Increase transparency in the markets, Enhance market quality through improved liquidity, by increasing quote continuity and market depth, Reduce settlement risks due to open trades, by elimination of mismatches, Provide management information system, Introduce flexibility in system, so as to handle growing volumes easily and to support nationwide expansion of market activity.

REQUIREMENTS FOR NET TRADING For investors

1. Installation of a computer with required specification

2. Installation of a mode 3. Telephone connection 4. Registration for on-line trading with broker 5. A bank account 6. Depository account 7. Compliance with SEBI guidelines for net trading

The following should be produce to get a demat account and online trading account
As identity, proof &address proof produce the following things: Voter ID card Driving license PAN card( in case of to trade more than 50000) Ration card Bank pass book Telephone bill

Other requirements, which are necessary

First page of the bank pass book and last 6 months statement. Bank managers signature along with banks seal, manager registration code on photograph.

For stock brokers:

1. Permission from stock exchange for net trading

2. Net worth of Rs. 50 lac 3. Adequate back-up system 4. Secured and reliable software system 5. Adequate, experienced and trained staff 6. Communication of order (trade confirmation to investor by e-mail) 7. Use of authentication technologies 8. Issue of contract notes within 24 hours of the trade execution 9. Setting up a website.

The net is used as a medium of trading in internet trading. Orders are communicated to the stock exchange through website. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the Order Routing System the client enters his requirements (security, quantity, price, and buy/sell) in broker's site. They are checked electronically against the clients account and routed electronically to the appropriate exchange for execution by the broker. The client receives a confirmation on execution of the order. The customer's portfolio and ledger accounts get updated to reflect the transaction. The user should have the user id and password to enter into the electronic ring. He should also have demat account and bank account. The system permits only a registered client to log in using user id and password. Order can be placed using place order window of the website.

Internet trading provides total transparency between a broker and an investor in the secondary market. In the open outcry system, only the broker knew the actually transacted price. Screen based trading provides more transparency. With online trading investors can see them sleeves the price at which the deal take place. The time gap has narrowed in every stage of operation. Confirmation and execution of trade reaches the investor within the least possible time, mostly within 30 seconds. Instant feedback is available about the execution. Some of the websites also offer; New and research report BSE and NSE movements Stock analysis Freebies IPO and mutual fund centers and Movements of interaction stock exchanges.

STEP BY STEP PROCEDURE IN ONLINE TRADING

Following steps explain the step by step approach to on-line trading: Log on to the stock broker's website Register as client/investor Fill the application form and client broker agreement form on the requisite value stamp paper Obtain user ID and pass word Log on to the broker's site using secure user ID and password Market watch page will show real time on-line market data Trade shares directly yourself by entering the symbol or number of the security Brokers server will check your limit in the on-line accountant demat account for the number of shares and execute the trade Order is executed instantly (10-30 seconds) and confirmation can be obtained. Confirmation is e-mailed to investor by broker

Contract note is printed and mailed in 24 hours Settlement will take place automatically on the settlement day Demat account and the bank account will get debited and credited by electronic means.

TRADING AND SETTLEMENT AT SHARE KHAN

The NSE first introduced online trading in India. The Online trading system imparted a greater level of transparency and investors preferred exchanges that offered Online trading because of the following factors: The ease of operation from the view of the both members and the investors. Increase in the confidence of the investors because at higher level of transparency. Facilities better monitoring of the market by the exchange. The best price achieved in buying and selling.

All these resulted in ever-increasing volumes on the exchanges offering the online trading.

TRADING PROCEDURE AT SHARE KHAN STOCK BROCKING

Share Khan deals in buying and selling equity shares and debentures on the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE) and the Over-The-Counter Exchange of India (OTCEI). Share Khan is provided with a computer and required software from their registered stock exchanges. These centers are called Broker Work Stations. These computers are connected to the server at the stock exchanges through cable. The member or broker sitting in his office can send the quotations, orders, negotiations, deals, inhouse deals, auction orders etc., through the computer. The central trading system (CTS) will accept these orders and send it for match.

If there is any mistake in the order, CTS will reject the orders and send respective error message to the member concern. All these operations are in built. The main objective of CTS is to monitor the Stock Exchanges operations. Order placed by the broker will be sent for a match and if the match is found suitable, the transaction will be executed. Otherwise, the order will be deleted automatically after completion of trading time the carry forward transactions (Good Till cancellation) are forward to the next day. Even if the match is not found with in the prescribed period, the order will not cancel.

TRADING SESSION
Trading timings are from 9:55 A.M. to 3:30 P.M. on all 5 days of the trading period. Monday to Friday is the trading period in all the stock exchanges. SEBI has stipulated that all the stock exchanges in India must have same trading period.

BROKER WORK STATION:

At the broker workstation the best BBOs the last traded price, the day s opening price, previous days closing price, highest and lowest prices, the weighted average price, the total trade value and total trade value will be available continuously, as the BBO for each scrip. Other information will be available on query from the BWS. These include top gainers /losers of the day. Trader-wise, scrip wise net position, client wise net position, top scrip by the volume/value, market summary etc. The BWS as a powerful profiling future which enables each trader to customize his/her screens layouts as is convenient, profiles may be set at the BWS by the individual users, for the scrips that he/she is interested in watching columns of information available, etc. Brokers are also provided with information relating to the companies in the matter of Book closure, Dividend declarations, resolutions in board meeting, information about liquidated companies, company report etc.

SETTLEMENT OF TRANSACTIONS

Clearing of transaction in the form of shares and cash is called settlement, which was held in clearing house of stock exchange (for example, SHAREKHAN is a clearance house is member in NSDL (National Securities Depository Limited). Buyers will take the delivery of shares through the Depository Participants (DPS) like SHARE KHAN and others. Finally, the settlement is made by means of delivering the share certificates along with the transfer deeds. The transferor (or the seller) duly signed transfer deed. It bears a stamp of the selling broker. The buyer then fills up the certificates fills up the particulars in the transfer deed. Settlement can be done in the following way. Spot settlement: under this method, the delivery of securities and payment for them are affected on the day of the contract itself. Rolling settlement: Under this rolling settlement the trading is on T+2,basis i.e. if Monday is trading day then Wednesday is the paying day . In case on non-delivery, the securities will go for auction.

DETAILS OF PROCEDURES
Delivery in : The members who is in PAY-OUT position delivers share certificates in to clearing house with in the settlement period along with the delivery Chelan filled in with the details of share certificates which has folio numbers or distinctive numbers etc. Delivery out: The buyer of shares who made pay in position will take delivery of shares from the clearinghouse. Pay-in: The member who is in paying position shall pay for value of shares with in the trading settlement period (T+2). Payout: The cheques paid in the clearinghouse will be paid members who are in paying position.

All disputes arising between members regarding non-deliveries, non-payments, good and bad deliveries pertaining to the settlement will be here by Share Khan and settled by the settlement committee of the exchange.

BROKERAGE STRUCTURE AT SHAREKHAN

Trading - 0.1 %( on each side) Delivery - 0.5% Exposure - 4 times of deposit Share khan provides offline trading too.

The given flow chart clearly explains the process of online trading

Login

Buy transcation
The system will check buying limits

Sell transcation
The system will check your dp account quantity

Orders accepted

Rejected orders would be communicated along with reasons

orders accepted

your order is transmitted to exchange for execution

pending buy orders would be displayed on your screen

on execution of your orders

pending sell orders would be displayed on your screen

you may edit your pending order

you may delete your pending order

you may edit your pending order

you may delete your pending order

flashed on your screen immediately on execution

conformationcoul d be send to your e-mail and mobile

contract note would be sent to by mail or hand delivery

ADVANTAGES OF ONLINE TRADING

Online trading has made it possible for anyone to have easy and efficient access to more reports and charts than it was previously possible if one went to any brokers' office. Thus, we have access to a lot more information online to self teaches ourbrokerslves.

Online trading has let room for smaller organizations to compete with multinational organizations since is no longer a legit issue. Being online does not identify the size of any particular organization, therefore, this additional power to the underdogs.

Online trading has allowed companies to locate themselves where they want, as physical location is not an issue anymore. Companies can establish themselves according to their gains and losses, for instance where tax (sales and value added taxes) is best suited to them.

Online trading gives control to individuals and they can exercise it over accounts thus comprehend what is going on when they trade. It is like going back to school and reeducating oneself on how to trade online.

Individuals benefit by saving comparatively a lot more when trading online as the cost per trade is less. Individuals can invest in a variety of products, unlike earlier when people bought bonds, mutual funds, and stock for long-term basis and sat on them. Now they can invest in stocks, stock and index options mutual funds, individual, government, and even insurance.

Online trading has made it possible for one fid investment options that were not available on a regular basis like offbeat net stocks eccentric unique things and trading in global market.

DISADVANTAGES OF ONLINE TRADING:

When network crashes, there will be problems and delays due to a large influx of rapid online trading criteria. Individuals are restricted to first-hand financial guidance. This simply means that the individual is himself / herself alone to. A tax (sales tax and value added tax) evaluation becomes an issue, especially when you are trading internationally. Chances are that one has no idea who one is dealing with on the other end, so it is advisable to gather all the possible information about the party one is dealing with. In short, do the home work and be prepared.

Online trading has left individuals open to too much information. This is harmful since it leaves brokerages wide open to sensitive data. According to a study conducted by Mary Rowland, careful investor: is online trading bad for your portfolio, the more one trades the less returns one gets, meaning that an addicted trader gets, carried away online and begins to trade for too much which causes losses for him / her.

The study also shows that smart investment is better than fast investment. Simply put speed should be considered to be a major factor would lead any online trader to think they know the market.

DATA ANALYSIS & INTERPRETATION

MARKET WATCH

INTERPERTATION The above picture shows the how online trading takes place and what are the company are traded on online bases and at what price the trading takes place . It show the company names and its share price of the opening , closing, highest and lowest value of share by this we can have a clear idea about the market.

BUY ORDER FORM

INTERPRETATION: The Above figure is the buy order book. Broker Will make

the buyer to buy the share through online with the help Of buy order book . There was a column provided for buying transaction purpose. It consist of

buyer name, company name, share quantity and price of share.

SELL ORDER FORM

INTERPRETATION The above figure is the sell order form. Broker will make Seller to

sell the share through online with the help of sell Order form. There was a column provided for selling transaction purpose. It consists of seller name, company name, share quantity and price of share.

ORDER FORM

INTERPRETATION The above figure is the order form. After receiving the order, the member enters them in his books and purchase and sale order are distributed among his assistants to handle them separately in non-specified and odd-lots.

MARKET DEPTH

INTERPRETATION The above figure is the market depth. with this we can have known how much was the price quoted for each company whether it high or low and fluctuation of share price , rating of the company opening ,closing prices and its SENSEX is whether decreasing or increasing every thing regarding of share is known.

TRADE BOOK

INTERPRETATION
The above figure is trade book. The total number of share traded or transferred from the buyer to seller or seller to buyer in a day of the which company and how many share are trade will be made an entry in the trade book.

CLIENT MARGIN

INTERPRETATION The above figure is client margin. When a trader like to buy a number

of share or a price the quantity required and the price for which the seller is ready to sell his shares is the client margin.

CLIENT ACTIVITY REPORT

INTERPRETATION The above figure is client activity report. The number of share which a seller is going to sell and the number of share which a buyer is going to buy on this they will prepare report is known as client activity report.

BROKERAGE CHARGERS
Here you will find a table comparing intraday brokerage charges and delivery brokerage charges charged by different online brokers in India: Share khan, ICICIdirect, Motilal Oswal, Religare, SBICAP Securities, Angel Broking, 5paisa, India bulls, UTI Securities, HDFC Securities, India info line, Reliance Money.
Online Broker SBICAP Securities brokerage charges Share khan brokerage charges Motilal Oswal brokerage charges 5 paisa brokerage charges Angel Broking brokerage charges ICICI direct brokerage charges Indiabulls brokerage charges HDFC Securities brokerage charges UTI Securities brokerage charges Religare brokerage charges Reliance Money brokerage charges Geogit brokerage charges Indiainfoline brokerage charges
MMC=Minimum monthly commitment.

Brokerage for Delivery

Brokerage for Intraday trading 0.10%

MMC*

0.50%

NIL

0.03% - 0.50%

0.03% - 0.10%

NIL

0.30% - 0.50%

0.03% - 0.15%

0.25% - 0.85%

0.07%

0.50%

0.02% - 0.03%

0.75%

0.15%

0.25% - 0.50%

0.05% - 0.10%

0.50%

0.15%

0.80%

0.15%

0.20% - 0.30%

0.02% - 0.03%

0.01% 0.30%

0.01% 0.03%

card system

0.50%

0.10%

Brokerage is usually negotiable: Several of you trying to choose an online broker and
open an online trading account must have been frustrated trying to search for the exact brokerage charges charged by various online brokers. But the fact is the brokerage charged by the same broker varies and in several cases is negotiable. For example if you go and tell a brokerage house that you are going to deposit 2 lakh rupees and try to convince them you are going to trade heavily, they might consider reducing your brokerage. That is why in the above table you will find only a range for the brokerage charges in some cases. But that should be enough to get an idea.

Effective brokerage with taxes is more: In addition to the above brokerage charges you
will have to pay STT (Securities Transaction Tax) at the rate or 0.02% of the total transaction amount. You will also be charged 12.5% Service Tax on the brokerage amount (and not on the transaction amount). For example, if your brokerage is 0.50% for delivery and you do a delivery transaction of Rs.100/- then the total brokerage you pay is 0.50 (brokerage) + 0.02 (stt) + 0.063 (service tax) = 0.58. Thus your effective brokerage (including all taxes) will be 0.58%. Similarly for brokerage on intraday transactions. One may also like to compare brokerages charged by the online brokers mentioned above for trading in futures and options. I have traded options on SBICAP securities and have been charged Rs.100/- flat brokerage fee for every options trade. I will probably find out and also add a comparison table for brokerage charges for trading derivatives (futures and options) later, if i see enough people google searching for the same. For futures, some online brokers charge different brokerage for different legs of the trade, i.e. different for buy and sell trade.

Except SBICAP Securities, I do not have any other trading account. So my information is gathered from indirect sources. In case there are any inaccuracies please let me know by posting a comment?

FINDINGS
All the stock exchanges in India were mechanized in the year 1994 November. That was the year when the stock exchanges introduced screen based trading across the country. While on line trading gives you speed and price advantage, there is some risk and disadvantage to entering orders on-line. The page alerts you to any pitfalls you should watch out for if you want to use the internet to trade stocks. If you do commit to trading online, you must be careful when you enter stock orders. It is easy to make mistakes, but the market and your brokers may not be sympathetic. Once an order is submitted, there may be nothing you can do to take it back if you made a mistake. The various types of orders you enter can be confusing. Individuals are restricted to first hand financial guidance. This simply means that the individual is himself/herself alone to make the decisions. Tax (sales tax and value added tax) evaluation becomes an issue, especially when you are trading internationally. Changes are that one has no idea who is dealing with on the other end, so it is advisable to gather all the possible information about the party one is dealing with. In short are full knowledge is to be known. Online trading as left individual open to too much information. This is harmful since it leaves brokerages wide open to sensitive data. When network crashes there will be problems and delays due to a large influx of traffic and rapid online trading criteria. For instance on 27th Oct 1997 there was a one day crash, which caused online trading on the New York Stock Exchange to stop and brokers were unable to conduct business. If you are going to trade online, you were obviously the one making all the trading choices. To make your trading decisions, you need to research your stocks and constantly pay attention to market news. This will require some time, as you pursue your sources of market information and use online tools.

SUGGESTIONS

The overall performance of Share Khan, DP and ONLINE TRADING is good. Here are the suggestions for further improvements of the performance in the future. Volume of paper work is small but it is very complicated to maintain data in system so try to reduce that by regular audit and updating data. Most of DPs do not have the necessary infrastructure to handle the high workload of transactions lending to many error by DPs, so by giving full infrastructure information to every DP can avoid this problem The pool a/c does not know the true owner of the shares and hence dividends are paid to the broker instead of owners, by this broker can do any manipulations or any fraud with the owner, for this the owner can loose his dividend. Hence for this try to pay the dividend directly to the owner. If the shares are fake/forged which delivered by the broker the shareholder can loose that system and have to receive another lot of issued shares from the broker in 21 days, this system stands abused as soon as possible. The online trading is easy to work but it is costly to maintain and difficult to learn. It should increase the speed of executing the orders. Mutual funds trading for other companies have to be encouraged. If phone orders are encouraged, trading in z securities are allowed, bank account for instant transfer are provided and offline option are given then Share Khan would be definitely improving in the turnover. Necessary steps should be taken by the exchanges to deal with the situation arising due to break down in online trading. Instant bank account should be provided as the other companies are providing, because this helps the Share Khan in dealing directly with the investors.

 Another important thing, which has to be taken into considerations, is portfolio management. It should have a separate department for portfolio management and should guide the investors. Share Khan takes initiative steps for portfolio valuation of the investors .Then investors will be attracted towards the Share Khan to a greater extent. Share Khan has to give more adverts through the media stating the advantages to the investors. Leverages should be provided to the investors till settlement. Then only it encourages the investors to take active part in online trading of the stock exchange The software or the system used in online trading should be advanced and the persons who operate should have minimum knowledge or if they are very well versed about the functioning of the system then it will be helpful in smooth functioning of online trading. In Share Khan investors cannot do their own trading on the system, every time they have to consult the DP members and has to tell to hold the shares by his name, instead of this provide the web trading facility to investors by this they can do their own trading by sitting in front of internet. I recommend the exchange authorities to take steps to educate Investors about their rights and duties. I suggest to the exchange authorities to increase the investors confidences. I recommend the exchange authorities to be vigilant to curb wide fluctuations of Prices. The speculative pressures are responsible for the wide changes in the price, not

CONCLUSION
The comprehensive study of on online trading system at Share Khan has been an enlightening experience stressing on the position aspects on

security trading. Dematerialization of shares and online trading has done in whole lot of good to the issuer, investor, companies and country. The Depository system has reduced the time lag in delivering and settlement of securities but also supported the cause of providing more liquidity to the security holder, the need for setting up of a depository, paper less trading through online trading system and settlement became in evitable and unavoidable for the smooth and efficient functioning of the capital market. This system has proven its worthiness by increasing in the settlement will be done with in the day in future is in itself an indication of how great a boon in this system of Online trading. E-brokerages provide convenience, encourage increased investor participation and lead to lower up front costs. In the long run, they will likely reflect increased market efficiency as well. In short run, however, there are a number of issues related to transparency, investors misplaced trust, and poorly aligned incentives between e-brokerages and markets, that may impede true market efficiency.

For efficiency to move beyond the user interface and into the trading process, consumers need a transparent window to observe the actual flow of orders, the time of execution and the commission structure are various points in the trading process. In this regard, institutional rules, regulations and monitoring functions play a significant role in promoting efficiency and transparency along the value chain in electronic markets. Our analysis confirms that in the context of online stock markets, the need for such intervention and oversight it particularly strong.

BIBLIOGRAPHY

BOOKS

Indian Financial System -M.Y.Khan Marketing of Financial Services -V.A.Avadhani Investment management -V.K.Bhalla Security Analysis and Portfolio Management -V.A.Avadhani

News Papers:

Economics Times of India Business Standard The Times of India

Web-site

www.nseindia.org www.bseindia.com www.nsccl.com www.moneycontrol.com www.investopedia.com