INTRODUCTION

Whether it’s retiring early, saving for children’s education, paying off a
loan or to live a secured and satisfied life everyone has dreams they can achieve
by investing their savings. However, the question that arises is that, should one
leave his money tucked away in the bank or plough it into the stock market
where the potential for higher returns is greater but the chances of losing money
is higher? Deciding where to invest depends on one`s attitude towards risk
(one`s capacity to take risk and one`s tolerance towards risk) and the investment
horizon and non-availability of guaranteed-return investment products. In such a
scenario, investing in equity, which offers returns that are higher than the
inflation rate, help to build wealth and to improve the standard of living.

India is a developing economy.its prospering in all spheres. Share

market is a compelling determinant of the economy and the financial situation of a country.Ever
since the liberalization,privatization and globalization,the foreign investment in our country is
booming. Share market is a clear indicator of the developing trend prevailing in our
country.Statistics reveal that the trade volume has been increasing continuously,coupled with the
ups and downs which is a nature of share trading. We are living in an interlinked world.with the
growing volume of trade,it has become a necessity that people are aware of the intricacies of the
web world.

SENSEX the benchmark indicator of share trading has more than tripled ever since on line share
trading commenced.it has become imperative to be a participant of this mode of trading.

Recently,the crisis in the financial market resulted in global inflation.the share market was a
clear indicator of the prevailing prices.

Share trading is a way of faster earning and losing money. In the recent years,a volatile market
could be witnessed. In the desire to earn money in a quick manner,more and more people have
ventured out into share trading. Lack of awareness of many investors have made them loose
lakhs of money in the stock market. Wise plays by many others have made them earn in crores.
Where the American NASDAQ is in the commanding position,hongkong,Tokyo etc are some of
the asian exchanges being quoted repeatedly when it comes to news about the share market.
SENSEX is not far behind.indian bourses are also often quoted.

Electronic trading or online trading eliminates the need for physical trading floors.brokers can
trade from their offices,using fully automated screen based processes. Their workstations are
connected to a stock exchange’s central computer via satellite using Very Small Aperture
Terminus(VSATs). The orders placed by brokers reach the exchange’s central computer and are
matched electronically.

Stock exchange

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

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

Raising capital for businessess

The stock exchange provides companies with the facility to raise capital for expansion
through selling shares to the investing public.

Mobilizing savings for investment

When people draw their savings and invest in shares, it leads to a more rational allocation of
resources because funds, which could have been consumed, or kept in idle deposits with banks
are mobilized and redirected to promote business activity with benefits for several economic
growth and higher productivity levels.

Facilitate company growth

Companies view acquisitions as an opportunity to expand product lines, increase

distribution channels, hedge against volatility, increase its market share, or acquire other
necessary business assets. A takeover bid or a merger agreement through the stock market is
one of the simplest and most common ways to company growing by acquisition or fusion.

Redistribution of wealth

By giving a wide spectrum of people a chance to buy shares and therefore become part-
owners (shareholders) of profitable enterprises the stock market helps to reduce large income
inequalities .Both casual and professional stock investors through stock price rise and dividends
get achance to share in the profits of promising business that were set up by other people.

Corporate governance-

By having a wide and varied scope of owners , companies generally tend to improve on their
management standards and efficiency in order to satisfy the demands of these shareholders
and the more stringent rules for public corporations by public stock exchange and the
government . Consequently , it is alleged that public companies (companies that are owned by
shareholders who are members of the general public and trade shares on public exchange) tend
to have better management records than privately-held companies (those companies where
shares are not publicly traded ,often owned by the company founders and / or their families and
heirs , or otherwise by a small group of investors) . However , some well-documented cases
are known where it is alleged that their has been considerable slippage in corporate governance
on the part of some public companies .

Creates investment opportunities for small investors

As opposed to their businesses that require huge capital outlay , investing in shares is open to
both the large and small stock investors because a person buys the number of shares they can
afford . Therefore the Stock Exchange provides an extra source of income to small savers.

Government raises capital for development projects

Governments at various levels may decide to borrow money in order to finance infrastructure
projects such as sewage and water treatment works or housing estates by selling another
category of securities known as bonds .These bonds can be raised through the Stock Exchange
whereby members of the public buy them , thus loaning money to the government . The
issuance of such municipal bonds can obviate the need to directly tax the citizens in order to
finance development , although by securing such bonds with the full faith and credit of the
government instead of with collateral , the result is that the government must tax the citizens or
otherwise raise additional funds to make any regular coupon payments and refund the principal
when the bonds mature.

Barometer of the economy

At the stock exchange , share prices rise and fall depending , largely , on market forces. Share
prices rise tend to rise or remain stable when companies and the economy in general show signs
of stability and growth .An economic recession , depression , or financial crisis could eventually
lead to a stock market crash . Therefore the movement of the general tend in the economy .The
listing requirements are the set of conditions imposed by a given stock exchange upon companies
that want to be listed on that exchange .Such conditions sometimes include minimum number of
shares outstanding , minimum market capitalization , and minimum annual income.
The development of broking in India can be categorized in 3 phases:

1. Stock brokers offering on their sites features such as live portfolio manager, live quotes,
market research and news to attract more investors.

2. Brokers offering on line broking and relationship management by providing and offering
analysis and information to investors during broking and non-broking hours based on their
profile and needs, that is, customized services.

3. Brokers (now e-brokers) will offer value management or services such as initial public
offerings on line, asset allocation, portfolio management, financial planning, tax planning,
insurance services and enable the investors to take better and well- considered decisions.
India is a developing economy. Its prospering in all spheres. Share market is a compelling
determinant of the economy and the financial situation of a country. Ever since the liberalization,
privatization and globalization, the foreign investment in our country is booming. Share market
is a clear indicator of the developing trend prevailing in our country. Statistics reveal that the
trade volume has been increasing continuously, coupled with the ups and downs which is a
nature of share trading. We are living in an interlinked world. with the growing volume of trade,
it has become a necessity that people are aware of the intricacies of the web world.

SENSEX the benchmark indicator of share trading has more than tripled ever since on line share
trading commenced. It has become imperative to be a participant of this mode of trading.
Recently, the crisis in the financial market resulted in global inflation. the share market was a
clear indicator of the prevailing prices. Share trading is a way of faster earning and losing
money. In the recent years, a volatile market could be witnessed. In the desire to earn money in a
quick manner, more and more people have ventured out into share trading. Lack of awareness of
many investors has made them loose lakhs of money in the stock market. Wise plays by many
others have made them earn in crores.
GLOBAL SCENARIO

When people talk about the Stock Market, it's no always immediatedly clear what they're
referring to. Is the Stock Market a place? Or is it something different? To many people it is an
abstract idea. They buy stocks in "the stock market" without ever leaving the comfort of their
computer terminal. But the stock market is indeed a physical place with buildings and addresses,
a place you can go visit.

Many folks think of Wall Street and the Stock Market as one in the same, and that view isn't
really far from the truth. Wall Street is the place where it all started and where the world's largest
financial market was born and prospered. From Wall Street sprang a new industry with it's own
language and terminology. Wall Street can trace its name back to 1653. Originally it was set up
for defense and not for commerce.

The year was 1790. The place was Philadelphia. The occasion was the founding of the first stock
exchange in America. Two years later a group of New York merchants met to discuss how to
take command of the securities business. The merchants, a group of 24 men, founded what is
now known as the New York Stock Exchange. But in early 1817, the merchant group from New
York, distressed at the sorry state of their stock exchange, sent a representative to Philadelphia to
observe how things were being done. Upon arriving with news about the robust exchange in
Philadelphia, the New York Stock and Exchange Board was soon formally organized.

The exchange opened up shop on Wall Street. As for the New York Stock Exchange, it has since
moved past its humble beginnings to the point where its system now facilitates billions of dollars
worth of trades each day. But there was a gradual build up to this sort of status. In the early
1900s massive amounts of money were made on Wall Street. But the boom period could not be
sustained indefinitely. And in 1929 this principle came front and center as the stock market crash
of 1929 seared the national.nay, global.psyche and triggered what was to be called the Great
Depression.

While many of the powers that be realized that the markets could not sustain a boom forever,
very few publicized this view, choosing instead to let the market be its own judge, jury and
executioner. As a result of the laissez-faire attitude, many people.rich and poor alike.lost a lot of
money.

But the stock market crash of 1929 was just the beginning of sorrows for Wall Street. For while
the economy eventually recovered from its catastrophic losses, the market excesses that had
factored into the crash in the late 1920s seeped back into the picture. The result was the stock
market crash of 1987, which saw the Dow Jones suffer what was the largest single-day loss in
the stock market.s history.
Since then, the government and the industry have tried to put measures in place to curtail, if not
entirely eliminate, the possibility of such a large-scale crash. The stock markets are now an
integral part of the global economy, and so proper safeguards to reduce the risks of another
disastrous crash are necessary.

The current "stock market" is comprised of 300,000 computers situated on pro trader's desks.
These computers are networked together using sophisticated protocols. This level of information
sharing makes pricing an almost exact science.

These 300,000 computers are further linked to another 26 million computers worldwide. These
computers are located in banks, small businesses, and large corporations. These computers
comprise the banking networks which make computerized transactions possible.

Finally, these computers are connected to another 300 million+ computers which connect and
disconnect from the financial markets daily. In New York City alone, these transactions amount
to over $2.2 trillion dollars daily

The size of the world stock market was estimated at about $36.6 trillion US at the beginning of
October 2008 The total world derivatives market has been estimated at about $791 trillion face
or nominal value,11 times the size of the entire world economy. The value of the derivatives
market, because it is stated in terms of notional values, cannot be directly compared to a stock or
a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority
of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a
comparable derivative 'bet' on the event not occurring). Many such relatively illiquid securities
are valued as marked to model, rather than an actual market price.
INDIAN SCENERIO

To speak of the Indian Stock Market is a bit of a misnomer because there is no one single stock
exchange in India. In fact, there are 21 stock exchanges conducting business across that country.
However, the Bombay Stock Exchange is the oldest exchange in the country and the National
Stock Exchange is the largest stock exchange in India. The two exchanges also account for the
majority of traded shares in India.

In 1875, 318 people formed the Native Share and Stock Brokers Association in India. This was
eventually renamed the Bombay Stock Exchange as the number of stock exchanges in the
country grew. The Bombay Stock Exchange was the first exchange to receive official recognition
from the Indian Government in 1956.

The National Stock Exchange is also located in Bombay. It was created based on a report of the
High Powered Study Group on Establishment of New Stock Exchanges. The report
recommended a national stock exchange that would give all investors across India equal access.
With the encouragement of the Indian Government, the National Stock Exchange was
incorporated in November 1992, and recognized as a stock exchange in April 1993.

The Indian Stock Index is called the Sensex. It is comprised of 30 stock-sensitive companies and
was first compiled in 1986 by the Bombay Stock Exchange. The companies come from 13
industries and are chosen to be representative of the businesses in India. It serves much like the
Dow Jones Industrial Index or the S&P 500 Index in America. The Sensex crossed 1000 for the
first time in 1990. Two years later, the index nearly quadrupled because of Financial Minister
Man Mohan Singh's financial policies. The index passed the 8000 mark in 2005. It peaked at
20,000 in January 2008.

The Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It traces its history
to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbai’s Town
Hall. The location of these meetings changed many times, as the number of brokers constantly
increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official
organization known as ‘The Native Share & Stock Brokers Association’. In 1956, the BSE
became the first stock exchange to be recognized by the Indian Government under the Securities
Contracts Regulation Act.

 
The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to
measure overall performance of the exchange. In 2000 the BSE used this index to open its
derivatives market, trading Sensex futures contracts. The development of Sensex options along
with equity derivatives followed in 2001 and 2002, expanding the BSE’s trading platform.
 
Historically an open-cry floor trading exchange, the Bombay Stock Exchange switched to an
electronic trading system in 1995. It took the exchange only fifty days to make this transition.
 Capital market reforms in India and the launch of the Securities and Exchange Board of India
(SEBI) accelerated the integration of the second Indian stock exchange called the National Stock
Exchange (NSE) in 1992. After a few years of operations, the NSE has become the largest stock
exchange in India.
 
Three segments of the NSE trading platform were established one after another. The Wholesale
Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment
was opened at the end of 1994. Finally, the Futures and Options segment began operating in
2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world.
 
In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior
Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50
stocks from 25 different economy sectors. The Indices are owned and managed by India Index
Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard &
Poor’s.
 
In 1998, the National Stock Exchange of India launched its web-site and was the first exchange
in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership
in the Indian financial market by gaining many awards such as ‘Best IT Usage Award’ by
Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999).

India has the second largest number of companies being traded on its stock exchanges, second
only to the United States. The Bombay Stock Exchange has more companies listed than any
other exchange in the world (4700 companies in 2007). The growing popularity of investing in
the stock market in India has also led to more middle-class investors and on-line trading of
Indian stocks. The number of Indians invested in the stock market is around 30 million.
COMPANY PROFILE
Sharekhan Ltd. is one of the leading retail stock broking house of SSKI Group which is running
successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI
Group, which has over eight decades of experience in the stock broking business. Sharekhan
offers its customers a wide range of equity related services including trade execution on BSE,
NSE, Derivatives, depository services, online trading, investment advice etc.
The firm’s online trading and investment site - www.sharekhan.com – was launched on Feb 8,
2000. The site gives access to superior content and transaction facility to retail customers across
the country. Known for its jargon-free, investor friendly language and high quality research, the
site has a registered base of over one lakh customers. The content-rich and research oriented
portal has stood out among its contemporaries because of its steadfast dedication to offering
customers best-of-breed technology and superior market information.
The objective has been to let customers make informed decisions and to simplify the process of
investing in stocks. On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable
application that emulates the broker terminals along with host of other information relevant to
the Day Traders. This was for the first time that a netbased trading 17 station of this caliber was
offered to the traders.
Sharekhan’s ground network includes over 331 centers in 137 cities in India which provide a
host of trading related services. Sharekhan has always believed in investing in technology to
build its business. The company has used some of the best-known names in the IT industry, like
Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign
Financial Technologies India Ltd, Spider Software Pvt Ltd. To build its trading engine and
content.
The Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are the
other investors. With a legacy of more than 80 years in the stock markets, the SSKI group
ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of
the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable
portion of the market in each of these segments. SSKI’s institutional broking arm accounts for
7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic
Institutional portfolio investment in the country.
It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional
Investors generate about 65% of the organization’s revenue, with a daily turnover of over US$ 2
million. The Corporate Finance section has a list of very prestigious clients and has many ‘firsts’
to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1
billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat
Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop.
It is a pioneer in online trading with a turn over of Rs.400crores and more than 800 peoples
working in the organization. SSKI the parent company of Share Khan has more than eight
decades of trust and credibility in the Indian stock market. In the Asian Money Broker’s poll
SSKI won the “India’s best broking house for 2004” award.
ON LINE TRADING

There are a few basic requirements that need to be in place before an individual can start the
process of buying, holding and selling shares. This document is a basic guideline to explain these
requirements. Please note that this document does not provide any advice on what shares to buy
or what investment strategy suits an individual. This is a getting started guide for individuals
based on my own experiences.

The 3 basic things needed for getting started are:

* Dmat Account

* Trading Account

* Bank Account

Dmat Account

A Dmat account is like a Bank Account, with the difference being that instead of cash, a Dmat
account holds shares. So, if shares are bought, they are deposited into the buyers Dmat account
and if shares are sold, they are reduced accordingly from the Dmat account. The shares that are
deposited to or reduced from the Dmat account are electronic shares. For an individual wishing
to trade in shares, it is compulsory to trade only in Dmat (dematerialized) shares. Physical shares
cannot be traded. Dmat shares have many advantages in terms of ease of handling etc.

A Dmat account can be opened through most banks and financial institutions, after filling up the
required forms and providing identity and address proofs. The usual charges associated with a
Dmat account are:

1. Account opening charges

2. Yearly charges for maintaining the Dmat account

3. Recurring periodic charges for holding shares in the Dmat account

4. Other service charges based on transactions carried out. Usually, there are no transaction /
service charges when shares are bought. The charges will be levied when shares are sold.

The above charges may not be the same across different service providers but a big part is likely
to be the same as regulatory agencies like Securities and Exchange Board of India (SEBI)
specify certain norms.
Trading Account

A Trading account is required if an individual wishes to trade, i.e. buy and sell shares in the
stock exchange. The 2 main stock exchanges in India are the National Stock Exchange (NSE)
and the Bombay Stock Exchange (BSE). A Trading account can also be opened with most banks
and financial institutions, after filling up the required forms and providing identity and address
proofs. The actual trading can be done by phone, internet or using transaction slips that are
provided at the time of opening the account. Personally, I have found buying and selling using
the internet fairly convenient. There are options to specify the price at which to buy or sell and it
is easy to track the status online.

There is a brokerage charge that is incurred for both buying and selling of shares. This charge
varies across different trading houses. Also, government levies like the Securities Transaction
Tax (STT) will be incurred on such transactions.

Bank account

Needless to say, a Bank account is required for carrying out various financial transactions
associated with trading of shares. This is where the money on sale of shares will be credited or
money for buying shares will be debited from. A normal Savings Account is enough and nothing
additional needs to be done with the Bank account.

Trading process

Once the Dmat account, Trading account and Bank account are in place, an individual is ready to
start trading. While it is not necessary to have the Dmat account, Trading account and Bank
account with the same organization, I feel that having it with the same organization offers
additional convenience, especially for individuals trading using the internet. The following
example of buying and selling using a Trading account on the internet illustrates the convenience
of having the Dmat account, Trading account and Bank account with the same organization.

Buying shares: When an individual wants to buy a share, he/she logs into the Trading account
and specifies the details like the Company name, no. of shares to buy and the price at which to
buy. Depending on this information, the required amount from the Bank account is set aside for
this trade. When the desired price is reached, this trade is executed and the amount (after
adjusting for charges) is debited from the Bank account and the shares are credited into the Dmat
account. If the Bank account had been with a different organization, then for carrying out this
trade, it would have been necessary to move the amount into the Trading account.

Selling shares: When an individual wants to sell a share, he/she logs into the Trading account
and specifies the details like the Company name, no. of shares to sell and the price at which to
sell. Depending on this information, the required no of shares from the Dmat account is set aside
for this trade. When the desired price is reached, this trade is executed and the shares are debited
from the Dmat account and the amount (after adjusting for charges) is credited to the Bank
account.
If the Bank account had been with a different organization, then after this trade, it would have
been necessary to move the amount from the Trading account into the Bank account. Please note
that apart from the charges that are levied by the Bank, the Dmat account service provider and
the Trading account service provider, there will be additional government taxes like STT and
Service Tax. Also, please make sure to read all the terms and fee details of the service providers
before opening any account and be aware of the transaction costs involved with each transaction.
Happy Trading!

Online share trading has replaced the off line trading process in almost every part of the world.
In India also, the scenario is same. India online share trading is becoming very popular among
the investors. Share trading in India is a popular way of investment and this has made NSE, the
third largest stock exchange of the world. As a growing economy, India is expected to do well in
all the sectors of investment and that is exactly what the investment sector is doing now. Shares
are the first choice of the investors because it can provide very good returns in very short period.

Following the global trends, India has also changed the process of trading. India online share
trading is providing the customers with the simple and comfortable way of share trading.
The online trading sites are providing free trading tools to the investor to provide them all the
necessary information and suggestion regarding the investment options and strategies. There are
several charts and graphs which allows the investors to interpret in the process. At the same time
information about all the latest openings for investment are also provided to the investor.

The classic accounts provide the investor with several attractive features. Through this account,
the investor can invest directly in the equities and
derivatives. The account can also be used as bank
account, demat account and obviously for the trading purpose. The account also offers cash
transfer facility in a short time. Again the IPO bookings can be done through this accounts.

Speed Trade:
The facility offers quick order execution, tic-by-tic charts, alerts and market summaries, real time
streaming quotes and many more.

Dial-n-Trade:
In this facility, two numbers are provided to the customers to place their orders on phone. The
phone banking facility provides automatic transfer of funds. Saves a lot of time and also provides
professional advises.
Demat Account:
As an alternative of the physical exchanges, provide quick and secured share trading process to
the investor.

THE equity market is all excited, and going places. No doubt, you want to get your share of the
action. Till recently, one could buy or sell stocks only through individual stockbrokers and
broking firms/companies. But now stock trading has gone online, and there are many Web-based
share-trading platforms such as icicidirect.com, hdfcsecurities.com, investsmartindia.com and
sharekhan.com. Most people just go to the broker their friends or relatives deal with or
recommend.

However, there is more to it than that. So, how should you choose a broker? That you need to be
careful in choosing the broje is stating the obvious. Besides the quality of service, the choice of
the broker may also have a bearing in the transaction cost. This may not matter for a long-term
investor doing small volume trades. However, it will for the active trader or when the portfolio
increases. The following should be considered before choosing a broker or online trading
platform:

How easy is it to open an account, and does it match your trading requirements? Brokerage
houses are fast simplifying the account opening process which is rigorous though. You must
check if the broker is a trading member in more than one exchange. You also need to consider
the minimum margin requirement. Brokers usually specify that you open an account with
specific banks.

You need to factor in the minimum balance requirement of the bank before opting for the broker.
For instance, IndiaBulls has trading membership only in the NSE. So, you may not be able to
transact on the BSE if you choose that firm. IndiaBulls also requires you to open a savings bank
account with HDFC Bank, for which the opening balance is Rs 1,000. You will also be required
to maintain a quarterly minimum balance of Rs 25,000.

Some brokers also stipulate a minimum lot or transaction size for each deal. Check if the lot is in
keeping with the usual size of your transactions. High minimum lot sizes or minimum values can
constrain your trading. For instance, ICICI Direct stipulates a minimum value of Rs 1,000.

Does the broker allow you to short sell or margin trade? Some online brokerages do not. Many
do, but may charge extra. Some brokers require you to hold your Demat account with them.
Offline or online, most brokers require you to maintain a minimum balance which determines the
trading limits.

India Bulls allows you to trade eight times the amount maintained in your account. For delivery-
based transactions, you can trade four times the amount. The remaining value should be
transferred before the start of the next trading day. If not, an interest of 21 per cent per annum is
levied on the outstanding balance. In the case of ICICI Direct, on placing your order, the entire
value of the transaction is earmarked and blocked in your savings bank account for this purpose.
This is possible as all the three accounts — trading, savings bank and demat — are linked. A 4
per cent interest accrues for the amount until the order is executed.

Check the clauses carefully to see how much leverage (4/8 times) you get on the balance
maintained, the penalty on non-remittance and whether interest accrues on the capital maintained
with the broker.

Brokers usually have recurring and one-time charges (account opening fees). Recurring charges
are the annual maintenance fee and the brokerages on transactions.

Brokerage is usually 0.25-0.85 per cent of the transaction value or a flat rate (between Rs 10 and
Rs 50) on a per trade basis, whichever is less. Some brokerages charge customers with large
accounts less. Annual charges for the demat account can be anything between Rs 250 and Rs
750. The brokerage may or may not include service tax. If you are an active investor with a high
trading turnover, brokerage charges will leave a dent on the profits. Obviously, the lower the
percentage rate, the better.If you are a low volume investor — active or passive — a stiff
minimum charge will hurt. Therefore, choose a broker or a Web trader that either does not
specify a minimum charge or levies a low one.

Trading Web sites have their own order book, which is matched in the exchange's order book.
Brokers may not always trade in your name. This could mean a potential conflict of interest.
However, this is not a major problem now, as you can cross-check on the same day whether your
broker has carried out the trading instructions in the NSE or the BSE.

You can use the trade confirmation feature offered on the Web sites of both exchanges
(www.bseindia.com and www.nseindia.com) to track your trades. The facility allows you to
check your trades of the last five days too. You can verify the same day's trades after 7 p.m. on
the NSE, and the next day on the BSE. You can also track your derivatives trades on the NSE
site. To track the trades on the Web site of the exchanges, you need a client code, order size and
time among other things. In the case of web trading, there are three ways to confirm your trade.
One, the confirmation of the trade executed is available immediately on the screen. Second
through e-mail and, third, through the electronic contract note.

With a broker, it becomes tedious to place orders when you are travelling. Broking houses do
have tie-ups and branches in important cities. Check about the availability of such services. The
online broking sites remove this difficulty from trading. But check whether an offline trade order
can be placed if the site is not accessible.

An immediate concern for investors using Net trading facilities is safety. SEBI mandates security
measures for web trade, besides the usual user ID and multi-level passwords. However, it still
pays to check with existing clients about the web trade site. In absence of such contacts, stay
away from lesser-known sites. For a first time investor, it is prudent to trade with the facility
backed by good institutional support even if it means sacrificing some profits. It is helpful if your
on-line/offline brokerages have customer service to answer queries.
Online trading gives first-time and low-volume investors an edge over physical broker trading in
terms of convenience. Also, it is more transparent. Banks that offer trading platforms make for
seamless trading and payment options.

The entire transaction process — from placing the order to making payments and delivery —
takes place seamlessly, and requires minimal follow-up. The brokerage and demat rates are
determined by the frequency and value of trades. The existing slab structures of brokerages tend
to favour active traders. However, the costs are largely the same regardless of whether you are
trading offline or online. Once you get the hang of the process you can shift to an offline broker,
if needed. Given the present cost structures, there may be some savings to be had by making
such a shift.

This could change if the scale of online trading picks up. Then, online platforms may be able to
lower their costs. So keep a tab on who offers what to use the cost-effective trading platform.

IF YOU trade with an offline broker, you can either follow his advice as to when to buy or sell or
make your own choice.

There are Web sites, such as www.wow-india.com and www.equitymaster.com, which provide
advisory services. But these sites should, at best, be used as one of the inputs in an investment
decision. They should not be the sole reference point for a buy or sell. As you need to do your
own stock picking, you need research materials such as historical stock charts.
 LIMITATION
People are not aware of hedging in stock market. People want to invest their money in the
security market but they haven’t the proper knowledge. Commodity market is less preferred
by the investors. Businessmen are more interested in the stock market than the others.
Investors take risk as well as returns into their mind while making the investment liquidity.
Lack of awareness of capital market: Since the area is not known before it takes lot of time
in convincing people to start investing in shares primarily in IPO’s.
• Some people are comfortable with traditional system: As people are doing trading from
there respective brokers, they are quite comfortable to trade via physical form of paper.
• Lack of Techno Savvy people and poor internet penetration: Since most of the people are
quite experienced and also they are not techno savvy. Also Internet penetration is poor in
India.
• Some respondents are unwilling to talk: Some respondents either do not have time or
willing does not respond, as they are quite annoyed with the phone call.
• Inaccurate Leads: Sometimes leads are provided which had error in it, which varies from
only 5- digit phone number to wrong phone number
• Misleading concepts: Some people think that as all the shares are in electronic form and
they don’t have any physical proof. Sometimes this leads to a great misconception of the
entire process.
• The time constraint was one of the major problems.
• The study is limited to the different schemes available under the Demat account selected.
• The lack of information sources for the analysis part. • Geographical locations. • Extreme
variability in MARKET.

SUGGESTIONS
1. MORE BRANCHES – Need to open more branches to be a topper in market Because it has a
low distribution network.
2. LESS TIME – They should try to make some arrangements to reduce account opening time by
verifying documents at branch it selves.
3. LINK-BANK A/Cs – Linked as many accounts as client wants to its online account.
4. NEW BANKS IN THE KITTY – Need to tie up with major banks like SBI, Allahabad Bank,
Bank of Baroda etc.
5. CUSTOMER SATISFACTION – The company should focus on the customer satisfaction not
on just taking money from their pocket.
6. CONTROLLED BRANCHES – The company would have to make some arrangements to
control the branches and make standardized procedures for all of them for their better control and
performance appraisal.
Improvement in the opening of De-mat
Seminars should be held for providing information to prospective and present customers.
People at young age should be encouraged to invest in stock market.
Some promotional activities are required for the awareness of the customer.
There should be a limited number of clients under the relationship manger. So that he can handle
new as well as old customer properly.

CONCLUSION
On the basis of the study it is found that Sharekhan Ltd is better services provider than the other
stockbrokers because of their timely research and personalized advice on what stocks to buy and
sell. Sharekhan Ltd. provide the facility of Trade tiger as well as relationship manager facility for
encouragement and protect the interest of the investors. It also provides the information through
the internet and mobile alerts that what IPO’s are coming in the market and it also provides its
research on the future prospect of the IPO.
Study also concludes that people are not much aware of commodity market and while it’s going
to be biggest market in India. The company should also organize seminars and similar activities
to enhance the knowledge of prospective and existing customers, so that they feel more
comfortable while investing in the stock market.
LEARNING OBJECTIVES
Before my Summer Internship Programme, I had very little knowledge about the stock market
and its fundamentals. And now after undergoing training for the 12th week at Sharekhan there is
a tremendous increase in my knowledge about the stock market. I have also gained a lot of
knowledge about the Sharekhan Company and its various products, schemes and policies and
also about its competitors. The products which I have sold up till now are Demat accounts. And I
am confident about my knowledge about demat accounts. I have learnt what are the various
indices and their significance in market. I have also learnt the impact of Sensex and Nifty on
overall stock market. I have learnt about various fundamentals and technical aspects, which
affect the stock prices in short, run and long run.
At Sharekhan we have also been taught to use the online terminal. Sharekhan is one of the top
retail brokerage houses in India with a strong online trading platform. The company provides
equity based products (research, equities, derivatives, depository, margin funding, etc.). It has
one of the largest networks in the country with 1000 share shops in 375 cities and India’s
premier online trading portal www.sharekhan.com. Out of these we have to mostly sell demat
accounts and Mutual Funds.
In the first week we had training sessions for 3 days in which our company guide Mr.
Ghanshyam kale gave us the complete information about the company, its products and policies.
He gave us tips on how to open and close the calls. He also gave us tips on how to do telecalling.
He also gave us information on how to fill the KYC form and what are the documents required to
open the demat account. Then finally after this we were sent to the market to bring demat
accounts and Mutual funds.
Initially we faced many obstacles and reasons were many like bad stock market conditions and
we were unable to locate potential market etc. but slowly I collected a good number of leads and
references from whom so ever I met. I am still following the clients who are giving follow up
dates. Our main task is to sell the online demat account. During this venture I came across many
people who came from different walks of life. I have learned how to deal with them and
convince them to open the demat account with Sharekhan. Selling a demat account requires
special focus on targeting the customers. Each and every person does not invest in the share
market. The person who will be investing in the share market should have at least the basic
knowledge about the same or should have the curiosity to gain the same. So what I had to do is
to identify the prospective client and then try to convince them. Wasting time on the customer
who does not know anything about stock market is completely worthless.
While on the call if customer asks me any query about which I am not very much sure then I call
our Ghanshyam sir who then clears my doubts and queries without any irritation. This not only
solves clients query but also makes our concepts clear and strong. I initially call roundabout 15
to 20 people every day. Out of these I found 5 to 8 persons who took actual interest in the Demat
account. As I met more and more people, I learned how to identify the prospective clients. I
came to know more about how to talk to them, how much time should be given to each client. So
my clients’ conversion ratio also increased. Even, by solving the customer queries, my own
understandings were enhanced.
While selling our product in the market, I also came to know more about our competitor's
product like, ICICIDirect, India bulls, India Infoline, Motilal Oswal, Ventura, Angel Broking etc.
and their strategy of marketing and the consumer's preference towards the competitor's product. I
did cold calling in these three months and created my own database through it. In the second
month some of the follow-ups from the first month started converting. Sharekhan also started
giving advertisement in leading English dailies and on channels like CNBC where the customers
care toll free number is displayed. Sharekhan also started giving ads on the various sites like
Yahoo, Google etc.
I met people in different locations .This includes people from the Big Showrooms and malls like
Big Bazzar, Chartered Accountants, Travel agents, business people, housewives, real estate
people, Customer Relationship Managers, Assistant Sales Manager, and engineers of some
companies. Once the customer fills up the KYC form, I call him/her after 5 working days to
check if he has received the welcome kit which contains the login ID and password from
Bombay office of Sharekhan. After he receives the kit I have to go to his place to install the
software in his computer and also I have to tell him how to trade online i.e. I have to explain him
the complete terminal.
I am maintaining a daily record number of people I met, their addresses and contact numbers and
their remarks in Excel sheets. I am also maintaining my By taking references from the clients.
By giving the Sharekhan`s pamphlets to the clients. By sending e-mails and SMS`s to friends,
and relatives we are educating them about Sharekhan`s products and services. By cold calling the
customer by meeting them personally and taking appointments and follow up dates as per their
convenience. By tele-calling the customers and taking appointments for the date on which they
will free.
I am targeting the staff of reputed companies so that I will get the accounts in lot and up to
certain limits I am successful in this.weekly report, SIP log book and the weekly achievement
report. They are helping me a lot in my SIP.
I have also learned how to maintain good relation with the employees and the co- trainees. In
Sharekhan I have learned how to maintain good relations with the customers by giving them the
proper service and solving their queries regarding the share market. Customer Relationship is
very necessary for the company to retain the customers. Buying and selling through internet is
fast. As soon as the prices of the shares goes up or comes down then they can be sold or
purchased instantly within seconds. The terminal through which the brokers buy and sell shares
is a software that completely depends on the internet. For Sharekhan, this terminal has been
designed by the software company “Spider”. Stock broking companies run with the help of IT.
Importance of information technology in the field of stock broking is immense. suspecting it. So
it’s very difficult to convince them to deposit that much amount and open a demat account.
LEARNINGS:
Had a practical experience of working in a reputed organization.
Got the practical knowledge of the market.
Learned the importance of the Excel sheet.
I maintained all my daily records in the Excel sheet.
Learned to manage time properly.
Learned the various policies of the company.
Learned how to interact with people, how to convince them and guide them in trading.
Learned how to open and close the calls.
Learned how to approach the customers.  Learned how to take appointments.
Enhanced my communication and convincing skills.
Learned how to use online trading terminal.
Learned about various products used in the share market especially Demat accounts and Mutual
Funds.
Learned various aspects regarding Share Market.
Learned about various products of the Sharekhan Limited.
Learned the meaning of the words that are mostly used in the share market.
In Sharekhan Ltd. I have learned a lot relating to the finance.