b trading system of stock exchange

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A SUMMER TRAINING PROJECT REPORT ON TRADING SYSTEM

2011

PREFACE

This project has been carried out while working as summer trainee in The

Arihant Capital Market LTD, Indore. All efforts have been made to know the Trading

System Of Stock Exchange. All efforts have been made so that the information

gathered is free from any biasness.

Besides gathering information from the institutional guide, it has been my

endeavor to gather information from the brokers and other trading staffs also.

Many interesting facts have come out in course of investigation. Every endeavorhas been made so that the result remains meaningful as well as fruitful.

BHAVESH PATELMBA 3rd Semester

FMS, Sagar


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ACKNOWLEDGEMENT

At the very outset, I take the opportunity to convey my heartiest gratitude

to those persons whose cooperation, suggestions and support paved the way for the

accomplishment of my work successfully.

I am extremely grateful to Mr. Ankur Atre(manager), Arihant Capital Market

LTD, Indore for giving me the golden opportunity to pursue my summer internship

programme in this esteemed organization.

I extend my warm thanks to all the members of this office, who have extended

their kind support whatever & wherever needed. I also extend my gratitude to theFaculty Of Management Studies, Dr. Hari Singh Gour University, Sagar (M.P.)

because it is the endeavor of the faculty that has given me such a scope.

Last but not the least, I am immensely grateful to my family members, who not

only rendered sustained help, moral and encouragement but also provide me the

necessary motivation for this work.

With regards

BHAVESH PATELMBA 3rd SemesterFMS, Sagar


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CERTIFICATE

Date: ........................

This is to certify that project report titled survey of Arihant Capital Market LTD.Indore TRADING SYSTEM OF STOCK EXCHANGE. has successfully completed byMr. BHAVESH PATEL, M.B.A. 3rd Semester 30th Batch student under the guidance ofMr. Ankur Atre (Manager) at Department of Business Management for the partialfulfillment for the award degree of Master of Business Administration is satisfactory inrespect of:

1. Contents and Presentation of the subject matter.

2. Language.3. Embodies the original work of the candidate.4. Submission within due date.

Signature of Signature of Signature ofSupervisor H.O.D. Examiner


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DECLARATION

I, Bhavesh Patel, hereby declare that the project report namely, Trading

System Of Stock Exchange prepared by me is an original work, is the result of

independent research carried out by me in partial fulfillment of the MBA program of

FMS Dr. Hari Singh Gour University, Sagar (M.P.). To the best of my knowledge and

belief, this research is an original piece of my work and is the sheer outcome of my

efforts and has not been submitted to any other University or Institution for the award of

any degree or diploma.

Signature of the student

BHAVESH PATEL

MBA 3rd

SemesterFMS, Sagar


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EXECUTIVE SUMMARY

As a partial fulfillment of my MBA curriculum I have undergone six weeks

summer training at ARIHANT CAPITAL MARKET LTD. I have done my summer

training project at INDORE branch from 11th May to 30th June.

The Arihant Group has emerged as one of the top 10 retail stock broking houses

in India, having memberships on BSE, NSE and the two leading commodity exchanges

in the country i.e. NCDEX and MCX. Arihant capital market Ltd is also registered as a

depository participant with CDSL. Arihant has exceeded customers expectations by

providing world-class service.

The questionnaire was used as data collection instrument and both open ended and

close ended type of questions were used as per the requirement. From the survey it

was found that

*Business class investors more proportion of their income in shares and securities as

compared to service class investors.

*Majority of investors trade according to expert the daily traders.

*Majority of investors take the decision on investment (where/what amount to invest) on

their own idea and some rely on experts opinion and brokers advice.

* In case segment, capital gain is the prior motives of the investors followed by regular

of the investors followed by regular income and tax income and tax planning etc.

*More details about the project are available in later part of this report.


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PREFACE

ACKNOWLADGEMENT

CERTIFICATE OF THE COMPANY

EXECUTIVE SUMMRY

TABLE OF CONTENTS

1. OBJ ECTIVE OF STUDY

2. INTRODUCTION

3. COMPANY PROFILE

4. TRADING SYSTEM OF STOCK EXCHANGE

5. RESEARCH METHODOLOGY

6. DATA ANALYSIS AND INTERPRETATION

7. SWOT ANALYSIS

8. FINDING

9. LIMITATION

10. CONCLUSION

11. ANNEXURE

12. BILIOGRAPHY


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OBJECTIVES OF THE STUDY

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

(b) To gather some knowledge about the Trading System.

(c) To understand the Trading System in a better way.

(d) To understand the trends of trade in the stock market in the last few years.

(e) To get the detail information about the company and to analysis the learning

in past six weeks at Arihant capital market .

(f) To gain the knowledge about the market conditions.

(g) How to handle the various questions raised by them and how to deal with

them.


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INTRODUCTION

AStock Exchange is the single most important institution in the secondary market for

providing a platform to the investors for buying and selling of securities through its

member. It is a place where already issued securities of companies are bought and sold

by investors. Stock Exchanges are an organized marketplace, either corporation or

mutual organization, where members of the organization gather to trade company

stocks or other securities. The members may act either as agents for their customers, or

as principals for their own accounts. It also facilitates for the issue and redemption of

securities and other financial instruments including the payment of income and

dividends.

Traditionally a stock exchange is an association of its members or stock brokers,

formed for the purpose of facilitating the buying and selling of securities by the public

and institutions at large and regulating its day to day operations. Of late however, stock

exchanges in India are operating now with due recognition from Security and Exchange

Board of India (SEBI)/ the Government of India under the securities contracts

(Regulation) Act, 1956. There are 24 recognized stock exchanges in India, out of which

one has not commenced its operations. Out of the 23 remaining stock exchanges, the

trading volumes are recorded. Most of the regional stock exchanges have formed

subsidiary companies and obtained membership of Bombay Stock Exchanges (BSE), or


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National Stock Exchange (NSE) or both. Members of these stock exchanges are now

working as sub brokers of BSE / NSE brokers.

Securities listed on the stock exchange(s) have following advantages:-

o

The stock exchange(s) provides a fair market placeo It exchanges liquidity

o There is continuous reporting of their prices

o Full information is available on the companies

o Rights of investors are protected


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List of Stock Exchanges in India

Bombay Stock Exchange

National Stock Exchange

Interconnected Stock Exchange Regional Stock Exchanges

o Ahmedabad Stock Exchangeo Bangalore Stock Exchangeo Bhubaneshwar Stock Exchangeo Calcutta Stock Exchangeo Cochin Stock Exchangeo Coimbatore Stock Exchangeo Delhi Stock Exchangeo Guwahati Stock Exchangeo Hyderabad Stock Exchangeo Jaipur Stock Exchangeo Ludhiana Stock Exchangeo Madhya Pradesh Stock Exchangeo Madras Stock Exchangeo Magadha Stock Exchangeo Mangalore Stock Exchangeo Meerut Stock Exchangeo OTC Exchange Of Indiao Pune Stock Exchangeo Saurashtra Kutch Stock Exchangeo

Uttar Pradesh Stock Exchangeo Vadodara Stock Exchange
http://www.surfindia.com/finance/bombay-stock-exchange.htmlhttp://www.surfindia.com/finance/national-stock-exchange.htmlhttp://www.surfindia.com/finance/regional-stock-exchanges.htmlhttp://www.surfindia.com/finance/bangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/bhubaneshwar-stock-exchange.htmlhttp://www.surfindia.com/finance/calcutta-stock-exchange.htmlhttp://www.surfindia.com/finance/cochin-stock-exchange.htmlhttp://www.surfindia.com/finance/coimbatore-stock-exchange.htmlhttp://www.surfindia.com/finance/delhi-stock-exchange.htmlhttp://www.surfindia.com/finance/guwahati-stock-exchange.htmlhttp://www.surfindia.com/finance/hyderabad-stock-exchange.htmlhttp://www.surfindia.com/finance/jaipur-stock-exchange.htmlhttp://www.surfindia.com/finance/ludhiana-stock-exchange.htmlhttp://www.surfindia.com/finance/madhya-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/madras-stock-exchange.htmlhttp://www.surfindia.com/finance/mangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/meerut-stock-exchange.htmlhttp://www.surfindia.com/finance/otc-exchange-india.htmlhttp://www.surfindia.com/finance/pune-stock-exchange.htmlhttp://www.surfindia.com/finance/kutch-stock-exchange.htmlhttp://www.surfindia.com/finance/uttar-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/vadodara-stock-exchange.htmlhttp://www.surfindia.com/finance/vadodara-stock-exchange.htmlhttp://www.surfindia.com/finance/uttar-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/kutch-stock-exchange.htmlhttp://www.surfindia.com/finance/pune-stock-exchange.htmlhttp://www.surfindia.com/finance/otc-exchange-india.htmlhttp://www.surfindia.com/finance/meerut-stock-exchange.htmlhttp://www.surfindia.com/finance/mangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/madras-stock-exchange.htmlhttp://www.surfindia.com/finance/madhya-pradesh-stock-exchange.htmlhttp://www.surfindia.com/finance/ludhiana-stock-exchange.htmlhttp://www.surfindia.com/finance/jaipur-stock-exchange.htmlhttp://www.surfindia.com/finance/hyderabad-stock-exchange.htmlhttp://www.surfindia.com/finance/guwahati-stock-exchange.htmlhttp://www.surfindia.com/finance/delhi-stock-exchange.htmlhttp://www.surfindia.com/finance/coimbatore-stock-exchange.htmlhttp://www.surfindia.com/finance/cochin-stock-exchange.htmlhttp://www.surfindia.com/finance/calcutta-stock-exchange.htmlhttp://www.surfindia.com/finance/bhubaneshwar-stock-exchange.htmlhttp://www.surfindia.com/finance/bangalore-stock-exchange.htmlhttp://www.surfindia.com/finance/regional-stock-exchanges.htmlhttp://www.surfindia.com/finance/national-stock-exchange.htmlhttp://www.surfindia.com/finance/bombay-stock-exchange.html


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Historical Background of Stock Exchanges

The first stock exchange was established in London in the year 1773. just after

establishment of London stock exchange various countries like France, Germany andUSA also established their own stock exchange markets. In India, the first exchangeestablished in Bombay in the year 1875. later, in year 1908, Calcutta stock exchangewas established which was recognized in the company in 1923. mean which in 1920 themadras stock exchange limited in 1973. So far the government of India has recognized22 stock exchange, which was located at major business centers in different parts ofcountry.

Till the mid fifties the stock exchange was governed by their own bye laws andregulations with very little interface by the government. In the year 1925, thegovernment of Bombay promulgated an act securities contracts and control act, 1625

for regulation and the stock exchange. During the world was second trading outside thestock exchange flourished with adverse effect on investors confidence due to base less issues and higher rate of liquidation of companies. In 1956, the center governmentpassed contracts (regulation) act 1956, which came into force through out the countryon 20th Feb. 1957.

Earliest records of securities trading in India are available from the end of the eighteenth

century. Before 1850, there was business conducted in Mumbai in shares of the East

India Company, which were considered as securities for buying, selling\ & exchange.

The shares of the Commercial Banks, mercantile bank & the Bank of Bombay were

some of the prominent shares traded.

In 1850, the Companies Act was passed & that heralded the

commencement of the joint stock companies in India.

It was the American civil war that helped Indian to establish broking

business. The leading broker, Shri Premchand Roy Chand designed & developed the

procedure to be followed while dealing in shares.

In 1874, the Dalal Street became the permanent place for meeting the

brokers to conduct their business. The brokers organized an association on 9 th July1875 known as Native share 7 stock Brokers Association to protect the stock &

interest of the native brokers. That was the foundation of the Stock Exchange, Mumbai.

The Exchange was established with 318 members. The Stock Exchange, Mumbai did

not have to look back as it started riding high in the ladder of growth. In January 1899,

Mr. James M.Maclen, M.P inaugurated the Brokers hall.

After the 1st World War, the stock exchange was housed properly at an old

building near the Town Hall. In 1928 the present premises were acquired surrounded by

Dalal Street, Bombay Samacher Marg and Hamman Street. At new building the present

location was constructed and was occupied on 1st

December 1930.


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In 1950, the regulation of business in securities and stock exchanges

became an exclusively Central Govt. subject following adoption of the constitution of

India. In 1956, the Parliament of India passed the Security Contract (Regulation) Act.

To regulate the security market, SEBI was initially established on October 12, 1988,

as an interim board under control of the Ministry of Finance, Govt. of India. In 1992 theSEBI Act came into existence.

In 1992 Over the Counter Exchange of India (OTCEI) came into existence

where securities of small companies are listed. In 1994, National Stock Exchange

(NSE) came into existence, which brought an end to the open out cry system of

trading securities which was in vogue for 150 years, and introduced Screen Board

Trading (SBT) system. BSEs one line trading system was launched on March 14,

1995. Now the trading in securities is done using screen based trading system through

duly authorized members of the exchange.

MANAGEMENT OF STOCK EXCHANGE

Management of stock exchange is done an elected body ofmembers. These bodies are know by different names in different stock exchange forexample, the BOMBAY, INDORE and AHEMDABAD stock exchange are managed by agoverning board. Council of management governs the MADRAS stock exchange. Acommittee manages the CALCUTTA stock exchange. While the board of directormanages stock exchange.

These governing bodies are powerful bodies enjoying extensive administrativepower of management and control over their respective stock exchange the day-to-dayfunction of the stock exchanges are executed by the sub-committee like the defaulterscommittee listing committee, settlement committee etc.

STOCK BROKERS

SEBI registered stock - brokers interested in providing Internet based tradingservices will be required to apply to the respective stock exchange for a formalpermission. The stock exchange should grant approval or reject the application as the

case may be, and communicate its decision to the member within thirty calendar days ofthe date of completed application submitted to the exchange.

The Exchange closely monitors outstanding position of top buying member-brokers and top selling member-brokers on a daily basis. For this purpose, it hasdeveloped various market monitoring reports based on certain pre-set parameters.These reports are scrutinized by officials of the Surveillance Dept. to ascertain whethera member-broker has built up excessive purchase or sale position compared to hisnormal level of business. Further, it is examined whether purchases or sales areconcentrated in one or more scrips, whether the margin cover is adequate, whethertransactions have been entered into on behalf of institutional clients and even the

quality of scrips, i.e., liquid or illiquid is looked into in order to assess the quality ofexposure. The Exchange also scrutinizes the pay-in position of the member-brokers and


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the member-brokers having larger funds pay-in positions are at times, at the discretionof the Exchange, required to make advance pay-in on T+1 day instead of on T+2 day.

BASIC REQUIREMENTS FOR STOCK BROKERS

Trading will be on existing stock exchanges through order routing system forexecution of trades. Therefore, stockbrokers are to comply with the following before thestart of trade on Internet.

1. The broker must have a net worth of Rs. 50 lakh if he wants to avail thefacility of Internet for his own.

2. Provision for maintenance of adequate back up system.3. The software system to be used by him should be secured and reliable.4. To employ the qualified staff for this purpose.5. To send order/trade confirmation to the client also through e-mail.6. The contract notes must be issued to the clients as per existing regulation

within 24 hours of the execution of trades.7. The broker and his client should use authentication technologies.

The above are some of the important pre-requisites for the stockbroker shouldintend to take benefits of trading on Internet. However, detailed guidelines issued by theSEBI for the stock exchange

KIND OF STOCK BROKERS

1.Commission Broker

Near about all the brokers buy and sell securities for earning a commission for investorpoint of view he is the most important person and responsibility is to buy and sell stokefor his customer. It means that he acts as an agent of investor and earns commissionfor his services rendered. The broker is also an independent dealer in securities. Hepurchases and sell securities in his own name but he is not allowed to deal with non-member.

2.Jobber

He is an professional speculator who works for a profit called turn he makes a

continuous auction in the market in the stoke in which he specialized. He trades in themarket evens for small difference in the prices and helps to maintain liquidity in thestoke exchange.

3.Floor Broker

The floor broker buy and sell shares for the other broker on the floor of the exchange.He is an individual member owns his seat and receives his own commission on theorders he execute. He helps other brokers when they are buy and as compensationreceives a portion the broker.


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4.Odd lit dealer

For trading in stock exchange there a certain number of share a fixed to be transacted

in a lot, this is known as round lat which is usually a, 100 share a. Any thing less thanthe round lot are add lot. If a person is in possession of add lot of share i.e. 10, 20, 30,40 etc. They he will has to look for the add lot dealer.

5.Budliwala

He is the person who finance or provide credit facilities to the market for this service hecharges a fees called contango or backwardation charges. The budliwala gives a fullysecured loan for period of 2 to 3 weeks.

6.Arbitrageur

A person who is specialist in dealing with securities in different stoke exchange centersat the same time. He makes a profit by the difference in the piece prevailing in differentcenters of the market activity. For example the rte of a certain scrip is higher in somestoke exchange than other on. In this case the broker will buy the scrip from the markedlower price and will sell the scrip in the market at higher price. The profit of thearbitrageur depends on the ability to get the prices from different centers before tradingin other stoke exchanges.


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COMPANY PROFILE

INTRODUCTION TO ARIHANT

Arihant Capital Markets Limited, an ISO 9001:2008 Certified Company, is one of theleading financial services companies in India. We provide a gamut of products andservices including securities and commodities broking, investment planning, financialplanning, wealth management and merchant banking to a substantial and diversifiedclientele that includes individuals, corporations and financial institutions.We are committed to giving our customers the best services and holding to our corevalues which always place our client's interests first. These values are reflected in our

Business Principles, which emphasize integrity, commitment to excellence, innovationand teamwork.We have presence in 110 cities with over 620 offices across the nation. Clients turn toArihant for its complete platform of financial services combined with excellent execution.We have a dedicated institutional team, which caters to mutual fund houses, insurancecompanies and almost all the banks active in the capital market segment.Our goal is to create wealth for our retail and corporate customers through soundfinancial advice and appropriate investment strategies.

Philosophy

Integrity and transparency in all transactions. Providing investment solutions based on quality and unbiased research. Providing personalized services to all investors, institutions, business associates. Achieving success through client's growth. Making financial services more affordable, understandable and available to all.

What we aspireTo be the pre-eminent and most trusted provider of financial services.The values to which we aspire can be summarised in 5 principles:

Integrity

Client commitment Strive for profitability Excellence Innovation


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Our history

Arihant Capital Markets Limited was established in 1994 by Mr. Ashok KumarJain, a Chartered Accountant. Arihant has followed a consistent growth path andhas established itself as one of the leading broking houses of the country with thesupport and confidence of its clients, investors, employees and associates. Wepride ourselves on our independence and continuous service since inception.

Since inception, Arihant is dedicated to creating wealth for clients and over a period oftime we have built a reputation for quality service. We have also refined ourselves as aninvestment advisor and are poised to provide complete investment managementsolutions to our valued clientele

Our AssociationsArihant Capital Markets Limited is listed on the Bombay Stock Exchange since 1993and since then the company has grown in leaps and bounds.

We are members of the leading stock exchanges of India:


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National Stock Exchange (NSE) Bombay Stock Exchange Limited (BSE)

We are a depository participant with:

National Securities Depositories Limited (NSDL) Central Depository Services Ltd. (CDSL)

We are members of leading commodities and currency exchanges in India:

National Commodities Exchange (NCDEX) Multi Commodities Exchange (MCX) MCX Stock Exchange Ltd (MCX-SX) NSE FX (Currency Derivatives segment of NSE)

We are AMFI Certified Mutual Fund Distributor, are registered with the SEBI forPortfolio Management Services (PMS) and are a Category - I Merchant Banker.

Our culture and people

Arihant's culture is characterized by five key qualities: commitment to clients, integrity,excellence, strive for profitability and innovation. Integral to our corporate culture is ourtotal dedication to superior client service, reliability and transparency in all our

transactions. At Arihant we believe our client's success is our success.Independence and ownership of work is blended in our culture which helps in creatingentrepreneurs within the organization and gives a feeling of ownership to ouremployees. Our people feel a close relationship to Arihant. They associate theirsuccess with the company's growth and this strong sense of belonging has helped usgrow over the years.

We believe that our commitment to the interests of our clients proves our value to them.We have a strong corporate culture that is based on firmly held beliefs.

We offer equal opportunity and tremendous growth potential to individuals who have theright talent and a commitment to excellence. Along with our reputation and clients, ourpeople are our most valuable asset.

To maintain our competitive edge and meet the high expectations of our clients, ourculture continues to evolve.

We aspire to be the best financial services company in India. To achieve this goal, wefocus relentlessly on carrying out our business principles, which are fundamental toeverything we do.

Business principles

Our clients' growth is our primary objective. We believe that if our clients wealthwill grow, ours will eventually follow.


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Every advice that we will give, would be in the interest of the client. We want towork towards making financial services available and affordable to all by offeringthe right advice. Make things simpler for investors.

We believe that our clients deserve the best. Our idea is not simply offering aproduct or service, but it is building a relationship with clients based on trust,

reliability, understanding and respect. We believe that righteousness is very important in every sphere of life, including

business. We therefore strive to be open and honest with ourselves, ourcolleagues and our shareholders.

We work as a family which is responsible for the growth of our client. Everyperson in our company works towards the benefit of the client.

We realize the need to constantly change and update ourselves to meet ourclients' upcoming needs in this burgeoning world of finance. We constantlyendeavour to anticipate the rapidly changing needs of our customers anddevelop services to meet those needs.

Integrity and honesty are at the heart of our business. We seek to achieve the

highest standards of professional conduct and ethics, to prevent and detectwrongdoing, and to govern ourselves in accordance with relevant rules andregulations and in adherence to compliance set by various regulatory bodiesgoverning us. While we try to be perfect, we might make mistakes occasionally,and when it comes under our observation, we take immediate steps to rectifythose errors and set things right.

Our business

Our success is defined by the success of our clients

Arihant has developed a diverse and robust portfolio of financial services to help ourcustomers manage their money in the way that benefits them most.
http://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspxhttp://www.arihantcapital.com/about-us/businesses.aspx


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With more than 500 professionals and staff working in 90 plus cities, Arihant has the

resources and nationwide reach to ensure the highest level of personalized service.Our fundamental mission is to provide our clients everything they need to do betteras realizing their strategic visions is our shared objective. Our service achieves thesegoals by putting clients at the center of everything we do. Our client-centric approach,ethical and transparent business practices, research-based advice, implementation ofcutting-edge technology and keeping up-to-date to the ever changing world of financehas helped our clients grow with the surging Indian economy over the years.

Key business of companyBrokingArihant is one of the leading providers of broking services to individuals and institutionsin the equity, derivatives and commodities segment in India.We proactively deliver the full depth and breadth of our broking services to clientsthrough a network of more than 300 branches and franchises across India.Excellent research support, state-of-the-art tools, smart risk management, capitalrequirements, excellent order routing and efficient operational practices are keycomponents of our offerings. We provide superior pre- and post-trading services toclients through robust technical architecture.

DistributionWith the objective of meeting all the investment needs of our clients, we providedistribution services of mutual funds and IPOs. We are an AMFI registered mutual funddistributor and are also registered with all the AMCs in India to sell the schemes offeredby them. Our distribution network is backed by in-depth & comprehensive research and

a strong team for marketing and sales support.
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We have a dedicated team exclusively for research on mutual funds and IPO. Weprovide monthly publications on mutual fund activity and fund recommendations andalso furnish reports on New Fund Offers (NFO) and forthcoming IPOsrecommendations. Our recommendations are objective and unbiased. For us, theclients growth is the top priority.

Consistent delivery of high quality advice on mutual funds and IPO investment hasestablished us as a competent and reliable distributor across the country. We are alsoamongst the few investment firms that offer the facility to invest in mutual funds and IPOonline, giving our clients freedom from paperwork and making investing convenient forthem.Depository

Our Depository business helps us in providing integrated financial solutions to ourclients. It is led by a team of professionals and the latest technological expertise,dedicated exclusively for the depository services.This creates a seamless transaction platform for clients to execute trades through

Arihant capital market Business and settle them through Arihant Depository Services.

Wealth management

Our wealth management business provides tailored, impartial and regulated financialplanning advice on life, retirement and investment products.Our services to high net worth individuals and corporate clients include:

Asset management Stock broking

Wealth structuring Financial planning.


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Our Disciplined investment process

Arihant has a philosophy of investing in quality businesses with a strong management atreasonable prices. We follow both a bottom-up approach and top-down approach toinvesting with an intensive research process for screening potential investments.

Research

Our research team supplements our broking, wealth management and distributionbusiness. Our research team comprises expert investment professionals forfundamental and technical research covering equity, derivatives, mutual funds andIPOs. We draw upon our experience and depth of resources, to provide the financialand strategic advice necessary for successful asset management.From day one, our focus has been to offer investors a platform to make informedinvestment decisions based on thorough research and discipline. We have thereforeestablished a research team to offer complete support and the right guidance to ourclients. Our research is used only for our personal and institutional clients.Our research extends into every corner of our equities business, supplying invaluable

analysis, information, and advice to our clients. We employ a disciplined and rigorousresearch process. Starting with a top down analysis, we look closely at the megatrendsand industry drivers that create opportunities for innovative companies. We identify andaffiliate ourselves with the fastest growing and fundamentally strong companies andprovide our investors with the best investment opportunities.

Merchant banking and investment banking

We deliver high-quality strategic advice and creative financing solutions to corporateswith the help of qualified professionals who have a combined experience of over 50years in investment banking, corporate advisory and corporate finance.

The primary activities of Merchant Banking Business are:


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Capital Market Services Corporate Finance Strategic Services

The comprehensive experience and knowledge of our team enables us to offer a host of

financial services covering capital raising, mergers and acquisitions, advisory, debtsyndication, qualified institutional placements, private placements, financial restructuringamong others.

Quality PolicyArihants Quality Policy Statement

ISO 9001:2008At Arihant Capital Markets Ltd. our aim is to continue to achieve high levels ofsatisfaction for our clients and help them achieve their financial goals through right

investment advice and excellent service.We aim to make financial products easily accessible and understandable to all. We arecommitted to delivering the highest quality solutions to meet our clients investmentneeds.To realise this, it is the policy of the Company to continually review and update ourprocesses, improve the competence of human resources and effectiveness of qualitymanagement systems, ensure compliance with all regulatory requirements, optimizetechnology and infrastructure, thereby enhancing customer satisfaction.The Quality Policy has full support of the Senior Management, and as such it is theirresponsibility to maintain and implement our Quality Policy and ensure that the staffadheres to the procedures.

Why choose arihant.At Arihant, you build a personal relationship and get to work with someone whois genuinely interested in your growth.You will benefit from an outstanding service, up-to-date technology,comprehensive financial products and services, complete guidance and support.That is not it. We make constant endeavour to understand your needs and makeevery effort to fulfil them. We strongly believe that our clients growth is stronglycorrelated to our growth.

Why choose Arihant

Personal Relationship

At Arihant we believe that it is not just the product or service that we are offering, it is arelationship we are building with our clients. Being a client you deserve a personal


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relationship based on trust, reliability, understanding and respect. This relationship isthe underpinning from which we will support you in meeting your financial objective.Your growth is our objectiveWe are genuinely interested in your growth. When you work with us, we make sure wegive you the right guidance and advice you deserve. From time to time, we offer you

advice on how you can get the maximum from your investments. Sometimes our adviceor view is contrarian to the markets, but that is what makes us different, because wedont work on herd mentality.Our clients value us because of our different approach and the right advice they getfrom us. We work as a family - an Arihant client is a client for the lifetime.

Unbiased and comprehensive Research

We can help you make more informed decisions through our in-depth, unbiasedresearch. Whether you want help managing your own portfolio or want us to manage itfor you, youll get investment guidance and portfolio planning thats right for you. Ourresearch team will offer excellent investment opportunities, will help you identifysignificant market trends, and will make sure that the information reaches you at theearliest. We provide an integrated approach of fundamental and technical research.Short-term, long-term or intraday trading, whatever your investment objective, we willmeet your needs.Our solitary objective is to help you achieve your goals.

Nationwide branch/franchisee network

Our offices are scattered all over the country. Get individualized assistance andpersonal guidance by visiting one of our nationwide branches or franchisee near you.Our executive will guide you about all the products and services we offer to help youmeet your investment needs.Whatever you require, well cater to your needs.

Array of Products and services

We offer wide range of investment products and services to make saving and investingeasier for you.


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Equities, derivatives, commodities, depository, IPOs, mutual fund, PMS, merchantbanking, internet trading - no matter what investment-related service/product you need,you can get it at Arihant.

Sophisticated tools for smarter trades and ease in investing

We have made trading and investing easy and convenient for you. You can seizepotential market opportunities with our online trading tools. Whether you are at office, athome, on a holiday or on the move, with our online services you can -

trade,

view your trade orders and bill summary, subscribe for IPO online with ease view your DP holdings from wherever you want.

anytime, anywhere.Our internet trading portal gives you continuous flow of market information andinvestment opportunities. We have sophisticated, state-of-the-art order routingtechnology which allows speedy and accurate execution of your orders. We offer fullBackoffice support through internet. All this is for you to make informed decisions ontime and with convenience.Access to Electronic Services may be limited or unavailable during periods of peak

demand, market volatility, systems upgrade, maintenance or for other reasons.

Excellent service and complete support

Were here for you. On the phone, through email, or one-on-one through personalservice. No matter what level of support you need, our executives are always ready toassist you. We have always been known to provide quality and genuine information.

Our friendly and helpful team of customer service executive make sure that they provideyou excellent service and meet all your needs.To make our dealings convenient for you, we offer doorstep service to our valued clients whether it is regarding collection of payments, delivery of securities and statements,or advice on investment. Were always happy to help you to meet your needs.This service is available to clients with a particular turnover and HNI clients


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Chairman Note

From day one, Ive made a commitment to keep the needs of investor as our top mostpriority. And since then we have never compromised on what is best for you. At Arihant,our goal is simple: We want to help you grow and meet your financial goals. That meanswe ensure that your money works hard for you.

As I look into the future, I am excited about the tremendous opportunities that ourbooming economy is offering to us. Going forward, our efforts would be to help you tapthese opportunities and meet your financial goals. We would compete on the basis ofresearch-driven and quality service to our clients and develop strong long-termrelationships based on earned trust, credibility and confidence. We want to provide ourinvestors a platform to make informed decisions based on comprehensive research

rather than mere tips.

By putting clients at the heart of everything we do, we aim to be consistently recognizedas one of the leading financial solution providers.

What we really aspire for is to make financial services available, affordable andunderstandable to all kinds of investors, thus, putting them on the road to financial bliss.I genuinely look forward to the opportunity to serve you better.

- Ashok K JainFounder and Chairman


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ABOUT THE TOPIC

Online Trading Systems

Online Trading Systems, was started to help you find the right trading systemto make money in the market. We offer all different types of trading systems, fromFutures Trading, Forex Trading, Stock Trading to Options Trading. Our Trading systemsinclude day trading, swing trading and longer term trading systems.

Online Trading Systems will continue to test and list various trading systems onour website. All Trading systems including Futures, Forex, Stocks and Options shouldbe tested and verified before you use real money. Some trading systems will post actualaccounts on their websites or newsletters. We still recommend you paper trade theirtrading system before using real money.

Also realize the markets are always changing, and a trading system that hasworked in the past might not work going forward. Another thing to consider is when youpaper trade a trading system, you can make money with it, but due to slippage or yourtrading software the actual results once you go live will not be the same.

Online trading in India

Online trading in India is the internet based investment activity that involves nodirect involvement of the broker. There are many leading online trading portals in Indiaalong with the online trading platforms of the biggest stock houses like the Nationalstock exchange and the Bombay stock exchange. The total portion of online sharetrading India has been found to have grown from just 3 per cent of the total turnover in2003-04 to 16 per cent in 2006-07.

Facilities of the Online trading in India:

The investor has to register with an online trading portal and get into anagreement with the firm to trade in different securities following the terms and conditionslisted down on the agreement. The order processing is done in correct timings as theservers of the online trading portal are connected to the stock exchanges anddesignated banks all round the clock. They can also get updates on the trading andcheck the current status of their orders either through e-mail or through the interface.Brokerages also provides research content on their websites, such that the clients cantake their own decisions on stocks before investing.


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Products and services of the Online trading in India:

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

National stock exchange and Bombay stock exchange:

In spite of many private stock houses at present involved in online trading inIndia, the NSE and BSE are among the largest exchanges. They handle huge daily

trading volumes, supporting large amounts of data traffic, and possessing a countrywidenetwork. The automated online systems used for trading by the national stock exchangeand the Bombay stock exchange are the NIBIS or NSE's Internet Based InformationSystem and NEAT for the national stock exchange and the BSE OnLine Trading systemor BOLT for the Bombay stock exchange.

OVERVIEW OF STOCK TRADING

The marketing of the securities on the stock exchange can be done throughmember of the stock exchange. These member can be either individuals or corporatebodies.

For the process of trading in stock exchange there is the basic need for atransaction between an individual and the broker execute customers order to buy or sellon the stock exchange trading ring. The exchange of scrip between the member of theexchange in from of buying or selling is called trading

Broker is the member of recognized stock exchange and help the customers inbuying or selling the securities for the brokerage that he receives.

Trading Method

Listing securities are traded on the floor of recognized stock exchange where itsmember traded. An investor is not permitted to enter the floor of stock exchange and hehas trust the broker to:

*. Negotiate the best price for the trade.

*. Settle the account, i.e. payment for securities sold on due date.


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*. Take delivery of securities purchase.

TYPES OF TRADING

Trading in stock exchange is conducted in two ways:

Ready delivery contract.

Forward delivery contract.

BASKET TRADING SYSTEM

The Basket Trading System provides the arbitrageurs an opportunity to take advantageof price differences in the underlying Sensex and Futures on the Sensex bysimultaneous buying and selling of baskets comprising the Sensex scrips in the CashSegment and Sensex Futures. This is expected to provide balancing impact on the

prices in both cash and futures markets.

The Exchange has commenced trading in the Derivatives Segment with effect fromJune 9, 2000 to enable the investors to, inter-alias, hedge their risks. Initially, the facilityof trading in the Derivatives Segment was confined to Index Futures. Subsequently, theExchange has introduced the Index Options and Options & Futures in select individualstocks. The investors in cash market had felt a need to limit their risk exposure in themarket to movement in Sensex.

To participate in this system, the member-brokers need to indicate number of Sensexbasket(s) to be bought or sold, where the value of one Sensex basket is arrived at bythe system by multiplying Rs.50 to prevailing Sensex. For e.g., if the Sensex is 4000,then value of one basket of Sensex would be 4000 x 50= i.e., Rs. 2,00,000/-. Theinvestors can also place orders by entering value of Sensex portfolio to be brought orsold with a minimum value of Rs. 50,000/- for each order.

PROCEDURE OF TRADING

1.Select of broker

The first step is buying or selling of share is to select a broker for transaction

business on behalf of the investor. The trading of securities on the stock exchange canbe done through members of the exchange.

An investor prefers to select a broker who shall. Act with due skill. Care and diligence in the conduct of all his business. Not create false market either singly or in concert with other.

2.Opening An Account With The Broker

The next step to open account with the broker. It helps the investor to provide hiscredit worthiness, if the clients were not to do margin money with the broker.

3.Selection Of Securities


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This is application for buying securities. The investor may be consulted withbroker and take advise for selection of securities.

4.Selection Of Time For Trading

This is important to get the best advantage from buying or selling the securities.

5. Placing An Order

Various method of placing an order with the broker has been evolved to give thebroker leverage when he is on the floor of the stock exchange.

6. Preparation Of Contract Note

SEBI circular of 4th Feb. 1991 requires that all member of the recognized stockexchange issue contract note to the investors on the execution of trade. Brokers,

therefore issue contract note to the client, which gives the name of the company, priceof trade, brokerage, time of execution, provision regarding arbitration etc. in term of thebye-laws of stock exchange, this is statutory requirement and mandatory.

7. Settlement

Compulsory Rolling Settlement

All transactions in all groups of securities in the Equity segment and Fixed Incomesecurities listed on BSE are required to be settled on T+2 basis (w.e.f. from April 1,2003). The settlement calendar, which indicates the dates of the various settlementrelated activities, is drawn by BSE in advance and is circulated among the marketparticipants.

Under rolling settlements, the trades done on a particular day are settled after a givennumber of business days. A T+2 settlement cycle means that the final settlement oftransactions done on T, i.e., trade day by exchange of monies and securities betweenthe buyers and sellers respectively takes place on second business day (excludingSaturdays, Sundays, bank and Exchange trading holidays) after the trade day.

The transactions in securities of companies which have made arrangements for

dematerialization of their securities are settled only in demat mode on T+2 on net basis,i.e., buy and sell positions of a member-broker in the same scrip are netted and the netquantity and value is required to be settled. However, transactions in securities ofcompanies, which are in "Z" group or have been placed under "trade-to-trade" by BSEas a surveillance measure ("T" group) , are settled only on a gross basis and the facilityof netting of buy and sell transactions in such scrips is not available.

The transactions in 'F' group securities representing "Fixed Income Securities" and " G"group representing Government Securities for retail investors are also settled at BSE onT+2 basis.

In case of Rolling Settlements, pay-in and pay-out of both funds and securities iscompleted on the same day.


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Members are required to make payment for securities sold and/ or deliver securitiespurchased to their clients within one working day (excluding Saturday, Sunday, bank &BSE trading holidays) after the pay-out of the funds and securities for the concernedsettlement is completed by BSE. This is the timeframe permitted to the Members to

settle their funds/ securities obligations with their clients as per the Byelaws of BSE.

The following table summarizes the steps in the trading and settlement cycle for scripsunder CRS :

ACTIVITY

T o Trading on BOLT and daily downloading ofstatements showing details of transactions andmargins at the end of each trading day.

o Downloading of provisional securities and fundsobligation statements by member-brokers.

o 6A/7A* entry by the member-brokers/ confirmation bythe custodians.

T+1 o Confirmation of 6A/7A data by the Custodians upto1:00 p.m. Downloading of final securities and fundsobligation statements by members

T+2 o Pay-in of funds and securities by 11:00 a.m. and pay-out of funds and securities by 1:30 p.m. Themember-brokers are required to submit the pay-ininstructions for funds and securities to banks anddepositories respectively by 10:40 a.m.

T+2 oAuction on BOLT at 2.00 p.m.

T+3 o Auction pay-in and pay-out of funds and securities by09:30 a.m. and 10:15 a.m. respectively.

The pay-in and payout of funds and securities takes places on the secondbusiness day (i.e., excluding Saturday, Sundays and bank and BSE tradingholidays) of the day of the execution of the trade.

The settlement of the trades (money and securities) done by a Member on his

own account or on behalf of his individual, corporate or institutional clients maybe either through the Member himself or through a SEBI registered custodianappointed by him/client. In case the delivery/payment in respect of atransaction executed by a Member is to be given or taken by a registeredcustodian, the latter has to confirm the trade done by a Member on the BOLTSystem through 6A-7A entries. For this purpose, the custodians have beengiven connectivity to the BOLT System and have also been admitted asclearing member of the Clearing House. In case a registered custodian doesnot confirm a transaction done by a Member within the time permitted, theliability for pay-in of funds or securities in respect of the same devolves on theconcerned Member.


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The following statements can be downloaded by the Members in their backoffices on a daily basis.

h. Statements giving details of the daily transactions entered into by theMember.

i. Statements giving details of margins payable by the Member in respect of thetrades executed by him.

j. Statements of securities and fund obligation.

k. Delivery/Receive orders for delivery /receipt of securities.

BSE generates Delivery and Receive Orders for transactions done by the Members in

A, B1, B2 and F and G group scrips after netting purchase and sale transactions in eachscrip whereas Delivery and Receive Orders for "T", "C" & "Z" group scrips and scripswhich are traded on BSE on "trade-to-trade" basis are generated on a gross basis, i.e.,without netting of purchase and sell transactions in a scrip. However, the fundsobligations for the Members are netted for transactions across all groups of securities.

The Delivery Order/Receive Order provides information like the scrip and quantity ofsecurities to be delivered/received by the Members through the Clearing House. TheMoney Statement provides scrip wise/item wise details of payments/receipts of moniesby the Members in the settlement. The Delivery/Receive Orders and Money Statementcan be downloaded by the Members in their back office

Pay-in and Pay-out for 'A', 'B', 'T', 'C', "F", "G" & 'Z' Group of Securities

The trades done on BOLT by the Members in all securities in CRS are now settled onBSE by payment of monies and delivery of securities on T+2 basis. All deliveries ofsecurities are required to be routed through the Clearing House,

The Pay-in /Pay-out of funds based on the money statement and that of securitiesbased on Delivery Order/ Receive Order issued by BSE are settled on T+2 day.

Demat pay-in :

The Members can effect pay-in of demat securities to the Clearing House through eitherof the Depositories i.e. the National Securities Depository Ltd. (NSDL) or CentralDepository Services (I) Ltd. (CDSL). The Members are required to give instructions totheir respective Depository Participants (DPs) specifying details such as settlement no.,effective pay-in date, quantity, etc.

Members may also effect pay-in directly from the clients' beneficiary accounts through

CDSL. For this, the clients are required to mention the settlement details and clearingmember ID through whom they have sold the securities. Thus, in such cases the


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Clearing Members are not required to give any delivery instructions from their accounts.

In case a Member fails to deliver the securities, the value of shares delivered short isrecovered from him at the standard/closing rate of the scrips on the trading day.

Auto delivery facility :

Instead of issuing delivery instructions for their securities delivery obligations in dematmode in various scrips in a settlement /auction, a facility has been made available to theMembers of automatically generating delivery instructions on their behalf from their CMPool accounts maintained with NSDL and CM Principal Accounts maintained withCDSL. This auto delivery facility is available for CRS (Normal & Auction) and for trade-to-trade settlements. This facility is, however, not available for delivery of non-paripassu shares and shares having multiple ISINs. Members wishing to avail of this facilityhave to submit an authority letter to the Clearing House. This auto delivery facility is

currently available for Clearing Member (CM) Pool accounts and Principal accountsmaintained by the Members with the respective depositories.

Pay-in of Securities in Physical Form

In case of delivery of securities in physical form, the Members are required to deliver thesecurities to the Clearing House in special closed pouches along with the relevantdetails like distinctive numbers, scrip code, quantity, etc., on a floppy. The datasubmitted by the Members on floppies is matched against the master file data on theClearing House.If there is no discrepancy, the securities are accepted.

Funds Pay-in

The bank accounts of Members maintained with the clearing banks, viz., Axis BankLtd.,Bank of India, Bank of Baroda, Canara Bank, Citi Bank, Corporation Bank,Dhanalaxmi Bank, HDFC Bank Ltd., Hongkong & Shanghai Banking CorporationLtd., ICICI Bank Ltd, Indusind Bank Ltd., IDBI Bank, Kotak Mahindra Bank, OrientalBank of Commerce., Punjab National Bank, State Bank of India, Standard CharteredBank, Union Bank of India, Yes Bank are directly debited through computerized postingfor their funds settlement obligations.

In case of Members whose funds pay-in obligations are not cleared at the scheduled

time, action such as levy of penalty and/or deactivation of BOLT TWSs , is initiated asper the prescribed penalty norms.


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Securities Pay-out

Demat securities are credited by the Clearing House in the Pool/Principal Accounts of

the Members. BSE has also provided a facility to the Members for transfer of pay-outsecurities directly to the clients' beneficiary owner accounts without routing the samethrough their Pool/Principal accounts in NSDL/ CDSL. For this, the concerned Membersare required to give a client wise break up file which is uploaded by the Members fromtheir offices to the Clearing House. Based on the break up given by the Members, theClearing House instructs the depositories, viz., CDSL & NSDL to credit the securities tothe Beneficiary Owners (BO) Accounts of the clients. In case delivery of securitiesreceived from one depository is to be credited to an account in the other depository, theClearing House does an inter-depository transfer to give effect to such transfers.

In case of physical securities, the Receiving Members are required to collect the same

from the Clearing House on the pay-out day.

TOP

Funds Payout

The bank accounts of the Members having pay-out of funds are credited by the ClearingHouse with the Clearing Banks on the pay-in day itself

In case a Member fails to deliver the securities, the value of shares delivered short isrecovered from him at the standard/closing rate of the scrips on the trading day.

Penalty Norms

For Settlement (Pay-in) Defaults

Violation/s Shortage amount Late fees/fines/penalty

Non-fulfillment offunds obligation(viz.Normal pay-in,securities shortagepay-in and auctionpay-in) and failureto deposit

additional capitaltowards capital

a) If the shortageamount is more than theBase Minimum Capital (atpresent Rs.10 lakhs) :

a) - 1% of such shortage amount,and

- additional 0.07% per day of theshortage amount.- Also, the trading facility of suchmember shall be withdrawn and

the securities pay-out shall bewithheld.
http://bseindia.com/about/tradnset.asp#tophttp://bseindia.com/about/tradnset.asp#top


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cushionrequirement as perSEBI norms withinstipulated time.

b) If the funds shortageis less than the BaseMinimum Capital (atpresent Rs.10 lakhs) :

b) - 1% of such shortageamount, and

- additional 0.07% per day of theshortage amount.

- In cases where the shortage

amount exceeds 20% of the BMC butless than the BMC on 6 occasionswithin a period of three months, thenalso the trading facility of the membershall be withdrawn* and the securitiespay-out due to the member shall bewithheld.

(*In case the members tradingfacility has been withdrawn onaccount of (b) above, then upon

recovery of the complete shortages,the member shall be permitted totrade, subject to such membersproviding a deposit equivalent to hiscumulative funds shortage amount asthe funds shortage collateral. Suchdeposit shall be kept with theExchange for a period of tenrolling settlements and shall bereleased thereafter. Such depositshall not be available against marginliabilities and also such deposit willnot earn any interest. Such depositmay be by way of cash, fixed depositreceipts of banks and/or bankguarantee.)

In case a member fails to meet his obligation amounting to less than 20% ofBMC, a penalty equivalent to his obligation amount or Rs.5,000/- whichever is

less will be levied:

Further, if a member fails to meet his pay-in obligations of a normalsettlement, auction settlement and that of securities delivered short in the pay-infor the same settlement, then such instances of default would be considered as asingle instance for the purpose of counting violations and levying penalties asabove.

Non deposit of additional capital under capital cushion requirement wouldbe considered as a separate instance for the purpose of counting instances ofviolation and levying fines/penalties as above.

Risk Management


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Cash Market

The expansion of BOLT across the country has led to a significant increase involumes and liquidity. This has also consequently increased the risk of default by

the Members in meeting their settlement obligations. BSE has initiated severalrisk management measures in order to maintain the safety of the market and toavert defaults by the BSE Members in meeting their payment and deliveryobligations.

Total Liquid Assets

The core of the risk management system is the liquid assets deposited by theMembers with BSE. These liquid assets cover the following five requirements:

Base Minimum Capital (BMC)

All Members are required to maintain a BMC of Rs.10 lakhs with BSE in theprescribed manner at all times. The composite corporate Members are requiredto maintain BMC in multiple of the membership rights held by them. The BMC, asprescribed by SEBI, is required to be kept in the form of cash (minimum 12.5%),Fixed Deposit Receipt(s) or Bank Guarantee(s) issued by bank(s) (minimum37.5%) and balance in the form of eligible shares. The eligible shares for thepurpose of the securities portion of the BMC are A and B1 group securitiesforming part of Group I classified as per the parameters of volatility and liquidityas stipulated in SEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23,2005. BMC is not available for adjustment towards margins.

Additional Capital

a. Members are also allowed to deposit Additional Capital (AC) over and

above the BMC with BSE as follows :


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(Liquid Assets) :

Cash Equivalent.

Particulars Hair-cut Limit on Capital Deposit

(i) Cash Nil No Limit

(ii) Bank Fixed Deposit Receipts (FDRs ).

Nil No Limit

iii) Bank Guarantee Nil Limit on BSE's exposure to a singlebank exposure as stipulated in theSEBI circular No. MRD/DoP/SE/Cir-07/2005 dated February 23, 2005.

(iv) Securities of the CentralGovernment * .

10% No limit

(v) Units of liquid Mutual Fund (or)Govt. Sec. Mutual Fund (by whatevername called which invests ingovernment securities) *.

10% No limit.

Other Liuid Assets - Non-Cash Component

(Total of Other Liquid Assets should not exceed total of Cash Equivalent) :

Particulars Hair-cut Limit on Capital Deposit

Non-Cash equivalent :

(i) Liquid (Group-I) Equity Shares (asper the criteria for classification ofscrips on the basis of liquidity).

(Only A and B1 group securitiesforming part of such Group I)

Same as the Value at Risk (VaR)margin for the respective shares.

Limit on BSE's exposure to a singleissuer as stipulated in the SEBIcircular No. MRD/DoP/SE/Cir-07/2005dated February 23, 2005.

(ii)Mutual Fund units (other than thoselisted under cash equivalent). *

Same as the VaR margins for theunits computed using the traded priceon BSE, if available, or else, usingthe NAV of the unit treating it as aliquid security.

* BSE, at present, does not accept such liquid assets towards collateral.

Cash equivalents should be at least 50% of the liquid assets. This impliesthat Other Liquid Assets in excess of the total Cash Equivalents is notregarded as part of the Total Liquid Assets.

a. MTM (Mark-To-Market) Losses: Mark-to-market losses on

outstanding settlement obligations of the Member.


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b. VaR Margins: Value at risk margins to cover potential losses for 99% ofthe days.

c. Extreme Loss Margins: Margins to cover the expected loss in situationsthat lie outside the coverage of the VaR margins.

d. Base Minimum Capital: Capital required for all risks other than the

market risk (for example, operational risk and client claims).e. Special Margin : Special margin collected as a surveillance measure.

Members are required to maintain the liquid assets (collateral) to cover allthe above five

Problems online share trading

As there are couples of good advantages there are also some technical disadvantages.As every coin have two sides.

Disconnection from InternetIn online share trading there is the possibility that your internet connection may

get slow or get stopped, this may result in disconnection from share market. At suchcritical times you have to call your executive (from whom you opened your tradingaccount) and place your order or square off your pending orders.

Computer ProblemIf your computer stops functioning then this may also result in disconnection

from share market at this time also you have contact your executive.

Other ProblemOther problems like electricity disconnection. Solution for this is inverter or batter

backup.Above all technical problems which may exist at any time and they are beyond ourcontrol means not in control.

What is offline share trading

Trading done through share broker is called offline share trading method

Nevertheless, with all the convenience of online trading there are still investorswho prefer the old fashion way of offline trading. Offline trading has lost some popularitybut it is still the main form of investing.

Offline trading offers many benefits as well:

1. The one benefit that an investor appreciates the most is that they are not alone

when making investment decisions.


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2. There are experienced and professional brokerage companies that handletheir investments for them.

3. Investors are not faced with the challenge of making these vital investmentdecisions; especially, if they do not have the experience necessary to make the

appropriate investments.

4. Also, there is someone there to answer any questions that may causeconcerns.

Not to mention, with offline trading mistakes are less likely to take place. No onewants to throw their money away or stand by and watch someone else throw theirmoney away. It may be wise to hire a professional to assist you in making the correctinvestment decisions if you feel you lack the knowledge necessary.


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RESEARCH DESIGN

For any researcher the research methodology is the most important criteria to decide

before the actual research process starts. There are many methods for conducting the

research some of them are as under:

The design of a research is a plan or a model that helps researcher to conduct a formal

investigation and survey. It is an application of methods and procedures for acquiring

the information needs for getting a desire out come. It decides the sources of data and

methods for gathering data. A good design insures that the information obtained is

relevant to the research question and that it was collected by objectives. Since,

research design is simply the frame work or plan for a study. It is a blue print that of a

house devised by an architect. My approach to research is descriptive and quite

specific.

Out of various research methods the research method, which was most suitable to my

research, was Exploratory Research because it provides me all the opportunities to

cover the all the aspect that I require to conduct the research and get an appropriate out

come.

Types of Data Collection

There are two types of data used. They are primary and secondary data. Primary data is defined

as data that is collected from original sources for a specific purpose. Secondary data is data

collected from indirect sources. (Source: Research Methodology, By C. R. Kothari)

Primary Sources

These include the survey or questionnaire method as well as the personal interview

methods of data collection.

Secondary Sources

These include books, the internet, company brochures, product brochures, the company website,

competitors websites etc, newspaper articles etc.


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Data collection instrument was structured schedule.

Contact methods : Schedule reservation filled with data by

asking questions from respondents.

Sampling universe : share market investors of indore city

Sample size : 200

Scope of the study:-

The study was conducted at arihant capital market ltd, Indore ( behind omni

palace, near ratlam kothi).

The study was conducted for a period of 11th May 2011 to 30th June 2011.

Tools for analysis:-

Weighted average calculation

Justification of the project:-

The company was interested to find out the investor perception and the problems

faced by the general investor while dealing with the brokers. The company was

also interested to find out the common problems as faced by general investor

while in share market and the satisfaction level for the services provided by the

brokers to the investor.

Dont be led by market rumours or get into shady transactions.

Do not sign blank Delivery instruction slip(s) while meeting security payin

obligation


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DATA ANALYSIS AND INTERPREATATION

1. Demographic Profile of investors

Table 1.0: Demographic Profile of investors

Demographics No. of respondents Percentage ofrespondents

AgeLess than 20 years 0 0

20-40 20 40Greater than 40 30 60

Total 50 Total 100

QualificationMatric 0 0Under Graduate 25 50Post Graduate 25 50

Total 50 Total 100

Occupation

Service 19 38Profession 6 12Business 15 30Student 10 20

Total 50 Total 100

Income (per month)

Less than Rs.20000

Rs.20000-40000 10 20Greater than 40000 25 50

15 30

Total 100 Total 100

Analysis & Interpretation:

It was found that the major population of investors was greater than 40yrs and

60% was of 20-40 yrs. And 50% respondents were under graduate and 50% were post

graduate. 35% of respondents were doing service. And majority of respondents i.e. 50%

earn income between Rs.20000-40000 per month. It means majority of investors was

greater than 40 years having income in between Rs 20000-40000.


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Statement 1. To know whether respondents invest.

Table No. 1.1 To know whether respondents invest.

Investment Decision No. of Respondents Percentage of Respondents

Yes 45 90

No 5 10

Total 50 100

Figure No. 1.1 To know whether respondents invest.


From the survey it was found that 90% respondents invest in the stock market

and 10% who were non-investors.

90%

10%

Yes No


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Statement 2. Awareness regarding types of Investment Instruments

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

Types of InvestmentInstruments No. of Respondents Percentage ofRespondents

Shares 15 30%

Mutual Funds 23 46%

Debentures 5 10%

Bonds 5 10%

Derivatives 2 4%

Total 50 100%

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

Analysis & Interpretation

Above pie-chart shows that 45% investors were aware of the mutual fund, 25%

investors were aware of shares, 15% investors were aware of debentures, 10%

investors were bonds. It means majority of persons aware about mutual fund whereas

shares and debentures were of second importance.

30%

46%

10%

10%4%

Shares Mutual Funds Debentures Bonds Derivatives


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2011

Statement 3. To know the type of investment option the person has been

investing

Table No.1.3 Type of investment option the person has been investing

Investment alternative No. of Respondents Percentage ofRespondents

Shares 15 30%

Mutual Funds 15 30%

Debentures 10 20%

Bonds 5 10%

Derivatives 5 10%

Total 50 100%

Figure No.1.3 Type of investment option the person has been investing


From the survey it was found that 30% respondents invest in Mutual funds, 25%

invest in Shares and 20% invest in Debentures. Thus, it can be stated that maximum

people invest in Mutual Funds whereas shares are having 2nd importance.

30%

30%

20%

10%

10%

Shares Mutual Funds Debentures Bonds Derivatives


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2011

Statement 4 .To know the rates at which the investment grow

Table No.1.4 The rates at which the investment grow

Investment Growth Rate No. of Respondents Percentage ofRespondents

Steadily 0 0%

At an average rate 5 10%

At fast rate 45 90%

Total 50 100%


From the survey it was found that 90% respondents wants their investment grow at fast

rate whereas only 10% respondents were in the favour of investment growth at average

rate.

0%

10%

90%

Steadily At an average rate At fast rate


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2011

Statement 5. To know the frequency of investment by the Respondents.

Table No. 1.5 Frequency of investment

Frequency ofInvestment No. of Respondents Percentage of Respondents

Daily 0 0%

Weekly 10 20%

Monthly 24 48%

Yearly 16 32%

Total 50 100%

Figure No.1.5 Frequency of Investment


From the above table & chart it was found that 45 respondents invest monthly, 35

invest yearly and there were 20 respondents who invest daily. Thus, it can be stated

that majority of the investors invest monthly in stock market.

0%

20%

48%

32%

Daily Weekly Monthly Yearly


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2011

Statement 6 .To know the percentage of income that respondent invest annually

Table No. 1.6 The percentage of income that respondent invest annually

Annual IncomeInvested No. of Respondents Percentage of Respondents

Up to 10% 7 14%

10-15% 11 22%

15-20% 20 40%

More than 20% 12 24%

Total 50 100%

Figure No. 1.6 The percentage of income that respondent invest annually


From the above table & chart, it was found that 40 respondents invest 15-20% of

their annual income, 24 respondents invest more than 20% of their annual income, 22

respondents invest up to 10-15% of their income and 14 respondents invest up to 10%

of their income in different investment avenues. Thus, it can be concluded that majority

of investors invest 10% to 20% of their monthly income.

14%

22%

40%

24%

Up to 10% 10-15% 15-20% More than 20%


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2011

Statement 7. To know the respondents influence on Investment decision.

Table No.1.7 The respondents influence on Investment decision

Sources No. of Respondents Percentage of RespondentsSelf 24 48%

Friends & Relatives 10 20%

Service providers & consultants 6 12%

Newspapers & Advertisement 5 10%

Agents 3 6%

Workshops & Seminars 2 4%

Total 50 100%

Figure No.1.7 The respondents influence on Investment decision


From the above table & chart, it was found that multiple aspects for investing

influenced respondents.48% respondents take investment decision on the basis of their

personal evaluation where as 20% respondents invest because of influence of friends &

relatives, the consultants influences 12% respondent and the advertisement influences

10% respondents. It can be stated that majority of the persons are influenced by their

own while opting for investment tool.

48%

20%

12%

10%

6% 4%

Self Friends & Relatives

Service providers & consultants Newspapers & Advertisement

Agents Workshops & Seminars


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2011

Statement 8. To Know The Factors That Were Considered While Investing.

Table No. 1.8 The Factors That Were Considered While Investing

Investment Factors No. of Respondents Percentage of Respondents

Return on investment 15 30%

Tax benefits 9 18%

Capital appreciation 7 15%

Maturity period 3 6%

Risk 6 12%

Safety of principal 3 6%

Liquidity 7 14%

Total 50 100%

Figure No. 1.8 The Factors That Were Considered While Investing


From the survey it was found that the maximum respondents considered return

on investment was most important factor, 18% respondents considered tax benefits as

an important factor and 14% respondents considered capital appreciation as an

important factor. It can be stated that majority of investors were consider return as an

important factor while investing.

30%

18%14%

6%

12%

6% 14%

Return on investment Tax benefits

Capital appreciation Maturity period

Risk Safety of principal

Liquidity


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2011

Statement 9. To Know Investors Action In Case Of Stock Market drop.

Table No. 1.9 The Investors Action In Case Of Stock Market drop

Investors preference incase of losses No. of Respondents Percentage of Respondents

Transfer funds into secureinvestment

15 25%

Wait to see if investmentimproves

20 40%

Invest more funds 13 30%

Withdraw funds & stopinvesting

2 5%

Total 50 100%

Figure No. 1.9 The Investors Action In Case Of Stock Market Drop


From the survey it was found that maximum respondents would wait to see if

their investment improves and start generating funds, 30% respondents would invest

more funds, 25% respondents would transfer funds into secure investment and 5%

respondents would stop investing. It can be stated that majority of investors would like

to wait to see whether investment improves or they can invest more funds.

30%

40%

26%

4%

Transfer funds into secure investment

Wait to see if investment improves

Invest more funds


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2011

Statement 10. To Know The Decision Regarding Other Investment Policy

Table no. 1.10 The Other Investment Policy

Investment Decision No. of Respondents Percentage ofRespondents

Yes 49 98%

No 1 2%

Total 50 100%

Figure 1.10The Other Investment Policy


From the survey it was found that 98% respondents have the other investment

policy where as 2% respondents do not have the other investment policy.

98%

2%

Yes No


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2011

Statement 11. To Know the Satisfaction Level Of Respondents With Their

Investment Option

Table no. 1.11 Important Factors for Choosing The Investment Option

Range

Max. Score=100*5=500 (Highly Satisfied)

Avg. Score=100*3=300 (Neutral)

Min. Score=100*1=100 (Highly Dissatisfied)


Most of the respondents have given the highest summated score to shares.

And the second most important investment option is debentures which influenced thedecision regarding investment. Other important factor is mutual fund coverage which

has the 332 summated score. Return on derivatives get the 280 summated score.

Particulars Highly

Dissatisfie

d

Dissatisfi

ed

Neutral Satisfie

d

Highly

Satisfie

d

Summate

d

Score

(1) (2) (3) (4) (5)

Shares 10 6 14 30 40 384

Mutual

funds

12 15 20 35 18 332

Bonds 20 18 35 19 8 277

Debentures 15 10 15 40 20 340

Derivatives 30 10 20 30 10 280


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2011

Statement 12. Important Factors That Was Considered While Investing

Table No. 1.12 Important Factors That Was Considered While Investing

Particulars Highly

Dissatisfie

d

Dissatisfie

d

Neutral Satisfie

d

Highly

Satisfie

d

Summate

dScore

(1) (2) (3) (4) (5)

Return on

investment

0 0 4 30 66 462

Tax

benefits

0 0 18 48 34 416

Capital

appreciatio

n

0 0 20 40 40 420

Maturity

period

5 5 40 30 20 355

Risk 5 10 20 35 30 375

Safety of

principal

10 20 40 20 10 300

Liquidity 15 15 20 30 20 325

Range:

Max. Score=100*5=500 (Highly Satisfied)

Avg. Score=100*3=300 (Neutral)

Min. Score=100*1=100 (Highly Dissatisfied)


Most of the respondents have given the highest summated score to Return on

investment. And the second most important factor is Capital appreciation which

influenced the decision regarding investment. Other important factor is Tax benefit

which has the 416 summated score.


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2011

SWOT ANALYSIS

STRENGTH:

1. The very first strength of trading system is that now T-3 settlement is used.

2. SEBI a regulatory body of Indian stock market who protects the interest of the

investors.

3. Latest software is used for trading and settlement

4. Due to computerization the trading is done faster

b trading system of stock exchange

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