TRAINING AND PROJECT

REPORT
(2006-08)
Investor’s awareness about stock
market
&
Their level of satisfaction
At Angel
Broking.

Jodhpur institute of
management

Supervised by:
Submitted by: MR.Amit
kumbhat NaveenaBurad
BM.Angel Broking
MBA 2nd year
JODHPUR

ACKNOWLEDGEMENT

A project is an essential part of a professional

degree. It requires the implementation of theoretical
knowledge into practical implementation. The
purpose of such a programmed is to provide the
student of opportunity to work in an organization
and apply their theoretical knowledge into practical
use. Based on the experience and exposure, a
project report is prepared on the basis of a specific
topic. A project is a steady division of venture
knowledge to practice, by the graces of experienced
personalities.
I consider myself extremely fortunate for being given
an opportunity to undergo my project in Employee
Motivation with reference to ANGEL BROKING Pvt.
Ltd. I was fortunate to have all the support from my
faculties, where I undertook my project. I therefore
take this opportunity to express my profound sense
of gratitude to all those who extended their
wholehearted help and support in carrying out the
project work.
I am greatly indebted to Mr. AMIT KUMBHAT (BM)
for giving me permission, guidance and supervision
to commence my training sparing time, despite their
busy schedule’s have been greatly encouraged,
assisted and persuaded by our college director Mrs.
Swati Lodha for her inspiration, guidance, and
motivating us to do this project.

OUR VISION
 To Provide Best Value for Money To
Investors Through Innovative Products.
Trading/Investment strategies state of the
Art technology and personalized service

OUR BUSINESS PHILOSOPHY

Ethical practices & Transparency in all our

dealings customer interest above our own
Always deliver what we promise effective
cost management.

CONTENTS
 About Capital Market
 Stock Market
 About all exchanges
* Foreign exchanges
* Indian exchanges
 Equity
 Derivative
 Commodity
 Trading account & Share
Trading
 Bibliography
 About Capital
Market
 Capital market is a source of long-term capital raised for the development of
companies. The stock exchange is a part of the capital market and helps
investors to trade in their shares and thus maintain the liquidity of their
investments. The capital market is distinct from money market-banks and
lending institutions provide short-term finance.

In short The Capital Market is that market in which corporate equity and
longer-term debt securities (those maturing in more than one year) are issued
and traded.

The capital market (securities markets) is the market for securities. Where
companies and the government can raise long-term funds. The capital market
includes the stock market and the bond market. Financial regulators, such as
the U.S. Securities and Exchange Commission and the Financial Services
Authority in the UK. Oversee the markets. To ensure that investors are
protected against misselling. The capital markets consist of the primary
market. Where new issues are distributed to investors. And the secondary
market, where existing securities are traded.

The capital market can be contrasted with other financial markets such as the
money market which deals in short term liquid assets. and derivatives
markets which deals in derivative contracts.
Stock market
 Both the private and the public sectors provide markets
makers in the capital markets. In Capital there is the Stock Market
is very important content. Further we discuss about the stock
market and its exchanges like BSE, NSE, MCX and NCDEX. A stock
market is a market for the trading of company stock, and
derivatives of same; both of these are securities listed on a stock
exchange as well as those only traded privately.
The term 'the stock market' is a concept for the mechanism that
enables the trading of company stocks (collective shares), other
securities, and derivatives. Bonds are still traditionally traded in an
informal, over-the-counter market known as the bond market.
Commodities are traded in commodities markets, and derivatives
are traded in a variety of markets (but, like bonds, mostly 'over-
the-counter').
The size of the worldwide 'bond market' is estimated at $45 trillion.
The size of the 'stock market' is estimated at about $51 trillion.

Function and purpose

The stock market is one of the most important sources
for companies to raise money. This allows businesses to go public,
or raise additional capital for expansion. The liquidity that an
exchange provides affords investors the ability to quickly and
easily sell securities. This is an attractive feature of investing in
stocks, compared to other less liquid investments such as real
estate.
History has shown that the price of shares and other assets is an
important part of the dynamics of economic activity, and can
influence or be an indicator of social mood.

All about exchange-

*Foreign exchange
*Indian
exchange
 Major Stock Exchanges-:
Foreign Exchange

New York Stock Exchange (NYSE)

The most prestigious exchange in the world is the New York Stock
Exchange (NYSE). The NYSE is the first type of exchange, where muctrading
is done face-to-face on a trading floor.

The NASDAQ –
 The second type of exchange is the virtual sort called an over-the-
counter (OTC) market, of which the NASDAQ is the most popular. These
markets have no central location or floor brokers whatsoever. Trading is
done through a computer and telecommunications network of dealers.

American Stock Exchange-

The American Stock Exchange has suffered from a lack of attention

compared to the bigger and better known NYSE and NASDAQ, however it is
a large exchange in its on right and home of some innovative products.
 Chicago Board of Trade -

The Chicago Board of Trade handles commodities futures and options.

Although it doesn't make a market in individual shares of stock, the CBOT is
an important part of our economy.

London Stock Exchange-

The London Stock Exchange (LSE) is a stock exchange located in London,

England. Founded in 1801, it is one of the largest stock exchanges in the
world, with many overseas listings as well as UK companies.
Exchanges in India-:
1) Bombay stock exchange

2) National stock exchange

3) National securities clearing corporation Ltd.(NSCCL)

4) National stock exchange Future and Option (NSE-FNO)

5) Multi Commodity Exchange of India Ltd. (MCX)

6) National commodity and derivatives Exchange Ltd. (NCDEX)

7) National Securities Depository Limited (NSDL)

8) Central Depository services Ltd. (CDSL)

BOMBAY STOCK EXCHANGE (BSE)

The oldest exchange in Asia and the first exchange in the country to be granted
permanent recognition under the Securities Contract Regulation Act,1956. Bombay
Stock Exchange Limited (BSE) has had an interesting rise to prominence over the
past 130 years.

While the BSE is now synonymous With Dalal Street, it wasn't always so. In tact
the first venues of the earliest stock broker meetings in the 1850 were amidst
rather natural environs - under banyan trees - in front of the town hall, where
Harriman circle is now situated. A decade later, the brokers moved their venue to
another set of foiiage, this time under banyan trees at the Junction of Meadows
Street and Mahatma Gandhi Road. As the number of brokers increased. They had
to shift From place to place, and wherever they went. Through sheer habit. they
overflowed in to the streets. At last in 1874, found a permanent place. and one that
they could quite literally, call their own. The new place was, aptly. Called Dalal
Street.
 The Journey of BSE: is as eventful and interesting as the history of India's
securities markets. India's biggest bourse, in terms of listed companies and market
capitalization’s had formulated comprehensive set of Rules and Regulations for the
Indian Capital Markets.

BSE as a brand is synonymous with capital markets in India. The BSE

SENSEX is the benchmark equity index that reflects the robustness of the economy
and finance. At par with international standards, BSE has been a pioneer in several
areas. It has several firsts to its credit even in an intensely competitive
environment.

 First in India to introduce Equity Derivatives

 First in India to launch a Free Float Index
 First in India to launch US$ version of BSE Sensex
 First in India to launch Exchange Enabled Internet Trading Platform
 First in India to obtain ISO certification for Surveillance. Clearing & Settlement
 BSE On-Line Trading System' (BOLT) has been awarded the globally
recognized the information security Management System standard Bs7799-
2.2002
 First to have an exclusive facility for financial training

Moved from Open Outcry to Electronic Trading , within just -50 days.

INDICES OF BSE

For the premier Stock Exchange that pioneered the stock broking activity in India.
125 years of experience seem to be a proud milestone. A lot has changed since
1875 when 318 persons became members of what today is called "Bombay Stock
Exchange Limited" by paying a princely amount of Re 1.

Since then, the stock market in the country has passed through both good and
bad periods. The journey in the 20th century has not been an easy one. Tin the
decade eighties, there was no measure or scale that could precisely measure the
various ups and downs in the Indian stock market. Bombay Stock Exchange
Limited (BSE) in 1986 came out with a Stork Index that subsequently became the
barometer of the Indian Stock Market.
 All about Sensex

Sensex or the sensitive index is a free float market capitalization weighted

index of 30 component stocks representing a sample of large, well-established
and financially sound companies. The free float market capitalization weighted -
methodology is a widely followed index construction methodology on which
majority of global equity benchmarks are based.

Free Float Market Capitalization

Market capitalization of any company reflects the total value of a firm's equity
currently available in the market. Market capitalization is calculated by multiplying
the number of outstanding common shares of the firm and the current trading
price of those shares. Market capital of 'a firm normally exceeds the book value
because market prices tend to increase at a quicker than earnings accumulate due
to value placed on expected future growth.

Free float market capitalization is defined as that proportion of total shares issued
by the company which are readily available: for trading in the market. It generally
excludes promoters' holding. Government holding strategic holding and other
locked in shares that win not come to the market for trading in the normal course.
A free float factor s agreed upon for each of the component stock which is then
multiplied to the market capitalization figure to determine the free float market
capitalization.

Sensex Calculation

Sensex is calculated using the "Free-float market capitalization" methodology. As

per this method the level of index at any point of time reflects the free float
market value of 30 component stocks relative to a base period. The base period of
Sensex is 1978-1979 and the base value is 100 index points. The calculation of
Sensex involved dividing the free-float market capitalization of 30 companies in
the index by a number called the index divisor. The divisor is the only link to the
original base period value of the Sensex. It keeps the index comparable over time
and is the adjustment point for all index adjustments arising out of corporate
actions, replacement of scripts etc. During market hours, prices of the index
scripts, at which latest trades are executed, are used by the trading system to
calculate Sensex every 15 seconds
Maintenance of Sensex

One of the important aspects of maintaining continuity with the past is

to update the base year average. The base year value adjustment ensures that
replacement of stocks in Index, additional issue of capital and other corporate
announcements like ‘rights issue’ etc. do not destroy the historical value of' the
index. The beauty of maintenance lies in the fact that adjustments for corporate
actions in the Index should not per se affect the index values.

The Index Cell of the exchange does the day-to-day maintenance of the
index within the broad index policy framework set by the Index Committee. The
Index Cell ensures that SENSEX and all the other BSE indices maintain their
benchmark properties by striking a delicate balance between frequent
replacements in index and maintaining its historical continuity. The Index
Committee of the Exchange comprises of experts on capital markets from all
major market segments. They include Academicians, Fund-managers from leading
Mutual Funds, Finance-Journalists. Market Participants, Independent Governing
Board members and Exchange administration.

Adjustment for Bonus, Rights and Newly issued Capital

The arithmetic calculation involved in calculating SENSEX is simple, but

problem arises when one of the component stocks pays a bonus or issues rights
shares. If no adjustments were made, a discontinuity would arise between the
current value of the index and its previous value despite the non-occurrence of
any economic activity of substance. At the Index Cell of the Exchange, the base
value is adjusted, which is used to alter market capitalization of the component
stocks.

Sensex Value

The index Cell of, the exchange keeps a close watch oil the events that might affect
the index on a regular basis and carries out daily maintenance of all the 14 indices
Adjustments for Rights Issues

When a company included in the compilation of the index, issues right shares the
Free-float market capitalization of that company is increased by the number of
additional shares issued based cm the theoretical (ex-right) price. An offsetting or
proportionate adjustment is then made to the Base Market Capitalization (see 'Base
Market Capitalization Adjustment' below).

Adjustments for Bonus Issue

When a company included in the compilation the Index issues bonus Shares . The
market capitalization of that company does not undergo any change. Therefore,
there is no change in the Base Market Capitalization, only the 'number of-shares' in
the formula is updated.

Other Issues

Base Market Capitalization Adjustment is required when new shares are issued by
way of conversion of, debentures, mergers, spin-offs etc. or when equity is reduced
by way of buyback of share, corporate restructuring etc. There is many other BSE
index besides Sensex. Sensex is based on only 30 scripts. So there was a need felt
of a broad-based index. So there is BSE-100 Index.BSE-200 Index.BSE-500 Index
and Sectrol Index and Dollex Series of BSE Indices. They are working in its own
basis!
2.NATIONAL STOCK
EXCHANGE
(NSE)
 The National Stork exchange of India limited has genesis in the report
of the I High Powered Study Group on Establishment of New Stock Exchanges,
which recommended promotion of a National Stock Exchanges by financial
institutions (FIs) to provide access to investors from all across the country on an
equal footing. Based on the recommendations, NSE was promoted by leading
Financial Institutions at the behest of the Government of India and was
incorporated in November 1992 as a tax-paving company unlike other stock
exchanges in the country.

On its recognition as a stock exchange under the Securities

Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the
Wholesale Debt Market (WDM) segment in June 1994. The Capital Market
(equities) segment commenced operations in November 1994 and operations in
Derivatives segment commenced in June 2000.

Across the globe, developments in information. Communication and network

technologies have created paradigm shifts in the securities market operations.
Technology has enabled organizations to build new sources of competitive
advantage, bring about innovation in products and services and to provide for
new business opportunities. Stock exchanges all over the world have realized the
potential of IT and have moved over to electronic trading systems. which are
cheaper, have wider reach and provide a better mechanism for trade and post
trade execution.

NSE is one of the largest interactive VSAT based stock exchange in the world.
Today it supports more than 3000 VSATs. The NSE-network is the largest private
wide area network in the country and the first extended C- Band VSAT network in the
World. Currently more than 9000 users are trading on the real time-online NSE
application. There are over 15 large Computer system which include non-stop fault-
tolerant computers and high end UNIX server operational under one roof to support
the NSE applications. This Coupled with the nation wide VSAT network makes NSE
the country’s largest Information user.

In an ongoing effort improve NSE’s infrastructure a corporate network has been

implemented connecting all the offices at Mumbai, Delhi, Calcutta and Chennai. This
corporate network enables Speedy inter-office communications and data and voice
connectivity between offices. In keeping with the current trend, NSE has gone online
on the Internet. Apart from having a 2mbps link to VSNL and our own domain for
internal browsing and e-mail purposes, we have also set up our own Web site.
Currently NSE is displaying its live stock quotes on the web site (www.nseindia.com)
which are updated online.
3. National Securities
Clearing Corporation
Ltd. (NSCCL)

The National Securities clearing (corporation Ltd.(NSCCL) a wholly owned

subsidiary of NSE, was incorporated in August 1995. It was the first clearing
corporation to be established in the country and also the first clearing corporation in
the country to introduce settlement guarantee. It was set up with the t`6llmving
objectives:

 To bring and sustain confidence In clearing and settlement of securities

 To promote and maintain, short and consistent settlement cycles
 To provide counter-party risk guarantee. and
 To operate a tight risk containment system.

NSCCL commenced clearing operations in April 1996. It has since completed more
than 1600 settlements (equities segment) without delays or disruptions. These all
above information is about BSE and NSE. Now details of Depository Server are going
to be mentioned here.
INDICES
S&P CNX NIFTY
S&P CNX Nifty is a well diversified 50 stock index accounting for 23 sectors
of the economy. It is used for a variety of Purposes such as bench marketing fund
portfolios, index based derivatives and index funds.

S&P CNX Nifty is owned and managed by India Index Services and Products Ltd.
(IISL), which is a joint venture between NSE and CRISIL IISL is India's first
specialized company focused upon the index as a core product. IISL have a
consulting and licensing agreement with Standard Poor's (S&P), who are world
leaders in index services.

 The average total traded value for the last six months of all Nifty stocks is
approximately 54.64% of the traded value of all stocks on the NSE
 Nifty stocks represent about 59.23% of the total market capitalization as oil
June 30, 2006.
 Impact Cost of the S&P CNX Nifty for a portfolio size of Rs.5 million is 0.07%
 S&P CNX Nifty is professionally maintained and is ideal for derivatives trading.

CNX Nifty Junior

The next rung of liquid securities after S&P CNX Nifty is the C'NX Nifty
junior. It may be useful to think of the S&P CNX Nifty and the CNX Nifty Junior as
making up the 100 most liquid stocks in India. As with the S&P CNX Nifty, stocks
in the CNX Nifty Junior are filtered for liquidity, so they are the most liquid of the
stocks excluded from the S&P CNX Nifty. The maintenance of the S&P CNX Nifty
and the CNX Nifty Junior are synchronized so that the two indices will always be
disjoint sets; i.e. a stock will never appear in both indices at the same time.
Hence it is always meaningful to pool the S&P CNX Nifty and the CNX Nifty Junior
into a composite 100 stock indexes or portfolio.

 CNX Nifty Junior represents about 8.68% of the total market capitalization as
on June 30, 2006.
 The average traded value for the last six months of all Junior Nifty stocks is
approximately 9.17% of the traded value of all stocks on the NSE
 Impact cost for CNX Nifty Junior for a portfolio size of Rs.2.50 million is 0.15%
 4. National Stock Exchange
Future and Options (NSE-
FNO)

The National Stock Exchange of India Limited (NSE) commenced trading in

derivatives with the launch of index futures on June 12, 2000. The futures
contracts are based on the popular benchmark S&P CNX Nifty Index. The
Exchange introduced trading in Index Options (also based on Nifty) on June 4,
2001. NSE also became the first exchange to launch trading in options on
individual securities from July 2,2001. Futures on individual securities were
introduced on November 9, 2001. Futures and Options oil individual securities are
available on 118 securities stipulated by SEBI. The Exchange has also introduced
trading in Futures and Options contracts based on the CNX-IT index from August
29. 2003. The turnover in the derivatives segment has shown considerable growth
in the last year, with NSE turnover accounting for 98% of the total turnover in the
year 2001-2002.

'This section provides you with an Insight into the derivatives segment of NSE.
Real-time quotes and information regarding derivative products, trading systems
& processes, clearing and settlement, Risk management, statistics etc. are
available here.

FUTURES

A futures contract is a forward contract, which is traded on an Exchange. NSE

commenced trading in index futures on June 12. 2000. The index futures
contracts are based on the popular market benchmark S&P CNX Nifty index.
(Selection criteria for indices) NSE defines the characteristics of the futures
contract such as the underlying index, market lot and the maturity date of the
contract. The futures contracts are available for trading from introduction to the
expiry date.

OPTIONS

An option gives a person the right but not the obligation to buy or sell
something. An option is a contract between two parties wherein the buyer
receives a privilege for which he pays a fee (premium) and the seller accepts an
obligation for which he receives a fee. The premium is the price negotiated and
set when the option is bought or sold. A person who buys an option is said to be
long in the option. A person who sells (or writes) an option is said to be short in
the option.

5. Multi Commodity Exchange

of India Ltd. (MCX)
 MCX is an independent and de-mutulized multi commodity exchange. It was
inaugurated on November 2003 by Mr. Mukesh Ambani, Chairman and managing
Director. Reliance Industries Ltd.: and has permanent recognition from the
Government of India for facilitating online trading, clearing and settlement
operations for commodities futures market across the country. Today MCX
features amongst the world's top three bullion exchanges and top four energy
exchanges.

MCX offers a wide spectrum of opportunities to a large cross section of

participants including producers/ processors, traders, corporate, regional trading
centre Importers exporters, co-operatives and industry associations amongst
others .headquarters in the financial capital of India ,Mumbai. MCX is led by in
expert management team with deep domain knowledge of the commodities
futures market. Presently, the average daily turnover of MCX is around .55bn (7,
000 crore-April 2006) with a record peak turnover of USD3,98bn (Rs.17.987
crore) on April 20, 2006. In the first calendar quarter of 2006.MCX holds more
than 55% market share of the total trading volume of all the domestic commodity
exchanges. The exchange has also affected large deliveries in domestic
commodities signifying the efficiency of price discovery.

Being a nation-wide commodity exchange having state-of-the-art infrastructure .

Offering multiple commodities for trading with wide reach and penetration . MCX
is well placed to tap the vast potential poised by the commodities market.

Key shareholders

Financial Technologies (I) Ltd. State Bank of India and its associates. National
Bank to Agriculture and Rural Development (NABARD). National Stock Exchange
of India Ltd. (NSE), Fid Fund (Mauritius) Lid. - an affiliate of Fidelity International,
Corporation Bank, Union Bank of India, Canara Bank, Bank of India, Bank of
Baroda, HDFC Bank and SBI Life Insurance Co. Ltd.

MCX win offer ‘unparallel efficiencies', unlimited growth' and 'infinite

opportunities' to all market participants. It win be acknowledged as the 'Exchange
of Choice', based on its strong service availability backed by superior technology.
 6. PHYSICAL AND FUTURES
COMMODITY MARKETS

Statutory framework for regulating commodity futures

exists in India

Commodity futures contracts and the commodity exchanges organizing

trading in such contracts are regulated by the Government of India under the
Forward Contracts (Regulation) Act 1952 (FCRA or the Act), and the Rules framed
there under. The nodal agency for such regulation is the Forward Markets
Commission (FMC), situated at Mumbai. Which functions under the aegis of the
Ministry of Consumer Affairs? Food & Public Distribution of the Central
Government.

Commodity Exchange

A commodity exchange is an association, or a company or any other body

corporate organizing, futures trading in commodities.

Futures Contract

A futures contract is a type of "forward contract". FCRA defines forward

contract as "a contract for the delivery of goods and which not a ready delivery
contract is”. Under the Act, a ready delivery contract is one, which provides for
the delivery of goods and the payment of therefore, either immediately or within
such period not exceeding 11 days after the date of the contract. Subject to such
conditions as may be prescribed by the Central Government. A ready delivery
contract is required by law to be fulfilled by giving and taking the physical
delivery of goods. In market parlance the ready delivery contracts are commonly
known as "spot" or "cash" contracts.

All contracts in commodities providing for delivery of goods and/or payment

of price after 11 days from the date of the contract are "forward" contracts.
Forward contracts are of two types - "Specific Delivery Contracts" and "Futures
Contracts". Specific delivery contracts provide for the actual delivery of specific
quantities and types of goods during a specified future period and in which the
names of both the buyer and the seller are mentioned.

The term 'Futures contract' is nowhere defined in the FCRA. But the Act
implies that it is a forward contract, which is not a specific delivery contract.
However, being a forward contract, it is necessarily "a contract for the delivery of
goods". A futures contract in which delivery is not intended is void (i.e. not
enforceable by law), and is, therefore, not permitted for trading at any commodity
exchange.

Salient Features of a "Commodity Futures Contract"

A commodity futures contract is a tradable standardized contract, the terms

of which are set in advance by the commodity exchange organizing and initial
trading in it. The futures contract is for a Specified variety of commodity. Known
as the "basis" though quite a few other similar varieties both inferior and superior
, are allowed to be deliverable or tender able for delivery against the specified
futures contract.

The quality parameters of the "basis" and the permissible tender able
varieties; the delivery months and schedules. the places of delivery, the "on" and
"off" allowances for the quality differences and the transport costs; the tradable
lots; the modes of price quotes; the procedures for regular periodical (mostly
daily) clearings: the payment of prescribed clearing and margin monies: the
transaction, Clearing and other fees: the arbitration, survey and other dispute
redressing methods; the manner Of settlement of outstanding transactions after
the last trading day. the penalties for no issuance Or non-acceptance of deliveries.
etc., are all predetermined by the rules and regulations of the commodity
exchange.

Consequently, the parties to the contract are required to negotiate only the
quantity to be bought and sold- and the price. Everything else is prescribed by
the Exchange. Because of the standardized nature of the futures contract, it can
be traded with ease at a moment’s notice.

Differences between the Physical and Futures Markets?

The physical markets for, commodities deal in either cash or spot contract
for ready delivery and payment within 11 days- or forward (not futures) contracts
for delivery of goods and/or payment on price after 11 days. These contracts are
essentially party to party contracts. and are fulfilled by the seller giving delivery
of goods of a specified variety of a commodity as agreed to between the parties.
Rarely are these contracts for the actual or physical delivery allowed to be settled
otherwise than by Issuing or giving deliveries. Such situations may arise when
unforeseen and uncontrolled circumstances prevent the buyers and sellers from
receiving or taking deliveries. The contracts may then be settled mutually.

Unlike the physical markets, futures markets trade in futures contracts

which are primarily used for risk management (hedging) on commodity stocks or
forward (physical market) purchases and sales. Futures contracts are mostly
offset before their Maturity and, therefore, scarcely end in deliveries. Speculators
also use these futures contracts to benefit from changes in prices and are hardly
interested in either taking or receiving deliveries of goods.

Price risk management and commodity futures market

perform economic function

The two major economic functions of a commodity futures market are price
risk management and price discovery. Among these, the price risk management is
by far the most important, and is the of a commodity futures market.
 The need for price risk management, through what is commonly called
"hedging", arises from price risks in most commodities. The larger, the more
frequent and the more unforeseen is the price variability in a commodity, the
greater is the price risk in it. Whereas insurance companies offer suitable policies
to cover the risks of physical commodity losses due to fire, pilferage, transport
mishaps. They do not cover similarly the risks of value losses resulting from
adverse price variations. The reason for this is obvious. The value losses emerging
From price risks are much larger and the probability of the recurrence is far more
frequent than the physical losses in both the quantity and quantity of good caused
by accidental fires and mishaps or occasional thefts.

Commodity producers, merchants, stockiest and importers face the risks of

large value losses on their production, purchases, stocks and imports from the fall
in prices. Likewise, the processors, manufacturers, exporters and other market
functionaries. entering into forward sale commitments in either the domestic or
export markets, are exposed to heavy risks front adverse price changes. True,
price variability may also lead to windfalls, when prices move favorably. In the
long run, such gains may even offset the losses from adverse price movements.
But the losses, when incurred are at times, so huge that these may often cause
insolvency. The greater the exposure to commodity price risks, the greater is the
share of the commodity in the total earnings or production costs. Hence the need
for price risks management or hedging through the use of futures contracts.

Hedging involves buying or selling of a standardized futures contract against

the corresponding sale or purchase respectively of the equivalent physical
commodity. The benefits of hedging flow from the relationship between the prices
of contracts (either ready or forward) for physical delivery and those of futures
contracts. So long as these two sets of prices move in close unison and display a
parallel (or closely parallel) relationship, losses in the physical market are offset,
either fully or substantially, by the gains In the futures market. Hedging thus
performs the economic function of helping to reduce significantly, if not eliminate
altogether, the losses emanating from the price risks in commodities.
 7.National Commodity
and Derivatives Exchange
Ltd. (NCDEX)

National Commodity & Derivatives Exchange Limited (NCDEX) is a

professionally managed Online multi commodity exchange promoted by ICICI
Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National
Bank for Agriculture and Rural Development (NABARD) and National Stock
Exchange of India Limited (NSE), Punjab National Bank (PNB), CRISIL Limited
(formerly the Credit Rating information Services of India Limited), Indian Farmers
Fertilizer Cooperative Limited (IFFCO) and Canara Bank by subscribing to the
equity shares have joined the initial promoters as shareholders of the Exchange.
NCDEX is the only commodity exchange in the country promoted by national level
institutions. This unique parentage enables it to offer a bouquet of benefits, which
are currently in short supply in the commodity markets.

NCDEX is a public limited company incorporated on April 23. 2003 under the
Companies Act. 1956. It obtained its Certificate for Commencement of Business
on May 9. 2001. It has commenced its operations on December 15, 2003. NCDEX
is a nation-level technology driven de-mutulized on-line commodity exchange with
an independent Board of Directors and professionals not having any vested
interest in commodity markets. It is committed to provide a world-class
commodity exchange platform for market participants to trade in a wide spectrum
of commodity derivatives driven by best global practices, professionalism and
transparency.

NCDEX is regulated by Forward Market Commission in respect of futures

trading in commodities. Besides, NCDEX is subjected to various laws of the land
like the Companies Act, Stamp Act, and Contracts Act. Forward Commission
(Regulation) Act and various other legislations, which impinge on its working.
NCDEX is located in Mumbai and offers facilities to its members in more than 550
centers throughout India. The reach wills gradually he expanded to more centers.

NCDEX currently facilitates trading of 48 commodities-Cashew,

Castor Seed, Chana, Chilli, Coffee-Arabica, and Coffee-Robusta. Common
Parboiled Rice, Common Raw Rice, Cotton Seed Oilcake, Crude Palm Oil, Expeller
Mustard Oil, Groundnut (in shell), Groundnut Expeller Oil. Grade Parboiled Rice,
Grade A Raw Rice, Guar gum, Guar Seeds, Gur, Jeera, Jute sacking bags, Indian
28 mm Cotton, Indian 31 mm Cotton, Lemon Tur, Maharashtra Lal Tur, Masoor
Grain Bold, Medium Staple Cotton. Mentha Oil, Mulberry Green Cocoons, Mulberry
Raw Silk, Rapeseed - Mustard Seed, Pepper. Raw Jute, RBD Palmolein, Refined
Soy Oil, Rubber, Sesame Seeds, Soy Bean, Sponge Iron, Sugar, Turmeric, Urad
(Black Matpe), V-797 Kapas, Wheat, Yellow Peas, Yellow Red Maize, Yellow
Soybean Meal, Electrolytic Copper Cathode, Aluminum Ingot, Nickel Cathode, Zinc
Ingot, Mild Steel Ingots, Sponge Iron, Gold, Silver. Brent Crude Oil, Furnace Oil.
At subsequent phases trading in more commodities would be facilitated.
 8.NATIONAL SECURITIES
DEPOSITORY LIMITED
(NSDL)

Although India had a vibrant capital market which is more than a century
old, the paper-based settlement of trades caused substantial problems like bad
delivery and delayed transfer of title till recently. The enactment of' Depositories
Act in August 1996 paved the way for establishment of NSDL, the first depository
in India. This depository promoted by institutions of national stature responsible for
economic development of the Country has since established a national
infrastructure of international standard that handles most of the settlement of
securities in dematerialized form in Indian capital market.

Using innovative and flexible technology systems. NSDL works to support the
investors and brokers in the capital market of the country. NSDL aims at ensuring
the safety and soundness of Indian marketplaces by developing settlement
solutions that increase efficiency, minimize risk and reduce costs. At NSDL we play
a quiet but central role in developing products and services that will continue to
nurture the growing needs of the financial services industry.

In the depository system, securities are held in depository accounts, which is

more or less similar to holding funds in bank accounts. Transfer of ownership of
securities is done through simple account transfers. This method does away with all
the risks and hassles normally associated with paperwork. Consequently, the cost
of transacting in a depository environment is considerably lower as compared to
transacting in certificates.

As a part of its on going market reforms, the Government Of India

promulgated the Depositories Ordinance in September 1995. Based on this
ordinance, Securities and Exchange Board of India (SEBI) notified its Depositories
and Participants Regulations ill May 1996. The enactment of the Depositories Act
the following August paved the way for the launch of National Securities
Depository Ltd. (NSDL) in November 1996. The Depositories Act has provided
dematerialization route to book entry based transfer of securities and settlement of
securities trade. In exercise of the rights conferred by the Depositories Act, NSDL
framed its Byelaws and Rules. The Byelaws are approved by SEBI. While the
Byelaws define the scope of the functioning of NSDL and its business partners, the
Business Rules outline the operational procedures to be followed by NSDL and its
"Business Partners."
 8. CENTRAL DEPOSITORY
SERVICES LTD. (CDSL)
 Each and every activity of CDSL stem from the essential reason behind
forming this depository i.e. to encourage India's individual investors to benefit
from actively participating in a depository. A Depository facilitates holding of
securities in the electronic form and enables securities transactions to be processed
by book entry by a Depository Participant (DP), who as an agent of the depository,
offers depository services to investors. According to SEBI guidelines, financial
institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The
investor who is known as beneficial owner (BO) has to open a Demat account
through any DP for dematerialization of his holdings and transferring securities.
The balances in the investors account recorded and maintained with CDSL can be
obtained through the DP. The DP is required to provide the investor at regular
intervals, a statement of account which gives the details of the securities holding a
and transactions. The depository system has effectively eliminated paper-based
certificates which were prone to be fake, forged, counterfeit resulting in bad
deliveries. CDSL offers an efficient and instantaneous transfer of securities.

CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly

with leading banks such as State Bank of India. Bank of India. Bank of Baroda,
HDFC Bank. Standard Chartered Bank. and Union Bank of India and Centurion
Bank. CDSL was set up with the objective of providing convenient, dependable and
secure depository services at affordable cost to all market participants. Some of
the important milestones of CDSL system are:

1. CDSL received the certificate of commencement of business from SEBI in

Feb. 1999.

2. Honorable Union Finance Minister, Shri Yashwant Sinha flagged off the
operations of CDSL on July 15. 1999.

3. Settlement of trades in the Demat mode through BOI Shareholding Limited,

the clearing house of BSE, started in July 1999.

All leading stock exchanges like the National Stock Exchange. Calcutta Stock
Exchange, Delhi Stock Exchange. The Stock Exchange, Ahmedabad, etc have
established connectivity with CDSL. As at the end of Dec 2005, over 5000 issuers
have admitted their securities (equities. bonds, debentures, and commercial
papers), units of mutual funds, certificate of deposits etc. into the CDSL system.
EQUITIES
 Funds brought into a business by its shareholders arc called equity.
It is a measure of a stake of a person or group of persons starting a
business.

Investing in equity

When you buy a company's equity, you are in effect financing it, and
being compensated with a stake in the business. You become part-owner
of the company, entitled to dividends and other benefits that the company
may announce, but without any guarantee of a return on your
investments.

Fundamental analysis

The analysis of factual information like financial figures, balance

sheet and other information publicly available is known as fundamental
analysis. This Information is used to derive a fair price of the share of the
company. The faithful fundamentalists believe that the market
incorporates all facts relating to the financial performance of the
company. But a systematic analysis will ensure a more accurate valuation
of the price. Fundamental analysts use tools such as ratio analysis (P/E,
MV/BV) and discounted cash flow analysis in order to arrive at the fair
value of a company and hence its share.

Financial ratios

A ratio is a comparison of two figures. They are called from the financial
statements of a company. These help in assessing the financial health of a
company. It could be a ratio between items from a balance sheet versus
another item on the balance sheet. Or it could be a ratio between one
figures of the balance sheet with a figure from profit and Loss account or
it could be comparison of one year's figure with a figure from the previous
year. For example Return on Equity=Net profit (A profit and a Loss figure)
divided by Net Worth (a balance sheet figure) in percentage terms.
Various kinds of financial ratios

There are many financial ratios. Some of the better known include:

Liquidity Ratios: Liquidity ratio measures the ability of a firm to meet its
current obligations. Liquidity ratios by establishing a relationship between
cash and other current assets to current obligations give measure of
liquidity .e.g. Current ratio [CR] = Current Assets/Current liabilities. A
high CR ratio (>2.5) indicates that a company can meets its short term
liabilities.

Leverage Ratios: Leverage ratio Indicates the proportion of debt and equity in
financing the firm’s assets. They indicate the funds provided by owners and
lenders.e.g .-------- Indicates that the company’s credit profile is bad.

Activity Ratios: Activity ratios are employed to evaluate the efficiency with which
firms manage and run their assets. They are also called turnover ratio. e.g.-- Sales
Turnover ratio = sales/total assets. A Sales Turnover ratio indicates how much
business a company generates for every additional rupee invested.

Profitability Ratios: These ratios indicate the level of profitability of the business
with relation to the inputs or capital employed. Some better-known profit ratios
include operating profit margin (OPM). Operating profit margin is a measure of the
company’s efficiency, either in isolation or in comparison to its peers.

EPS,P/E,BV and MV/BV

Earning Per Share (EPS): EPS represents the portion of a company's profit
allocated to each outstanding share of common stock. Net income (reported or
estimated) for a period of time is divided by the total number of shares outstanding
during that period. It is one of the measures of the profitability of common
shareholder's investments. It is given by profit after tax (PAT) divided by number of
common shares outstanding.

Price Earning Multiple (P/E):

Price earning multiple is ratio between market value per share and earning per
share.

Book Value (BV):

(of a common share) The Company's Net worth (which is paid-up capital + reserves
& surplus) divided by number of shares outstanding.
Market value to book value ratio (MV/BV ratio):

It is the ratio between the market price of a security and Book Value of the security

Technical Analysis

Technical analysis is the study of historic price movements of securities and trading
volumes. Technical analysts believe that prices of the securities are determined
largely by forces of demand and supply. Share prices move in patterns which are
easily identifiable. Crucial insights into these patterns can be obtained by keeping
track of price charts, leading to predictions that a stock price may move up or down.
The belief is that by knowing the past, future prices can predict.
DERIVATIVES
 The term "Derivative" indicates that it has no independent value, i.e. its
value is entirely "derived" from the value of the underlying asset. The underlying
asset can be securities, commodities, bullion, currency, live stock or anything
else. In other, derivative means a forward, future, option or any other hybrid
contract of pre determined fixed duration, linked for the purpose of contract
fulfillment to the value of a specified real or financial asset or to an index of
securities.

With Securities Laws (Second Amendment) Act, 1999. Derivatives has been
included in the definition of Securities. The term Derivative has been defined in
Securities Contracts (Regulations) Act, as:-

A- Derivative includes: -

(a) A security derived from a debt instrument, share, loan, whether secured or
unsecured risk instrument or contract for differences or any other form of
security.

(h) A contract which derives its value from the prices, or index of prices of
underlying securities;

Futures Contract

Futures Contract means a legally binding agreement to buy or sell the

Underlying security on a future date. Future contracts are the
organized/standardized contracts in terms of quantity, quality (in case of
commodities), delivery, time and place for settlement on any date in future. The
contract expires on a pre-specified date which is called the expiry date of the
contract. On expiry, futures can he settled by delivery of the underlying asset or
cash. Cash settlement enables the settlement of obligations arising out of the
future/option contract in cash.

Option contract

Options Contract is a type of Derivatives Contract, which gives the

buyer/holder of the contract the right (but not the obligation) to buy/sell the
underlying asset at a predetermined price within or at end of a specified period.
The buyer / holder of the option purchase the right from the seller/writer for a
consideration which is called the premium. The seller/writer of an option is
obligated to settle the option as per the terms of the contract when the
buyer/holder exercises his right. The underlying asset could include securities, an
index of prices of securities etc.
 Under Securities Contracts (Regulations) Act, 1956 options on securities
has been defined as "option in securities" means a contract for the purchase or sale
of a right to buy or sell, or a right to buy and sell, securities in future, and includes
a teji, a mandi, a teji mandi agalli, a put a call or a put and call in securities.

An Option to buy is called Call option and option to sell is called put option.
Further, if an option that is exercisable on or before the expiry date is called
American option and one that is exercisable only on expiry date, is called European
option. The price at which the option is to he exercised is called Strike price or
Exercise price.

Therefore, in the case of American options the buyer has the right to exercise
the option at anytime on or before the expiry date. This request for exercise is
submitted to the Exchange, which randomly assigns the exercise request to the
sellers of the options, who are obligated to settle the terms of the contract within a
specified time frame.

As in the case of futures contracts, option contracts can be also be settled by

delivery of the underlying asset or cash. However, unlike futures cash settlement in
option contract entails paying/receiving the difference between the strikes
price/exercise price and the price of the underlying asset either at the time of
expiry of the contract or at the time of exercise/assignment of the option contract.

Structure of Derivative Markets in India

Derivative trading in India takes can place either on a separate and independent
Derivative Exchange or on a separate segment of an existing Stock Exchange.
Derivative Exchange/Segment function as a Self-Regulatory Organization (SRO)
and SEBI acts as the oversight regulator. The clearing & settlement of all trades on
the Derivative Exchange/Segment would have to he through a Clearing
Corporation/House, which is independent in governance and membership from the
Derivative Exchange/Segment.
COMMODITIES
 Commodity includes all kinds of goods. FCRA defines "goods" as "every
kind of movable property other than actionable claims, money and securities".
Futures' trading is organized in such goods or commodities as are permitted by
the Central government. At present, all goods and products of agricultural
(including plantation), mineral and fossil origin are allowed for futures trading
under the auspices of the commodity exchanges recognized under the FCRA. The
national commodity exchanges have been recognized by the Central Government
for organizing trading in all permissible commodities which include precious (gold
& silver) and nonferrous metals, cereals and pulses, ginned and unlined cotton,
oilseeds, oils and oilcakes, raw .lute and jute goods, sugar and gaur, potatoes and
onions coffee and tea: rubber and spices, etc.

Commodity Markets

Commodity markets are markets where raw or primary products are

exchanged. These raw commodities are traded oil regulated commodities
exchanges, in which they are bought and sold in standardized Contracts.

This article focuses on the history and current debates regarding global
commodity markets. It covers physical product (food, metals, and electricity)
markets but not the ways that services, including those of governments. nor
investment. nor debt, can be seen as a commodity. Articles on reinsurance
markets, stock markets, bond markets and currency markets cover those
concerns separately and in more depth. One focus of this article is the
relationship between simple commodity money and the more complex instruments
offered in the commodity markets.

Forward contracts

Commodity and futures contracts are based on what's termed "Forward"

Contracts. Early oil these "forward" contracts (agreements to buy now, pay and
deliver later) were used as a way of getting products from producer to the
consumer. These typically were only for food and agricultural Products. Forward
contracts have evolved and have been standardized into what we know today as
futures contracts. Although more complex today, early "Forward" contracts for
example, were used for rice in seventeenth century Japan. Modern "forward", or
futures agreements, began in Chicago in the 1840s, with the appearance of the
railroads, Chicago being centrally located emerged as the hub between
Midwestern farmers and producers and the east coast consumer population
centers.
Hedging
"Hedging" a common (and sometimes mandatory) practice of farming
cooperatives insures against a pour harvest by purchasing Futures contracts in
the same commodity. If the cooperative has significantly less of its product to sell
due to weather or insects, it makes up for that loss with a profit on the markets,
since the overall supply of the crop is short everywhere that suffered the same
conditions.

Whole developing nations may be especially vulnerable. and even their

currency tends to be tied to the price of those particular commodity items until it
manages to be a fully developed nation. For example, one could see the nominally
fiat money of Cuba as being tied to sugar prices since o lack of hard currency
paying for sugar means less foreign goods per peso in Cuba itself. In effect, Cuba
needs a hedge against a drop in sugar prices, if it wishes to maintain a stable
quality of life for its citizens.

Commodity Futures Trading

Forward trading in commodities, which was banned tot - nearly 40 years was
liberalized in 2003. It was real lowed to encourage fair price discovery in agric-
commodities that was more market determined. This was expected to ensure
effective price risk management. A future contract is an agreement between a
buyer and a seller for the purchase and sale of a particular asset at a specific
future date. Commodity futures are available for cereals like wheat and maize,
gold and metals, energy products, spices and industrial products like rubber and
cotton.

Commodity futures trading have recently been under the scanner as it being
touted as one of the causes for the spiraling agricultural commodity prices. The
concerns may well he misplaced: hardening prices may have more to do with a
genuine shortfall in production and the government inability to frequently
intervene in the market duty to a sharp decline in food grains stock.

Difference between stock exchange and commodity

futures exchange
The basic difference between the commodity futures exchange and the
stock exchange is that in a commodity exchange, actual physical products that
are non-financial in nature are traded. Physical or sport trading and options
trading are also not allowed on the commodity exchanges as yet. The size of
commodity physical market in India is estimated to be about Rs. 7, 50,000 crore.
The average daily trading on the futures exchanges is about Rs. 10,000 crore.
The Commodities exchanges in India
There are four national level commodity exchanges namely the Multi
commodity Exchange (MCX), National commodities and Derivatives Exchange of
India (NCDEX). National Multi commodity exchange (NMCE) and the National
Board of Trade (NBOT). The first three exchanges trade in all the permitted
commodities, while NBOT trades only in soybean. There are also 23 regional
single-commodity exchanges where futures trading are permitted. The forward
Markets commissions (FMC) currently regulate the commodity futures market.

Participants in commodities market

Hedgers: They face risk associated with the price of an asset. They use the
futures market to eliminate this price risk. For example - farmers, producers and
consumers.

Speculators: They are participants who wish to bet on future movements in the
price of an asset. Futures allow them leverage for taking bigger risks and
increasing their potential for bigger gains or losses.

Arbitrageurs: They work a making profits by taking advantage between prices

of the same product across different markets (For instance, MCX, NCDEX or spot
and future markets).

Investors: They work with a long-term horizon in mind. Such people can enter a
particular contract and roll over to the next month contract allowing hem good
leverage on payments of exchange stipulated margins.

Minimum amount of money to get registers & invest

First, find a broker that has the membership of exchanges that trade in the
commodity of your interest and verify the credentials of the broker. Client
membership fees range any where between 50,000 to Rs. 1 lakh. Obtaining a
Demat account is optional in case of MCX, and compulsory in NCDEX. The investor
has to pay the broker a margin ranging between 5% to 10% of the price of the
commodity, depending on the volatility. Consider gold, To invest in 1 kg of gold,
the investor has to pay an initial margin Rs. 47,500 (5%) of the price. Rs. 9,
50,000 (taking the price as 9.500/10g). On a daily basis, the investor has to pay
the broker the difference between the daily price and the price at which the
purchase was Ade. If there has been a loss, it has to be paid up as a margin
called mark to market margin. If the price of a commodity is very volatile, the
exchange could introduce a special margin to control the market. As per the
contracts, the exchange can levy a special margin if prices rise over 2% above the
previous close.
Trading account
&
Share Trading
1. An account similar to a traditional bank account, holding cash
and securities, and is administered by an investment dealer.
2. An account held at a financial institution and administered by
an investment dealer that the account holder uses to employ
a trading strategy rather than a buy-and-hold investment
strategy

1. Though trading accounts are traditionally thought to hold only

stocks, a trading account can hold cash, foreign cash,
securities and a number of other types of investments.

2. Investors who use a number of trading strategies or have

a number of brokerage accounts may separate their accounts
in order to avoid confusion. One account may be a registered
account for their retirement savings; another account may be
a buy-and-hold account for their long-term stocks; another
may be a margin account; and another may be a trading
account used for conducting day-trading activities.
 Trading System
Trading system is a set of rules that tell you when to initiate or exit
a trade.
A good system will be multifaceted and will address entry and exit
conditions, risk control, and cash management.

No matter how complex the system is, it must be easy to implement

and execute.

Trading systems should ideally eliminate a lot of the guesswork that

goes into finding good stocks that are ready to take off. It should
also help you determine stop loss and exit strategies.
In theory, if you find the right system, your gains will outweigh
your losses and the net result will be a steadily growing profit in
your stock account.

The biggest enemies of any trader are fear and greed. Gamblers
call fear "playing with scared money" and that's a good phrase for
the investor to keep in mind as well. If you are playing with scared
money, that means that you cannot afford to lose that money and
you are going to make knee-jerk decisions based upon that fear.
That's a surefire recipe for failure.

Trading system automatically eliminates these two emotions. Once

you pick a system, and stick to it, all emotions are eliminated. All
you have to do is follow it and do what you are supposed to do
when they tells you to do it.
 Types of Trading
There are several types of trading styles that persons seeking to
profit from short term trades in the market may wish to use. Here is
a brief description of the most widely used short term trading
styles.

Day Trading
Day traders buy and sell stocks throughout the day in the hope that
the price of the stocks will fluctuate in value during the day,
allowing them to earn quick profits.

Swing Traders
The principal difference between day trading and swing trading is
that swing traders will normally have a slightly longer time horizon
than day traders for holding a position in a stock.

Position Trading
Position trading is similar to swing trading, but with a longer time
horizon. Position traders hold stocks for a time period anywhere
from one day to several weeks or months.

Online Trading
Online trading is not really properly described as a trading style.
Rather, online trading is simply a term that refers to the medium
used to enter and execute trades.
Trading Strategies
Stock trading strategies are a particular "game plan" that outlines
how you are going to participate in the stock market
Four main investment objectives cover how you accomplish most
financial goals.
Learn the basic - trading is not a get rich quick scheme.

There are two basic ways exchanges execute a trade:

On the exchange floor -:

Trading on the floor of the New York Stock Exchange (NYSE)

Anyone who wanted to invest in the stock market needed to retain

the services of a broker – something that still exists today,
regardless of the fact of whether or not you are trading online.

As an established profession, brokers in the real world (as opposed

to brokers in the virtual world online) were able to charge their
customers fairly large commissions on any trade done.

Electronically -:

The electronic markets use vast computer networks to match

buyers and sellers, rather than human brokers.

While this system lacks the romantic and exciting images of the
NYSE floor, it is efficient and fast.
Many large institutional traders, such as pension funds, mutual
funds, and so forth, prefer this method of trading.
How Stocks Trade-:
Most stocks are traded on exchanges, which are places where
buyers and sellers meet and decide on a price.
Some exchanges are physical locations where transactions are
carried out on a trading floor.
The other type of exchange is virtual, composed of a network of
computers where trades are made electronically.

Selecting a Good Trading Software

There are so many different stock market software packages on the
market that you could try a different one, every day of the year,
and never run the same one twice.
In general, stock market trading software can help you in the
following areas:

- Identify Channel Breakouts ;

- Generate high probability mechanical buy/sell signals ;
- Control your dollar risk
- Forecast new tops and bottoms with great accuracy ;
- Reveal trading trends for any time frame ;
- Curb your tendencies toward Fear and Greed

Software has no emotions. It doesn't love or hate the stock that

you own and it doesn't want to get rich. It simply crunches numbers
and tells you what it "thinks" about when to buy, sell, or hold.

And while it is not flawless, it's a lot smarter than most of us are.
Before selecting a software package, download and try it out first. If
the program that you are considering doesn't have a free trial, or a
100% money-back guarantee, then pass and look for another.
Although there are software packages that specialize in one
particular function, such as providing real-time stock quotes, for
example, you would be better off to select an all-in-one package
that provides everything you need to make informed decisions.

The Pros to Stock Trading Online

The ability to trade stocks online, via the Internet, is a fairly

new phenomenon that has provided the opportunity for literally
millions of new investors to diversify their investment strategy, both
long-term and short-term, and have the chance of stock investing
listed on almost every single stock exchange around the world.

The pros to trading on the Internet can be determined and,

essentially, fall into the following:

1. Low commissions
2.Quick Information
3. No interference – free to invest
4. 24/7/365
5. Right here, right now!
6. No investment threshold

Low commissions
Before the days when it was possible to trade online, anyone who
wanted to invest in the stock market needed to retain the services
of a broker – something that still exists today, regardless of the fact
of whether or not you are trading online.

As an established profession, brokers in the real world (as opposed

to brokers in the virtual world online) were able to charge their
customers fairly large commissions on any trade done.

Information

As you may imagine, information is King when it comes to investing

in the stock market.

Knowing just the right moment when to buy stock or when to sell
stock is what will set you apart as a successful trader from the
millions of ordinary traders or, even, those traders who manage to
lose money.

Having said that, in order to get your hands on this information you
either need to (a) find it yourself, or (b) have it provided to you, or
(c) experience some pure luck – if not a combination of all three.

No interference – free to invest

One major advantage that trading via the Internet has is the fact
that you cannot be stopped or dissuaded from investing in a
particular stock.

In other words, if you like the look of a stock, you simply log-on to
your online brokerage account and instruct your broker to purchase
the stock in question. However, if you trade in the real world, using
a live broker, trading may not be that easy.

24/7/365

If you didn’t already know it, the Internet never closes, nor does it
shut down to sleep, rest or take a day off.

By trading online you can move your investments around the world
24/7/365, thereby making sure you take full advantage of what is
going on in the world as it happens!
 Top Online Stock
Trading Sites
Online stock trading sites offer investors access to a variety of tools
and research that just a few years ago were only available through
full service brokerage accounts.
There are many online stock trading sites to choose from, but
narrowing down the field may seem time consuming and
overwhelming.

Charles Schwab
E*Trade
Fidelity
Firstrade
Muriel Siebert
OptionsXpress
Scottrade
TD Ameritrade
 Online Share trading
process

Investor who wishing to invest in share gets all the stock details in
which he is interested .after analyzing all data he place buy order
via share broker or online. When his order confirms cash is transfer.
Investor who wishing to sale his shares place the sale order, when
sale order is confirms cash is transfer.
 Bibliography -:
Website

 www.bseindia.com

 www.nseindia.com

 www.wikipedia.com

 www.nedexindia.com

 www.equitymaster.com

 www.myiris.com

 www.tradeindia.com

 www.gogle.com

Newspaper & Magazine

 Value line

 Business today

 The economics times

Books
 Security analysis