Growth of Online Trading in India

AMITY BUSINESS SCHOOL
AMITY UNIVESITY, UTTAR PRADESH
SUMMER INTERNSHIP PROJECT REPORT ON

TITLE
“GROWTH AND DEVELOPMENT

OF ONLINE TRADING IN INDIA”
SUBMITTED BY: SUBMITTED TO:

SHIVAM GUPTA Mr.Vishal Sharma
MBA (M&S-09) Area Sales Manager
9312923992 Sharekhan Ltd.
shivamgupta1985@gmail.com
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ACKNOWLEDGEMENT
First of all I would like to thank the Management of SHAREKHAN LTD. for giving me the
opportunity to do my two-month project training in their esteemed organization. I am highly
obliged to MR. VISHAL SHARMA (AREA SALES MANAGER) AND MR. PANKAJ
KUMAR (ASSISTANT MANAGER) for granting me to undertake my training at Sector-18
NOIDA branch.
I express my thanks to all Sales Managers under whose able guidance and direction, I was able to
give shape to my training. Their constant review and excellent suggestions throughout the project
are highly commendable.
My heartfelt thanks go to all the executives who helped me to gain knowledge about the actual
working and the processes involved in various departments.
I would also like to sincerely thank my faculty guide Mr. Jitendra Kumar whose guidance has
helped me to understand and complete my project in a timely and proper manner.
SHIVAM GUPTA
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CONTENTS PAGE NO.
Executive summary 4
Research Objectives 5
Research Methodology 6
Limitations 10
Introduction-Sharekhan 11
Online Trading 15
Literature Review 27
Data Analysis 43
Conclusion 70
Recommendations 71
Industry Relevance 72
Learnings 73
Bibliography 74
Appendix 75
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EXECUTIVE SUMMARY

As per the title suggest the project report has been prepared regarding the growth and development
of online trading in India. Online trading was initiated by NSE in India and soon after the other
exchanges also followed it. There was a major boom in yr. 2000 when lots of online trading
companies came with a bang but only few were survived because of lack of computer knowledge
and low internet penetration.
There are two types of online trading companies one is the banking online trading companies and
the other is non-banking trading.
A few examples of banking online trading companies are HDFC securities, ICICI direct.com, UTI
securities etc.
On the other hand non banking trading companies are sharekhan.com, Angel Broking, Reliance
Money etc.
Today online trading contributes are about 8-10%. It is continuously growing and has a huge
market potential.
A study was undertaken to determine the growth of various online trading companies in India in
terms of trade done by them through online and services provided by them.
Major findings indicates that out of a survey of 100 respondents it was seen that 77 investors prefer
online trading because of few major factors such as time saving convenience, protection through
Freudian brokers etc. although during my research project I’ve seen that most of the respondents
feel online trading, a secure way of investing into stock market still a few of them feel it unsafe and
a bit complicated but they posses information about online trading.
Today the online trading companies having cut-throat competition in our offering whose brokerage
discounts lower margin money and zero balance accounts.
Due to the rising education awareness and use of internet there is a huge potential for online trading
in future and companies must come up with innovative offerings to capture the untapped market.
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RESEARCH OBJECTIVES

The objectives of my research project has been-
1. To determine the growth and development of online trading in India.
2. To understand the customer perception of online trading.
3. To see the type of technology used by stock exchanges and by the Indian customer in online
trading.
4. To determine what type of products the customers deal while doing the online trading.
5. To understand the presence of major online traders in the Indian market and looking about
the features provided by them.
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RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY

TITLE:
To determine the “GROWTH AND DEVELOPMENT OF ONLINE TRADING IN INDIA”
TITLE JUSTIFICATION :
The above title is self explanatory. This study mainly deals with growth of online trading in India
since its inception in the year 2000.The trading volumes of stock exchange has increased since
then and the services offered by the online stock traders has facilitated the Indian Customer. The
level of Indian stock trading through online has been increasing and provides a vast scope for the
future.
SCOPE OF THE STUDY
Since the year 2000 a big boom has been witnessed in the Indian Stock Market when the market
showed the coming up of Online Trading System. Many online stock trading companies came but
initially due to lack of online trading some companies vanished and some survived. The
companies which survived are getting the handsome returns also attracting the foreign Investment
Companies. Nowadays this sector is facing cut-throat competition and also provides huge growth
prospects. The study then goes to evaluate and analyze the findings so as to present a clear picture
of the trends in the online trading sector.
SIGNIFICANCE OF THE STUDY
The 100 people have been interviewed through various sources and their responses have been
analyzed. This data can be explorated to take in the trends all Indian Online Stock Trading Industry.
The significance for the Industry lies in studying the growth trends that emerge from the study. It is
one of the fastest growing and evolving sectors.
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RESEARCH DESIGN
 NON-PROBABILITY
The non –probability respondents have been researched by selecting the persons who does
the stock trading. Those persons who do not trade in stocks have not been interviewed.
 EXPLORATORY AND DESCRIPTIVE RESEARCH
The research is primarily both exploratory and descriptive in nature. The sources of
information are both primary and secondary. The secondary data has been taken by referring
to various magazines, newspapers and journals online through the help of the internet to get
the figures required for the research purposes.
The objective of the exploratory research is to gain insights and ideas.

The objective of the descriptive research study is typically concerned with determining the
frequency with which something occurs.
A well structured questionnaire was prepared for the primary research and personal interviews were
conducted to collect the responses of the target population.
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SAMPLING METHODOLOGY
Sampling Technique:
Initially, a rough draft was prepared a pilot study was done to check to check the accuracy of the
Questionnaire and certain changes were done to prepare the final questionnaire to make it more
judgmental.
Sampling Unit:
The respondents who were asked to fill out the questionnaire in the National Capital Region are the
sampling units. These respondents comprise of the persons dealing in stock trading. The people
have been interviewed in the open market, in front of the companies, telephonic interviews and
through other sources also.
Sample Size:
The sample size was restricted to only 100 respondents.
Sampling Area:
The area of the research was National Capital Region (NCR).
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LIMITATIONS
The various limitations of the study are:
 There is lack of awareness among people about investing in stock market. So the people
who are aware of such things were found in specific areas for survey purposes.
 Most people are comfortable with traditional system in small towns and like to trade from
their respective brokers, hence not providing a true opinion of theirs.
 Most of the people they are not techno savvy. Though Internet penetration is growing still
it is not at the required level.
 Some of the respondents who did not do online trading were able to respond to only some
questions.
 The survey was done in the NCR region and may not truly express the opinion of whole
country
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INTRODUCTION
SHAREKHAN BACKGROUND
Sharekhan is one of the leading retail brokerage of SSKI Group which was running sucessfully
since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has
over eight decades of experience in the stock broking business. Sharekhan offers its customers a
wide range of equity related services including trade execution on BSE, NSE, Derivatives,
depository services, online trading, investment advice etc.
The firm’s online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000.
The site gives access to superior content and transaction facility to retail customers across the
country. Known for its jargon-free, investor friendly language and high quality research, the site has
a registered base of over one lakh customers. The number of trading members currently stands at
over 6.5Lacs. While online trading currently accounts for just over 2 per cent of the daily trading in
stocks in India, Sharekhan alone accounts for 22 per cent of the volumes traded online.
The content-rich and research oriented portal has stood out among its contemporaries because of its
steadfast dedication to offering customers best-of-breed technology and superior market
information. The objective has been to let customers make informed decisionsand to simplify the
process of investing in stocks.
On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application that
emulates the broker terminals along with host of other information relevant to the Day Traders.
This was for the first time that a net-based trading station of this caliber was offered to the traders.
In the last six months SpeedTrade has become a de facto standard for the Day Trading community
over the net.
Sharekhan’s ground network includes over 750 branches in 315 cities in India, .
Sharekhan has always believed in investing in technology to build its business. The company has
used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft,
Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider
Software Pvt Ltd. to build its trading engine and content. The Morakhiya family holds a majority
stake in the company. HSBC, Intel & Carlyle are the other investors.
With a legacy of more than 80 years in the stock markets, the SSKI group ventured into
institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading
players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of
the market in each of these segments. SSKI’s institutional broking arm accounts for 7% of the
market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio
investment in the country. It has 60 institutional clients spread over India, Far East, UK and US.
Foreign Institutional Investors generate about 65% of the organization’s revenue, with a daily
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turnover of over US$ 2 million. The Corporate Finance section has a list of very prestigious clients
and has many ‘firsts’ to its credit, in terms of the size of deal, sector tapped etc. The group has
placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular
Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper’s Stop.

PRODUCTS OFFERED BY SHAREKHAN
1- Equity in online and offline trading.

2- Portfolio Management Services.
3- Offline & online Trade in Commodities and Derivatives..
4- Mutual Fund Advisory& Insurance..
REASONS TO CHOOSE SHAREKHAN LIMITED
Experience
SSKI has more than eight decades of trust and credibility in the Indian stock market. In the Asia
Money broker's poll held recently, SSKI won the 'India's best broking house for 2004' award. Ever
since it launched Sharekhan as its retail broking division in February 2000, it has been providing
institutuonal-level research and broking services to individual invcestors.
Technology
With ShareKhans online trading account you can buy and sell shares in an instant from any PC with
an internet connection. PesonYou will get access to ShareKhans powerful online trading tools that
will help him take complete control over your investment in shares.
Accessibility
Sharekhan provides ADVICE, EDUCATION, TOOLS AND EXECUTION servies for investors.
These services are accessible through ShareKhans centres across the country (Over 588 locations in
148 cities) over the internet (through the website www.sharekhan.com) as well as over the Voice
Tool.
Knowledge
In a business where the right information at the right time can translate into direct profits, client
gets access to a wide range of information on our content-rich portal, sharekhan.Client will also get
a useful set of knowledge-based tools that will empower you to take informed decisions.
Convenience
One can call ShareKhans Dial-N-Trade number to get investment advice and execute your
transactions. We have a dedicated call-centre to provide this service via a Toll Free Number 1800-
22-7500 & 1800-22-7050 from anywhere in India.
Customer Service
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ShareKhans customer service team will assist you for any help that you need relating to
transactions, billing, demat and other queries. Our customer service can be contracted via a toll-free
number, email or live chat on www.sharekhan.com.

Investment Advice
Sharekhan has dedicated research teams of more than 30 people for fundamental and technical
researchs. Our analysts constantly track the pulse of the market and provide timely investment
advice to you in the form of daily research emails, online chat, printed reports and SMS on your
mobile phone.
Benefits
 Free Depository A/c

 Secure Order by Voice Tool Dial-n-Trade.
 Automated Portfolio to keep track of the value of your actual purchases.
 24x7 Voice Tool acess to your trading account.
 Personalised Price and Account Alerts delivered instantly to your Cell Phone & E-mail
address.
 Special Personal Inbox for order and trade confirmations.
 On-line Customer Service via Web Chat.
 Anytime Ordering.
ShareKhan offers the following products:-
CLASSIC ACCOUNT
This is an User Friendly Product which allows the client to trade through website
www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence prefers to
invest in stocks or who do not trade too frequently.
Features
 Online trading account for investing in Equity and Derivatives via www.sharekhan.com
 Live Terminal and Single terminal for NSE Cash, NSE F&O & BSE.
 Integration of On-line trading, Saving Bank and Demat Account.
 Instant cash transfer facility against purchase & sale of shares.
 Competative transaction charges.
 Instant order and trade confirmation by E-mail.
 Streaming Quotes (Cash & Derivatives).
 Personlized market watch.
 Single screen interface for Cash and derivatives and more.
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 Provision to enter price trigger and view the same online in market watch.
DIAL-N-TRADE

Along with enabling access for trading online, the CLASSIC ACCOUNT also gives Dial-n Trade
serives. With this service, all the cutomer has to do is dial our dedicated phone lines 1-800-22-
7050, 3030-7600.
PORTFOLIO MANAGEMENT SERVICES
1. ProPrime: - Research & Fundamental Analysis.

2. ProTech: - Technical Analysis.
-Thrifty Nifty
-Beta Portfolio
3. ProArbitrage: -Exploit price analysis
IPO ON-LINE
You can apply all the forthcoming ipo online hasselfree, paperless and time saving work.
Account Opening Charges(normal) Rs 49 +5000 margin cheque(refundable)

Annual Maintanance Charges Rs. NIL first year Rs. 300/= p.a. from
second celender year onward
EXPOSURE : 4 TO 6.7 TIMES (ON MARGIN MONEY)
ONLINE FUND TRANSFER
Sharekhan have tie up with Eleven banks for online fund transfering i.e. HDFC, ICICI, IDBI,
CITI, Union Bank of India, Oriental Bank of Commerce, INDUSIND, UTI bank , Bank of india,
Yes Bank and Centruion Bank of Punjab, for online money transfer.
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WHAT IS ONLINE TRADING
Online trading involves investment activity which takes place over the Internet and it does not
require physical inclusion of the broker. An investor has to register with an online trading portal
like ICICIdirect.com, motilaloswal.com and sharekhan.com and many companies like that and
investor gets into an agreement with the firm to trade in different securities according to the terms
and conditions given on the agreement. As the servers of the online trading portal are connected all
the time to the stock exchanges and designated banks the order processing is done in real time and
investors can also have updates on the trading. They can also check the status of their orders either
through e-mail or through the interface that it cannot be accessed by a third party.Some options are
usually given to users such as to link their bank account, Demat accounts and brokerage accounts
into a single interface. A single window is also there for all exchanges and a single screen is there
for the complete order routing mechanism. The hardware used comprises Web and application
servers, switches, routers, firewalls and security devices, and specialized appliances. There are two
broad models in play in the online brokerage space-
1. Bank-backed firms
2. Entrepreneur-floated firms.
Bank-backed brokerages such as ICICIdirect and HDFC Securities have expanded on the basis of
their brand name and the trust of investors in them. The integrated 3-in-1 accounts offered by these
bank-backed brokerages help their parent bank by giving it accounts along with float income.
In second case i.e Entrepreneur-backed companies like Sharekhan, Indiabulls, Religare and
Indiainfoline have expanded by offering customers a mix of online and offline accounts, higher
margin finance amounts and lower brokerage rates. Though the bank based has performed better
but the latter have not lagged too far behind.
The reason why online trading has developed over conventional offline brokerage firms is that this
conventional method struggled with unfavorable economies. Staff cost is just one example of it. As
the markets opens for 330 minutes a day one dealer can at best execute 500 trades in a day while
online company like ICICI direct executes 150,000-200,000 trades a day on the National Stock
Exchange alone accounting for 3-4% of NSE trades of 5 million a day. It would require a large
amount of dealers to service this demand. Besides the salary costs it would also demand huge
expenses in real estate and support systems.
The offline model has got a downfall in the form of lower bandwidth and IT costs and the cost of
bandwidth has fallen to one-eighth of what it was in 2000 giving online broking an advantage
especially in the case of lower-volume retail investors.
Today 30% of volumes on the NSE comes from this and it may go up to 50% in three-four years
providing explosive growth for online broking in India.
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To be a successful trading portal it will definitely depend on bouquet of services provided by it for
an end-user. Most of the portals charge a small registration fee and brokerage based on various
conditions but it's important for the organization to keep focussed on customer-centric services and
delivery models to actually enjoy the most attention.

THE EMERGENCE OF E-BROKING IN INDIA
The Indian trader is being fancied by the democratized world of online trading or also known as e-
broking. The regular and attractive advertisements in the print media and electronic media have
added to this fancy world.
But as we compare to the Western countries, in India online trading has not still grasped the market
, but has done a very important amount of progress in the past years and the future of online trading
is bright. That is why many new companies are coming into this form of business structure and the
existing companies are changing to this new format besides offline and other traditional forms of
business. With only a mere share of 10% online trading a combined gross turnover of around Rs.
9000-10,000 crores handled by the BSE and NSE together there is a much greater scope for online
trading. At present some of the dominant players in the online trading market of share market are –
1. Sharekhan.com
2. Icicidirect.com
3. Unicon
4. 5paisa.com
5. Indiabulls
6. Kotak Securities
7. Motilal Oswal
8. Geojit Securities
9. Angel Trade
10. Reliance Money
11. Religare
12. Karvy
13. IL&FS
Earlier the share market was not safe enough to invest but some of the changes in the past ten years
in the Indian share market have created the interest of trading in the shares by the people. Broadly
we can classify three important factors which have contributed to the development of online trading
in India-
Firstly the major step was taken by the National Stock Exchange (NSE) in the year 1994 which
allowed the electronic trading and seeing to this various other stock exchanges in India followed
soon. This helped in making the fast .accurate and transparent transactions saving a lot of time then
the traditional method of trading. The investors were also saved by the clutches of the fraud brokers
at the times when the clients were not aware of the true prices of the shares.
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Secondly, in the year 1996 the dematerialization of the shares came (also known as DEMAT) which
avoided the online presence of shares in an electronic form avoiding them from theft, pilferage or
from other losses like counterfeiting and frauds regarding share transfer.

The third reason was the rapid growth of computer education and learning of internet by the people.
With the evolving of internet the online trading became a hit and the investors became confident in
investing just with a click of a mouse.
With the happening of such events the ratio of trading has improved a lot. As it takes less time
people praise this technology for trading purposes. Some people who traded rarely now even trades
2-3 times every day as it provides edge of researching about companies on the internet. The number
of small investors is increasing on the daily basis that trades on the internet.
If a person invests or trades in equities, derivatives, commodities etc through the use Internet it is
known as online trading enabling the investor to connect electronically to buy or sell stocks,
derivatives etc with the other investors. This can be done with the help of online service providers
like Sharekhan.com, ICICI Direct.com etc. A person can access a stockbroker's website through an
PC connected to Internet and can place his orders. The benefits are-
.
• A person can see the latest market movement through streaming quotes.
• Reduces time lag due to self-execution and instant confirmation.
• Empowers traders to have a complete control over their trading decisions.
• A person can access his accounts and related information on the Website.
• Provides greater convenience of trade as a person can trade from home or other convenient
location.
• It is cheap in terms of cost associated and offers reduction in overheads
• A trader can view the historical charts on his computer.
The Internet revolution has changed the way to communicate and the way to do business in today’s
society bringing us closer and closer to vital sources of information. It provides us with means to
directly interact with service-oriented computer systems tailored to our specific needs; therefore,
we can serve ourselves better by making our own decisions.
This new access by the online trading customers to low-cost transactions and cutting-edge, real-
time market information that formerly belonged only to brokers has opened up extraordinary new
investment opportunities as well as a crucial need for state-of-the-art information.
Today the investors use the Internet Client-Server technology to buy and sell the securities at an
instant at any point of time. People investing online have reached the proportions. Online trading
allows an investor to buy and sell shares on the exchange through Internet and helps in the direct
control of his investments.
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The data of the startup dates by some of the brokers in India and charges charged by them are
shown in the table as below:
TABLE 1: LAUNCH DATE AND FEATURES OF ONLINE BROKERS
BROKERAG BROKERAG
MARGIN MIN. REGD. ENCRYPTIO
LAUNCH E E DEPOSITOR
S BROKERAG CHARGE BANK N
DATE (DELIVERY) (TRADING) Y
(%) E (RS) S (RS) LEVEL (BIT)
* %
Febuary- HDFC
SHAREKHAN 25 0.25 # 0.1 500 own DP 128
2000 16 or GTB
Febuary200
INVESTMART 25-30 0.75 0.25 25 910 HDFC own DP 128
0
HDFC
Febuary20-
GEOJITSECURITIES 30 0.5 0.07 NA NA /CitiBan own DP 40
00
k
10 paisa/
FGLOBAL NYS* 25-30 1 0.11 750 HDFC own DP 128
share
0.20
ICICIDIRECT April-2000 100 0.43 25 750 ICICI own DP 128
- 0.85
HDFC /
EQUITYTRADE July-2000 25 0.5 0.1 NA 2000 CitiBan HDFC 40
k
HDFC/
KOTAK SECURITIES August-2000 33 0.25 0.1 NA 500 CitiBan own DP 40
k
HDFC/
ANANDRATHIDIREC September2
25 0.25 0.05 NA NA CitiBan own DP 128
T 000
k
September2
MONEYPORE 40 0.5 0.05-0.1+ NA 1000 HDFC any 40
000
HDFC
0.3
MOTILALOSWAL NYS* 30 0.1 50 NA /CitiBan own DP 40
- 0.4
k
# or Rs1000 per month

l * Operations not yet seamless
l+ statutory charges
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(Source: Capital Market)

ANGEL BROKING
The Angel Group which was started in 1987 has two corporate memberships on BSE and one on
NSE with net worth of Rs 1,600 mln today. It has one of the top positions with a network of 102
terminals across the country and an average daily volume of Rs 1,500 mln. The Group also serves
as clearing members of BSE and NSE for the derivatives segment. Mr Dinesh Thakkar, CMD,
states that Internet-based trading with efficient support systems, smooth and glitch-free back-end
operations and up-to-the-minute market reports and analysis boosts confidence of the investor.
Thakkar feels introducing rolling settlement will ensures timely settlement for a real investor and
the speculator also won’t suffer much on account of the underlying mechanism of daily badla or a
continuous net settlement system. Angel broking is a registered as a depository participant with
CDSL.
Angel's retail stock broking house offers the following services-.
• E-broking
• Investment Advisory
• Portfolio Management Services
• Wealth Management Services
• Commodities Trading
Trades In both BSE and NSE.
The company provides 4 trading platforms, 2 are browser based & 2 are application based.
Angel investor:
It is a browser based trading platform. The rates are updated on clicking the refresh button. This
facility ensures it is not blocked by firewall which is useful for investor who needs to access
information from places where firewall blocks such data.
Angel Trade
It is a browser based trading platform in which the rates are updated automatically. This platform is
useful for investors & traders to access market from different terminals.
Angel Diet
It is an application based trading platform where rates are updated automatically and segments are
available on a single screen making it an ideal platform for the daily traders.
Angel Anywhere
It is an application based trading platform where rates are updated automatically. This is ideal for
investors & traders who are inclined towards trading based on charts & technical tools.
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Brokerage and fees:
1. Account opening fees:

Stock trading account - Rs 575/-
Demat account - Rs 200/-
Commodity Trading - Rs 625/-
2. Brokerage:
For trade up to the range of Rs 1 - 3 Crore:
Cash Based: 0.50%
Day trading: 0.05%
Derivatives: 0.05%
For trade more than Rs 3 Crore, brokerage is about 0.03%.
ICICIDIRECT.COM
ICICI Direct.com is one of the leaders in Internet-based trading segment in India. It has complete
seamlessness as far the three intermediaries’ i.e. Banks, depositories and brokers. The trading
platform is divided mainly into a trading centre, allocation of funds and demats view status, which
allows easy buying and selling, order book and cash and security projection on the screen. Many
other features like news regarding stocks and other points such as stock watch, technical reports,
market information, etc facilitates investors a lot. ICICI Direct started its operations on 17 Apr.
2000 and provides integrated services of banking, depository services and e-broking.. E-trading has
reduced the paperwork and when the makes any buying or selling transactions on the settlement
date, it is electronically debited or credited in the customers a/c. ICICI Direct offers the SSL with
128-bit encryption. Bagchi of ICICI Direct states that there should be clarity about the concept and
enforcement of digital signatures, differing technologies and standardization of these technologies
for a seamless experience for the customer. Improved and secured online payment systems have
added to the benefits of online trading.
ANAND RATHI SECURITIES
Anand Rathi Securities is a new-generation securities firm, but one of the fastest growing ones. It
has four seats on BSE and one seat on NSE. The firm is today a large and established player across
all business segments of retail and institutional broking, investment banking and advisory services
with a highly professional and motivated team of over 200 people comprising a research wing with
a team of 10 analysts tracking close to 150 companies. The firm is known for its professional
approach in the business of stock broking and recognized for its transparency and integrity. It has
almost 40,000 retail customers through 75 franchisees in nearly 50 cities. On the wholesale broking
front, it has relationships with close to 75 institutional investors in India and abroad. Total traded
volume on BSE and NSE for FY 2000 exceeded Rs 40,000 cr. The company took the Internet
trading initiative in Sep. 2000. On whether Net trading encourages speculation in the markets, says
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Amit Rahti, director, Says, “Net trading doesn’t really change the fundamental nature of any equity
market. Greed and fear have always ruled the markets for decades and Net trading will not change
that or exaggerate that to any significant extent. In fact, through real-time information
dissemination, it may bring price adjustments more quickly, making the markets a little more
efficient.”

GEOJIT SECURITIES
Geojit Securities has the distinction of being the first to commence Internet trading in the country in
Feb. 2000. It is a retail stock brokerage firm catering to over 1,00,000 investors through its 50
branches across the country. All the branches are linked through VSAT and lease lines for reliable
and instant connectivity. Recently, HDFC Bank and Geojit announced the launching of the order
level fund transfer system for Internet trading. The company has plans for expansion as well as a
slew of new products. Retail stock broking has been Geojit’s core activity since its inception in
1987. Of a total of 80-100 crores daily turnover, around two crores constitute trades on the Internet.
The company has 10,000 registered members. The company thinks that the existing client base
would be its real wealth as they are the main prospects for the future and they could be converted
into Internet trading mode.
Trade In: BSE and NSE
Online Stock Trading Platforms:
Geojit offers 2 different online trading platforms to its customers:
1. Gold
Online browser based (website) stock trading platform by Geojit. This platform is suitable for low
volume stock market investors who want flexibility to trade any where they go. This is kind of
standard browser based trading platforms available by its competitors. Stock quotes in this web
based application refreshes every second and provide latest update from the market.
2. Platinum
Installable terminal based trading account by Geojit. This trading terminal is suitable for high
volume intraday traders. Quotes are refreshes and orders are executed much faster then browser
based trading websites.
Brokerage and Account opening fees:
Account opening fees: Rs 500/- one time non refundable.
Brokerage:
1. For delivery based trading, Geojit brokerage is 0.30% for trading less then 10 lakhs a month
and reduces for more volume.
2. For Intra-day trading, Geojit brokerage is 0.030% for trading less then 2 Crores a month and
reduces for more volume.
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3. For F&O trading, Geojit brokerage is Rs 75/- per lot less then 9 Crores a month and reduces
for more volume.

MOTILAL OSWAL SECURITIES
Motilal Oswal Securities Ltd. (MOSt) was founded in 1987 and has presence in 200 cities through
400 outlets. It provides advice-based broking (equities and derivatives), portfolio management
services (PMS), e-Broking, depository services, commodities trading, IPO and mutual fund
investment advisory services. Motilal Oswal E-Broking is complete online stock trading solution
for Indian stock market. Following are the features of its e-trading-
1. Easy single screen trader with instant trade confirmation similar to exchange based
trading terminals.
2. Provides access to various online reports like margin report, Demat A/c details, trades
executed, turnover report, net position report with market to market profit/loss and
realized profit.
3. Facilitate online transfer funds through HDFC Bank.
Motilal Oswal Securities Ltd. (MOSt) is one of the best broking houses in India. Founded in
1987, MOSt has in 200 cities through 400 outlets. MOSt provide advice-based broking (equities
and derivatives), portfolio management services (PMS), e-Broking, depository services,
commodities trading, IPO and mutual fund investment advisory services.
RELIANCE MONEY
RelianceMoney.com is the financial services division of the Anil Dhirubhai Ambani Group which is
being promoted by Reliance Capital Limited offering most dynamic web based trading
environment to its clients filling up the gap between old online trading companies in India and
their customers.It uses features such as SECURITY TOKEN makes you online trading experience
more secure without complexity Reliance Money (or RelianceMoney.com) is the financial services
division of the Anil Dhirubhai Ambani Group promoted Reliance Capital Limited.
RelianceMoney.com offers most dynamic web based trading environment to its customers. The
new trading platform has many new features which basically fill up the gap between old online
trading companies in India and their customers. In Reliance money one can invest in-
1. Equity (Stock) Trading

2. Derivatives Trading
3. Forex Trading
4. Commodity Trading
5. IPO's
6. Mutual Funds
7. Insurance
Type of Account
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Reliance money offers 3 types of accounts to its customers. Account for beginners, for middlers and
for experts.
Brokerage and fees:

Reliance Money offers lowest brokerage rates in today's online stock trading industry in India. The
brokerages are as low as 0.075% for delivery based trading and 0.02 for now delivery.
RELIGARE
Ranbaxy Laboratories Limited promotes the Religare as a part of its financial product and service
provider Company. Religare provides services in three areas including Retail, Wealth management
and the Institutional spectrum. It offers services like equities, commodities, insurance broking,
wealth advisory, portfolio management services, personal finance services, Investment banking and
institutional broking services. Religare has more than 900 locations across in more than 300 cities
and towns in India. Religare Securities Limited deals in services like online trading at BSE and
NSE, Derivatives, commodities, IPO, Mutual fund, Investment banking and institutional broking
services.
Religare Enterprises Limited is Ranbaxy Laboratories Limited promoted financial product and
service provider company.
Religare provide its service in three different segments including Retail, Wealth management and
the Institutional spectrum. It offers wide range of services including equities, commodities,
insurance broking, wealth advisory, portfolio management services, personal finance services,
Investment banking and institutional broking services. Religare retail network spreads across more
than 900 locations across more than 300 cities and towns in India.
Type of Account
 R-ACE (Basic)
It's the basic online trading account provided by Religare. Investor can trade and access their
account information online and over the phone as well.This account comes with a browser based
online trading platform and no additional software installation needed. This type of account also
provides Lifetime free DP account with no annual maintenance charges.
 R-ACE Lite (Advanced)

It's the advanced account option for the investor with Religare. This trading account provides the
entire feature of R-ACE (Basic) account. In addition it also provides real-time streaming stock
quotes and alerts. This trading platform is also browser based and no software installation is
needed.
 R-ACE Pro (Professional)

As the name indicates this account is for high volume traders. Along with the features from above 2
accounts, this account also comes with a Trading Terminal, software which needs to install on your
computer. This terminal directly connects the investor to stock market and having all industry
standard Treading terminal features including technical charting (intra-day and EOD), multiple
watch list, advanced hot-key functions for faster trading, derivative chains, futures & options
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calculator. As in basic and advance account, trading is available online through internet and offline
though phone.

Religare offers three kinds of accounts as above. Below are detail about fees and activation charges
for each account:
R-ACE
-Account activation charges Rs.299/-.

-Minimum margin of Rs.5000/- required.
R-ACE Lite
-Minimum margin of Rs.5000/- required.
R-ACE Pro
-Minimum margin of Rs.10,000/- required.
-All the account comes with free annual maintenance charge.
-All account comes with free DP account.
On the basis of volume and frequency of trading, Religare provide different options for brokerages.
On the broader way they divided into three categories:
 Classic Account
Intraday brokerage varies from 0.3% to 0.5%.
Delivery brokerage varies from 0.30% to 0.50%.
Derivatives brokerage varies from 0.3% to 0.5%.
 Freedom Account
In this payment scheme, investor has to pay a fix amount in advance for
Monthly (Rs 500/-), Quarterly (Rs.1400), Half-yearly (Rs 2500) or Annual
Subscription (Rs 4000). This one time payment enable account holder to
trade for Rs. 3,00,000 intraday & derivative trading and Rs. 40,000 of
delivery based trading for zero brokerage.
 Trump Account
Trump account has two payment options, Trump Plus and Trump Super plan:
1. Trump Plus has annual subscription fees of Rs 2,500, Brokerage on

Delivery Trades of 0.25% and Brokerage on Intraday Trades & F&O Trades
of 0.025%.
2. Trump Super has annual subscription fees of Rs. 15,000, Brokerage on
Delivery Trades of 0.15% and Brokerage on Intraday Trades & F&O Trades
of 0.015%.
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KOTAK SECURITIES LIMITED
Kotak Mahindra Bank set up Kotak Securities Limited in the year 1994. Kotak Securities is a
corporate member of both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE)
having a wide geographical reach. Kotak securities online trading, is the online trading portal of the
Kotak Securities Ltd, the leading stock broking house of India. The online division of Kotak
Securities Limited provides services like internet broking services, online IPO and mutual fund
investments.
Trade In: BSE and NSE
Account Types:
Kotak offers different account types according to user’s requirement:
Kotak Gateway
Kotak securities gateway account opens the gateway to a world of investing opportunities for
beginners. Kotak gateway user can trade anywhere, anytime using internet.Kotak also offers call
and trade facility. They provide sms alert, research report, free news and market updates. Best
feature of Kotak gateway is call and trade facility. Anybody can activate Kotak securities gateway
account with any amount between Rs 20,000 to 5, 00,000. This can be in form of cash deposit or
the value of the shares you buy. Brokerage will be charged based on the account type. For intraday
trading brokerage is .06% both sides for less then 25 lakhs and .023% for more then 25 crores.
Kotak Privilege Circle
This is the premium account for its users. Along with kotak gateway account benefits they provides
independent market expertise and support through a dedicated relationship manager and a dedicated
customer service desk which provides assistance in opening accounts, handling day-to-day
problems, and more. They provides KEAT premium which is an exclusive online tool that lets you
monitor what is happening in the market and view your gains and losses in real-time.
One can activate Kotak securities privilege circle account with any amount more than Rs. 10,
00,000/- as margin, by way of cash or stock. For intraday trading brokerage is .06% both sides for
less then 25 lakhs and .03% for more then 25 crores.
Kotak High Trader

This is the best offer for daily trader or intraday traders. This is an Auto Square Off product where
you can enjoy the benefits of intra-day trading. Trader can get the 6 times exposure on the margin.
They provide all the benefits which kotak gateway and privilege account provides. Trader can
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apply paper free order for IPO.

One can activate Kotak securities high trader with any amount less than Rs 5, 00,000/- as margin,
by way of cash or stock. The minimum brokerage that is applicable in the Kotak high trader
account is 4 paisa on delivery and 4 paisa in the cash segment.
Kotak Freeway
Frequent trader use this account type because freeway account enables it’s users to trade as many
times as they like - at a fixed brokerage.
One can activate Kotak securities freeway with any amount less than Rs. 1, 25,000/- as margin, by
way of cash or stock. They charge fixed brokerage of Rs.999/- a month and on delivery transaction
brokerage is .59% on less then 1lakhs and .18% on more then 2 crores.
Kotak Flat
This product is best suited for the needs of the Indian retail investor who actively invests through
the internet. Kotak flat introduces the international trend of charging brokerages on per trade basis.
Brokerage rate works up to 0.18% on delivery trades and 0.018% for intraday trades.
Kotak Assist
This account most suits to long term investors. This account provides Complete assistance on all
your financial investment.

A trading account in Kotak requires you to have a minimum of Rs.1000 to start with, the bank
account to have a minimum of Rs.2500.
Brokerage:
1. For Intra-day trading, Kotak brokerage is around 0.05%.

2. For delivery trading, Kotak brokerage is around 0.45%.
5 PAISA.COM
5paisa is Online Stock Trading Company of India Infoline Securities Private Ltd. Besides high
quality investment advice from an experienced research team, the site offers real time stock quotes,
market news and multiple tools for technical analysis.
Trades In: BSE and NSE
Trading Terminals:
5Paisa offers 2 different online trading terminals to its customers:
1. Investor Terminal (IT)
Investor Terminal is 5Paisa's equity trading terminal for low volume trader. This is web based
terminal and could access from anywhere. This product provides limited features in comparison of
Trader Terminal, which is another product provided by 5Paisa.
2. Trader Terminal (TT)
Trader Terminal is for high volume equity traders. Trader Terminal provides high volume trading
with powerful interface and fast order execution.
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Account opening fees: Rs 500/- onetime non refundable.
Brokerage:
5 paisa offers charge only 5 paisa for Rs100 of intraday trade done, which is 0.05% brokerage. In
case of in delivery trade, they charge an additional 0.20% for back office and securities handling.
LITERATURE
REVIEW
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ONLINE TRADING INFRASTRUCTURE
The emergence of online exchanges has facilitated faster transactions by providing online trading
portals and brokerage houses ease and flexibility. The Internet has indeed opened up new
opportunities for conducting the business. The worldwide stock exchanges has made a major shift
from the traditional method of trading and now conduct a bulk of its business online through its
brokers and partners. In the developed countries majorly all the exchange transactions are
conducted online. The trend took off slowly in India and the National Stock Exchange (NSE) and
the Bombay Stock Exchange (BSE) two of the largest exchanges in India have been conducting
online trade successfully for some time.
WHY ONLINE TRADING ENTERED LATE IN INDIA?
The Indian exchanges and brokering houses have been very slow in moving their transactions
online and the major reason has been the lot government regulations. The initial delay was due to
laying down the specifications for creating Closed User Groups (CUGs). This issue was resolved
between the Department of Telecommunications (DoT) and the Finance Ministry around 1998 and
after that soon came the online trading portals like ICICIDirect.com, motilaloswal.com,
sharekhan.com and smartjones.com. Connectivity related issue was perhaps the most important
technological factor. Traditionally the cost of leased lines and VSAT links has been very high and
the reliability of the links was very low. To commission the links it took a long time as one had to
make an application and wait for a few weeks for the link to be up and running. Many other issues
like security, backup and recovery procedural costs also acted as deterrents in the process. Now
with the resolution of regulatory issues India no longer have any pressing connectivity and
bandwidth issues. The entry of private players into the broadband scenario and the government
opening up the telecom sector these issues have become almost non-existent. Security solutions and
services available in the market have matured and it doesn't cost a pretty packet anymore to put a
simple backup solution in place.
Through online trading everyday large volumes of data is being transacted. At BSE the average
daily turnover in 2001-2002 (April-March) was Rs 1244.10 crore and the number of average daily
trades was Rs 5.17 lakh.
To control Online Trading RBI made regulations making it mandatory for companies to store at
least 7 years of transactional and financial data.
1. Design needs to be always-on, secure, redundant, and have adequate backup and recovery
processes.
2. For such high amounts of critical data it's natural to deploy network-based storage like NAS
or SAN.
3. Security is a vital and integral part of the design architecture. The hardware and software
elements should be built around layered security architecture and should be held in place
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with a well-documented security policy.

4. Ideally online exchanges should have 'five-nines' availability.
5. It's difficult to deploy out-of-the-box applications at exchanges as each has a unique
architecture based on factors like operations flow, trading volumes, number of members,
number of users, and number of locations.

6. NSE has deployed NIBIS (NSE's Internet Based Information System) for real-time
dissemination of trading information over the Internet and NEAT a client-server-based
application to help its operations.
7. BSE has deployed an OnLine Trading system (BOLT) on a Tandem platform which has a
two-tier architecture. It claims to be able to support up to 2 million trades a day.
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INDIAN EXCHANGES: NSE and BSE
The NSE and BSE are among the largest exchanges in the country handling very large daily trading
volumes, support large amounts of data traffic, and have a very large nationwide network.The
trading volume in year 2000 was huge with the average daily turnover in the capital markets
segment at NSE is around Rs 2300 crore and in the derivatives segment, around Rs 1300 crore. The
average daily traffic volume was around one million trades per day in the capital markets segment
and around 50,000 trades per day in the derivatives segment and there were around 13,000
registered users in both segments and an average of around 9500 users is logged in at a time.At
BSE the average daily turnover in 2001-2002 (April-March) was Rs 1244.10 crore and the number
of average daily trades was Rs 5.17 lakh.
THE NETWORK DESIGN
Any online exchange should always be-on, safe, secure, redundant and should have adequate
backup & recovery processes. The Vice President of NSE-IT G.M Shenoy tells that the basic design
objective of NSE was to provide fair, equal and transparent access across all NSE nationwide
locations and to provide connectivity to the trading members as soon as possible.
The telecom sector is fairly liberal nowadays but way back in 1993 the technology was maturing
and was very costly. The cost of lease lines was almost ten times as much as it is today. Satellite
technology was a boon since it allowed quicker deployment than leased lines. Today NSE has the
country's largest VSAT network with over 3000 VSATs and expects to grow to more than 4000
VSATs very soon.
NETWORK ELEMENTS
When there are massive trading volumes and traffic bulk it makes one tensed even to think of the
expected losses in case of a ten minute downtime when daily trade crosses Rs 3000 crore. Network
elements like security, storage, backup and recovery processes, availability and other different
applications are to be planned carefully and commissioned. Also the RBI regulations to store at
least 7 years of transactional and financial data has to be followed and to store such high amounts
of critical data it's natural to deploy network-based storage like NAS or SAN. NSE is implementing
a SAN as it feels that its data volumes have grown widely.Security is a vital and integral part of the
design architecture and the hardware and software elements should be built with layered security
architecture around and it should also be held in place with a well-documented security policy.
According to Shenoy the security is the most crucial element in the network and at NSE all
applications have been built with a conscious approach towards security. All the security policies
are tightly integrated and regularly scrutinized thus not providing any room to compromise with.
Also all the applications and OSs are hardened time to time for safety.
The Backup and recovery has emerged as one of the most important and vital aspects of business
continuity. When online exchanges were designed earlier a lot of emphasis was perhaps not placed
on this aspect as it is done nowadays. However it's not difficult to add continuity processes to a
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programme which is existing. Shenoy said that a terrestrial-based trading network was deployed as
a backup to NSE VSAT network in the middle of 2000 and it have more than 850 leased lines
connecting to different locations in India. NSE is the only stock exchange in the country which has
a fully-redundant business continuity site in Chennai.

Availability: Ideally online exchanges should have 'five-nines' availability. Exchanges usually likes
to host its infrastructure in-house and not use the services of an external or other data center.
NSE claims to achieve uptime greater than 99.9% which is mostly due to internally formulated
procedures and continuous review of SLAs with hardware vendors.
Applications: It is tough to deploy out-of-the-box applications at exchanges as each has a unique

architecture based on factors like operations flow, number of members, trading volumes, number of
users and number of locations. The applications like trading, surveillance, index computation,
listing, membership, clearing, risk-management and accounts may be developed in-house or by
external software developers.
There are two popular types of architectures-
1. NSE architecture
2. BSE architecture
These both exchanges keep on updating and upgrading their technology systems to keep delivering
according to commitments and promises made to its members, partners and customers.
NEAT-THE NSE ARCHITECTURE
NSE has deployed NIBIS (NSE's Internet Based Information System) for real-time dissemination it
of trading information over the Internet and NEAT a client-server-based application to help its
operations. All the trading information is stored in NEAT an in-memory database at the server end
for achieving minimum response time and maximum system availability for users. The trading
server software runs on a fault-tolerant STRATUS mainframe and the client software runs on
Windows PCs. The telecommunications network uses the X.25 protocol and is the backbone of the
automated trading system. Each trading member trades on the NSE with other members through a
PC located in the trading member's office. The trading members on the Wholesale Debt Market
segment are linked to the central computer at the NSE through dedicated 64 Kbps leased lines and
VSAT terminals. These leased lines are multiplexed using dedicated 2 MB optical-fiber links. The
WDM participants connect to the trading system through dial-up links. The exchange uses RISC-
based Unix servers from Digital and HP for backoffice processing. Applications like Oracle 7 and
SQL/Oracle Forms 4.5 front ends are used for the exchange functions.
BOLT-THE BSE ARCHITECTURE
BSE has deployed an OnLine Trading system (BOLT) on March 14, 1995. It works on a Tandem
S74016 platform running on 16 CPUs. The Tandem Himalaya S74016 machines act as the backend
to more than 8000 Trader Workstations networked on Ethernet, VSAT and Managed Leased Data
Network (MLDN). The systems claim to handle up to two million trades a day. BOLT has a two-
tier architecture. The trader workstations are connected directly to the backend server which acts as
a communication server and a Central Trading Engine (CTE). Other services like information
dissemination, index computation, and position monitoring are also provided by the system. A
transaction monitoring facility in the Tandem architecture helps keep data integrity through non-
stop SQL. With the help of MTNL, BSE has setup a MLDN Network comprising 300 2 Mbps lines
and 1500 64 Kbps lines which connect all regional stock exchanges and offices in Mumbai. Access
to market related information through the trader workstations is essential for the market participants
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to act on real-time basis and take instantaneous decisions. BOLT has been interfaced with various
information vendors like Bloomberg, Bridge, and Reuters. Market information is fed to news
agencies in real time. The exchange plans to enhance the capabilities further to have an integrated
two-way information flow

RECOMMENDATIONS OF SEBI
The SEBI has also played an important role in the issue of the guidelines regarding online trading
so that the chances of fraud and misrepresentation are minimized. The some of recommendations
are as follows:
The stock brokers which are being registered with Securities Exchange Board of India (SEBI) will
have to apply to stock exchanges for a formal permission. The following conditions must be
fulfilled-
1. The online trading company must have a minimum net worth of Rs 50 lakh
2. The encryption technology should be there in the system used by the brokers to ensure the
provision for confidentiality ,security ,justifiability and reliability of data .The user id, first level
and second level password, automatic expiry of passwords at the end of a reasonable period,
secured socket level security for server access through Internet, suitable firewalls between the
trading set-up directly connected to an exchange trading system and the Internet trading set-up,
microprocessor-based Smart cards, dynamic password, 64 bit/128- bit encryption are the basic
minimum security standards.
3. The brokers must maintain adequate back-up systems and data storage capacity which must
be checked by the stock exchanges.
4. The minimum qualification must be laid down by the stock exchange to ensure that the persons
hired by the brokers must have the proper qualification regarding trading so as to guide the clients
and he can communicate regarding trading instructions.
5. To handle contingency situations and for review of incoming and outgoing electronic
correspondence the respective stock exchange must develop uniform written rules, regulations
and procedures.
6. To ensure the authenticity and accuracy of data a certification agency must be appointed using
the certification technologies when notified by the government or the SEBI.
7. The better client and the broker relationship to be maintained.
8. To determine the risk associated with the clients the brokers must have the have sufficient
verifiable information about clients and the stock exchange must ensure it.
9. The clients must be taken into an agreement stating about all the obligations and rights including
the minimum service standards to be maintained by the service provider broker for services
specified by SEBI/exchanges for Internet-based trading from time to time.
10. The web site of the broker providing the online trading facility should contain information rules
and regulations affecting client broker relationship, arbitration rules, investor protection rules, etc
meant for investor protection. It should also provide and display prominently hyper link to the web
site/page on the web site of the relevant stock exchange(s) displaying rules/ regulations/circulars.
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Ticker/quote/order book displayed on the web site of the broker should display the time stamp as
well as the source of such information.
11. An e-mail should be sent to he investor for the confirmation of his Order or trade.

12. The limits of trading and exposure provided to the client must be set on system-based control
and brokers and exchanges must ensure it. The limits must be predefined by the broker on the
exposure and turnover of each client. The system of broker should be such that it is capable of
assessing the risk of the client as soon as the order comes in. The system should inform the clients
client the reports on margin requirements, payment and delivery obligations etc.
13. As per the regulations the Contract Notes must be issued to clients within 24 hours of the trade
execution.
14. Cross trades of the clients will not be allowed with each other to the brokers using Internet-
based systems for routing client order and all orders must be offered to the market for matching.
15. A separate working group has been set up to look into the surveillance and enforcement-related
issues arising due to Internet-based securities trading. However, general anti-fraud provisions
(SEBI Fraudulent and Unfair Trade Practices Regulations, 1995) will apply to all transactions
involving securities or financial services, regardless of the medium.
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ISSUES IN SELECTION OF AN E-BROKER
Individual investors compare the brokerage provided by various online traders. Brokerage can be a
key differentiator among different schemes offered by e-brokers in the present competitive market
place. For example icicidirect.com was the first to enter into e-broking and charges the highest
brokerage (for delivery transactions) at 0.85 per cent per trade as compared to InvestSmart which
charges 0.75 per cent. Other competitors like 5Paisa.com, Sharekhan and Kotakstreet.com charges
0.25 per cent of the transaction value for delivery-based trades. The pattern of entry into e-broking
shows that ``brokerage and associated costs'' can be the differentiators only for a timewhile.
ICICIdirect.com as the first entrant, has touted itself as the first integrated e-broking service
provider in the market. Although it charges high brokerage charges than its competitors it has
positioned itself as the only player to have online broking, banking and depository interface in one
module to offer a fully integrated online trading experience. Sharekhan, tried to overcome
icicidirect.com by introducing a flat fee product of Rs. 1,000 per month. This innovation helped
Sharekhan to get the investors who traded heavily and had not to worry about paying heavy
brokerage .But the next launch in e-trading halved the flat fee to Rs 500 and got an edge over
Sharekhan. It also allowed short sales and offered clients the option of trading against securities up
to three times sales marked for delivery providing for exposure.
Thus innovation provides limited scope for it is a matter of time before almost all the schemes offer
more or less identical features. All it depends is on the client's risk profile, preferences and
requirements and each client may have to choose the different schemes.
Online trading is still at infant stage and all the major players which have set up e-broking outfit’s
aim to achieve two objectives-
1. To broadbase the overall trading of investors, while holding their existing clientele intact.
2. Most settled e-broking players like ICICIdirect.com, InvestSmart and Kotakstreet.com are
using their brick-and-mortar presence to encourage investors to go online.The investors are
being assured if due to any reasons like poor connectivity or Internet infrastructure and that
even if the Internet order-routing system breaks down or investor access is broken for any
reason, online registered investors can have the option of putting through their orders
offline.
As this combination is still a new concept, most investors will be better off clarifying how the
offline environment will operate, if the online environment fails for any reason. For the investor,
the important thing is to ensure that this switch from online to offline is seamless and that there are
no associated hidden costs.
From the opinion of an investor viewpoint the click-and-mortar approach to investing may be the
best bet till the online trading market matures in terms of technology, infrastructure and service to
become a self-sustaining business proposition. The brick-and-mortar brokerage outfit is likely to
subsidise the investment in online trading technologies and further in the ongoing/recurring costs.
Unless the share of online trading volumes increase dramatically to 10-15 per cent of the total
trading volumes the traditional brick-and-mortar outfits will continue to dominate the market.
.
The investor checklist is mainly a trendspotter's guide to the selection of an e-broker. With most
online trading outfits still forging agreements with payment gateways for online banking and with
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depository participants for online demat, it may be too early to differentiate the grain from the chaff
among e-brokers. But the investors' checklist still looks at aspects that are expected to acquire
prominence as online trading catches on.

The pedigree of the e-broker plays a great role as to decide the serious players. Going forward,
consolidation is inevitable even in this industry and when that happens, online trading sites such as
icicidirect.com, Sharekhan, Geogit securities, InvestSmart and Kotakstreet.com with a good
reputation have a much better chance of survival and growth than the stand-alone sites such as
5paisa.com and Indiabulls.
Technology and backoffice infrastructure used by these online companies may prove to a burden in
the long run. It is good for medium to term investors looking at online trading from a perspective,
sites with deep pockets and a pedigree will be a good choice.
With the consolidation in the industry and standardization of technology the quality of service
becomes the key differentiator. In the initial stage from investors viewpoint holding at least two
online trading accounts with two different outfits will be good in the long run which helps in the
evaluation of the quality of service and security-related issues of the two companies. So investor
can switch to the better player according to his comfort level.
.
The integrated package provided initially by ICICIdirect.com offered a seamless 3-in-1 package of
broking, banking and demat accounts. This helped in reduction of the paperwork and time involved
in settlements and transfer of shares or money. Although other players also started it but it gave a
headstart to ICICIDirect.
.
Currently ICICIDirect offers online trading services only to investors who have a bank or a demat
account with ICICI bank and same is the case with Kotakstreet having a dmat a/c with Kotak
securities and should have a bank account either with Citibank, HDFC Bank or Global Trust Bank.
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ADVANTAGES OF ONLINE TRADING
1. Provides with the Freedom of Information
The Internet provides a new sense of controlling our financial future as the amount of investment
information available online is truly outstanding. An investor can-
• Know the price of any stock he desires at any point time on the internet.
• An investor can review the price history of any stock in chart format online
• An investor can follow in-depth the events happening in the market
• Helps an investor in receiving a wealth of free commentary and analysis about stock
markets in the global economy
• Helps an investor to conduct an extensive financial research of any company he desires
• He may also consult with other investors online present around the world
Some online stock broking companies provide real-time stock quotes, daily roundups of the stock
market, expert commentary, and a deep community of fellow investors.
2. Provides Control to Investors Money
When an investor wants to buy or sell stock he no longer need to call his broker on the phone thus
helping in the execution of the order instantly on the internet.
3. Provides access to the market

Through the sophisticated information streams, dedicated trading platforms and sophisticated tools
the investor can access the markets which provides more agility in buying and selling stocks.
4. Ensures the best price for investors
Some companies like Investsmart (IL&FS)specialize in the techniques which offers the best price
deals for the buy and sell orders of the investors and traders providing the high level of
transparency by displaying of information relating to the specific stocks and company profiles
which helps in getting the best quote for the orders.
5. Online trading offers greater transparency
Online trading offers the investors with greater transparency by providing with an audit trail. The
process involves a complete integrated electronic chain starting from order placement, to clearing
and settlement and finally ending with a credit into the depository account of the investor. All these
stages are inspected which brings the transparency into the system.
6. Provides hassle free trading
Online trading provides an integration of the bank account, trading account and demat accounts,
which leads to easy and paperless trading for the client.
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7. Online trading allows instant trade execution

Online transactions helps in the quick execution of the entire trading transaction right from logging
to the traders site and to the settlement of the bank account in a very short period of time.
8. It provides a level playing field
Trading online gives even the smallest retail investor access to information which was earlier
available only to the big traders. It has provided with a level playing field for all investors in the
securities market.
9. Online trading reduces the settlement risk
This method of trading reduces the settlement risk for the investor as when a short sell order is
played the orders are squared off at the specified cut-off time and are not allowed to be carried
forward.
10. Provides live financial news & analysis

The online sites also provide live terminals which provide streaming news to give investor the
latest financial information as it occurs.
11. Online help desk
Some companies provide online help desk an investor cancan contact the Tele Trading Executives
from the Tele Trading team during and after market hours and can clarify questions.
12. Instant order trade confirmations
Through online trading every trade is confirmed immediately and investor receives an on-screen
confirmation following every trade with full details for the investors records which avoids costly
errors that would have been discovered when it is too late.
13. Keeps Information Secure
As per the guideline provided by SEBI every effort has to be made to keep the investors account
and personal information secure by use of encryption technology and updated security technology
to advanced fraud prevention measures.
DISADVANTAGES OF ONLINE TRADING

1. In online terminal, investor can’t get customized expert advice, whereas in offline the broker
gives suggestions according to investors strategy (i.e. short term or long-term)
2. Brokerage is high compared to offline.
3. Privacy is less due to hacking scandals
4 .Transactional errors due to technical problems

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

the year 2000 online trading is gained momentum with trading volumes growing by 150 per cent
per annum in the years 2003-2005.The volume of all trades executed through the Internet on the
National Stock Exchange had grown from less than Rs 100 crore (Rs 1 billion) in June 2003 to over
Rs 700 crore (Rs 7 billion) in July 2005 which was a handsome growth.
This also provided a massive rise in the number of Internet traders. At the end of July 2005, there
were 108 registered brokers on the NSE and the number of Internet trading subscribers to about
1.054 million. And the top three players ICICIdirect.com, Indiabulls and Kotak Securities had
nearly 85 per cent of the total customer base. Today the ICICIDirect has nearly 36% market share.
In March 2003 ICICIDirect had about 234,000 customers trading through its portal which rose to
over 675,000 customers in the year 2005.According to Anup Bagchi the MD and CEO of
ICICIdirect.com as their company was the first player to enter the online trading segment,
ICICIdirect has made broking more structured and transparent which further reduced the
operational hassles.
At the same time the number of subscribers trading through the portal of Kotak Securities had gone
up significantly by 150 per cent and the number of online trading customers had grown from
30,000 to 75,000. And the company expected to have at least 130,000 customers by the end of that
fiscal.
Indiabulls which was a late entrant in the game had its online customers growing from 35,000 in
June 2003 to over 140,000 in the mid 2005. Out of total customer base of 180,000 majority were
online customers. Indiabulls appointed 2,000 relationship managers to handle online clients.
In the recent past years of 2005 ICICIDirect and Indiabulls recorded an annual volume growth of
100 per cent and IndiaBulls had about 30 per cent of India's online trading volumes.
In the year 2005 the online revenues grew faster for Indiabulls than offline revenues (online
revenues increased from 40 per cent to 60 per cent of the total year 2004 and clients wanted a
backup while trading online.
ICICI Direct had 7.5 lakh registered users online in the tear 2005 more than five times what
Indiabulls had. In 2005 number of demat accounts doubled to 7.1 million with the facility of online
trade since 2002. From the years 2000-2005 the online broking grew to account for a tenth of the
total trading volumes. If the numbers are considered for only the retail segments, the growth is
starker. Almost half of the Rs 5,000 crore-6,000 crore daily market volume on the NSE accounted
for by non-retail
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Online trading represented 30 per cent of Sharekhan's broking business in the year 2005. The
number of customers registered with Sharekhan was 130,000 at that point of time of which 60,000
used Internet trading.
At that point of time despite the rapid growth of online trading in India it constituted a puny 8-10
per cent share of the total turnover on the NSE although this rose from 2-3 per cent about two years
ago. The big players expected a 100 per cent growth in their subscriber base every year for the next
few years.
According to a recent article in livemint.com while the Indian markets lag those
in many emerging and developed countries in online trade volume, some of
the share brokers expect that in the coming years the buying and selling of
shares through the Internet would account for up to half of the total equity
trade volumes.
Today the total volume of online trade in India is about 20% of total trades.
According to brokers the better broadband connectivity across the country and
wider awareness of equity as an asset class will rise the online trade volumes
to over 50% of total trade.
In India the demography is such that two-thirds of the population is under the
age of 36 and more than 50% is under age of 25 and this is another supporting
factor for this view. According to
Mr R. Kalyanaraman the senior vice-president of Sharekhan Ltd the total
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number of traders opting for online trading is on a rising considerabily,though

people are making more cautious investments. Sharekhan is the India’s largest
online brokerage firm and the majority owned by Citigroup Venture Capital
International and Infrastructure Development Finance Co. Ltd.
Also according to him the online volume has suffered a dent because of recent
market volatility and negative market sentiment.
Sharekhan gets 60% of its brokerage revenue from the online trading. In 2003
when there were only 10-15 brokers empanelled for Internet trading with the
exchange and accounted just about 10% of total volume in Indian stock
marketsthe number has increased to around 300 brokers wooing Internet-
savvy investors. According to a recent study Ernst and Young only 4% of India’s
domestic household savings or just about 13% of its gross domestic product is
being channelled to shares and debentures issued by companies which is very
less or in an initial stage. Sudip Bandyopadhyay chief executive of Reliance
Money Ltd says that online investing is still at a nascent stage in India and
expects that Internet-based trading will eventually take about half of the total
stock market trading as like with developed markets such as the US.
Philippines has the highest online trade with about 55-60% execution of trade
is online.The reason is because they had wider Internet connectivity years
before India. The biggest challenge in India remains better Internet
connectivity. The earlier Web-based technology used for Internet trading has
been replaced by specialized software which gives real-time global data
streaming rates to trader helping investors to analyse the market trends and
helps in faster execution of trades. Earlier the investors made trade calls over
the phone which sometimes led to the delays.
Online share trading in India was at a boom in the end of 2006 with daily-
traded volumes more than tripling from Rs 1,500 crore to Rs 5,000 crore in the
last one year and terminals was set up in small towns such as Rajkot, Hubli and
Vijayawada .In that year the share of online trading rose dramatically from 7%
last year to 20% as a percentage of overall traded volumes.Due to this factor
the top five US brokerage firms decided to make a foray into India in the next
year driven by strategic interest.Also at that time non-metros accounted for
half of the daily turnover of online trading.
In a crash of the market in the early Febuary 2008 the investors remained
away from online trading and the turnover of the NSE from internet-based
trading dipped to a daily average of Rs 1,648 crore between February 1 and
February 8 as compared with Rs 3,450 crore in January 2008 Rs 3,587 crore in
December 2007 and Rs 4,417 crore in November 2007 in the exchange’s cash
market segment. In the mid Febuary 2008 it accounted for just 12% of NSE’s
total cash turnover as compared with a high of 24% in November last year..
The most online stock broking companies started from 2000 onwards because of development of
global Internet economy and for years 2000 to 2003 the stock market was under a bear hug. The
intense competition among a new wave of online brokerage companies hammered down brokerage
rates from 1% (in 2000) to 0.25 %, or even lower to 5 paisa.
According to Aseem Dhru, MD and CEO, HDFC Securities in todays scenario an online business
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can break even in as short a period as about 18-24 months. Earlier there were other problems like
the Internet connectivity was unreliable, and investors resisted the strict margins and compliance
online stock broking demanded. Initially it seemed that online stock tradingwould flop. In the year
2003 online trades were a merely 2% of trades on the National Stock Exchange. Even the strong
players like Kotak Securities could only get online transaction volumes of a mere Rs 25-30 crore in
a day.
A few companies like Hometrade and LTtrade went off after the dotcom implosion. But some
determined companies like Sharekhan Ltd, Indiabulls and IndiaInfoline,remained despite the
burden of huge cash-burn. Sharekhan, for example, is estimated to have lost Rs 20 crore on its
launch campaign. According to R Kalyanaraman, Senior VP, Sharekhan at that time there was room
to service the mass market through a trusted nameand those who bore the pain are still around in
the market to reap the gains.
If seen today Kotak Securities deals online transactions worth Rs 1,000 crore a day. This may mean
annual revenues of Rs 120 crore, assuming a 0.05% brokerage. But Kotak Securities’ total revenues
including offline transactions are higher at Rs 834 crore.
HDFC Securities have 500,000 online customers’ deals in daily online trades worth Rs 250-300
crore is also in the black. The revenues it had in 2007-08 is Rs 100 crore. HDFC Securities had
revenues of Rs 67 crore and a net profit of Rs 7.21 crore in 2006-07. ICICIdirect has 1.5 million
online broking accounts and parent ICICI Securities reported revenues of Rs 750 crore for March
2008. Sharekhan at present has 650,000 customers with daily Internet trading volumes of Rs 400-
500 crore. The new player Reliance Money has 2 million online accounts trades worth Rs 2,000 to
Rs 3,000 crore per day.
Today online trading accounts for 25-30% of retail market turnover that can make online stock
trading a Rs 400 crore industry, measured by the brokerage earned by them.
The online model has helped the companies to expand rapidly without big investments in
distribution. Prasanth Prabhakaran, Senior VP and Head of Broking, Kotak Securities says that
even though the company has no branches in Rourkela and Sambalpur it gives volumes and Tier-II
and tier-III cities bring in 40-45% of total trading volumes. Apart from cutting margins and making
trades cheaper for investors, online trading has shaved off a lot of costs for brokerage firms
resulting in business making more money. On the retail side of the business the companies having a
stronger online presence are enjoying better profitability. But the offline business still rules
institutional business.
HDFC Securities earns 75% of its revenues from online trades. The key to success is quick ramp-up
because the initial system set-up cost is based on assumptions on the number of accounts and trades
that the firm will carry out and once the point is reached, the break-even can come faster. If today a
new entrant comes he will have to start off with the capacity to handle at least 100,000 trades a day
which could entail an investment of Rs 25 crore on the initial technology and hardware set-up. The
annual expanses of around Rs 4-5 crore will also be needed to scale up.
Industry size: Rs 5,000 cr

Online share: Rs 400 cr
Key players: HDFCsec, ICICIdirect, Indiabulls, Indiainfoline, Kotaksecurities, Sharekhan
Current growth rate: 40-50%
The stock markets which saw a dip in online trading due to investor apathy because of prolonged
bearishness in recent years is now witnessing a revival of interest and is expected to have a record
Page1
growth in the coming years.
Mr Tarun Shah, CEO of Sharekhan, Mumbai says that the retail investors in the capital market are
the most neglected ones have no access to research and Sharekhan, seeks to fill this vacuum felt by
retail investor.

Sharekhan has invested about Rs 13 crore in the last two years in creating the requisite
infrastructure by way of branches and for Internet trading.
Sharekhan has presence in about 80 cities across the country now and it is seeking to consolidate its
presence in the current year 2008 and has focus on expanding its membership. Sharekhan enjoyed
about 20 per cent market share in Web business (Internet trading) in stock markets and in past 3
years Web trading showed lot of promise but as the market witnessed a downturn retail customers
had no much interest in it.
By then the company has been adding around 1, 000 customers a month and felt that for retail
customer web trading was a very good medium as it provides live information.Web trading
constituted about 1 per cent to 2 per cent of the revenue Sharekhan in the year 2001-02.
But in the year 2002-03 overall revenue of Sharekhan trebled and the share of Web trading
constituted 22 per cent of the revenue. At that time the Sharekhan's daily trading volume was over
Rs 200 crore the Web trading constituted at about Rs 40 crore a day major part of the volume came
from the intraday transactions.
According to Tarun Shah the growth of Internet trading in the stock markets would come with a
rapid pace and web trading in the total turnover of the capital markets would go up to 10 to 15 per
cent in the next 2-3 years which is now just about 1 to 2 per cent.
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ANALYSIS PART
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INTERPRETATION
The total number of people who trade online out of 100 is 77 people. The about 77standard
deviation is 0.423 with a mean of .77 meaning that the 77% people are consistent with online
trading and a mode of 1 defining that maximum number of response comes is online trading.
Q2-Which of the following companies are you aware of?
ICICI DIRECT.COM 77
SHAREKHAN.COM 59
INDIABULLS 34
KOTAK SECURITIES 58
RELIGARE 38
ANY OTHER 60
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ICICI
ANY OTHER DIRECT.COM ICICI DIRECT.COM
18% 24% SHAREKHAN.COM
RELIGARE
INDIABULLS
12%
SHAREKHAN.C KOTAK SECURITIES
KOTAK OM RELIGARE
INDIABULLS
SECURITIES 18%
10% ANY OTHER
18%
INTERPRETATION
The maximum number of people is aware of ICICIDirect .com with a share and the next place is
shared by Sharekhan and Kotak Securities at 18%.12% of people are aware of Religare and 10% of
Indiabulls.
Q3-In which of the following do you trade online?
MUTUAL FUNDS 37
EQUITY 65
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INITIAL PUBLIC OFFER (IPO) 49

COMMODITIES 18
FUTURE AND OPTIONS
(DERIVATIVES) 17

70 65
60 49
50
37
40
Series1
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INTERPRETATION
The maximum amount of person’s trade online to trade in equity. The second preference is to trade
in IPO in which about 49 people do.37 people trade online to deal in mutual funds 18 deal in
commodities and 17 in future and options.
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Statistics
Q4. THROUGH WHICHTECHNOLOGY DO YOU TRADE ONLINE?
N Valid 77
Missing 23
Mean 1.26
Median 1.00
Mode 1
Std. Deviation .441
Variance .195
Range 1
Minimum 1
Maximum 2
INTERPRETATION
Out of the people who trade online it is seen that the maximum peopletrade through web based
online trading and a mean of 1.26 shows this.
Q5. DO YOU FEEL ONLINE TRADING IS SECURE?
Cumulative
Frequency Percent Valid Percent Percent
Valid NO 21 21.0 21.0 21.0

YES 79 79.0 79.0 100.0
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Total 100 100.0 100.0

Statistics
Q5. DO YOU FEEL ONLINE TRADING IS SECURE?
N Valid 100
Missing 0
Mean .79
Median 1.00
Mode 1
Std. Deviation .409
Variance .168
Range 1
Minimum 0
Maximum 1
INTERPRETATION
The 80% people believe that the online trading is secure. This shows that the online trading has
taken a good place in the mind of Indian Stock Traders and the Indian consumer is moving towards
Page1
online trading faithfully.

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QUESTION 6- Statistics
Q6c.Is Time
Q6a.Is security a Q6b.Is Instant saving an
important factor online transfers important factor Q7d. Do you feel
for online a good factor for for online online trading is
trading? online trading? trading? convenient?
N Valid 77 77 77 77
Missing 23 23 23 23
Mean 1.42 1.52 1.49 1.83
Median 1.00 1.00 1.00 2.00
Mode 1 1 1 2
Std. Deviation .615 .641 .576 .801
Variance .378 .411 .332 .642
Range 2 2 2 3
Minimum 1 1 1 1
Maximum 3 3 3 4
Q6a.Is security an important factor for online trading?

Cumulative
Valid Strongly Agree 50 50.0 64.9 64.9

Agree 22 22.0 28.6 93.5
Neither Agree Nor Disagree 5 5.0 6.5 100.0
Total 77 77.0 100.0
Missing System 23 23.0
Total 100 100.0 Page1

INTERPRETATION
About 50% of people strongly agree that they consider security as an important factor when they go
for online trading, while 22 out of 77 respondents just agree and five people nor agree nor disagree.
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Q6b.Is Instant online transfers a good factor for online trading?
Cumulative

Agree 28 28.0 36.4 92.2
Neither Agree NOR Disagree 6 6.0 7.8 100.0
Total 77 77.0 100.0
Total 100 100.0
INTERPRETATION
While considering online trading 43% of people strongly agree to the fact that instant online
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transfers is an important consideration while 28 people just agree to this while 6 persons neither
agree neither disagree to this fact.

Q6c.Is Time saving an important factor for online trading?
Cumulative

Agree 32 32.0 41.6 96.1
Neither Agree nor disagree 3 3.0 3.9 100.0
Total 77 77.0 100.0
Total 100 100.0
INTERPRETATION
42 people out of 100 strongly believe the time saving as an important factor for the online trading
while 32 agree still agree and 3 are do not agree nor disagree.
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Q6d. Do you feel online trading is convenient?
Cumulative

Agree 38 38.0 49.4 85.7
Neither agree nor disagree 7 7.0 9.1 94.8
Disagree 4 4.0 5.2 100.0
Total 77 77.0 100.0
Total 100 100.0
INTERPRETATION
While 28 persons strongly agree to the fact that online trading is convenient,37 persons agree to it,7
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people neither agree neither disagree ,and 4 people do not consider online trading as a convenient
one.

Q7.Do you think that online trading has helped in growth and development of Indian Stock
Market?
N Valid 100
Missing 0
Mean .87
Median 1.00
Mode 1
Std. Deviation .338
Variance .114
Range 1
Minimum 0
Maximum 1
Q7.Do you think that online trading has helped in growth and development of Indian Stock Market?
Frequency Percent Valid Percent Cumulative Percent
Valid no 13 13.0 13.0 13.0

yes 87 87.0 87.0 100.0
Total 100 100.0 100.0
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INTERPRETATION
The 13% of people believe that the online trading has not helped in growth and development of
Indian stock market while the majority of people i.e around 77% people believe that the online
trading has certainly helped in growth and development of Indian Stock Market.
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Q9.Do you think Q11.What is your
STATISTICS Q8.Which online trading is Q10.What is stream of
trading method easy and fast your highest education
do you prefer? way of trading? education level?
N Valid 100 100 100 100

Missing 0 0 0 0
Mean 1.48 .86 3.33 2.73
Median 1.00 1.00 3 3.00
Mode 1 1 4 3
Std. Deviation .731 .349 .726 .930
Variance .535 .122 .526 .866
Range 2 1 3 4
Minimum 1 0 1 1
Maximum 3 1 4 5
Q8.Which trading method do you prefer?
Cumulative
Valid online 66 66.0 66.0 66.0

offline 20 20.0 20.0 86.0
Both 14 14.0 14.0 100.0
Total 100 100.0 100.0
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INTERPRETATION
THE 66% OF PEOPLE PREFER ONLINE TRADING,20 PEOPLE PREFER THE OFFLINE
TRADING AND 14 PEOPLE PREFER TO DO TRADING BOTH ONLINE AND OFFLINE.
Q9.Do you think online trading is easy and fast way of trading?
Cumulative
Valid No 14 14.0 14.0 14.0

Yes 86 86.0 86.0 100.0
Total 100 100.0 100.0
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INTERPRETATION
14 % PEOPLE BELIEVE THAT ONLINE TRADING IS NOT FAST AND EASY WAY OF
TRADING WHILE 86% OF PEOPLE ARE IN ITS FAVOUR.
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Q10.What is your highest education level?
Cumulative
Valid Secondary education 1 1.0 1.0 1.0

Senior secondary 12 12.0 12.0 13.0
Graduate 40 40.0 40.0 53.0
Post graduate 47 47.0 47.0 100.0
Total 100 100.0 100.0
INTERPRETATION
1 person out of 100 people met was secondary educated while the 12 persons were senior
secondary educated 40 people were graduates and 47 people were post graduates.
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Q11.What is your stream of education?
Cumulative
Valid science(medical_ 9 9.0 9.0 9.0

science(non-medical) 29 29.0 29.0 38.0
commerce 46 46.0 46.0 84.0
humanities 12 12.0 12.0 96.0
others(specify) 4 4.0 4.0 100.0
Total 100 100.0 100.0
INTERPRETATION
THE data collected shows that 9 people are from the medical stream,29 from the non-medical
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stream,46 people are from the commerce stream,12 from the humanities,4 people are from the other
stream.

Q8.Which trading method do you prefer?
*
Q11.What is your stream of education?
COUNT Q11.What is your stream of education? Total
science(medical_ science(non- commerce humanities others(specif
medical) y)
Q8.Whic Online 8 19 31 6 2 66
h trading Offline 1 3 9 6 1 20
method Both
do you 0 7 6 0 1 14
prefer?
Total 9 29 46 12 4 100
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INTERPRETATION
The table and graph shows that out of nine people science medical stream 8 prefer to trade online
and one offline, and out of 29 people from science non-medical stream 19 trade online, 3 people
trade offline and 7 people trade through both methods. Out of 46 commerce people 31persons trade
online, 9 persons prefer offline trading and 6 people prefer both forms of trading. Out of 12
humanity persons 50% prefer offline and other 50% prefer offline. In other cases 2 persons out of 4
prefer to trade online, 1 offline and 1 person prefer both.
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Q12.Do you think introduction of online trading has helped in attracting the new investors thus
increasing the trading volumes of Stock Market?
Cumulative
Valid no 10 10.0 10.0 10.0

yes 90 90.0 90.0 100.0
Total 100 100.0 100.0
INTERPRETATION
90% of people believe that online stock trading has helped in increasing trading volumes at stock
exchange while 10% of people still disagree with the fact.
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Q13.Do you find easy to operate the computer?
Cumulative
Valid no 9 9.0 9.0 9.0

yes 91 91.0 91.0 100.0
Total 100 100.0 100.0
INTERPRETATION
91% of people find it easy to operate a computer while the other 9 %people does not find it easy to
operate a computer.
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Q14.Do you own a computer?
Cumulative
Valid No 13 13.0 13.0 13.0

Yes 87 87.0 87.0 100.0
Total 100 100.0 100.0
INTERPRETATION
13 people out of 100 do not own a computer while 87 people do have it.
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Q15.Do you have an Internet Connection?
Cumulative
Valid No 29 29.0 29.0 29.0

Yes 71 71.0 71.0 100.0
Total 100 100.0 100.0
INTERPRETATION
29 people out of 100 interviewed did not had an internet connection while the rest 71 people had
internet connection. The summary of` people who trade online and has internet connection are-
COUNT
Q15.Do you have an Total
Internet Connection?
NO YES
Q8.Which trading ONLINE 11 55 66
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method do you prefer? OFFLINE 11 9 20

BOTH 7 7 14
Total 29 71 100
Q16-At what time do you trade online?

OFFICE HOURS 74
NON OFFICE HOURS 24
FREE TIME 45
AFTER MARKET TRADE 20
INTERPRETATION
The table shows the responses of the persons who trade online and at at what time do they
trade.Maximum of people trade during the office hours as the time clashes with the office hours.20
people also does after market trade while while 45 persons do trading in their free time.
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Q17-In which of the following do you trade online?

Online shopping 35 Online Ticket Booking 68
Online Banking 45 Others 86
INTERPRETATION
From the survey of 100 people it is clear that 15% of people use internet for online shopping,29%
people use it for online ticket booking,19% for online banking and 37% people use it for other
purposes such as chatting, e-mail etc.
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CONCLUSION
The online trading is growing with a rapid pace with the rising level of education among the
customers. The other factors being that the Indian Investor nowadays wants to deal himself in
trading rather than depending upon other middlemen. They also consider the factors like time
saving in doing the online transactions, convenience etc. Although some people feel that online
trading is not secure but the people doing the trading online is happy about the increasing security
concerns among the companies. The year 2008 has not been so good for the stock market and the
Sensex and Nifty has been dipping and affecting the business negatively for these companies. This
is due to the fact that at these times people do not prefer to open the DMAT and Trading accounts.
So the companies have to reduce their account opening fees to attract more and more customers.
Also people trade very less in the bearish market and the company’s profits against brokerage fees
soars downwards. It is also a found fact that during the bearish market the ratio of online trading
becomes very less. Also there is an intense competition among the companies and the companies
come up with new and new promotion schemes such as discounted and negotiable brokerages, Zero
balance accounts, waiving a/c opening fee and AMC etc. As the internet penetration is growing in
India this business holds a huge potential for growth. The mantra for success in the current
situation will be educating the customers about the benefits of online trading and the amount
of ROI that can be generated through it. The total trading volume of brokerage companies has
increased from US$1239.1 billion in 2004 to US$1492.1 billion in 2005, and is expected to reach
US$6535.7 billion by 2015.
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RECOMMENDATIONS
 The companies should come up with more and more innovative features in their web
portals.
 The customer should be educated regularly regarding the new technologies and techniqes of
trading online and also other relevant information.
 The companies should look after to develop more safe and secure ways of transacting
business online.
 The companies should make maxium efforts to detect fraud cases and minimise them.
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INDUSTRY RELEVANCE
My research project is Quite Relevant to the Investment Industry. The following things can be
usefull for Share Khan-
 Sharekhan Ltd will be able to know their market position with other competitors.
 The company will also get to know some areas of improvement which came forward
through my research.
 The changing perception of Indian consumers and thier requirements will also be made
clear.
 The company will be able to do the effective segmentation of their market based on the
research analysis.
 The investment companies at large will be able to understand how to keep themselves
abreast with the changing technology.
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LEARNINGS
The two month summer training was a good experience for me to learn the practical aspects of the
corporate life.Some of the learning of mine are:
 I improved my communication skills by learning how to talk to different kind of people as it

requires the diffent approach to handle each person.
 I learnt to how handle the pressure under difficult situations.
 I became aware about various aspects of working of stock exchange
 I learnt about the consumer perception about the stock market and online trading.
 Patience was the thing I learnt the most as I have to approach the clients who were to be
explained same things again and again while appraoching or calling them at regular
Intervals.
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BIBLIOGRAPHY
Marketing management by Philip Kotler
Marketing research by Gilbirt A. Churchill, Jr, Dawn Iacobucci
Times of India
The Economic Times
The Financial Express
www.sharekhan.com
www.icicidirect.com
www.kotakstreet.com
www.bseindia.com
www.nseindia.com
www.bseindia.com
www.sebi.co.in
www.livemint.com
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APPENDIX
QUESTIONAIRE NAME _______________
AGE _______________
Growth and Development of Online Trading in India
GENDER _______________
Q1-Do you trade online or not?
Yes
No
Q2- Which of the following companies are you aware of-

ICICIDirect.com
Sharekhan.com
IndiaBulls
Kotak Securities
Religare
Any other_________________________
Q3-In which of the following do you trade online-

Mutual Funds
Equity
Initial Public Offer(IPO)
Commodities
Future & Options
Q4-Through which technology do you trade online-

Web Based Technology
Aplet Based/VM/Software Based Technology
Q5-Do you feel online trading is secure?

Yes
No
Q6-What factors do you consider when you trade online?
Rate on Scale of 5- 1-Strongly Agree, 2-Agree, 3- Nor Agree nor Disagree,40-Disagree,5-Strongly Disagree
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Security
Instant online transfers
Time Saving/Any Time Access
Convenient

Q7-Do you think online trading has helped in growth and development of Indian Stock Market?
Yes
No
Comment
____________________________________________________________________________________
____________________________________________________________________________________
________________________
Q8-Which of trading methods do you prefer-

Online
Offline
Q9-Do you think online trading is easy and fast way of trading?
Yes
No
Q10-What is your highest education level?

Secondary Education
Senior Secondary
Graduate
Post Graduate
Other(Specify)
Q11-What is your stream of education?

Science(Medical)
Science(Non-Medical)
Commerce
Humanities(Economics)
Other(Specify)
Q12-Do you think introduction of online trading has helped in attracting the new investors thus increasing
the trading volumes at Stock Market?
Yes
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No
Q13-Do you find easy to operate a computer?

Yes

No
Q14-Do you owe a Computer?

Yes
No
If not from where do you trade? ________________________________________

Q15-Do you have an Internet connection?
Yes
No
If not from where do you trade? (Ex-Cyber Cafe) _____________________________
Q16-At what time do you trade?

Office Hours
Non Office Hours
Free Time
After Market Trade
Q17-Do you use Internet for-

Online Shopping
Online Ticket Booking
Online Banking Others(Please Specify)
Thank You For Sparing Your Valuable Time!
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GLOSSARY
1. Intra Day Transactions-The deals which are done in the stock market on day to day basis
and not carried forward for the next day.
2. Delivery-When the transactions are not done Intra Day and are carried forward for more
than one day it is known as Delivery.
3. Brokerage-It is the fees charged by the stock broking companies for facilitating the buying
and selling of share market instruments.
4. DMAT-DMAT refers to dematerialization of shares in which the shares are kept in the
electronic form instead of being it in physical form. For dealing in shares SEBI has made it
compulsory to have a DMAT A/C.
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Growth of Online Trading in India

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AMITY BUSINESS SCHOOL

AMITY UNIVESITY, UTTAR PRADESH

SUMMER INTERNSHIP PROJECT REPORT ON

“GROWTH AND DEVELOPMENT

SUBMITTED BY: SUBMITTED TO:

CONTENTS PAGE NO.

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

1. To determine the growth and development of online trading in India.

2. To understand the customer perception of online trading.

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

 EXPLORATORY AND DESCRIPTIVE RESEARCH

The objective of the exploratory research is to gain insights and ideas.

AMITY BUSINESS SCHOOL

The sample size was restricted to only 100 respondents.

The area of the research was National Capital Region (NCR).

AMITY BUSINESS SCHOOL

The various limitations of the study are:

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

1- Equity in online and offline trading.

REASONS TO CHOOSE SHAREKHAN LIMITED

AMITY BUSINESS SCHOOL

 Free Depository A/c

ShareKhan offers the following products:-

AMITY BUSINESS SCHOOL

PORTFOLIO MANAGEMENT SERVICES

1. ProPrime: - Research & Fundamental Analysis.

Account Opening Charges(normal) Rs 49 +5000 margin cheque(refundable)

EXPOSURE : 4 TO 6.7 TIMES (ON MARGIN MONEY)

ONLINE FUND TRANSFER

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

AMITY BUSINESS SCHOOL

TABLE 1: LAUNCH DATE AND FEATURES OF ONLINE BROKERS

# or Rs1000 per month

(Source: Capital Market)

AMITY BUSINESS SCHOOL

Angel's retail stock broking house offers the following services-.

Trades In both BSE and NSE.

AMITY BUSINESS SCHOOL

1. Account opening fees:

ANAND RATHI SECURITIES

AMITY BUSINESS SCHOOL

Trade In: BSE and NSE

Online Stock Trading Platforms:

Geojit offers 2 different online trading platforms to its customers:

Account opening fees: Rs 500/- one time non refundable.

AMITY BUSINESS SCHOOL

1. Equity (Stock) Trading

Brokerage and fees:

AMITY BUSINESS SCHOOL

 R-ACE Lite (Advanced)

 R-ACE Pro (Professional)

AMITY BUSINESS SCHOOL

-Account activation charges Rs.299/-.

1. Trump Plus has annual subscription fees of Rs 2,500, Brokerage on

AMITY BUSINESS SCHOOL

Trade In: BSE and NSE

Kotak offers different account types according to user’s requirement: