Summer Training Report

on
ONLINE TRADING OF DESTIMONEY SECURITIES

Submitted to: Mr.Lallit Mohan Gupta

submitted by: Name - Swatanter Bir Singh Course - M.B.A. Roll No. - 104472248015

DESTIMONEY SECURITIES PRIVATE LIMITED.

Ranjeet Avenue, Amritsar,Punjab,143001

ACKNOWLEDGMENT

I express my sincere gratitude to my industry guide Mr. Harbir Singh, Branch Manager, Destimoney Securities Pvt Ltd. for his able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible.

I would also like to thank the entire team of Destimoney Securities Pvt. Ltd. successful completion of my project .

Also, I am thankful to my faculty guide Mr.Lallit Mohan Gupta of my institute, for his continued guidance and invaluable encouragement.

Signature: Swatanter bir singh

PREFACE
The MBA curriculum is so designed that student get enough practical knowledge of business world which helps them to explore their skills in the corporate world in future. The MBA training helps the students to understand and gain knowledge about the industry and market environment .It develops the skills of analyzing and interpreting problems through application of concepts and techniques of management . Trainee did a project for Destimoney securities in Amritsar . The study consists of the following chapters.

Introduction of Destimoney securities Study of products of Destimoney securities Softwares used in destimoney securities Conclusion

DECLARATION

I, Er. SWATANTER BIR SINGH , a student of FEROZEPUR INSTITUTE OF MANAGEMENT,FEROZEPUR, PUNJAB, hereby declare that this project is the record of authentic work carried out by me during the academic year 2010-2012 and has not been submitted to any other university or Institute towards the award of any degree. An attempt has been made by me to provide all relevant and important details regarding the topic to support the theoretical edifice with concrete research evidence. This will be helpful to clean the fog surrounding the various aspect of the topic. I hope that this project will be beneficial for the Organization.

Place: ferozepur (Punjab) Date:

SWATANTER BIR SINGH FEROZEPUR INSTITUTE OF MANAGEMENT

Certificate
This is certify that SWATANTER BIR SINGH of MBA , student of FEROZEPUR INSTITUTE OF

MANAGEMENT has successfully completed his project titled ONLINE TRADING AT DESTIMONEY SECURITIES Under the supervision of Mr. HARBIR SINGH,Branch Manager at Destimoney securities pvt. Ltd., Amritsar. This project is an original piece of work and has not been copied from any other source. It further certifies that this project has not been submitted to any other company/ University for any other purpose.

TABLE OF CONTENTS:

INTRODUCTION INDUSTRY PROFILE COMPANY PROFILE PRODUCTS OF THE COMPANY SERVICES PROVIDES GROWTH OF ONLINE TRADING SOFTWARES INTERFACES PURPOSE OF STUDY RISKS INVOLVED STOCK MARKETS LITERATURE REVIEW OBJECTIVES RESEARCH FINDINGS INTERPRETATIONS RECOMMENDATIONS CONCLUSIONS QUESTIONNAIRE BIBLIOGRAPHY REFRENCES

CHAPTER 1 INTRODUCTION
PROJECT PROFILE
PROJECT TITLE:
ONLINE TRADING OF DESTIMONEY SECURITIES

OBJECTIVES OF STUDY:
To Understand and analyze the marketing strategies of Destimoney Securities. To understand and analyze online trading at Destimoney Securities. To improve the format of DSR (Daily Sales Report)

1. 2. 3. 4. 5. 6. 8. 9.

Title of the Report Type of Report Author Organizing Unit Language of Report Abstract Security Classification Distribution Statement

ONLINE TRADING OF DESTIMONEY SECURITIES

Study and Research based Swatanter Bir Singh

Destimoney Securities Pvt. Ltd.

English

Study of softwares and stratigies used in online trading.

General General

EXECUTIVE SUMMARY:

As per the title suggest the project report has been prepared regarding the online trading software at Destimoney Securities Private Ltd. EXE based desktop software is designed for active traders who transact frequently to capture favorable short-term price movements. The platform offers active traders the tools they need to make critical decisions with confidence. It offers real-time tick by tick streaming quotes and market announcements from Indias premier Exchanges BSE and NSE. A fully customizable interface is provided to view and analyze the real-time quotes. Client can open multiple market watches, define filters quotes by criterion, define and set triggers to highlight the stocks meeting their criterion be it a stop loss or alert on an investment opportunity. EXE based interface has comprehensive Technical Analysis features to help the client to time the markets. Client can plot OHLC, Candle Stick, and Close Charts with both realtime tick-by-tick data and end of the day data for securities listed on BSE and NSE. It offers more than 30 popular indicators including Moving Averages, ROC, RSI, MACD, Williams %R, Stochastic etc. Through an easy-to-use interface, users are provided with the same tools and advantages that the professionals enjoy.Today online trading contributes are about 8-10%. It is continuously growing and has a huge market potential. A study was undertaken to determine effectiveness of software or interfaces used during online trading in the stock market and features to be improved in software used at Destimoney in comparison with Power India Bulls software.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 Ive 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 accountsDue 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.

CHAPTER 2 INDUSTRY AND COMPANY PROFILE

Destimoney (erstwhile Dawnay Day AV) is an innovative financial services provider and advisory firm, formed in the year 2006 as a subsidiary of Dawnay Day UK. In mid 2008, NSR (New Silk Route) had acquired 100% stake in the business. Sudip Bandyopadhaya is the CEO of Destimoney group. The Destimoney Group at present has 4 business lines; Destimoney India Services Pvt Ltd, which provides portfolio management services; Destimoney Enterprises Pvt Ltd, which provides financial advisory services and distributes insurance products, loans, fixed deposits, mutual funds, structured products; Destimoney Securities Pvt Ltd., which deals with broking of stocks & shares; Decimal Point Analytics, which is into global research outsourcing businesses.

KEY MANAGEMENT:
Sudip Bandyopadhaya - MD & Group CEO Jhuma Guha President Anand Agarwal Head Of Distribution K. Giri CFO & Head-Operations Gurmeet Singh - Head Of Broking

Ananad Maliwal Chief Technology Officer Sunando Guha Chief Human Resource Officer Zahid Gawandi Chief Marketing Officer

DESTIMONEY GROUP :

Currently, Destimoney has a network of over 130 branches spread in over 70 locations in 20 states across the country. With an unrelenting focus on our twin values of "Integrity" and "Client

First" Policy, Destimoney, with the help of over 3000 employees and a strong IT infrastructure, provides advisory services to individuals and institutional clients in India and abroad.

Funding Partner New Silk Route :

New Silk Route is a leading Asia-focused growth capital firm founded in 2006 with over $1.4 billion under management, focused on the Indian subcontinent, as well as other rapidly growing economies in Asia and the Middle East. The firm is led by Rajat Gupta - Chairman, Victor Menezes Senior Advisor, Parag Saxena - CEO, each of whom has a track record of building and leading global organizations. NSR have made 9 Investments to date in sectors of Consumer Services, Telecom, Manufacturing, Financial Services and Infrastructure. They have a team of16 Investment Professionals working out of 4 offices; New York, Mumbai, Dubai, and Bangalore.

It has membership of the National Stock Exchange (NSE) Bombay Stock Exchange (BSE)

The company is also a member of National Securities Depository Limited (NSDL) & Central Depository Services India Limited (CDSL).

Company profile:
Name of the company: Destimoney Securities .

Year of Establishment in India : 2006

Head Quarter: Destimoney Securities Private limited Registered Office: Tech web center, A-Wing, 6th Floor, New Link Road, Oshiwara, Jogeshwari, Mumbai-400102.India

Nature of Business: Service Provider Services: Depository Services, Online Services and Stock Market Service Provide

Number of Employees: Over 4500

Website: www.destimoney.com

Slogan: Youre Guide to The Stock Market Jungle.

MISSION :
Organizations mission is to forge strong, sustained relationships with the clients by creating value for them within a transparent and controlled investment process .

VISION:
Destimoney vision is to build a world class customer centric financial services enterprise that fulfills the financial needs of Middle India with Global Processes and focuses on profitable growth. Destimoney plans to do this, by distributing all financial products and manufacturing a select few and building an organization that unlocks the potential across four dimensions, viz. individual, team, customer and market place.

AWARDS AND ACHIEVEMENTS:

Destimoney has been voted as the Top Domestic Brokerage House in the research Category, twice by Euro money Survey and four times by Asia money Survey. Destimoney Limited won the CNBC AWARD for the year 2006. The team has completed over US$5 billion worth of deals in the last 7 years - making it among the most significant players raising equity in the Indian market. Destimoney, a veteran equities solutions company has over 8 decades of experience in the Indian stock markets. If we experience their language, presentation style, content or for that matter the online trading facility, we'll find a common thread; one that helps us make informed decisions and simplifies investing in stocks. The common thread of empowerment is what Destimoney all about! "Destimoney has always believed in collaborating with like-minded Corporate into forming strategic associations for mutual benefit relationships" says Sudip Bandy opaphyay, President Destimoney Limited. Destimoney is also about focus. Destimoney does not claim expertise in too many things. Destimoney expertise lies in stocks and that's what he talks about with authority. So when he says that investing in stocks should not be confused with trading in stocks or a portfolio-based strategy is better than betting on a single horse, it is something that is spoken with years of focused learning and experience in the stock markets. And these beliefs are reflected in everything Destimoney does for us! Destimoney is a part of the Dhanlaxmuni Bank group, an Indian financial services power house, with strong presence in Retail equities Institutional equities Investment banking.

Destimoney securities provides 4 in 1 account.

Demat a/c Trading a/c: for cash calculation

Bank a/c: for fund transfer Dial and Trade: for query relating trading

Destimoney is in fact-:
Among the top 3 branded retail service providers No. 1 player in online business Largest network of branded broking outlets in the country serving more than 7, 00,000 clients. Destimoney`s Management team is one of the strongest in the sector and has positioned .Destimoney ke advantage of the growing consumer demand for financial services products in India through investments in research, pan-Indian branch network and an outstanding technology platform. Further, Destimoney lineage and relationship with Destimoney Group provide it a unique position to understand and leverage the growth of the financial services sector. Destimoney Corporate Stock Market Private Limited is a leading India-based investment bank with strong research-driven focus. Their team members are widely respected for their commitment to transactions and their specialized knowledge in their areas of strength.

CHAPTER 3 PRODUCTS AND SERVICES

PRODUCT OFFERING
1. Trading Portal (with almost negligible brokerage) Equity Broking Commodity Broking Derivatives ( Futures& Options ) Offshore Investments (Contract For Differences) D-Mat Account. 2. Financial Products Mutual Funds Life Insurance O ULIP plan O Term Plan O Money Back Plan General Insurance O Vehicle/Motor Insurance O Health Insurance O House insurance IPOs NFOs 3. Value-Added Services Retirement Planning Financial Planning Tax Saving

 Children Future Planning 4. Credit Cards 5. Gold coins retail in

PRODUCTS AND SERVICES

DESTIMONY customers have the advantage of trading in all the market segments together in the same window, as we understand the need of transactions to be executed with high speed and reduce time. At the same time, they have the advantage of having all kind of insurance & Investment Advisory Services for Life Insurance, General Insurance, Mutual Funds and Ipos also. Destimoney is a customer focused financial services organization providing a range of investment solutions to our customers. It works with clients to meet their overall investment objectives and achieve their financial goals. The clients have the opportunity to get personalized services depending on their investment profiles. The personalized approach enables clients to achieve their Total Investment Objectives. Companys key product offering are as follows:

Tailor made Branch Network of 126 Branches Customized Solution

Commodities Mutual fund & IPOs

Insurance Private Client Equity Transactions Online Group Investing

Lower Money Peace of Convenience Management Commissions Mind

More Choice

Direct Access

Market Access

Full Choice

CHAPTER 4 ONLINE TRADING

INTRODUCRTION ABOUT ONLINE TRADING:
Before getting in to the online trading we should know some things about the Internet, e-commerce and etc.

1) What is Internet?
Internet is a worldwide, self-governed network connecting several other smaller networks and millions of computers and persons, to mega sources of information. This technology shrinks vast distances, accelerating the pace of business reforms and revolutionizing the way companies are managed. It allows direct, ubiquitous links to anyone anywhere and anytime to build up interactive relationships. A combination of time and space, called the Internet promises to bring unprecedented changes in our lives and business. Internet or net is an inter- connection of computer communication networks spanning the entire globe, crossing all geographical boundaries. It has re-defined the methods of communication, work study, education, business, leisure, health, trade, banking, commerce and what not it is virtually changing every thing and we are living in dot.com age. Net being an interactive two way medium, through various websites, enables participation by individuals in business to business and business to consumer commerce, visit to shopping arcades, games, etc. in cyber space even the information can be copied, downloaded and retransmitted. The use of Internet has grown 2000 percent in last decade and is currently growing at 10 percent per month. In India, growth of Internet is of recent times. It is expected to bring changes in every functional area of business activity including management and financial services. It offers stock

trading at a lower cost. Internet can change the nature and capacity of stock broking business in India.

2. E-commerce
Electronic commerce is associated with buying and selling over computer communication networks. It helps conduct traditional commerce through new way of transferring and processing of information. Information is electronically transferred from computer to computer in an automated way. E-commerce refers to the paperless exchange of business information using electronic data inter change, electronic technologies. It not only reduces manual processes and paper transactions but also helps organization move to a fully electronic environment and change the way they operated. PCs and networking attempts to introduce banks of the tools and technologies required for electronic commerce. The computers are either workstations of individual office works or serves where large databases and information reside. Network connects both categories of computers; the various operating systems are the most basis program within a computer. It manages the resources of the computer system in a fair and efficient manner. Now we can enter in to the concept known as online trading. In the past, investors had no option but to contact their broker to get real time access to market data. The net brings data to the investor on-line and net broking enables him to trade on a click of mouse. Now information has become easily accessible to both retail as well as big investor.

EVOLUTION OF BROKING IN INDIA:

The evolution of a broking in India can be categorized in three phases Stockbrokers will offer on their sites features such as live portfolio manager, live quotes, market research and news, etc. to attract more investors.

Brokers will offer online broking and relationship management by providing and offering analysis and information to investors during broking and non- broking hours based on their profile and needs, i.e. customized services.

ONLINE TRADING:
The increasingly popular activity of buying and selling securities over the internet, or to a lesser extent, through a broker's proprietary software. In Online share trading the trading is done by using computer and Internet connection. In other words trading done through computer having Internet connection is called online share trading. Instead of going to any share broker you can do trading yourself using online share trading method. In this method you must have a computer and Internet connection or else you can make use of Internet cafe. Nowadays due to Internet facility lots of things have become easier as compared to earlier days. So making use of the great Internet facility you can start your own online share trading.

FEATURES OF ONLINE TRADING PLATFORM:

One of the most competent & tested Online Trading Platform. Real time streaming quotes & portfolio tracking. User friendly and fully automated platform. Single platform to invest in Equity, Commodity, Currency, IPO & Mutual Funds Integrated real -time payment gateway for lien marking / instant credits via HDFC Bank, ICICI Bank & Axis Bank, Dhanalakshmi Bank 24 * 7 real -time online back office access to customers Real time access to research & technical analysis Intra -day and end - of -day charts

CHAPTER 5 SOFTWARES AND INTERFACES

TRADING SOFTWARES USED BY DESTIMONEY SECURITIES PRIVATE LTD:-1. ODIN SYSTEM 2. OMNESYS NEST Odin System:
"We have evaluated a number of leading front office trading applications and it gives us great pleasure to say that ODINTM, developed by Financial Technologies, is the best of them all. The administration functionality and user-friendly features, as designed in the ODINTM application, are a pleasure to use. Destimoney Securities Private Limited continues to be delighted with the thoughtful design processes, short timelines and prompt and accurate execution provided by Financial Technologies dedicated team.

Overview:
ODIN Program Trading is a special trading application that facilitates auto-execution of the trades based on the selected strategies. Program Trading can be used to take advantage of arbitrage/spread opportunities that exist across the Cash and Futures or Calendar Spread in various Exchanges like MCX, MCX Stock Exchange to cater the segments like Commodities, Currency, Equities and Derivatives. The application has a built-in intelligence to search for the opportunities that exist in the market as per the yield and other criteria defined by the user.

Features:
Option to select touchline or weighted average price for calculation of Spread available Option to specify the Tick size by which the order should be modified Option to activate Square Off mode with a Timer that has an inbuilt logic to square off all option positions by the end of the trading day Option to specify whether user want to do a Reverse only after a Forward execution and vice versa Choose from the list of built-in Arbitrage, Quote drive Arbitrage (Bidding Model) as well as Calendar Strategies (Spread IOC) that can be applied across selected stocks/contracts

Benefits:
Enables automatic calculation and execution of complex arbitrage/spread strategies without the need for any form of human intervention Application performs complex calculations based on the predefined parameters on a continual and real-time basis Eliminates any opportunity loss that arises if the same actions are to be performed manually Enables Members to execute strategies for Proprietary Trades or on behalf of their clients Enables Members to run multiple strategies in a single application Exploit the arbitrage opportunities arise in the markets automatically

OMNESYS NEST :

Omnesys is a leading provider of software for Securities markets worldwide. Omnesys products range from multi-asset, multi venue trading systems, market data and connectivity solutions to buy-side and sell-side firms, consumer oriented trading terminals and websites. The main product suite Omnesys NEST is available as a firm or broker hosted model, and in a Software As a Service (SaS) Model. Omnesys NEST is a platform of choice for leading institutions, exchanges and brokers in India. OMNESYS NEST is used by more than 200 of the top institutions in India as well as various exchanges which provide OMNESYS NEST as a front office service to their customers. The software as a service model is available to all the members of the exchanges and covers the entire trading community. Omnesys NEST is a fully integrated eco-system for securities including Order Management System, comprehensive pre-trade risk management systems, supports various types of front ends, automated trading systems, and Algos. Omnesys NEST also

provides FIX execution capabilities and APIs for both buy and sell side firms. With exceptional throughput and scalability capabilities, NEST has captured significant market share in the Indian markets within a short period of time. A substantial percentage of the volumes on the markets happen through Omnesys NEST automated trading systems and algos. OMNESYS is a privately held company based in Bangalore. DOTEX(A wholly owned subsidiary of NSE) and Intel Capital have minority stakes in the company. The company has Offices in Bangalore, Mangalore, Kolkata, Delhi and Mumbai.

Growth Analysis:
Any customer intending to use a Trading platform needs to plan on scalability and access to multiple asset classes and multiple venues. Omnesys NEST is presently connected to all the exchanges and asset classes in India.In the first quarter of 2011 it will be going live on DGCX Dubai and SGX Singapore. In subsequent quarters it will be connecting to US markets and other global markets.

OMNESYS NEST manages the intra firm trading, order and risk management flows
of

Investment Banks, FII (Foreign Institutional Investors), Brokers, FI trading equities and commodities, Futures and Options, Currencies on the Indian Exchanges.

OMNESYS NEST manages the order flow from Buy side to Sell side firms via EMS
products. NEST manages the trading, order and risk management flows of

Asset Management Firms, FII (Foreign Institutional Investors), Mutual Funds, Pension Funds, Banks, Insurance companies and Investment houses,

Wealth management firms

Destimoney provides two trading interfaces:

Web Interface: Web Interface is ideal for individual clients who trade occasionally
and want to trade from the comfort of their home or office. This interface allows the client to login through any internet capable system. It gives client the benefit of real-time streaming data with the flexibility of trading from any part of the world. With user friendly interface client can view real time quotes and can place orders in both the exchanges.

EXE Interface: EXE based desktop software is designed for active traders who
transact frequently to capture favorable short-term price movements. The platform offers active traders the tools they need to make critical decisions with confidence. It offers real-time tick by tick streaming quotes and market announcements from Indias premier Exchanges BSE and NSE. A fully customizable interface is provided to view and analyze the real-time quotes. Client can open multiple market watches, define filters quotes by criterion, define and set triggers to highlight the stocks meeting their criterion be it a stop loss or alert on an investment opportunity. EXE based interface has comprehensive Technical Analysis features to help the client to time the markets. Client

can plot OHLC, Candle Stick, and Close Charts with both real-time tick-by-tick data and end of the day data for securities listed on BSE and NSE. It offers more than 30 popular indicators including Moving Averages, ROC, RSI, MACD, Williams %R, Stochastic etc. Through an easy-to-use interface, users are provided with the same tools and advantages that the professionals enjoy.

PURPOSE OF STUDY: The objectives of my research project have been:

To study the concepts of online trading in stock market. To understand the working of online trading softwares at Destimoney Securities ltd. To understand how online trading through these effective interfaces is helpful for customers while trading. To compare the features of ODIN and NEST interfaces with the Power India Bulls software. To analyse what can be done to upgrade the software of Destimoney Securities Ltd to Power India Bulls software.

Neat System:
The NEAT system supports an order driven market, wherein orders match on the basis of time and price priority. All quantity fields are in units and prices are quoted in Indian rupees. The regular lot size and tick size for the Exchange notifies various securities traded from time to time. NEAT is the primary front office Automated Stock Trading application in use by Programs European Equities business. The EMEA Auto Trading Application Development team is based in London and is responsible for the continued development and build-out of the NEAT platform. In particular this involves extending the use of NEAT to other desks and equities businesses, (Equity Derivatives, Convertibles), opening up the platform to direct access by Clients, and the on-boarding of new types of auto trading functionality such as Delta/Gamma hedging.

Role & Responsibility of NEAT developer:

The candidate will be a key member of the NEAT development team, which is currently comprised of a mix of JPMorgan employees and contractors. The team follows an iterative UPstyle development methodology, and all developers responsibilities include participation in complex parallel development streams, application architecture and design, coding, testing, deployment, third-line support and investigation of trading issues from internal users and external clients. The candidate will be an experienced Java developer, knowledge of Microsoft .NET, C#, UML and RV messaging is a bonus. Prior experience with high-performance distributed real-time systems is highly advantageous. Excellent communication skills are mandatory, both written and verbal. Experience with an enterprise-level source control and configuration management system is vital, Clear Case advantageous. We are looking for an experienced, self-starting, flexible, motivated, dynamic and committed team player that wants to work in a rapidly changing and highly challenging environment.

As this is an experienced developer role, the successful candidate will additionally be expected to contribute to advancing the Auto Trading team's (and the wider Equities / Biotech Community's) software design and development procedures and capabilities by: Staying current with technology industry trends. Utilizing and contributing to Application Development best practices.

Participating in the Auto Trading Team's process improvement initiatives including the software engineering process improvement activities.

Technical Skills:
Essential: Strong experience of software development using Java technologies A strong grounding in high-performance real-time distributed server-based systems, messaging, component architecture patterns, and related design methodologies. Full project lifecycle experience - requirements analysis, design, build, test and deployment, preferably with an iterative or agile methodology.

Experience of an enterprise-level source control / configuration management system. Software modeling via the Unified Modeling Language (UML). Proficiency with the Eclipse IDE. Previous experience of Software Quality / Process Improvement methodologies and initiatives.

Desirable: Experience in performance profiling & tuning of real-time server applications. Clear Case. Transact-SQL on Sybase and/or MS SQL Server. Win32 / COM+ development. Experience with Tyco RV. C# and .NET technologies

Personal Requirements

Work Experience Experience as a full time software developer. Experience of working on high profile mission critical real-time applications. Banking experience is desirable but not required; however experience of commercial software development is mandatory. Education

To degree level: Computing, Mathematics, Sciences or Engineering degrees preferred. Personal Attributes Excellent communication and team-working skills. Good analytical and problem-solving skills. Ability to multi-task. Able to manage own workload without supervision.

CHAPTER 6 RISKS INVOLVED

BASIC RISKS INVOLVED IN TRADING ON THE STOCK EXCHANGE: Risk Of Higher Volatility:
Volatility refers to the dynamic changes in price that securities undergo when trading activity continues on the Stock Exchange. Generally, higher the volatility of a security/contract, greater is its price swings. There may be normally greater volatility in thinly traded securities/ contracts than in active securities/ contracts. As a result of volatility your order may only be partially executed or not executed at all, or the price at which your order got executed may be substantially different from the last traded price or change substantially different from the last traded price or change substantially thereafter, resulting in notional or real losses.

Risk Of Lower Liquidity:

Liquidity refers to the ability of market participants to buy and/ or sell securities / contracts expeditiously at a competitive price and with minimum price difference. Generally, it is assumed that more the numbers of orders available in a market, greater are the liquidity. Liquidity is important because with greater liquidity, it is easier for investors to buy and/ or/ sell securities/ contracts swiftly and with minimum price difference, and as a result, investors are more likely to pay or receive a competitive price for securities/ contracts purchased or sold. There may be a risk of lower liquidity in some securities/ contracts as compared to active securities/ contracts. As a result, your order may only be partially executed, or may be executed with relatively greater price difference or may not be executed at all Buying/ selling without intention of giving and/ or taking delivery of a securities, as a part of a day trading strategy. May also result into losses. Because in such a situation, stocks may have to be sold/ purchased at a low/high prices, compared to the expected price levels, so as not to have any obligation to deliver/ receive a security.

Risk Of Wider Spreads:

Spread refers to the difference in best buy price and best sell price. It represents the differential between the price of buying a security and immediately selling it or vice versa. Lower liquidity and higher volatility may result in wider than normal spreads for less liquid or illiquid securities/ contracts. This in turn will hamper better price formulation.

Risk- Reducing Orders:

Most exchanges have a facility for investors to place Limit Orders, Stop Loss Orders etc. The placing of such orders (e.g., stop-loss orders, or limit orders), which are intended to limit losses to certain amounts, may not be effective many a time because rapid movement in market conditions may make it impossible to execute such orders. 1 .A market order will be executed promptly, subject to availability of orders on opposite side, without regard to price and that, while the customer may receive a prompt execution of a market order, the execution may be at available prices of outstanding orders, which satisfy the order quantity, on price time priority. It may be understood that these prices may be significantly different from the last traded price or the best price in that security. 2. A limit order will be executed only at the limit price specified for the order or a better price. However, while the customer receives price protection, there is a possibility that the order may not be executed at all. 3.A stop loss order is generally placed away from the current price of a stock/ contract, and such order gets activated if and when the stock/ contract reaches, or trades through, the stop price. Sell stop orders are entered ordinarily below the current price, and buy stop orders are entered ordinarily above the current price. When the stock reaches the pre-determined price, the stop loss order converts to a market /limit order and is executed at the limit or better. There is no assurance therefore that the limit order will be executed at the limit or better.

There is no assurance therefore that the limit order will be executable arises, just as with a regular limit order.

Risk Of News Announcements:

Issuers make news announcements that may impact the price of the securities/ contracts. These announcements may occur during trading, and when combined with lower liquidity and higher volatility, may suddenly cause an unexpected positive or negative movement in the price the security/ contract.

Risk Of Rumors:
Rumors about companies at times float in the market through word of mouth, newspapers, websites, or news agencies, etc. The investors should be wary of and should desist from acting on rumors.

System Risk:
High volume trading will frequently occur at the market opening and before market closes. Such high volumes may occur at any point in the day. These may cause delays in order execution or confirmation. 1. During periods of volatility, on account of market participants continuously modifying their order quantity or prices or placing fresh orders, there may be execution and its combinations. 2. Under certain market conditions, it may be difficult or impossible to liquidate a position in the market at a reasonable price or at all, when there are no outstanding orders either on the buy side or sell side, or if trading is halted in a security due to any action on account of unusual trading activity or stock hitting circuit filters or for any other reason.

System/ Network Congestion:

Trading on NSE is in electronic mode based on a satellite, combination of technologies & computer systems to place & route orders. You are cautioned to note that although these problems may be temporary in nature, but when you have outstanding open positions or un exceeding orders., these represents risks because of your obligations to settle all executive transaction.

Securities and Exchange Board of India (SEBI): With the objective of improving market efficiency, enhancing transparency, checking unfair trade practice and bringing the Indian market up to international slandered, a package of reforms consisting of measures to liberalize, regulate and develop the securities market was introduced during the 1990s. This has changed corporate securities market beyond recognition in this decade. The practice of allocation of resources among different competing entities as well as its terms by a central authority was discontinued. The secondary market overcome the geographical barriers by moving to screen based trading

CHAPTER 7 STOCK MARKET OF INDIA

THE TWO MAIN STOCKS MARKET OF INDIA ARE: National Stock Exchange(NSE) Bombay stock exchange(BSE)

BSE:- At the end of the American civil war, the brokers who thrived out of this war in 1874,
found a place in a street, where they would easily assemble and transact business. This street is nowadays, popularly known as DALAL STREET. In 1887, they formally established in Bombay, and were known as Native Shares and Stock Brokers Association. In 1895, it acquired a premise in the same street and finally was inaugurated in 1899 with the name Bombay Stock Exchange (BSE). India's premier stock exchange Bombay Stock Exchange (BSE) can also trace back its origin to as far as 125 years when it started as a voluntary non-profit making association. You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like 'The BSE Sensitive Index rose 5% today'. Obviously, stocks and stock markets are important. Stocks of public limited companies are bought and sold at a stock exchange. But what really are stock exchanges? Known also as News on the stock market appears in different media every day. he stock market or bourse, a stock exchange is an organized marketplace for securities (like stocks, bonds, options) featured by the centralization of supply and demand for the transaction of orders by

member brokers, for institutional and individual investors. The exchange makes buying and selling easy. The need for stock exchanges developed out of early trading activities in

agricultural and other commodities. During the middle Ages, traders found it easier to use credit that required supporting documentation of drafts, notes and bills of exchange. (Figure-1)

India's other major stock exchange National Stock Exchange (NSE), promoted by leading financial institutions, was established in April 1993. Over the years, several stock exchanges have been established in the major cities of India. There are now 23 recognized stock exchanges Mumbai (BSE, NSE and OTC), Calcutta, Delhi, Chennai, Ahmedabad, Bangalore, Bhubaneswar, Coimbatore, Guwahati, Hyderabad, Jaipur, Kochi, Kanpur, Ludhiana, Mangalore, Patna, Pune, Rajkot, Vadodara, Indore and Meerut.

NSE:-With the liberalization of Indian economy it was found necessary to lift the Indian

stock

markets on par with the international standards. The NSE was incorporated in 1992 by industrial development bank of India, industrial credit and Investment Corporation of India, industrial finance corporation of India, all insurance corporations, selected commercial banks and others. NSE is Indias leading stock exchange covering more than 160 cities and towns across the country. It provides the modern fully

computerized trading system designed to offer investors across the country a safe and easy way to invest to liquidate investment and securities. Investors in many areas of country did not have the same access and opportunity to trade so there arise the need for setting up the national stock exchange. The NSE network has been designed to provide equal access to investors from anywhere in India and to be responsive to their needs.

CHAPTER 7 LITERATURE REVIEW

LITERATURE REVIEW :

Brief Summaries of Articles Reviewed and Relevant to the Project Involving Modeling of Economic Series Coordinated with Interest Rate Scenarios Ahlgrim, D'Arcy and Gorvett, 1999, Parameterizing Interest Rate Models, Casualty Actuarial Society Forum, summer 1-50. http://www.casact.org/pubs/forum/99sforum/99sf001.pdf Uses simulation to develop future scenarios for various applications. Wilkies Provides a review of historical interest rate movements from 1953-1999, summarizes the key elements of several interest rate models and describes how to select parameters of the models to fit historical movements. Ait-Sahalia, 1999, Do Interest Rates Really Follow Continuous-Time Markov Diffusions? University of Chicago Working Paper Examines whether interest rates follow a diffusion process (continuous timeMarkov process), given that only discrete-time interest rates are available. Based on the extended period 1857 to 1995, this work finds that neither short-term interest rates nor long-term interest rates follow Markov processes, but the slope of the yield curve is a univariate Markov process and a diffusion process. Bernstein, 1996, Against the Gods: The Remarkable Story of Risk, New York: John Wiley & Sons, Inc. Provides an excellent long term perspective of risk and the development of methods to measure and deal with risk. Explains the shift from a focus on hazard risk to financial risk over the last few decades. Casualty Actuarial Society Financial Analysis Committee (CASFAC), 1989, A Study of the Effects of Asset/Liability Mismatch on Property/Casualty Insurance Companies, Valuation Issues, 1-52. http://www.casact.org/pubs/dpp/dpp89/89dpp001.pdf Discusses the potential impact of an asset-liability mismatch for property-liability insurers. By mismatch, this article means that anticipated cash flows from existing assets and liabilities will not precisely offset each other. Several mismatch scenarios are evaluated, and it is found that both potential risk and reward are greater, the greater the mismatch. Chapman and Pearson, 2001, What Can Be Learned from Recent Advances in Estimating Models of the Term Structure, forthcoming. Provides a comprehensive review of term structure models. They conclude that volatility increases with the level of the short term interest rate and, within normal interest rate ranges, mean reversion is weak. They also point out that the

appropriate measure for volatility depends on whether the period 1979-1982 (when the Federal Reserve shifted policy from focusing on interest rates to inflation rates) is treated as an aberration or included in the sample period. They also conclude that more research is needed to determine which interest rate model is best. Chapman and Pearson, 2001, Recent Advances in Estimating Term-Structure Models, Financial Analysts Journal (July/August), 77-95. Provides a summary of term structure literature and contrasts the issues that have been resolved with those areas that require further research. They point out that mean reversion of interest rates is weak and that absolute volatility appears to be related to rate levels. Unfortunately, the specific nature of volatility is currently unresolved. Cox, Ingersoll, and Ross, 1985, A Theory of the Term Structure of Interest Rates, Econometric, 53: 385-407. Using a general equilibrium framework, CIR develop a process for the short-term interest rate. The CIR term structure model is: drt = ( rt )dt + rt dBt Fama, 1984, The Information in the Term Structure, Journal of Financial Economics 13, 509528 Examines the ability of forward rates to forecast future spot rates. Based on data for 1974 and subsequent, he finds evidence that very short-term (one-month) forward rates can forecast spot rates one month ahead. Data prior to 1974 indicate that this predictive power extends five months into the future. Fama, 1990, Term Structure Forecasts of Interest Rates, Inflation, and Real Returns, Journal of Monetary Economics 25, 59-76 Examines the ability to forecast one-year spot interest rates in the context of forecasting its components: the one-year inflation rate, and the real return on one- year bonds. It is found that the expected values of those two components move opposite to one another. This results in a situation where the five-year yield spread (the yield on five-year bonds over the one-year spot rate) is unable to forecast near- term spot rates (one or two years ahead); while the spread has power to forecast the inflation and real return components of the spot rate, those components tend to offset somewhat. As the time horizon is extended, the ability to forecast the spot rate improves. Fama also finds that forecasts of these variables are related to the business cycle. Fama and Bliss, 1987, The Information in Long-Maturity Forward Rates, American Economic Review 77, 680-692 Examines expected returns on U.S. Treasury securities with maturities of up to five years. They find that the one-year interest rate has a mean-reverting tendency, which results in one-year forward rates having some forecasting power two to four years ahead. Thus, the paper provides evidence that, while forward rates are not good forecasters of very near-term changes in interest rates, they are better at forecasting long-term changes. Fisher, 1930, Theory of Interest, New York: The Macmillan Company. Summarizes the economic intuition behind adjusting nominal interest rates based on expected future inflation.

 Hardy, 2001, A Regime-Switching Model of Long-Term Stock Returns, North American Actuarial Journal, 5 (2), 41-53. http://www.soa.org/library/naaj/1997-09/naaj0104_4.pdf Using monthly data from the S&P 500 and the Toronto Stock Exchange, a regime- switching lognormal model is parameterized and compared with other models. The author finds the performance of the regime-switching model to be favorable. Heath, Jarrow, and Morton, 1992, Bond Pricing and the Term Structure of Interest Rates: A New Methodology for Contingent Claims Valuation, Econometrica, 60: 77-105. Rather than developing a process for the short rate, HJM model the movements of the entire term structure through a family of forward rate processes. df (t , T ) = (t , T , f (t , T ))dt + (t , T , f (t , T ))dBt where ln P(t , T ) f (t , T ) = T HJM find that the drift in forward rates can be restated in terms of the volatilities, implying that the market price of risk is unimportant in contingent claims valuation.

CHAPTER 8 OBJECTIVES AND RESEARCH

OBJECTIVE:
To find the market potential and market penetration of DestimoneyMoney product offerings in Amritsar. To collect the real time information about preference level of customers using Demat account and their inclination towardsVarious other brokerage firms e.g. Indiabulls, Sharekhan, Indiainfoline, Religare, Alankit, Unicon and Destimoney. To expand the market penetration of Destimoney money. To provide pricing strategy of competitors to fight cut throat

Competition:
To increase the product awareness of Destimoney money as single window shop for investment solutions.

METHOLODOGY:
Based on the responses of the questionnaire, analysis has been carried out .

PRIMARY OBJECTIVES:
1.To identify the objective of software investment plan o f an Indian individual investor. 2. To study the role of software provider in the Destimoney profiled managing investments of investors . 3.To know the preferred investment avenues of the Indian individual investor segregated in

terms of financial literacy and provide for best software to our customer . 4. To know the risk to learned level o f the individual investor in order to suggest a suitable investment portfolio. 5. To identify the preferred sources of information influencing investment decisions . 6. To study the dependence/ independences of the demographic factors (Gender and Age) of the investor and his/her risk tolerance level.

HYPOTHESIS:

H01: Investors are 100% aware of presence of third party in software market . H02 :Investment habit is found in most of the people to participate in the study . H03: Investors take help of third party to take software market management. H04: Third party financial service provider play a significant role software
decision.

market

RESEARCH DEDIGN :
TYPES OF RESEARCH DESIGN: A research work is done in order to discover the relationship between dependent variable i.e. Risk tolerance level and independent variables such as Age, Gender o f an individual investor on the basis of the survey . To study the role of third party software service provider in investor.

DATA SOURCES:
The research is supported by collective interpretation of primary data and secondary data sources.

DATA COLLECTION METHOD:

Data collection method used is totally based on customer interaction Individual meetings were conducted with different investors. Every meeting was followed by taking inputs on the designed questionnaire, provided in the annexure .The questionnaire consists of 10 questions of which consists of the basis for software demographic characteristics o f the investor, role of third party service providers/intermediaries, investment details, risk to

learner level of the investor and were focused to accomplish the other objectives of the study .

SAMPLE DESIGN :

POPULATION OF THE STUDY :

The population for the study included the investors different economic sectors/zones like service class investors, small investors, self employed, chartered accountants, property dealers etc. in Delhi and NCR region in order to understand the necessary aspects of an individual investor.

SAMPLING TECHNIQUES:
Many investors were reluctant to reveal their investment details especially the amount of money invested so; referral sampling method is used for this empirical study .

SAMPLE SIZE:
Research has been carried out with a sample size of 10 investors with which one can easily represent the population properly.

SCOPE OF THE STUDY:

The study is totally based on role of third party financial service provider in managing

investments of investors and perception about investments considering the current scenarios in the equity market. The biggest concern with the service providers is the quality

maintenance on sale and after sale of financial products. This research is on present market scenarios as it is supported by latest data and the outcomes are taken as an input source in filling up the gaps.

TIME CONSTRAINT:
This research is performed in a period o f 45 days, so time spent on the study might have an impact on actual findings.

CHAPTER 9 FINDINGS AND INTERPRETATIONS

Findings:

(Result of Preference share investment)

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 4 Finding of line trading NO.of precentage

Preference of Investment:Interpretation: This shows that although the mutual funds market is on the rise yet, the most favored investment continues to be in the Share Market. So, with a more transparent system, investment in the Stock Market can definitely be increased. Awareness on Online Share Trading:-

(Result of Awareness of Online Share Trading)

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 Awareness on Online Share Trading No.of %

Interpretation: With the increase in cyber education, the awareness towards online share trading has increased by leaps and bounds. This awareness is expected to further with the increase in Internet education. Result of Preference of Investment increase

Awareness of Destimoney Money as a Brand:-

(Result of awareness of Destomoney facilities)

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 Awareness of Destimoney Money as a Brand No.of %

Interpretation: This pie-chart shows that reliance money has a Reasonable amount of Brand awareness in terms of a premier Retail stock broking company. This brand image should be further leveraged by the company to increase its market share over its competitors.

Awareness of Destimoney Money Facilities:-

(Result of awareness of Destomoney facilities)

1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 Awareness of Destimoney Money Facilities No.of % people

Interpretation: Although there is sufficiently high brand equity among the target

audience

yet, it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby, that, the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness. Satisfaction Level among Customers with current broker:

(Result of satisfaction level among customers with current)

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 Satisfaction Level among Customers with current broker No.of % People

1. Result of Awareness of Destimoney money as a Brand

2. Result of Awareness of Destimoney money Facilities 3.Result of satisfaction level among customers with current broker

Interpretation: This pie-chart corroborate the fact that Strategic marketing,

today, has gone beyond only meeting Sales targets and generating profit volumes. It shows that all the competitors are striving hard not only to woo the customers but also to make them Brand loyal by generating customer satisfaction. Frequency of Trading:-

(Result of Frequency of Trading)

0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 4 5 No. of % Frequency of Trading

Interpretation: In spite of the huge returns that the share market promises, we see that there is still a dearth of active traders and investors. This is because of the non transparent structure of the Indian share market and the skepticism of the target audience that is generated by the volatility of the stock market. It requires efficient bureaucratic intervention on the part of the Government.

Percentage of earnings invested in Share Trading:-

(Result of percentage of earning invested in share trading)

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 No.of % Percentage of earnings invested in Share Trading No.of %

Interpretation: This shows that people invest only up to 10% of their earnings in the stock market, again reiterating the volatile and not transparent structure of the Indian stock market.

CHAPTER 10 RECOMMENDATIONS AND CONCLUSION

RECOMMENDATIONS:

Result of percentage of earning invested in share trading Based on the findings of our project we would like to suggest the following:After sales services and follow up calls are important for getting new references so trained telesales should be appointed for this purpose whose sole work should be to make feedback calls.

Destimoney is having too many financial products right from Demat account General Insurance and not all the salespeople are familiar with each and every product so the work force should be segregated each group dealing in a specific product and the sales target should be given likewise.

While interacting with the investors I found that most of the customers are unaware about the Mutual fund. Some of the people look upon mutual funds and equity trading as gambling. Thus a mutual fund awareness program can help to increase the penetration of mutual funds in the market.

Destimoney hold declare in black ink that they will charge just 1 paisa per transaction. People tend to think that there must be some hidden charges.

Rs750 account opening charges are too high when targeting a corporate so the company should be flexible on this amount.

Destimoneys hold provide periodic training for updating the product knowledge of various financial advisors. Company should have a scheme of rewards and recognition to employees and the field persons to boost their motivation.

CONCLUSIONS:This study confirms the earlier assumptions regarding the role of third party financial service provider in investment management. It was observed that people do invest their money after consulting with financial service provider, but investors have moderate knowledge of third party financial service provider present in the market. The individual investor still prefers to invest in financial products which give risk free returns . This confirms that Indian investors even if they are of high income, well educated, salaried, independent are conservative investors prefer to play safe. The investment product designers can design products which can cater to the investors who are low risk tolerant and can motivate investors to invest in mutual funds to eliminate equity market risks.

HUGE POTENTIAL: All though relatively new entrants in the market, Destimoney is slowly but surel gaining a strong hold because it is finally able to grasp the investment climate in Delhi. Secondly the branch managers at all the branches are very knowledgeable with a lot of experience in the financial markets so under their leadership can definitely expand its base.

The entire workforce consists of mostly youngsters, which means they canbe encouraged and motivated to do good work because they have a long way to go and most of them are eager to climb the ladder. Right now Destimoney is at its nascent stage and will surely grab the major market under its belt very soon like in other fields.

Huge investments taking place:

The Stock Market has been very buoyant until now especially in the past 3 years. This particular trend is very favorable because a soaring SENSEX means higher returns, which encourages the investors to invest their money in the market. Although in the past 3 months the market has shown very unpredictable trend and has already lost over 1000 points.

So in order to make the best the only thing required is to recruit more field staff who should be trained in a proper way to get better results. In case of insurance, it requires push selling because people always associate it with emergencies and unpleasant situations like death and they dont want to think about such situation let alone prepare for them, which means it requires a lot of conviction on part of the executives:

CHAPTER 11 QUESTIONNAIRE
QUESTIONNAIRE

CUSTOMER SATISFACTION TOWARDS ONLINE TRADING

1) Name

()

2) Address:

() ()

3) Contact number:

() () ()

4) Educational qualification i) school level ii) under graduate iii) post graduate iv) others () () () ()

5) Income i) below 10000 ii)10000-20000per month iii) above 20000 () () ()

6)What induced you to begin online share trading i) reference by friend ii) Online advertisements iii) advice by finanacial consultants () () ()

7) Were you doing share trading before choosing online i) yes ii) no () ()

8) Where do you access the internet i) home ii) stock broker office iii) browsing centre () () ()

9) How often do you do online share trading i) daily basis ii) weekly basis iii) monthly basis iv) irregular () () () ()

10) Are you professional trader i) yes ii) no () ()

11) which site do u use for trading i) destimoney ii) india bulls () ()

iii) sharekhan iv) geojit

() ()

12) Does the site guide you on online trading i) yes ii) no () ()

13) Do you feel that there is more transparency in online share trading i) yes ii) no () ()

14)Is commission charged by trading site reasonable i) yes ii) no () ()

15) is online trading simple i)yes ii) no 16)which software would you prefer for online trading () ()

i)odin ii)nest iii)neat iv)any other 17) For what pupose you are using nest software i)sharing ii)bank loans iii)others 18)If your software provides with the security alert i) yes ii) no 19)If your software provide back office report i) yes ii) no 20)Are the charges offered by the company for the software relevant to you i) yes ii)no

CHAPTER 12 BIBLIOGARPHY AND REFERENCES

BIBLOGRAPHY:

Agarwal, J.D. "Security Analysis & Portfolio Management: A Review, Finance India, Vol. II No. 1, March 1989.

Bhatt, V. V. "An Appraisal of Some Recent Estimates of Savings and Investments", ICRNI, Vol. 5, 1963.

Douglas A. Hayes and W. Scott Bauman "Investments: Analysis and Management" III Ed., 1976, MacMillan.

Malhotra, Naresh "Marketing Research and Applied Orientation" IV Ed., 2005, Pearson.

Newspapers: The Times of India The Economic Times

REFERENCES:www.mutualfundsindia.com www.easymf.com www.amfiindia.com www.google.com www.moneycontrol.com www.valueresearchonline.com www.nseindia.com www.bseindia.com www.destimoney.com/