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PRESENTED BY;
RIGZIN ANGMO
RIYA BISWAS
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Traditionally stock trading is done through
stock brokers, personally or through
telephones.
As number of people trading in stock marketincrease enormously in last few years, some
issues like location constrains, busy phone
lines, miss communication etc start growing
in stock broker offices. Information technology (Stock Market
Software) helps stock brokers in solving these
problems with Online Stock Trading.
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Stocks (Shares, equity) are traded in stock
exchange. India has two big stock exchanges
(Bombay Stock Exchange - BSE and National
Stock Exchange - NSE) and few smallexchanges like Jaipur Stock Exchange etc.
Investor can trade stocks in any of the stock
exchange in India.
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The Bombay Stock Exchange, founded in the1870s, is the oldest stock exchange in Asia.With 6,000 companies listed from everyimaginable industry.
Most Foreign Companies have startedinvesting heavily in the Indian stock marketsand with most industries giving healthyreturns on investments, indications are thatthe markets will continue to
perform above expectations.
India boasts of the third highest
investor base in the world,
unthinkable till a few years ago.
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The Bombay Stock Exchange switched to anelectronic trading system in 1995.
It took the exchange only fifty days to make thistransition.
This automated, screen-based trading platformcalled BSE On-line trading (BOLT) currently has acapacity of 8 million orders per day.
The BSE has also introduced the world's firstcentralized exchange-based internet tradingsystem, BSEWEBx.co.in to enable investorsanywhere in the world to trade on the BSEplatform.
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•The National Stock Exchange (NSE) is the
world’s third largest stock exchange in
terms of transaction volumes. The NSE is
based out of Mumbai.
•NSE is the largest stock exchange in India in
terms of daily turnover and number of
trades, for both equities and derivative
trading.
National Stock Exchange (NSE) waspromoted by leading financial institutions,
banks, insurance companies and other
financial intermediaries in India.
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NSE was set up with the objectives of:
Establishing nationwide trading facility for all
types of securities
Ensuring equal access to investors all over thecountry through an appropriate
telecommunication network
Providing fair, efficient & transparent securities
market using electronic trading system
Enabling shorter settlement cycles and book
entry settlements
Meeting International benchmarks and standards
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Electronic trading, sometimes calledetrading, is a method of trading securities (such as stocks, and bonds), foreign currency,
and exchange traded derivatives electronically. It uses information technology to bring together buyers and sellers throughelectronic media to create a virtual market
place.
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Online Stock Market Trading is an internet
based stock trading facility. Investor can
trade shares through a website without any
manual intervention from Stock Broker. In this case these Online Stock Trading
companies are stock broker for the investor .
They are registered with one or more Stock
Exchanges. Mostly Online Trading Websites inIndia trades in BSE and NSE.
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The major financial products and services ofthe Online trading in India are like
equities
mutual funds life insurance
general insurance
loans
share trading commodities trading
portfolio management
financial planning.
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1. To register with an online trading portal and getinto an agreement with the firm to trade indifferent securities.
2. The order processing is done in correct timingsas the servers of the online trading portal areconnected to the stock exchanges.
3. They can also get updates on the trading andcheck the current status of their orders either
through e-mail or through the interface.
4. Brokerages also provides research content ontheir websites, such that the clients can taketheir own decisions on stocks before investing.
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Reduced cost of transactions
Greater liquidity
Greater competitionTighter spreads
Increased transparency
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Number of years % practicing e-Trading
1-2 years 68
3-4 years 25
5-6 years 7
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METHOD %
Online trading 20
Manual trading 66
Both 14
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a) Benefits to the users
b) Benefits to the brokers
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1. Lower transaction cost
2. Transparency
3. Convenience
4. Procedural benefits
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1. Business potential
2. Easier risk management
3. Lower staff cost
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E- broking in India has become increasinglypopular as people from all walks of the society can
easily be a part of the stock market and look aftertheir investments on their own and with a fewsimple clicks of a button.
Those who are in the corporate fields or run a
business of their own and yet want to earn a fewmore extra bucks gladly turn to E- broking in Indiawhich is fast and gives you all the informationrequired irrespective of where you are in the world.
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Login on to an electronic communication
network through the internet.
Then user access his e trading account with
the help of secure customer password. After that the user can connected directly
with one or more exchanges and any
transaction would be instantenous or
irrevocable.
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Scalabilityof trading
system
E tradingsystem
Integration
with thirdpartysystem
Securitymodel
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There are two different type of trading
environments available for online equity
trading
A. Installable software based Stock TradingTerminals
B. Web (Internet) based trading application
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These trading environment requires software
to be installed on investors computer. These
software are provided by the stock broker. These software's require high speed internet
connection. This kind of trading terminals
are used by high volume intra day equity
traders.
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Orders directly send to stock exchanges
rather then stock broker. This makes order
execution very fast.
It provides almost each and everyinformation which is required to a trader on
a single screen including stock market
charts, live data, alerts, stock market news
etc.
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Location constrain - You cannot trade if you
are not on the computer where you have
installed trading terminal software.
It requires high speed internet connection. These trading terminals are not easily
available for low volume share traders.
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These kind of trading environment doesn't
require any additional software installation.
They are like other internet websites which
investor can access from around the world
through normal internet connection.
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Real time stock trading without calling or visitingbroker's office.
Display real time market watch, historical datas,graphs etc.
Check the trading history; demat accountbalance and bank account balance at any time.
Provide online tools like market watch, graphsand recommendations to do analysis of stocks.
Place offline orders for buying or selling stocks.
Set alert to inform you certain activity on thestock through email or sms.
Customer service through Email or Chat.
Secure transactions.
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Website performance - sometime the website
is too slow or not enough user friendly.
Little long learning curve especially for
people who doesn't know much aboutcomputer and internet.
Brokerages are little high.
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Internet stock-trading in India is a recentphenomenon and began as recently asJanuary 2000.
Although there are more than 40 e-brokers,the industry is still in a nascent stage asonline trades account for merely Rs.700million, which is a negligible percentage of the
total stock trade.The leading e-brokers in the Indian markets
are ICICIDirect, india bulls, motilalOswal, 5PAISA, etc.
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1. ICICIDirect
2. Sharekhan
3. Indiabulls
4. 5PaisaMotilal
5. Oswal Securities6. HDFC SecuritiesReliance
7. IDBIPaisaBuilder
8. Religare
9. Geojit
10. Networth Stock Broking11. Kotak Securities
12. Standard Chartered-STCI Capital Markets Ltd
13. Angel Trade
14. HSBC InvestDirect
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1. Ask for Demo: Contact the broker who
provide online trading service and ask him
to give you a demo of product.
2. Check if the broker trades in multiple stockexchanges. Usually most of the Online
Trading Websites trade in NSE and BSE in
India.
3. Check the integration of Brokerageaccount, Demat account and Bank account.
4. Compare brokerages with other peer
companies.
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1. Proof of residence (Address proof)Driving license Voter's ID
Passport
Photo credit card
Photo ration card Utility Bill (Telephone, Electricity etc)
Bank Statement
2. Proof of identity
Driving license
Voter's ID Passport
Photo ration card
3. PAN Card
4. Two photographs
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The magic trading which is supposedlypossible through the mechanism of E-Tradingis a long way to materialize. It is has notspread its wing on the Indian soils. In fact,
there are lots of practical limitations for the*E-Trading* to gain momentum.
1. Rupee Not Ready In fact the basicrequirements for the working of E-Trading is
the full convertibility of rupee.Unfortunately, the Indian rupees is yet tobecome fully convertible. This is a singlemost crucial handicap facing the globalelectronic trading by companies in India.
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2. In India, although electronic funds
transfer take place, this is done within the
frontiers of the country. Banking System Not
Ready Banking system is not prepared to
facilitate the working of global trading. Since
banks occupy a pivotal role in the mechanism
of international trade.
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3. It is important that they must be
position to facilitate the electronic and
paperless trade at the global level. Laws of
land is Not Ready The existing legislations
governing the e- banking operations require
the recording and presentation of evidence
of payments in physical form. These laws
such as laws of evidence, criminal laws, the
central excise and direct tax laws do not
recognize completely the electronic funds
especially at global level.
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4. Infrastructure Not Ready Although,
Reserve Bank of India is committed in
providing excellence in banking services by
way of adopting e-banking or e-commerce
facilities but adequate step have not yet
been taken to create, maintain and
strengthen the infrastructure like
international communication facilities.
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5. The low density of telephones, low Internetpenetration, and low installed base of computers are responsible for the poor availability of theInternet.
6. Very few online payment gateways are available,hindering the smooth growth of the industry.
7. Fifth, the concept of trading on computers throughthe Internet requires a change in the habits ofpeople; enhancing trust in these techniques may
take more time.
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Barriers %
Lack of Security 21
Lack of Privacy 11
Inadequate E-Payment facilities 10
Lack of Computer literacy 8
Lack of IT infrastructure 14
Lack of IT-skilled personnel 4.5
Lack of appropriate laws relatedto ecommerce
11.5
Preference for face-to-facetransaction
20
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Current Web-based electronic commerce
systems are lacking in efficient electronic
brokerage.
However, brokerage plays an important rolein many electronic commerce transactions.
Over the past few years significant research
has been done in the area of electronic
commerce, based on distributed objecttechnology.