ONLINE TRADINGServices of HDFC Securities

LimitedBy

Chitta Rama Krishna

Objective

• The main objective of the project is to understand online trading of Shares and the services provided by the custodian HDFC Securities Limited.

Guides of this project

• Mentor : Director and Principal Madam Preethi Chrysolite

• Support : Head of the department for Management

Madam SuhasiniWe are very much thankful to them for their

guidance and support for this project.

Abstract• In this project we discussed about the share market, Online trading and the services provided by the custodian HDFC

Securities Limited.

• We discussed in brief about the required terminology in the share market.

• We discussed about the influences on share prices movement.

• We briefed about the technical analysis of share market.

• We discussed about the Advantages and disadvantages of the online trading.

• We focused on the major custodians in India, International Stock exchange indices, sectoral indices, sources of information.

• We discussed about the Do’s and don’ts given by Securities Exchange Board of India (SEBI)

• Site map of HDFC Securities Limited

• Briefed the procedure of trading of shares online through HDFC Securities Limited.

• Displayed the portfolio of the presenter.

• As this is not a research project, hence, project design not mentioned., and there is no sampling technique used.

• It is an knowledge gaining project on online trading.

Abstract

• This project describes,

• Share market, Online trading, services by HDFC Securities Limited

• Basic terminology• Do’s & Do not’s given by SEBI• Stock Exchanges, Different indexes, different

sectors, etc.• Factors influencing share price movement

ONLINE TRADING

• Online trading means trading of shares on Internet.

• The Internet is a global system of interconnected computer networks that use the standard Internet Protocol Suit (TCP/IP) to serve billions of users worldwide. It is a network of networks that consists of millions of private, public, academic, business, and government networks, of local to global scope, that are linked by a broad array of electronic,

Advantages of Online Trading• Speedy execution: It allows very fast execution, measured in terms of milli seconds.• Cost reduction: Transaction costs are lower for trade executed with a direct access brokerage. • Paperless Transaction: your share certificates get deposited in electronic form (DMAT) in your web

trade account. • Orders can be also placed offline during non-market hours. • There is no limit to information available online in sites • For NRIs this is the easiest option to invest in Indian markets. • Record of all transactions are available at your fingertips. • The overwhelming advantage of online share trading is convenience. • While normally, you deal with a broker and own paper shares, with online trading everything is very

simple, fast, and efficient and effective.• Real time stock trading without calling or visiting broker's office. • Display real time market watch, historical data, graphs etc • Investment in IPO's, Mutual Funds and Bonds. • Check the trading history; demat account balance and bank account balance at any time. • Provide online tools like market watch, graphs and recommendations to do analysis of stocks. • Place offline orders for buying or selling stocks. • Set alert to inform you certain activity on the stock through email or sms. • Customer service through Email or Chat. • Secure transactions.

Disadvantages of Online Trading

• 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 about computer and internet.

• The fees involved in trading vary considerably with broker, market, ECN and type of trading account and software.

Some online brokers may also charge inactivity fees on traders.

• Traders need to have internet and computer in their home, because threat of information theft exists if he access at internet cafes

• Volume Requirement: Some firms charge inactivity fees if a minimum monthly trading volume has not been met.

• Knowledge: New and inexperienced traders may find it difficult to become familiar with direct access trading. Knowledge is required when dealing with something like making trade decisions & order routing

Share Market

Stock Exchange

Broker

Trader

Custodians

Bank Account

SEBIcontrol

Stock Exchange

• 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 small exchanges like Jaipur Stock Exchange etc. visit www.chittorgarh.com to see the list of Stock Exchanges in India

• Investor can trade stocks in any of the stock exchange in India

BSE Vs NSEBSE NSE

•Index•Started at•Base year•No. of Companies

No. Index movers

•Location•Calculation method

•Base value

•Sensex•1986•1978 – 79•5034

•30

•Mumbai•Free float market capital

•100

•NIFTY•1992•1995•1552

•50

•New Delhi•Free Float Market capital

•100

Indices in BSE , NSE

BSE NSE•SENSEX•BSE 100 BSE 200 BSE 500 •BSE Mid Cap Index BSE Small Cap Index

Sectoral Indices

BSE Auto BSE Bankex BSE Capital Goods Consumer Durables FMCG Health Care IT Metal Oil & Gas Power PSU Realty TEC k

Dollar Linked Indices •Dollex 30•Dollex 100•Dollex 200

S&P CNX NIFTY

CNX NIFTY JUNIOR

CNX 100

S&P CNX 500

CNX MIDCAP

NIFTY MID CAP 50

S&P CNX DEFTY

CNX IT

BANK NIFTY

CNX INFRA

CNX REALTY

International Market Indices

• USA - NASDAQ, S & P 500, Dowjones Ind.Avg

• Singapore - Straight Times• Hong Kong - Hangseng• Japan - Nikkei 225• Germany - DAX• United Kingdom - FTSE 100• China - SSE 180 Composite Index

(Shanghai)

Stock Trading• Stock Trading• Traditionally stock trading is done through stock brokers, personally or through

telephones. As number of people trading in stock market increase 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.

• 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 in India trades in BSE and NSE.

• Types of Stock trading online• 1. Installable software based Stock Trading Terminals• 2. Web (Internet) based trading application

Custodian

• What Does Custodian Mean?A financial institution that has the legal responsibility for a customer's securities. This implies management as well as safekeeping.

• There are 345 custodians existing in India.

Some major Custodians in India

• HDFC Securities Ltd.

• Share Khan Limited

• SBI Cap Securities Limited

• ICICI Securities Limited

• Karvy Stock Broking Ltd.

• TATA Securities Ltd.

Broker

• What Does Broker Mean?1. An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.

2. The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.

3. A licensed real estate professional who typically represents the seller of a property. A broker's duties may include: determining market values, advertising properties for sale, showing properties to prospective buyers, and advising clients with regard to offers and related matters.

Bear and Bulls A bear market is a general decline in the stock market over a period of time.It is a transition from high investor optimism to widespread investor fear and pessimism.

A bull market is associated with increasing investor confidence, and increased investing in anticipation of future price increases (capital gains). A bullish trend in the stock market often begins before the general economy shows clear signs of recovery

Influences on share prices• Company profile and Performance History• Trend in the share price for certain period• Natural calamities, national and international• Political issues• Government policies, subsidies, sops, ex-im policies• EPS, PE Ratio, Profit%, Quarterly, half yearly, yearly results• Budget allocations to the particular sector• Effect of international policies• Foreign Investments• Bulk Deals• Supply & Demand – More sales low price, More purchases high price • Seasonal agriculture yield• Seasonal demand of goods• Market sentiments• Speculation by Bulls and Bears.

Sectoral Indices

• Automobile• IT• Bankex• Consumer durables• FMCG• Oil & Gas• PSU• Reality• Health Care• Metal • Telecommunication• Power• Consumer Goods

Sources of Information

• News Papers - Economic Times Finance columns of

Eenadu and other news papers.

• Internet websites - Rediff money, Google finance,

Economic Times, Bazaar Trend, and websites of

custodians.• Television - ET Now,

ND TV Profit, HM TV, etc.

Technical Analysis

Dependent on Intuition and Interpretation

Analysis of Data

Analysts interpret price charts depending on the pattern of movement - head-and-shoulders patterns, double-bottoms, flags and pennants etc. These patterns are used by

analysts to predict share price movements.

Analysts rely on complex calculations of numbers, to crunch raw price and volume data. After this analysis process, the secondary indicators, i.e., oscillators, moving averages, bands, etc, are calculated and used to spot buying or selling opportunities. Analysts use software, scientific methods, complex equations and complex mathematical formulas to derive indicators.

Bollinger Bands

Exponential Moving Averages

Envelopes (5%)

Parabolic SAR

Simple Moving Averages

Do’s & Dont’s by SEBI

Do’s Don’tsHere are the DOs

Deal only with SEBI-registered brokers/sub-brokers.

Ensure that the broker/sub-broker has a valid SEBI registration certificate.

Ensure that the broker/sub-broker is permitted to transact in the market.

State clearly to the broker/sub-broker who will be placing orders on your behalf

Insist on client registration form to be signed by the broker/sub-broker before commencing operations.

Enter into an agreement with your broker/sub-broker setting out the terms and conditions clearly.

Insist on contract note/ confirmation memo for trades done each day

Insist on bill for every settlement.

Ensure that broker’s name, trade time and number, transaction price and brokerage are shown distinctly on the contract note.

Insist on periodical statement of accounts.

Issue cheques/drafts in trade name of the broker only.

Ensure receipt of payment/ deliveries within 48 hours of payout

In case of disputes, file written complaint to the broker/sub-broker, to the stock exchange of which he is a member and to SEBI within a reasonable time.

In case of sub-broker disputes, inform the main broker about the dispute within a maximum of 6 months.

Familiarise yourself with the rules, regulations and circulars issued by the stock exchanges/SEBI before carrying out any transactions.

Watch out for the DON’Ts

Don’t deal with unregistered broker/sub-broker

Don’t pay more than the approved brokerage to the intermediary.

Don’t undertake deals on behalf of others.

Don’t neglect to set out in writing orders for higher value given earlier over the phone.

Don’t sign blank delivery instruction slip(s) while meeting security pay-in obligation

Don’t accept unsigned/duplicate contract note/confirmation memo

Don’t accept contract note/confirmation memo signed by any unauthorised person.

Don’t delay payment/deliveries of securities to the broker/ sub-broker.

Don’t get carried away by luring advertisements

Don’t be led by market rumours or get into shady transactions

All the best in your Stock market Trading endevour

SEBI has  laid down certain Guidelines for Dealing with Brokers & Sub-brokers

HDFC Securities Limited• HDFC securities Ltd, a trusted financial services intermediary is a subsidiary of India's respected

private sector Bank - HDFC Bank.

A leading stock broking company having completed 10 years in operation, serves a diverse customer base of retail and institutional investors.

•Discerning investors experience a robust platform to trade in Equities, derivatives, currency futures and mutual funds through both NSE & BSE and other investment options like IPO's, bonds, corporate fixed deposits,insurance etc.

•Investors are also provided with niche - Equity Investment advise and execution platform with superior technology aid and unbiased research across sectors, economy and scrips.

Our webportal is designed to meet the requirements of everyone from a beginner to a savvy and well-informed trader with highest service standards,convenience and hassle-free trading tools.

The Webportal aims to provide a one stop window for all financial needs with seamlessness and customer centric services

•

HDFC Securities Limited• WEBPORTAL

Based on Web 2.0 technology.

SPEEDState-of-the art technology enabling seamless trading experience on both the exchanges BSE and NSE.

• Clients could adopt to trade with us either online, or on the phone, or relationship managers from the convenience of their home or office.

• The 4-in-1 Advantage account  enables clients to seamlessly move funds and securities across your bank, demat and trading account.

• Clients get to enjoy limits across exchanges to trade • No need to issue cheques or delivery instructions. • Place IPO / NCD applications via few clicks using the trading account or by the phone.

No standing in queues or filling application forms. • ASBA application facility. • Customer care centre to address all queries and grievances.

HDFC Securities Limited• REACH

HDFC securities has a strong unified call centre catering to clients across India and overseas aiding clients who wish to have their orders placed by a tele-agent. 7 Regional language call centre facility is available for clients. Over 128 exclusive branches across India also service clients locally by dedicated relationship managers.

TRANSPARENCYWith our trusted pedigree, a client can be assured of best services in a transparent manner and is in total control of their funds and stocks.

EXPERTISEWith a decade of experience and a rating of A1+1, HDFC securities has a admired lineage of providing financial services to customers in a transparent and trusted manner. We have a dedicated, motivated and experienced team of professionals to provide you top class service.

TIMELY AND RELEVANT INFORMATIONWe realize the importance of making information available to clients as it happens. Empowered with the latest news, developments and unbiased research, enables a client to take informed decisions.

YOUR INTERESTFor HDFC securities, client's interest comes first. We endeavor to provide high quality investment services, in a simple, direct and cost-effective manner to help you achieve your financial goals.

HDFC Securities Limited• OUR OFFERINGS' ONE STOP SHOP, FOR ALL YOUR INVESTMENT NEEDS

• Equity and Derivatives • IPO • Mutual Fund • Fixed Deposits • Non Convertible Debentures • General Insurance • Life Insurance • Bonds • Currency Derivatives • PMS•

REGISTERED OFFICE / CORPORATE OFFICE

HDFC Securities LimitedOffice Floor 8, "I THINK" Bldg,Jolly Board Campus,Kanjurmarg (East),Mumbai - 400042. India.Tel : 022 - 30753400Fax : 022 -30753435

HDFC Securities Limited

• Resident Account Opening

• To Open An Account :-

Step 1: Fill the online application form, or you may call us on our toll-free number at 1800-209-9700 or on 91-22-61411700

Step 2: Keep the minimum essential documents ready and our representative will contact you and come over to collect these, and complete the application formalities.

• Step 3: Within two weeks of submitting the form you shall receive your online trading login and password and can start trading online right away.

Trading online procedure

Login

Buy transactions Sell transactions

System checks buying limitsSystem checks DP Account Quantity

Orders Accepted Orders acceptedRejected orders will be

communicated along with reasons

Order is transmitted to exchange for execution

Execution is displayed on the screen immediately

Confirmation could be sent to traders e-mail and mobile

Contract note would sent to trader by mail or hand delivery.

Amount will be deducted/deposited in the

traders bank account

Buy & Sell Place your equities or derivative orders.

Order Book View the list and current statuses of the orders you have placed during the day but which have not been traded in the exchange as yet.

Trade Book View the list of orders that have been traded during the day.

Quotes Retrieve the latest quotes and other vital trading information for the stock of your choice.

Funds Hold/Release

Place and release fund holds from your Bank accounts to cover the cash or margin trades you make.

A funds hold is a block made in your HDFC Bank account exclusively for trading purposes. Once a funds hold is created, the hold amount cannot be used for purposes other than trading.

Securities Hold/Release

Place and release holds from your HDFC Bank demat accounts when you need to sell shares.

A securities hold is a block made in your HDFC demat account exclusively for trading purposes. Once a securities hold is created, the quantity on hold cannot be used for purposes other than trading.

Option Calculator Use this calculator to determine the theoretical premium for option contracts.

Cost of Carry Calculator

For futures contracts, use this tool to calculate the storage cost and the interest paid to finance the underlying asset.

Password Update your login password from here.

The information of services available to the online trader.

References

• www.nseindia.com• www.bseindia.com• www.rediff.com/money• www.hdfcsec.com• www.investopedia.com• A book on Fundamentals of Investments by

Gordon. Alexander, William F.Sharpe & Jeffery V. Bailey

Conclusion

• Online trading is a great experience by the trader to buy and sell shares online. But, trader must be aware of internet usage, beware of phishing, hacking, maintain secrecy of passwords, have their own set up of computer with internet communications.

• Trader holding a PAN Card is mandatory for trading.• HDFC Securities online trading is continuously improving their

services and modifying their website to become more user friendly to the trader.

• This website gives us a clear picture of trend in share price movements of each and every scrip to enable us to make a correct decision.

• Online trading facilitates the trader to have a convenient trading, fast, reliable, and informative experience.

• Online trading is environmental friendly, because, there is no paper work involved in the 90% of online trading.

Thank you