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TABLE OF CONTENT
2. SR.NO. TOPIC
1 INDUSTRY OVERVIEW
 INDUSTRY ANALYSIS
2 COMPANY OVERVIEW
 GENERAL INFORMATION
 PRODUCTS & SERVICES
 ABOUT EQUITY MARKET
 ABOUT DERIVATIVES
 ABOUT MUTUAL FUND
3 RESEARCH METHODOLOGY
 RELEVANCE TO THE STUDY
 RESEARCH PROBLEM
 DATA COLLECTION
 FINDINGS & SUGGESTIONS
3. INDUSTRY OVERVIEW
 HISTORY OF THE STOCK BROKING INDUSTRY
 INTRODUCTION TO STOCK BROKING BUSINESS
 MAJOR PLAYERS IN THE INDUSTRY
 INDUSTRY ANALYSIS
4.  HISTORY OF THE STOCK BROKING INDUSTRY
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200
years ago. The earliest records of security dealings in India are meager and obscure.
By 1830’s business on corporate stocks and shares in Bank and Cotton presses took place
in Bombay. Though the trading list was broader in 1839, there were only half a dozen
brokers recognized by banks and merchants during 1840 and 1850. The 1850”s witnessed
a rapid development of commercial enterprise and brokerage business attracted many
men into the field and by 1860 the number of brokers increased into 60.
In 1860-61 the American Civil War broke out and cotton supply from United States of
Europe was stopped; thus, the “Share Mania” in India begun. The number of brokers
increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a
disastrous slump began (for example, Bank of Bombay share which had touched Rs.
2850 could only be sold at Rs. 87). At the end of the American Civil War, the brokers
who thrived out of Civil War in 1874, found a place in a street (now appropriately called
as Dalal Street) where they would conveniently assemble and transact business.
In 1887, they formally established in Bombay, the “Native Share and Stock Brokers’
Association” (which is alternatively known as “The Stock Exchange”). In 1895, the Stock
Exchange acquired a premise in the same street and it was inaugurated in 1899. Thus the
Stock Exchange at Bombay was consolidated.
Thus in the same way, gradually with the passage of time number of exchanges were
increased and at currently it reached to the figure of 24 stock exchanges.
 INTRODUCTION TO STOCK BROKING BUSINESS
5. Stock exchanges to some extent play an important role as indicators, reflecting the
performance of the country’s economic state of health. Stock market is a place where
securities are bought and sold. It is exposed to a high degree of volatility; prices fluctuate
within minutes and are determined by the demand and supply of stocks at a given time.
Stock brokers are the ones who buy and sell securities on behalf of individuals and
institutions for some commission.
The Securities and Exchange Board of India (SEBI) is the authorized body, which
regulates the operations of stock exchanges, banks and other financial institutions. The
past performances in the capital markets especially the securities scam by Harshad Mehta
has led to tightening of the operations by SEBI. In addition the international trading and
investment exposure has made it imperative to better operational efficiency. With the
view to improve, discipline and bring greater transparency in this sector, constant efforts
are being made and to a certain extent improvements have been made.
A broker is an intermediary who arranges to buy and sell securities on behalf of the
clients (the buyer and the seller).
According to Rule 2 of SEBI Rules 1992, a stockbroker means a member of a recognized
stock exchange or stock exchanges of which he or she is admitted as a member.
Stock market transactions are carried out on computerized systems and deals are recorded
for inspection at any time.
• Stock brokers independently may deal with the following:
o Operations for private clients and institutional clients.
o Some brokers act only as dealers (client investment managers) while
others are principally advisors (equity sales advisors).
o Some brokers provide services for portfolio management and
constantly review investments in the light of trends and developments
in the market.
o Financial services brokers specialize in bond issues, handling
institutional accounts or mutual funds.
• In large firms, stock brokers work in the following areas:
o Deal with, and advise, smaller firms
6. o Securities brokers work on behalf of firms with private clients to
understand the investment plans and objectives of the client i.e.
expectation for returns and interest in risk taking. They are
representatives of brokerage firms and execute orsers to buy and sell
securities. They are equipped with both knowledge and experience to
give advice on the sale and purchase of scrips and management of
o Advise for investments.
o Carry out market transactions.
o The financial services in firms’ concerns pre-sales, sales and after
sales services. These firms have departments to manage the sales and
trading for the owners of securities, investment banking for firms and
the government for the issue of securities and capital markets which
form an essential arm for trading activities.
 As Securities Analysts – Brokers may be required to advise on floatation of
shares in conjunction with the merchant banks. They are expected to have
knowledge of the market to be able to anticipate certain trends and make
 As Investment Analysts – The Investment Analyst provides accurate information
to investors and fund managers. There are two major roles as an analyst.
o Institutional Analyst – The process of analysis involves making
predictions of the company’s future based on its past and present
o Stock Broking Analyst – Investment Analysts work with firms which
provide advice on buying and selling of shares and also with those
firms which have funds to be managed. Fund managers in merchant
banks, insurance and pension funds are involved with huge
investments made by millions of investors. The funds are eventually
disbursed as insurance claims, pensions etc. They are specialized
financial advisors who provide advise on the how and where of details
concerning investment. Investment Analysts study the company’s
annual report; visit the organization, interview senior executives to
assess statistical information, profits and import and export figures for
the industry as a whole. Institutional analysis involves studying the
2. Transaction cycle
7. A person holding assets (Securities/Funds), either to meet his liquidity needs or to
reshuffle his holdings in response to changes in his perception about risk and return of the
assets, decides to buy or sell the securities. He selects a broker and instructs him to place
buy/sell order on an exchange. The order is converted to a trade as soon as it finds a
matching sell/buy order. At the end of the trade cycle, the trades are netted to determine
the obligations of the trading members’ securities/funds as per settlement cycle.
Buyer/seller delivers funds/securities and receives securities/funds and acquires
ownership of the securities. A security transaction cycle is presented above.
8.  MAJOR PLAYERS IN THE INDUSTRY
1. ANGEL BROKING LIMITED
2. S S KANTILAL ISHWARLAL SECURITIES PVT LTD.
3. ICICI WEB TRADE LTD. (www.icicidirect.com)
4. 5 PAISA.COM (www.5paisa.com)
5. KOTAK SECURITIES LTD. (www.kotakstreet.com)
6. INDIABULLS (www.indiabulls.com)
7. MOTILAL OSWAL SECURITIES LTD.
8. HDFC SECURITIES LTD. (www.hdfcsec.com)
9. UTI SECURITIES LTD.
10. IDBI CAPITAL MARKET SERIVICES LTD.
11. REFCO SIFY SECURITIES PVT LTD.
A/c Opening Fee Brokerage Interface
460 0.40 0.08 HDFC, ICICI,UTI
ICICI Direct 750 NIL 0.75 0.18 ICICI Bank
India bulls 750 250 0.40 0.10 N.A.
5 paisa 800 NIL 0.20 0.05
OBC, UTI &
Kotak Street 500 N.A. 0.59 0.06
Kotak Bank &
HDFC Securities 700 NIL 0.50 0.15
HDFC & Other 4
INDUSTRY ANALYSIS USING PORTER’S FIVE FORCES
10. 1. SUPPLIERS
UTI Securities Ltd.
Refco Group Ltd.
IDBI Capital Mkt. Services Ltd.
UTI Securities Ltd.
Refco Group Ltd.
IDBI Capital Mkt. Services Ltd.
ICICI Web Trade Ltd
Kotak Securities Ltd
Motilal Oswal Securities Ltd
HDFC Securities Ltd
Marwadi Finance Ltd
ICICI Web Trade Ltd
Kotak Securities Ltd
Motilal Oswal Securities Ltd
HDFC Securities Ltd
Marwadi Finance Ltd
11.  NSDL & CSDL are the regulatory bodies for Depository Participants like SSKI,
SHCIL, ICICIdirect.com, etc. Also these regulatory bodies have got an upper
hand as the bargaining power stock broking houses like SSKI, etc. would be less.
 NSE & BSE are playgrounds where common an investor trade through stock
broking houses, for which they have to take permission from NSE/BSE.
 NSE & BSE are under the purview of SEBI, that’s why stock broking houses like
SSKI, have low bargaining power. But here there is one advantage that NSE/BSE
have i.e. they cannot go for forward integration.
 MCX & NCDEX are stock exchanges which trade in commodities and
derivatives. Here again stock broking houses have to follow rules and regulation
of the same.
 Web maintainers are companies which maintain web sites & technical aspects of
the same. Here stock broking houses like SSKI can have more bargaining power
due to Tuff competition among web maintaining companies.
 Web maintainers are companies who make and maintain software’s for stock
broking houses. If say for example stock broking houses switches over to other
web maintainers then that company cannot understand the mechanisms of
software’s. So it is quite high switching cost.
12.  There are various types of investors who trade through stock broking houses like
SSKI, which includes investors like small investors, medium net worth investors,
business partners, institutional investors and mutual fund companies.
 Here the bargaining power of stock broking houses depends on how big the
 So here we can say that bargaining power of stock broking houses is high in case
of small investors & HUF.
 While the bargaining power is moderate in case of HNI (High New Worth
Investors)/ MNI’s (Medium Net Worth Investors) and business partners.
 But the in case of mutual fund companies and institutional investors bargaining
power is less.
 There is competitive buzz in stock broking industry; competitors are offering low
brokerage and best services with added feature. So switching cost is pretty much
less. So the buyer can easily switch over to competitors product.
3. ENTRY BARRIERS
 HUGE CAPITAL: - Capital is necessary not only for fixed facilities but
also for customer’s credit and absorbing start up losses. To start a stock
broking house, one needs huge capital for technology up gradation and skilled
13.  TECHNOLOGY:- Technology for stock broking houses is life saving
device. Stock broking requires huge capital to make their products user
friendly, which in turn requires capital to employ skilled manpower. Thus,
technology could be one of the entry barriers.
 Regulatory Constraints: -
Obtaining a license is a tedious job for a stock broking house. It should
comply with the regulation of the governing bodies like SEBI, NSDL, etc. For
a stock broking houses to plunge into the stock broking industry, it needs to
have some kind of financial background and expertise. Thus, regulators
constraints could be an entry barrier.
 Experience curve:-
The core competency in this industry is the services which are provided to the
end-users and the research based activities which includes “TIPS”,
fundamental as well as technical script analysis. Also the most important thing
which helps already established firms is-“TRUST” which people would be
having on firms like SSKI , Angel, Motilal Oswal, etc. this is very difficult for
new companies to imitate.
The “Reach” to the customer is the key factor in the industry. The network of
the companies like Angel, Motilal Oswal, Angel Broking, and ICICI is very
efficient and spreaded all over India. It will take time for a new entrant to
establish such a huge network (e.g. Marwadi), which say that,” Network can
come up as most difficult entry barrier to overcome.”
 Expected Retaliation: -
14. Whenever a new player comes in the industry, the old companies have an
option to reduce the prices of their product. This kind of practice is called
expected Retaliation which is also possible in this industry in terms of less
brokerage rates and reduced account opening charges.
E.g. before the entry of so many mew companies, Angel Broking was having
two types of accounts viz. speed trade speed trade plus, which were costing
1000 & 1500 account opening charges respectively. But due to competition,
they have come up with only one account i.e. speed trade plus with the
account charges of Rs.1000.
 The company is facing the competition from local as well as national level
players. The local players provide facility for off-line trading while the
national players like ICICIdirect.com and Kotakstreet.com, HDFC Security
provide online trading services.
 There are also other big names like Indiabulls, Motilal Oswal, 5paisa and
Marwadi encircles the company form both the sides by providing online and
off-line trading with competitive services.
4. POTENTIAL ENTRANTS
 The potential entrants in like Investmart, Jeojit and Cipher which are coming
in near future to Rajkot City.
15.  Nationalized banks are also thinking to enter in this field by tying up with
broking houses. E.g. Bank Of Baroda.
 Here substitutes are such instruments which can be used instead of investing
 The instruments like Bank FD, insurance, mutual funds are the substitutes.
 If the use of this instruments increase this may be disadvantage for the stock
 The companies and banks which are having these instruments can plunge into
16. BSE (THE STOCK EXCHANGE OF MUMBAI)
The stock exchange, Mumbai, popularly known as “BSE” was established in 1875 as
“The Native Share and Stock Broker’s Association”. It is the oldest one in Asia, even
older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary
non-profit making Association of Persons (AOP) and is currently engaged in the process
of converting itself into demutualized and corporate entity. It has evolved over the years
into its present status as the premier Stock Exchange in the country. It is the first Stock
Exchange in the country to have obtained permanent recognition in 1956 from the Govt.
of India under the Securities Contracts (Regulation) Act, 1956.
The Exchange while providing an efficient and transparent market for trading in
securities, debt and derivatives upholds the interests of the investors and ensures redressal
of their grievances whether against the companies or its own member-brokers. It also
strives to educate and enlighten the investors by conducting investor education program
and making available to them necessary informative inputs.
A Governing Board having 20 directors is the apex body, which decides the policies and
regulates the affairs of the Exchange. The Governing Board consists of 9 elected
directors, who are from the broking community (one third of them retire ever year by
rotation), three SEBI nominees, six public representatives and an Executive Director &
Chief Executive Officer and a Chief Operating Officer.
17. NSE (NATIONAL STOCK EXCHANGE)
NSE was incorporated in 1992 and was given recognition as a stock exchange in April
1993. It started operations in June1994, with trading on the Wholesale Debt Market
Segment. Subsequently it launched the Capital Market Segment in November 1994 as a
trading platform for equties and the Futures and Options Segment in June 2000 for
various derivative instrument.
NSE has been able to take the stock market to the doorsteps of the investors. The
technology has been harnessed to deliver the services to the investors across the country
at the cheapest possible cost. It provides a nation-wide, screen-based, automated trading
system, with a high deree of transparency and equal access to investors irrespective of
geographical location. The high level of information dissemination through on-line
system has helped in integrating retail investors on a nation-wide basis. The standards set
by exchange in terms of market practices, products, technology and service standards
have bocome industry benchmarks and are being replicated by other market participants.
Within a very short span of time, NSE has been able to achieve all the objectives for
which it was set up. It has been playing a leading role as a change agent in transforming
the Indian Capital Market to its present form. The Indian Capital Markets are a far cry
from what they used to be a decade ago in terms of market practices, infrastructure,
technology, risk management, clearing and settlement and investor service.
18. COMPANY OVERVIEW
 GENERAL INFORMATION
 ABOUT THE GROUP,HISTORY
 CORE COMPETENCE
 PRODUCTS OF ANGEL BROKING
 7 P’S OF ANGEL BROKING
 SWOT ANALYSIS
 TRAINNING & EDUCATION
 VALUE ADDED SERVICES
19. GENERAL INFORMATION
NAME : ANGEL BROKING
HEAD OFFICE : G-1 AKRUTI TRADE CENTRE,
ROAD NO. 7,
ANDHERI – 400 093
PH NO : (022) 2835 8800 / 3083 7700
WEB SITE : www.angeltrade.com
CHIEF EXECUTIVE OFFICER : Mr. DINESH THAKKAR
BRANCH OFFICES : 21 BRANCHES
20. ABOUT THE GROUP
Angel group is engaged in various activities such as trading/advisory services in Indian
capital market viz., equity, futures and options etc. and also in Indian commodities
markets viz., commodities futures.
The Angel Group has emerged as one of the top 5 retail stock broking houses in India,
having memberships on BSE, NSE and the two leading commodity exchanges in the
country i.e. NCDEX and MCX. Angel Broking Ltd is also registered as a depository
participant with CDSL. It is the only 100% retail stock broking house offering a gamut of
retail centric services like Research, Investment Advisory, and Wealth Management
Services, E-Broking & Commodities to individual investor.
The group is promoted by Mr. Dinesh Thakkar and professionally managed by a team of
1926 direct employees. It has a nation wide network comprising 12 Regional Centres, 60
branches, 2740 registered sub brokers and business associates and 6370 active trading
terminals which cater to the requirements of 224441 retail clients.
The group is promoted by Mr. Dinesh Thakkar, who started this business as a small
sub-broker in 1987 with a team of 3. Today the Angel group is managed by a team of 60
professionals and 200 support staff and a nation wide network comprising 21 branches,
over 250 sub-brokers, 500 business associates and 600 terminals. The group is currently
services approximately more then 1200 retail clients.
Best Value for Money
To Investors Through
Trading / Investment Strategies,
And Personalized Service.
22. MISSION STATEMENT
The main mission statement of angel broking ltd is to be on top in and around Rajkot and
Saurashtra peninsula with the help of retail, bulk and past business within three years.
For FY 06-07 focus will be on Bulk business from existing sub-brokers of competitors by
giving those competitive pricing, better connectivity and Post trading Back-up software
in post centralized and direct billing era.
23. CORE COMPETENCE
 Top quality research & portfolio advisory services for equities
 Retail focused research products
 Robust internet trading facility
 Commodities research & broking services
 Depository services through CDSL
 Web based 24 x 7 back office software
 Good understanding of the sub-broker and retail customer needs
 Professional work culture with a personal touch
 Cost- effective processes
 State-of-the-art technology
 Streaming quotes & real time charts for bse /nse [cash / derivatives]
 Single connectivity and speedy execution of trades.
 Private v-sat network for remote areas.
 Online technical support & help desk.
24. Business Philosophy
Ethical practices & transparency in all our dealings
Customer interest above our own
Always deliver what we promise
Effective cost management
Quality Assurance Policy
We are committed to being the leader
In providing World Class Product & Services
Which exceed the expectations of our customers
Achieved by teamwork and
A process of continuous improvement
Our CRM Policy
A Customer is the most Important Visitor
On Our Premises
He is not Dependent on us but
We are dependant on him
He is not interruption in our work,
But is the Purpose of it
We are not doing him a favor by serving
He is doing us a favor by giving us an
Opportunity to do so
25. CHANGING TREND
Remember the time when you left orders with your broker in the morning and received a
confirmation fax late in the evening?
You wondered whether you had acquired the shares at the best possible price for the day.
Today, the picture is different. Imagine a scenario where you log on to your account, get the
live quotes of scripts you are interested in, get advise from experts and research reports
on your investment choice and then just click the mouse to place your order, pay the
amount due (which automatically gets debited into your account with the on line
brokerage firm), get your account statement, and the delivery of your shares into your
Demat account. All this through just one click of a mouse. Seems like a dream? But with
online trading this has become a reality. A few seconds later, you get the confirmation on
your screen. And after the trade settlement, your bank and DP accounts will reflect the
The speed of transaction, confidentiality about the prices and ease of settlement in the
paperless mode should be good reasons for retail investors to jump on to the Net. All they
need is a PC, a modem, a subscription to an ISP, an account with a bank (which has a web
presence) and a depository account. And they can choose from a plethora of e-trading web
So, finally the changing trend is known as E-trading which really means Buying and selling
securities via the Internet or other electronic means such as wireless access, touch-tone
telephones, and other new technologies with online trading. In most cases customers access a
brokerage firm's Web Site through their regular Internet Service Provider. Once there,
customers may consult information provided on the Web Site and log into their accounts to
place orders and monitor account activity"
26. Limitations of physical share
Capital market reforms in India have outstripped the process of liberalization in most
other sectors of the economy. However, the creation of an independent capital market
regulator was the initiation of this reform process. After the formation of the Securities
Market regulator, the Securities and Exchange Board of India (SEBI), attention were
drawn towards the inefficiencies of the bourses and the need was felt for better
regulation, discipline and accountability because Before 1996, all the transactions were
done through physical form in security market. Because of physical form investors were
facing so many problems. At that time the certificates were transferred to the purchase
An investor who wants to hold security, he must have to transfer the certificate of
security in company within 3 months. But here the main problem was that the certificates
may be emerged. For even a small amount of investment investors must have to pass
from longer and tedious procedure. Earlier when Demat facility was not introduced the
transfer of stock was done through physical movement of papers so that there was a need
for physical delivery of securities. The system of transfer of ownership was grossly
inefficient, as every transfer involves physical movement of paper security to the issue of
registration and for any minor change in ownership, it was compulsory that it must be
evidenced by an endorsement of the security certificate. The system seems to be time
consuming, there was very less control as well as the procedure was Lengthy.
On the other hand theft, forgery duplication of certificates and other irregularity were the
common problems faced by investors. then NSE and BSE were formed with main
objective to remove all the drawback faced by the public specially for online trading.
UNIQUENESS OF ANGEL
27.  100% retail focus
 BSE / NSE cash, F&O & commodities on a single screen
 flexible margins/ exposure limits
 Personalized services through centralized help desk and 25 branches.
 cost effective technology
ADVANTAGES OF ANGEL TRADE
 convenient and hassle-free trading
 tracking of prices of various stocks & fastest access to news & results
 trading from comforts of your home
 easier transfer of funds & securities through electronic means
 Various value added software available for all the clients.
 Major players are Angel, SSKI, MOST, Karvi, Anagram, India Bull, Kotak in
 Marwadi and Ajay Natwarlal in sub-broker networking segment.
 Market: Retail _SSKI and MOST are considered successful among rest mainly
because of good research, aggressive pricing, Margin Funding and spacious and
well ambient office.
We are in the view that in bulk business major problem faced by sub- brokers of
MSFPL and Ajay are connectivity and IT support, Back office support, Margin funding
and research to reach end clients. Between Marwadi and Ajay there are 200 terminals
operates in Rajkot and 150 kms area these SBs are our major target. Their position is
more vulnerable particularly in direct billing.
 Summarize competition
 Outline your company’s competitive advantage
28. GOALS AND OBJECTIVES
 State specific measurable objectives
 State market share objectives
 State revenue/profitability objectives
 High-level financial plan that defines financial model, pricing assumptions, and
reviews yearly expected sales and profits for the next three years.
 Use several slides to cover this material appropriately
 Technology requirements
 Personnel requirements
 Resource requirements
 Financial, distribution, promotion, etc
 External requirements
 Products/services/technology required to be purchased outside company
RISKS & REWARDS
– Summarize risks of proposed project
 Addressing risk
– Summarize how risks will be addressed
– Estimate expected pay-off, particularly if seeking funding
 Near term
– Isolate key decisions and issues that need immediate or near-term Resolution
 Long term
29. – Isolate issues needing long-term resolution. State consequences of decision
postponement If you are seeking funding, state specifics
PRODUCTS OF THE ANGEL BROKING
Trading in securities / commodities using the internet platform is a convenient option. We
provide you an opportunity to trade on BSE / NSE ( Cash and F & O ), NCDEX and
MCX from the comfort of your home or office.
Our internet trading platform gives you state-of-the-art trading facility, order and trade
confirmation, e- contracts and 24 X 7 on-line web enabled back-office system at the click
of a button.
DIET ANGEL TRADE
30. ANGEL DIET
 Application based ideal for traders
 User friendly & sample navigation
 Robust & speedier execution of trade
 BSE,NSE, F & O, MCX & NCDEX
31. ANGEL TRADE
 Browser based for investors
 No installation required
 Advantages of mobility
 BSE, NSE, F & O, MCX & NCDEX
32. ANGEL ANYWHERE
 Application based ideal for traders using technical tools
 Intra-day / Historical charts with various indicators
 BSE, NSE-Cash & Derivatives
33. 7 P’s of Angel Broking
 Product Variety
Angel Broking offers 3 types of online trading accounts for its
customers specially designed according to their volume in share trading.
Those 3 varieties are:
• Angel Diet
• Angel Trade
• Angel Anywhere
User friendly. Attractive & colorful websites
Angel Broking offers its customers depository services and trade
execution facilities for equities, derivatives and commodities backed with investment
by decades of broking experience.
A/c Opening Fee Brokerage
460 0.40 0.08
34. 3. PRAMOTION
Online share trading is totally a new concept in Indian Market. Generally investor doesn’t
like to come out from conventional way of share trading. Share khan has introduced this
product in. The concept and Product are still new in the market. Therefore the company
has undertaken extensive promotion campaign to create awareness about the product.
Share khan adopts the following tools for promoting the product
Company advertises its product through TV media on channels like CNBC, Print
Media-in leading dailies and outdoors media. Besides attractive and colorful
brochures as well as posters are used giving full details about the product. .Mails
are sent to people logging on to sites.
Also, stalls are opened up now and then at places where prospective customers
can be approached.
 Sales Force
The Company has an aggressive sales force, which is given incentives, based on
their sales. The sales force is given intensive training continuously.
35.  Seminar
The Company also arranges seminar in corporate world for creating awareness
about the product
 Direct Marketing
Company emphasizes more on direct marketing, as many people are still not
aware of this new way of smart trading. For this, the company recruits and trains
sales representatives so as to explain the product and solve customer queries
related to the product. This is the most effective way to communicate the three-in-
one concept which company offers.
Angel Broking uses various channel alternatives to reach to its customers through
• Tele Marketing
• Retail Share Shops
• Franchisee Owners
• Sales Force
Access to the website from any part of the globe.
Angel Broking has the largest chain of retail share shops in India. It covers cities
all over India like Bandra, Thane, Ahmedabad, Amreli, Anand, Baroda, Bhavnagar,
Gandhinagar, Rajkot, etc.
36.  Selection: Employees are selected on the basis of their experience
and qualification as applicable to the job.
 Training: Intensive training is provided to the employees till a week
once they join and even at times required after that.
 Motivation: The employees are motivated through incentives they
 Research Team
Angel Broking has a team of dedicated analysts who have years of working
experience in the industries that they track, and a proven track record in using
their knowledge of the investment science to deliver results. The heart of Angel
Broking is really treated loyally like the kings. The customer care, which
comprises of highly trained executives operating from 9:30 to 8:00 p.m.
6. PHYSICAL EVIDENCE
 Locality of the office:
In Ahmedabad, Rajkot, Bhavnagar, etc.
 Office Environment:
The ambience within the office is what can make the customer feel comfortable in
trading. The cordial and friendly atmosphere at office is like a full time
motivation for the employees.
 Interiors and Infrastructure:
The office is well furnished and has 24* computer terminals on which tick-by-
tick price movements of the securities are displayed.
 In this service organization, the ways in which the customers receive delivery of
the service constitutes the process. Here, the process involves adding ‘value’ or
‘utility’ so that the customers get full satisfaction for the money spent by them.
37.  Here the process begins from the step when customer wants to open e-invest
account and ends when his account is actually activated.
 All Indian residents and NRI are eligible to avail this service.
During this training at Angel Broking, we had come to know the Strengths-Weaknesses-
Opportunities-Threats for the company and it is very useful for a company to analyze
them. Therefore, the SWOT analysis is presented here and the suggestions for
maintaining strengths and removing weaknesses are explained.
 Well-maintained infrastructure.
 Dedicated, Intelligent and Loyal staff.
 On-line trading products.
 Lowest brokerage and other charges w.r.t. Competitors.
 The best investment advice correct up to 70-90 % through dedicated
 Research and reports.
 Wide product range to enable the clients to choose the best alternative.
38.  One of the best DPs in India.
 A positive image in the existing clients.
 Less awareness in the market.
 Time consuming process for account opening, resolving the problems of the
 Service quality is not maintained accordingly how they are promoted.
 Slope of stock market towards delivery based transaction.
 Large potential market for delivery and intra-day transactions.
 Open interest of the people to enter in stock market for investing.
 Attract the customers who are dissatisfied with other broker & DPs.
 An indirect opportunity generated by the market from its bullishness.
 Large untapped market in the Saurashtra region of Gujarat.
 Decreasing rates of brokerage in the market.
 Increasing competition against other brokers & DPs
 Poor marketing activities for making the company known among the customers.
 A threat of loosing clients for any kind of weakness of the company.
39.  Loosing the untapped market with the entry of the competitors.
TRAINING AND EDUCATION
In the commodity trading strategies ,Angel provide strategies how to do trading in
commodity and give guidance how to judge future prices of the commodities same as
stocks, commodities also have various factors affecting prices of the commodity like
monsoon etc so special researcher would be training you about it.
40. Along with guidance, seminars and workshops are held after specific interval. If we talk
about workshops recently workshop of a computerized technical analysis of stocks was
held specially for brokers/sub-brokers/high net worth individual investors/high volume
traders/day traders etc.
Special workshops for intra-day trading are held where guidance is provided to intra day
trader what they have to do in previous day and put into action in the next day because in
the intra day we cannot seat and analysis chart for long period of time so techniques are
41. Same as the other work shops derivative strategies and derivative analysis are provided in
the reports and along with it for more guidance to the client of Angel they held
VALUE ADDED SERVICES
Angel provides various services which increases the value of the firm and provides
customer satisfaction through these services. These services helps customer in trading
and makes the task easy, in this firm will be providing services for this special person are
appointed for specific purpose who would be providing that services only .Thus
personalized concentration is given to all the clients.
Following are the services offered by Angel :
43.  Ebroking provides you on-line trading facilities on BSE / NSE (Cash and F&O),
NCDEX and MCX through our 3 unique extruding software especially designed
for traders as well as investors
 Trading in securities / commodities using the internet platform is a convenient
option. We provide you an opportunity to trade on BSE / NSE (Cash and F&O),
NCDEX and MCX from the comfort of your home or office.
 Our internet trading platform gives you state-of-the-art trading facility, order and
trade confirmation, e-contracts and 24X7 on-line web enabled back-office system
at the click of a button
2. BACK OFFICE
 Internet based back office: 24 hours, 365 days, integrated online back office
through user id and password.
 Current and historical data: data, both present and historical.
 customized reports : digital contracts, bills, positions, ledger, accounts segment
wise- exchange wise
 Queries: client queries and the feedback for the same
3. FUNDAMENTAL RESEARCH
44. THE SUNDAY WEEKLY REPORT
This weekly report is ace of all the reports. It offers a comprehensive market overview
and likely trends in the week ahead. It also presents top picks based on an in-depth
analysis of technical and fundamental factors. It gives short term and long term outlook
on this scrip, their price targets and advice trading strategies. Another unique feature of
this report is that it provides an updated view of about 70 prominent stocks on an ongoing
THE INDUSTRY WATCH
This report provides an in-depth look at specific industries which are likely to outperform
others in the economy. It analyses their strength and weaknesses and ascertains their
future outlook. The final view is arrived at after thorough interaction with industry
45. Angel’s stock research has performed very well over the past few years and angel model
portfolio has consistently outperformed the benchmark indices. The fundamentals of
select scrips are thoroughly analyzed and actionable advice is provided along with
investment rationale for each scrip.
Key developments and significant news announcement that are likely to have an impact
on market / scrips are flashed live on trading terminals. Flash news keeps the market men
updated on an online basis and helps them to reshuffle their holdings
46. At Angel, we provide you a platform and trade in Commodities future with both the
leading Commodity Exchanges i.e. MCX & NCDEX and offer you immense benefits.
5. INVESTMENT ADVISORY
 A premium service for clients who need professional guidance on long term
 Minimum fund / portfolio of Rs. 1 lac and maximum of Rs. 4 lac eligible for
 Appropriate risk profiling before taking investment decisions
 Periodic group meetings and seminars in branches.
 Monthly Newsletter from the desk of “Angel Gold” .
 Browser based back-office software
6.PORTFOLIO ADVISORY SERVICES
47. Angel offers discretionary PMS to investors I order to assist them in manging their funds
amidst continuous changing market dynamics and increasing complexities of investing.
Investing in equity markets requires in-depth knowledge and through analysis coupled
with clear understanding of domestic and international economies. Investors need the
services of an expert to manage their funds and deliver good returns in diverse market
conditions. Continuous wealth creation with an emphasis on capital preservation is
essential I today’s complex markets.
In order to systematically diversify the holdings of clients across varied sectors and with
an intention to give them handsome returns
7. DP Services
48.  No risk of loss, wrong transfer, mutilation or theft of share certificates.
 Hassle free automated pay-in of your sell obligations by your clearing
members, ABL / ACDL (No need for physical instruction at all).
 Reduced paper work.
 Speedier settlement process. Because of faster transfer and registration of
securities in your account, increased liquidity of your securities.
 Instant disbursement of non-cash benefits like bonus and rights into your
 Efficient pledge mechanism.
 Wide branch coverage.
 Personalized / attentive services of trained help desk.
 ‘Zero’ upfront payment.
 No charges for extra transaction statement & holding statement.
 All in one combined Monthly ‘Bill-cum-Transaction-cum-Holding-cum-
8. RESEARCH REPORTS & SERVICES
49.  Daily / weekly reports
50.  Company / sector reports
 Special reports – event based
51.  Intra-day calls / position calls
52. ABOUT THE EQUITY MARKET
PRIMARY EQUITY MARKET
53. There are four ways in which a company may raise equity capital in the primary market.
 PUBLIC ISSUE
 RIGHTS ISSUE
 PRIVATE PLACEMENT
 PREFERENTIAL ALLOTMENT
By far the most important mode of issuing securities, a public issue involves sale of
securities to the public at large. The company making a public issue has to go through a
fairly elaborate process which involves the following:
 Approval by the board
 Appointment of lead managers
 Appointment of other intermediaries like co-managers, advisors, underwriters,
bankers, brokers, and registrars
 Preparation of the prospectus
 Filing of the prospectus with the Registrar of Companies
 Printing and dispatch of prospectus and application form
 Filing of the initial listing application
 Promotion of the issue
 Statutory announcement
 Collection of applications
 Processing of applications
 determination of the liability of underwriters
 Allotments of securities
 Listing of the issue
When public issues get heavily over-subscribed, a large number of investors lose interest
on the subscription money locked with the company, while the issuing company enjoys
54. the benefits of float money. To prevent this, the Securities Exchange Board of India has
come out with the stock invest scheme. This is an additional facility available to
investors, besides the existing instruments like cash, cheques, and drafts, to apply for
public issues. The stock invest scheme works as follows:
 An investors who has a savings account or current account with a bank applies, in
a prescribed form, for issue of a certain number of stock invests of requisite
 The bank issues the stock invests, which are properly dated, and marks a lien in
the account of the investor for the amount of stock invests issued.
 The investors submits the application form for a public issue along with the
requisite stock invests to the collecting banker.
 The collecting banker transmits the application form with stock invests to the
registrar of the issue.
 After the allotment is finalized, the registrar fills up the right side of the stock
invest form indicating the entitlement of the investor.
 The registrar presents the stock invests to the controlling branch of the colleting
bank for the public issue, claiming whatever amounts are relevant according to
 The collecting bank gives credit to the company’s accounts as stock invests are
 After the company’s account is credited, the registrar proceeds with formal
allotment. In case of full and partial allotment, the registrar intimates the
successful applicants through allotment advice. In case of unsuccessful applicants,
the registrar returns the applications form along with cancelled stock invests to the
controlling bank, which in turn advise the issuing bank.
 The issuing bank intimates the applicant about the release of lien on the account
as sequel to non-allotment.
55. BOOK BUILDING
A company can use the process of book building to fine tune its price determination.
When a company employs the book building mechanism, it does not predetermine the
issue price or interest rate and invite subscription to the issue. Instead it starts with an
indicative price band which is determined through a consultative process with its
merchant bankers and asks its merchant bankers to invite bids from prospective investors
at different prices. Those who bid are requires to pay the full amount.
Based on the response received from investors the final price is selected. Investors who
have bid a price equal to or more than the final price selected are given allotment at the
final price selected. Those who have bid for a lower price will get refund.
A right s issue involves selling securities in the primary market by issuing rights to the
existing shareholders. When a company issues additional equity capital it has to be
offered in the first instance to the existing shareholders on pro rata basis. This is required
under section 81 of the Companies act 1956. The shareholders, however, may be a
special resolution forfeit this right, partially or fully, to enable a company to issue
additional capital to the public.
Private placement and preferential allotment involve sale of securities to a limited
number of sophisticated investors such as financial institutions, mutual funds, venture
capital funds, banks, and so on. What there does not seem to be a very clear-cut
distinction between the two in the Indian context we find that broadly (i) Private
Placement refers to sale of equity or equity related instruments of an unlisted company or
sale of debentures of a listed or unlisted company, and (ii) preferential allotment refers to
sale of equity or equity related instruments of a listed company. Private placement in
India is mostly of equity or equity-related instruments of unlisted companies and debt
instruments of listed companies.
56. PREFERENTIAL ALLOTMENT
An issue of equity by a listed company to selected investors at a price which may or may
not be related to the prevailing market price is referred to as preferential allotment in the
Indian capital market. A preferential allotment is not related to a public issue and certain
categories of investors in a public issue. Preferential allotment in India is given mainly to
promoters or friendly investors to ward off the threat of takeover. This is now a very
popular means of raising fresh equity capital because: (1) The cost and uncertainty
associated with the public issue is high (2) Sophisticated investors like mutual funds and
private equity investors are likely to pay a higher price.
The price at which a preferential allotment of share is made should not be lower than the
higher of the average of the weekly high and low of the closing prices of the shares
quoted on the stock exchange during the six months period before the relevant date or
during the two week period before the relevant date.
57. SECONDARY EQUITY MARKET
For buying and selling any security in the market there must be a some medium to make
transaction. This medium is called secondary market. In secondary market one can buy
and sell the security which would listed in stock exchange.
The secondary market which represented an institutional mechanism that was inadequate,
non-transparent, hardly regulated and rarely geared to investor protection till the early
nineties, has also witness notable developments. Among them are the prescriptions of
norms by SEBI for intermediaries like brokers/sub-brokers/dealers in trading/settlement,
broad based governing boards of stock exchanges, capital adequacy norms for the
intermediaries, corporate membership, transparency in trading and settlement practices,
development of cash market, regulation of badla trading, introduction of future/options
trading. The setting up of the Over-The Counter Exchange of India (OTCEI) and the
National Stock Exchange (NSE) represents a landmark in the direction of developing
vibrant, strong, matured, and equitable secondary market as an integral constituent of the
emerging securities market in India. An equally significant development has been the
coming into being of the National Securities Depositories Ltd (NSDL) and the system of
dematerialized trading. The commencement of derivative trading has certainly added to
the sophistication of the market greatly and integrates it with international markets. The
corporatisation and demutualization of the stock exchanges, separating trading,
ownership and management is yet another crucial factor in the same direction.
Each stock exchange has certain listed securities and permitted securities which are
traded on it. Members of the exchange alone are entitled to the trading privileges.
Investors interested in buying or selling securities should place their orders with the
members of the exchange.
There are two ways of organizing the trading activity the open outcry system and the
58. OPEN OUTCRY SYSTEM
As the nomenclature suggests, under the open outcry system, traders shout and resort to
signals on the trading floor of the exchange which consist of several ‘notional’ trading
posts for different securities. A member wishing to buy or sell a certain security reaches
the trading post where the security is traded. Here, he comes in contact with others
interested in transacting in that security. Buyers make their bids and sellers make their
offers and bargains are closed at mutually agreed-upon prices. In stocks where jobbing is
done, the jobber plays an important role. He stands ready to buy or sell on his account.
He quotes his bid (buying) and asks (selling) prices. He provides some stability and
continuity to the market.
In the screen-based system the trading ring is replaced by the computer screen and distant
participants can trade with each other through the computer network. A large number of
participants, geographically separated, can trade simultaneously at high speeds. The
screen-based trading system (a) enhances the information efficiency of the market as
more participants trade at a faster speed. (b) permits the markets participants to get a full
view of the market, which increases their confidence in the market, and (c) establishes
transparent audit trails While computerized trading is more efficient, it decidedly lacks
the vibrancy and vitality of the traditional floor trading. Technology seems to have its
own way of pushing colorful traditions and practices into oblivion.
Till 1994, trading on the stock market in India was based on the open outcry system with
the establishment of the National Stock Exchange in 1994, India entered the era of
screen-based trading. Within a short span of time, screen-based trading has supplanted
the open outcry system on all the stock exchanges in the country, thanks to SEBI’s
initiative in this respect.
59.  Buyers and sellers places their orders on the computer. They can be limit orders
or best market price orders.
 The computer constantly tries to match mutually compatible orders on price and
 The limit order book, i.e the list of unmatched limit orders is displayed on the
screen. Put differently , it is open for inspection to all traders.
Traditionally, trades in India were settled b physical delivery. This means that the
securities had to physically move from the seller to the seller’s broker, from the seller’s
broker to the buyer’s broker and from the buyer’s broker to the buyer. Further, the buyer
had to lodge the securities with the transfer agents of the company and the created bed
To enable the creation of depositories to facilities dematerialized trading in India, the
central government passed the Depositories Act, 1996. The highlights of this Act are as
 Every depository will be required to be registered with the Securities and
Exchanges Board of India.
 Investors will have the choice of continuing with the existing share
certificates or opt for the depository mode.
 Investors opting to join the depository mode are required to register with the
agents for the depositories. These will be custodial agencies like banks,
financial institutions, and large brokerage firms.
 Shares in the depository mode will be fungible. This means that they will
cease to have distinctive numbers.
 Any loss caused to the beneficial owners due to the negligence of the
depository or the participant will be indemnified by the depository.
60. The National Securities Depository Limited (NSDL), India’s first depository, was set up
in 1996, it was followed by the Central Securities Depositories Limited (CSDL), Both the
depositories, the NSDL in particular, have recorded a significant growth in their
SHIFT TO ROLLING SETTLEMENT
Till recently share transactions in India were settled on the basis of a weekly account
period. (On the Bombay Stock Exchange the account period was Monday to Friday and
on the National Stock Exchange the settlement account period was Wednesday to
Tuesday.) This meant that purchase and sales during an account period could be squared
up and at the end of the account period, transactions could be settled on a net basis.
The weekly settlement system along with the badla system of carrying forward
transaction from one account period to the next, according to many informed observers of
the Indian Stock market, led to unbridled speculative activity and periodic market crisis.
So, SEBI decided to introduce rolling settlement in important scripts with effect from 1st
January 2002. Under a rolling system each day constitutes an account period and its
trades are settled after a few days. For example, under the T+5 rolling settlement which
was introduced initially, the trades were settled after 5days. With effect from April 1,
2002, the T+3 settlements system has been introduced
ABOUT THE DERIVATIVES
Keeping in view the experience of even strong and developed economies the world over,
it is no denying the fact that financial market is extremely volatile by nature. Indian
financial market is not an exception to this phenomenon. The attendant risk arising out of
the volatility and complexity of the financial market is an important concern for financial
analysts. As a result, the logical need is for those financial instruments which allow fund
managers to better manage or reduce these risks.
Out of various risks, Credit Risk and Interest Rate risk are the two core risks, which are
commonly acknowledged by various categories of Financial Institutions particularly
banks. Effective management of these core risks is a critical factor in comprehensive risk
management and is essential for the long-term financial health of business organizations,
especially banks.With gradual liberalization of Indian financial system and the growing
integration among markets, the risks associated with operations of banks and All India
Financial Institutions have become increasingly complex, requiring strategic
management. In keeping with spirit of the guidelines on Asset-Liability Management
(ALM) systems and on integrated risk management systems, it is very much required to
design risk management architecture, taking into consideration the size, complexity of
business, risk philosophy, market perception and the level of capital. In addition, fine-
tuning the risk management system to deal with credit and market risk is also the need of
the hour. For enabling the banks and the financial institutions, among others, to manage
their risk effectively, the concept of derivatives comes into picture. The emergence of the
market for derivative products, most notably forwards, futures and options, can be traced back to
the willingness of risk-averse economic agents to guard themselves against uncertainties arising
out of fluctuations in asset prices. By their very nature, the financial markets are marked by a
very high degree of volatility. Through the use of derivative products, it is possible to partially or
fully transfer price risks by locking–in asset prices. As instruments of risk management, these
generally do not influence the fluctuations in the underlying asset prices. However, by locking-in
asset prices, derivative products minimize the impact of fluctuations in asset prices on the
profitability and cash flow situation of risk-averse investors.
A derivative is a financial instrument, which derives its value from some other financial
price. This “other financial price” is called the underlying. The underlying asset can be
equity, FOREX, commodity or any other asset.
A wheat farmer may wish to contract to sell his harvest at a future date to eliminate the
risk of a change in prices by that date. The price for such a contract would obviously
depend upon the current spot price of wheat. Such a transaction could take place on a
wheat forward market. Here, the wheat forward is the “derivative” and wheat on the spot
market is “the underlying”. The terms “derivative contract”, “derivative product”, or
“derivative” are used interchangeably. The most important derivatives are futures and
A very simple example of derivatives is curd, which is derivative of milk. The price of
curd depends upon the price of milk, which in turn depends upon the demand, and supply
See it this way. American depository receipts/ global depository receipts of ICICI,
Satyam and Infosys traded on stock exchanges in the USA and England have their own
values? No. They draw their price from the underlying shares traded in India.
Consider how the value of mutual fund units changes on a day-to-day basis. Don’t mutual
fund units draw their value from the value of the portfolio of securities under the
schemes? Aren’t these examples of derivatives? Yes, these are. And you know what,
these examples prove that derivatives are not so new to us. Nifty options and futures,
Reliance futures and options, Satyam futures and options etc are all examples of
derivatives. Futures and options are the most common and popular form of
The derivatives markets has existed for centuries as a result of the need for both users and
producers of natural resources to hedge against price fluctuations in the underlying
commodities. India has been trading derivatives contracts in silver, gold, spices,
coffee, cotton and oil etc for decades in the gray market. Trading derivatives
contracts in organized market was legal before Morarji Desai’s government banned
forward contracts. Derivatives on stocks were traded in the form of “Teji” and
“Mandi” in unorganized markets. Recently futures contract in various commodities
was allowed to trade on exchanges. In June 2000, NSE and BSE started trading in
futures on Sensex and Nifty. Options trading on Sensex and Nifty commenced in
June 2001. Very soon thereafter trading began on options and futures in 31
prominent stocks in the month of July and November respectively. The market lots
keeps on changing from time to time. The minimum quantity you
can trade in is one market lot.
DERIVATIVES: AN INDIAN CONTEXT:
In Indian context, the intensity of derivatives usage by institutional investors (viz. Banks,
Financial Institution; Mutual Funds, Foreign Institutional Investors, Life and General
Insurers) depend on their ability and willingness to use derivatives for one or more of the
 Risk containment: using derivatives for hedging and risk containment purposes
 Risk Trading/Market Making: Running derivatives trading book for profits and
 Covered Intermediation: On-balance-sheet derivatives intermediation for client
transaction, without retaining any net-risk on the balance sheet (except credit
64. TYPES OF DERIVATIVES
Derivative as a term conjures up visions of complex numeric calculations, speculative
dealings and comes across as an instrument which is the prerogative of a few ‘smart
finance professionals’. In reality it is not so. In fact, a derivative transaction helps cover
risk, which would arise on the trading of securities on which the derivative is based and a
small investor can benefit immensely. “A derivative security can be defined as a
security whose value depends on the values of other underlying variables.” Very
often, the variables underlying the derivative securities are the prices of traded
Derivatives and futures are basically of 3 types:
 Forwards and Futures
OptionsOptions FuturesFutures SwapsSwaps ForwardsForwards
Interest RateInterest Rate CurrencyCurrencyPutPut CallCall
A forward contract is the simplest mode of a derivative transaction. It is an agreement to
buy or sell an asset (of a specified quantity) at a certain future time for a certain price. No
cash is exchanged when the contract is entered into.
Illustration: - Shyam wants to buy a TV, which costs Rs 10,000 but he has no cash to
buy it outright. He can only buy it 3 months hence. He, however, fears that prices of
televisions will rise 3 months from now. So in order to protect himself from the rise in
prices Shyam enters into a contract with the TV dealer that 3 months from now he will
buy the TV for Rs 10,000. What Shyam is doing is that he is locking the current price of
a TV for a forward contract. The forward contract is settled at maturity. The dealer will
deliver the asset to Shyam at the end of three months and Shyam in turn will pay cash
equivalent to the TV price on delivery.
It is an agreement between two parties to buy or sell an asset at a certain time in the
future at a certain price through exchange traded contracts.
A Future represents the right to buy or sell a standard quantity and quality of an asset or
security at a specified date and price. Futures are similar to Forward Contracts, but are
standardized and traded on an exchange, and are valued, or "Marked to Market” daily.
The Marking to Market provides both parties with a daily accounting of their financial
obligations under the terms of the Future. Unlike Forward Contracts, the counterparty to
a Futures contract is the clearing corporation on the appropriate exchange. Futures often
are settled in cash or cash equivalents, rather than requiring physical delivery of the
underlying asset. Parties to a Futures contract may buy or write Options on Futures.
An option is a contract, which gives the buyer the right, but not the obligation to buy or
sell shares of the underlying security at a specific price on or before a specific date.
‘Option’, as the word suggests, is a choice given to the investor to either honor the
contract; or if he chooses not to walk away from the contract. There are two kinds of
options: Call Options and Put Options.
A Call Option is an option to buy a stock at a specific price on or before a certain date.
When you buy a Call option, the price you pay for it, called the option premium, secures
your right to buy that certain stock at a specified price called the strike price. If you
decide not to use the option to buy the stock, and you are not obligated to, your only cost
is the option premium.
Put Options are options to sell a stock at a specific price on or before a certain date. In
this way, Put options are like insurance policies. With a Put Option, you can "insure" a
stock by fixing a selling price. If something happens which causes the stock price to fall,
and thus, "damages" your asset, you can exercise your option and sell it at its "insured"
price level. If the price of your stock goes up, and there is no "damage," then you do not
need to use the insurance, and, once again, your only cost is the premium.
Technically, an option is a contract between two parties. The buyer receives a privilege
for which he pays a premium. The seller accepts an obligation for which he receives a
67. Call options give the taker the right, but not the obligation, to buy the underlying shares
at a predetermined price, on or before a predetermined date.
Illustration: - Raj purchases 1 Satyam Computer (SATCOM) AUG 150 Call --Premium
This contract allows Raj to buy 100 shares of SATCOM at Rs 150 per share at any time
between the current date and the end of next August. For this privilege, Raj pays a fee of
Rs 800 (Rs eight a share for 100 shares).
The buyer of a call has purchased the right to buy and for that he pays a premium.
Now let us see how one can profit from buying an option; Sam purchases a December
call option at Rs 40 for a premium of Rs 15. That is he has purchased the right to buy that
share for Rs 40 in December. If the stock rises above Rs 55 (40+15) he will break even
and he will start making a profit. Suppose the stock does not rise and instead falls he will
choose not to exercise the option and forego the premium of Rs 15 and thus limiting his
loss to Rs 15.
Call Options-Long & Short Positions
When you expect prices to rise, then you take a long position by buying calls. You are
bullish.When you expect prices to fall, then you take a short position by selling calls. You
68. PUT OPTIONS
A Put Option gives the holder of the right to sell a specific number of shares of an
agreed security at a fixed price for a period of time.
Illustration:- Raj is of the view that the a stock is overpriced and will fall in future, but
he does not want to take the risk in the event of price rising so purchases a put option at
Rs 70 on ‘X’. By purchasing the put option Raj has the right to sell the stock at Rs 70 but
he has to pay a fee of Rs 15 (premium).
So he will breakeven only after the stock falls below Rs 55 (70-15) and will start making
profit if the stock falls below Rs 55.
Put Options-Long & Short Positions
When you expect prices to fall, then you take a long position by buying Puts. You
When you expect prices to rise, then you take a short position by selling Puts.
You are bullish.
CALL OPTIONS PUT OPTIONS
If you expect a fall in price(Bearish) Short Long
If you expect a rise in price (Bullish) Long Short
69. IMPORTANT FACTORS IN DERIVATIVES
We have seen how one can take a view on the market with the help of index futures. The
other benefit of trading in index futures is to hedge your portfolio against the risk of
trading. In order to understand how one can protect his portfolio from value erosion let us
take an example.
Illustration: Ram enters into a contract with Shyam that six months from now he will
sell to Shyam 10 dresses for Rs 4000. The cost of manufacturing for Ram is only Rs 1000
and he will make a profit of Rs 3000 if the sale is completed.
Cost (Rs) Selling price Profit
1000 4000 3000
However, Ram fears that Shyam may not honor his contract 6 months from now. So he
inserts a new clause in the contract that if Shyam fails to honor the contract he will have
to pay a penalty of Rs 1000. And if Shyam honors the contract Ram will offer a discount
of Rs 1000 as incentive.
Shyam defaults Shyam honors
1000 (Initial Investment) 3000 (Initial profit)
1000 (penalty from Shyam) (-1000) discount given to Shyam
- (No gain/loss) 2000 (Net gain)
As we see above if Shyam defaults Ram will get a penalty of Rs 1000 but he will recover
his initial investment. If Shyam honors the contract, Ram will still make a profit of Rs
2000. Thus, Ram has hedged his risk against default and protected his initial investment.
The above example explains the concept of hedging.
Speculators are those who do not have any position on which they enter in futures and
options market. They only have a particular view on the market, stock, commodity etc. In
short, speculators put their money at risk in the hope of profiting from an anticipated
price change. They consider various factors such as demand supply, market positions,
open interests, economic fundamentals and other data to take their positions.
Illustration: Ram is a trader but has no time to track and analyze stocks. However, he
fancies his chances in predicting the market trend. So instead of buying different stocks
he buys Sensex Futures.
On May 1, 2001, he buys 100 Sensex futures @ 3600 on expectations that the index will
rise in future. On June 1, 2001, the Sensex rises to 4000 and at that time he sells an equal
number of contracts to close out his position.
Selling Price : 4000*100 = Rs 4,00,000
Less: Purchase Cost: 3600*100 = Rs 3,60,000
Net gain Rs 40,000
Ram has made a profit of Rs 40,000 by taking a call on the future value of the Sensex.
However, if the Sensex had fallen he would have made a loss. Similarly, if would have
been bearish he could have sold Sensex futures and made a profit from a falling profit. In
index futures players can have a long-term view of the market up to atleast 3 months.
An arbitrageur is basically risk averse. He enters into those contracts were he can earn
riskless profits. When markets are imperfect, buying in one market and simultaneously
selling in other market gives risk less profit. Arbitrageurs are always in the look out for
In the futures market one can take advantages of arbitrage opportunities by buying from
lower priced market and selling at the higher priced market. In index futures arbitrage is
possible between the spot market and the futures market.
 Assume that Nifty is at 1200 and 3 month’s Nifty futures is at 1300.
 The futures price of Nifty futures can be worked out by taking the interest cost
of 3 months into account.
 If there is a difference then arbitrage opportunity exists.
Let us take the example of single stock to understand the concept better. If Wipro is
quoted at Rs 1000 per share and the 3 months futures of Wipro is Rs 1070 then one can
purchase ITC at Rs 1000 in spot by borrowing @ 12% annum for 3 months and sell
Wipro futures for 3 months at Rs 1070.
Sale = 1070
Cost= 1000+30 = 1030
Arbitrage profit = 40
These kinds of imperfections continue to exist in the markets but one has to be alert to the
opportunities as they tend to get exhausted very fast.
The margining system is based on the JR Verma Committee recommendations. The
actual margining happens on a daily basis while online position monitoring is done on an
Daily margining is of two types:
1. Initial margins
2. Mark-to-market profit/loss
The computation of initial margin on the futures market is done using the concept of
Value-at-Risk (VaR). The initial margin amount is large enough to cover a one-day loss
that can be encountered on 99% of the days. VaR methodology seeks to measure the
amount of value that a portfolio may stand to lose within a certain horizon time period
(one day for the clearing corporation) due to potential changes in the underlying asset
market price. Initial margin amount computed using VaR is collected up-front.
The daily settlement process called "mark-to-market" provides for collection of losses
that have already occurred (historic losses) whereas initial margin seeks to safeguard
against potential losses on outstanding positions. The mark-to-market settlement is done
73. ABOUT MUTUAL FUNDS
Mutual fund is the ideal investment vehicle for today’s complex and modern financial
scenario. The sources of revenue like fix income instruments, real estate, derivatives etc...
But due to less information available it can not be understood easily.
A mutual fund is the answer to above all the situations. Nowadays a mutual fund is a
strong tool to pull a large amount from the market. There are several schemes to invest
money and get more revenue. With the help of Mutual fund an investor can invest their
money indirectly in share market.
Mutual fund industry was started in India with establishment of UTI (1963), which is
only player in the market of mutual fund up to 1987. During that time mutual fund
market refers the unit link schemes like Master Share and Master Gain.
Mutual fund provides varieties of schemes for different kind of customers to suit their
goals. Mutual fund have open-ended and close-ended schemes, children’s plan,
diversified equity fund, balanced fund, liquid fund, income fund, short term fund, sector
fund, ELSS (equity linked savings schemes) and pension plan.
74. WHY ONE SHOULD INVEST IN MUTUAL FUND?
 PROFESSIONAL INVESTMENT MANAGEMENT
 LOW COST
 CONVENIENCE AND FLEXIBILITY
HOW TO CHOOSE A MUTUAL FUND?
 PAST PERFORMANCE
 KNOW THE FUND MANAGER
 DOES IT SUIT YOUR RISK PROFILE?
 READ THE PROSPECTUS
 HOW THE FUND WILL AFFECT THE DIVERSIFICATION OF YOUR
 WHAT DOES IT COST TO THE INVESTOR?
75. TYPES OF MUTUAL FUND
1. OPEN ENDED SCHEMES
These funds are sold at the NAV based prices, generally calculated on every business
day. These schemes have unlimited capitalization, open-ended schemes do not have a
fixed maturity - i.e. there is no cap on the amount you can buy from the fund and the unit
capital can keep growing. These funds are not generally listed on any exchange.
Open-ended funds are bringing in a revival of the mutual fund industry owing to
increased liquidity, transparency and performance in the new open-ended funds promoted
by the private sector and foreign players. Open-ended funds score over close-ended ones
on several counts. Some of these are listed below:
a) Any time exit option: The issuing company directly takes the responsibility of
providing an entry and an exit. This provides ready liquidity to the investors and avoids
reliance on transfer deeds, signature verifications and bad deliveries.
b) Tax advantage: Though Budget 2000 proposals envisage a tax rate of 20% on dividend
distribution made by the Debt funds, the funds continue to remain attractive investment
vehicles. In equity plans there is no distribution tax.
c) Any time entry option: An open-ended fund allows one to enter the fund at any time
and even to invest at regular intervals (a systematic investment plan).
The open ended funds offered by PruICICI are Liquid Plan, Income Plan, Gilt-Treasury, Gilt-
Investment, Balanced Fund, Growth Fund, Tax Plan , FMCG Fund, Technology Fund, Monthly Income
Plan , Fixed Maturity Plan, Child Care Plan, Power and Short Term Plan
76. 2. CLOSE ENDED SCHEMES
Schemes that have a stipulated maturity period, limited capitalization and the units are
listed on the stock exchange are called close-ended schemes.
These schemes have historically seen a lot of subscription. This popularity is estimated to
be on account of firstly, public sector MFs having floated a lot of close-ended income
schemes with guaranteed returns and secondly easy liquidity on account of listing on the
The closed-ended fund managed by PruICICI is ICICI Premier.
BY INVESTMENT OBJECTIVE
1. GROWTH SCHEMES
These funds seek to provide growth of capital with secondary emphasis on dividend.
They invest in shares with a potential for growth and capital appreciation. Because they
invest in well-established companies where the company itself and the industry in which
it operates are thought to have good long-term growth potential, growth funds provide
low current income. Growth funds generally incur higher risks than income funds in an
effort to secure more pronounced growth.
Growth and income funds seek long-term growth of capital as well as current income.
The investment strategies used to reach these goals vary among funds. Some invest in a
dual portfolio consisting of growth stocks and income stocks, or a combination of growth
stocks, stocks paying high dividends, preferred stocks, convertible securities or fixed-
income securities such as corporate bonds and money market instruments. Others may
invest in growth stocks and earn current income by selling covered call options on their
portfolio stocks. Growth and income funds have low to moderate stability of principal
and moderate potential for current income and growth. They are suitable for investors
who can assume some risk to achieve growth of capital but who also want to maintain a
moderate level of current income.
77. 3.BALANCED SCHEMES
The Balanced fund aims to provide both growth and income. These funds invest in both
shares and fixed income securities in the proportion indicated in their offer documents.
Ideal for investors who are looking for a combination of income and moderate growth.
4.MONEY MARKET SCHEMES
For the cautious investor, these funds provide a very high stability of principal while
seeking a moderate to high current income. They invest in highly liquid, virtually risk-
free, short-term debt securities of agencies of the Indian Government, banks and
corporations and Treasury Bills. Because of their short-term investments, money market
mutual funds are able to keep a virtually constant unit price; only the yield fluctuates.
Therefore, they are an attractive alternative to bank accounts. With yields that are
generally competitive with - and usually higher than -- yields on bank savings account,
they offer several advantages. Money can be withdrawn any time without penalty.
Although not insured, money market funds invest only in highly liquid, short-term, top-
rated money market instruments.
Money market funds are suitable for investors who want high stability of principal and
current income with immediate liquidity.
These funds invest in securities of a specific industry or sector of the economy such as
health care, technology, leisure, utilities or precious metals. The funds enable investors to
diversify holdings among many companies within an industry, a more conservative
approach than investing directly in one particular company.
Sector funds offer the opportunity for sharp capital gains in cases where the fund's
industry is "in favor" but also entail the risk of capital losses when the industry is out of
favor. While sector funds restrict holdings to a particular industry, other specialty funds
such as index funds give investors a broadly diversified portfolio and attempt to mirror
the performance of various market averages.
Index funds generally buy shares in all the companies composing the BSE Sensex or NSE
Nifty or other broad stock market indices. They are not suitable for investors who must
conserve their principal or maximize current income.
78. LIMITATIONS OF ANGEL
Although it is powerful as compared to other firms prevailing in the market it has some
limitations which are seen by us during training period.
 Angel is having DP of CDSL which is slow as compared to NSDL.
 Marketing and Brand Building is not there in Saurashtra.
 Less awareness due to starting phase
 In the A/c opening form, Opening letter is not well prepared. It does’t include all
details like dealing room, telephone no., relationship etc.
 H.R. Department is not there in Rajkot branch
 To compete, Angel should also deal with mutual fund and other products.
79. RESEARCH METHODOLOGY
 RELEVANCE OF THE STUDY
 RESEARCH PROBLEM & OBJECTIVE
 HYPOTHESIS, SCOPE OF THE STUDY
 DATA COLLECTION, SAMPLE DESIGN
 RESEARCH INSTRUMENT
 LIMITATIONS OF THE STUDY
 RESEARCH ANALYSIS
 TESTING OF HYPOTHESIS
 FINDINGS AND SUGGESTIONS
80. RELEVANCE OF THE STUDY
Any country of the world is measured by its economy. The economy indicates whether
the nation is strong or weak, developed or under – developed.
Financial market is one of the factors which affects the economy of any country. Stock
market affects Indian economy directly or indirectly.
In India stock market is fully developed but on the other side derivatives segment and
commodity segment are upcoming.
In the financial market, there are various instruments for investment or saving. The more
investment or saving in these instruments, the more development is possible.
The instrument like F.D., Equity, Debenture, Cash segment, Bond, Mutual Fund,
Derivatives and commodities. There are other bullion market, Real Estate, Precious
Objects, Insurance etc… are available.
There are so many investors in India are not much familiar with their instruments but one
fact is that there is immense scope for these instruments.
Thus to know the awareness about the investment pattern in stock market particular in
Rajkot city this study is undertaken.
As a Angel Broking member this study is undertaken to know the investment pattern in
stock market and also find out the way to attract such investor who like to trade in stock
At last this study helps me to gain the knowledge and the company to attract new
81. RESEARCH PROBLEM
In the Rajkot city, many people invest in stock market but most of the investor trading on
equity while the other segments are remains inaccessible.
Very few people in the Rajkot who are trading in derivatives and commodity while there
is immense opportunities for developing of these segments.
Angel Broking as a stock broking company needs to focus on increasing interest in stock
market investment because if trading on these instruments increase Angel Broking will be
benefited by earning revenue in terms of brokerage.
So that this study is undertaken.
The main objective of the study is to know the investment pattern in stock market and the
potential market among the people of Rajkot City.
Some other secondary objectives are as under:
1. To know the awareness of Investment Pattern of Equity Market.
2. To know the scope for the Investment Pattern of Equity Market.
3. To know the purpose of investing in Equity Market.
4. To know the influencing force behind the decision making while trading in Equity
5. To find out the best pattern to educate about Equity Market.
6. To find out the medium which is the best suitable for trading on Equity Market.
H0: “There is no significant difference of investment pattern in stock
market among the people of Rajkot City.”
H1: “There is significant difference of investment pattern in stock
market among the people of Rajkot City.”
SCOPE OF THE STUDY
The research that is being conducted by us will be useful in the following respect.
 This will help the company, how to make people aware about Equity Market by
imparting best education.
 This will help the company to know the taste of masses and turn it towards Equity
 This will help the company to frame effective Marketing Strategy.
 This will also help to select the right media for advertising to create brand
awareness as well as to give knowledge of the products.
 Mind share of Angel Broking can be known.
 This will also help to select right medium for trading in Equity Market segment.
 This will help the company to reduce the obstacles which come in the way for the
development of Equity Market segment.
83. DATA COLLECTION
When data are collected and compelled from the published nature or any other’s primary
data is called secondary data.
So far as our research is concerned, we have not collected any information from any
sources. So, we have not used secondary data for our research
The data which is collected directly from the respondent to the base of knowledge and
belief of such research are called primary data.
Sample design is definite plan for obtaining a sample from a given population. It refers to
the technique or procedure the researcher would adopt selecting items for the sample.
Sample design may as well as lay down the no. of item to be included in the sample i.e.
the size of sample.Sample design is determined before the data are collected.
It is very true that it’s very difficult to do the research with the whole universe. As we
know that it is not feasible to go for population survey because of the numerous
customers and their scattered location. So for this purpose sample size has to be
determined well in advance and selection of sample also must be scientific so that it
represents the whole universe.So far as our research is concerned, we have taken sample
size of 100 respondents. We have selected Income Earners with savings to invest in
We have collected the data through QUESTIONNAIRE by personal meeting and tale –
calling with people.
84. LIMITATION OF THE STUDY
1. Personal Bias:
People may have personal bias towards particular investment option so they may
not give correct information and due to which conclusion may be derived.
2. Time Limit:
The time duration of the research is short that’s why the information is not
The area was limited to Rajkot city only, so we can not know the degree of the
literacy outside the city.
4. Sample Size:
The last limitation is Sample size, taken by us is of 100 only; due to which we
may not get the proper results.
85. ANALYSIS OF DATA
1. GENDER RATIO :
2. AGE GROUP
BELOW 35 25
ABOVE 65 10
36-50 51-65 ABOVE
87. 4. OCCUPATION
EMPLOYEE WORKING IN PVT.
GOVT. EMPLOYEE 20
WORKING IN PVT.
88. 5. OF THIS INVESTMENT OPTION WHERE DO YOU INVEST
BANK FD 90
MUTUAL FUND 10
REAL ESTATE 35
NO. OF PERSONS
89. 6. IF YOU INVEST IN STOCK MARKET, WHICH WOULD BE
YOUR PREFERENCE FROM BELOW?
90. 7.WHEN YOU MAKE A DECISION TO INVEST IN STOCK
MARKET, WHICH FACTOR WILL YOU GIVE IMPORTANCE?
RISK REDUCTION 25 2
INVESTMENT 30 1
SPECULATION 10 5
ARBITRAGE 20 3
TO INCREASE THE
LEVERAGE 15 4
91. 8.WHICH STOCK EXCHANGE WOULD YOU PREFER TO CARRY
OUT YOUR TRANSACTION?
BSE NSE MCX NCDEX
NO. OF PERSONS
92. 9. DO YOU CONSIDER INVESTMENT IN STOCK MARKET ARE
SAFER THAN OTHER INVESTMENT AVENUES?
93. 10. IF NO, THAN WHICH CONSTRAINTS THAT HOLDING YOU
RISK TAKING ABILITY 40
FUND FACILITY 15
LACK OF KNOWLEDGE 25
LACK OF GUIDANCE 20
94. 11. HOW MUCH TIME WILL YOU BE ABLE TO DEVOTE FOR
LEARNING STOCK MARKET?
1 DAY 5
2 DAYS 10
3 DAYS 20
2 HRS PER DAY OVER 1
CAN'T SAY 40
2 HRS PER DAY
OVER 1 MONTH
95. 12. ACCORDING TO YOU WHICH MEDIUM IS THE MOST
RELIABLE FOR TRADING IN STOCK MARKET?
STOCK BROKING COS. 40
 Most of the people in Rajkot City are investing in fixed return Instruments.
 But there are investors who use Equity as an investment tool.
 Those people who want to invest in Derivatives & Commodities are investing
mainly for reducing risk and they consider them as investment tool.
 People generally want to take trading decisions independently or under the
guidance of Friends or Well Known Stock Broking Houses.
 Literature and Self Experience can be taken as the best method to impart
education about stock market.
 More than 40% of the respondents are interested to invest into the stock market.
TESTING OF HYPOTHESIS
TESTING OF HYPOTHESIS USING Z TEST (TWO TAILED):
1) The Null Hypothesis (H0) “There is no significant difference of
97. investment pattern in stock market among the people of Rajkot City.”
Therefore, H0 : u = 50%
H1: u ≠ 50%
2) Level of Significance : σ
The Level of significance should be set at α = 0.05
3) The Statistical Test :
Z = X – u / σx
Where, Z = No. of standard deviations for the desired level of
X = Mean of the sample
U = Mean of the population or hypothetical mean
σx = Estimate for the standard error or the mean
4) The Decision Rule
1.000 (1-0.025) = 0.975
1.9+ 0.6 = 1.96 & - 1.96 (the result will be between two)
σx = 5 / root of 300 - 1
Z = 55 – 50 / 0.8676
5.) Draw a statistical conclusion
The absolute value of the computerized Z statistic (5.763) is larger
than 1.96, therefore null hypothesis is rejected.
So, Alternate Hypothesis is accepted.
H1: “There is significant difference of investment pattern in stock
market among the people of Rajkot City.”
98. FINDINGS AND SUGGESTIONS
 Angel Broking needs to make its marketing team strong and also it should
increase marketing activities such as promotional campaigns.
 Angel Broking should educate the investors about Derivatives & Commodities by
organizing classes, corporate presentations, taking part in consumer fairs,
 Company should show the benefits of trading on Derivatives & Commodities
 Angel Broking can also use Newspapers and Local New Channels as a medium of
 Angel Broking may also use its helpline number for giving education on stock
 Company may appoint special team for giving education & attracting people
towards trading in stock market.
THE INVESTMENT PATTERN IN THE STOCK MARKET AMONG THE
PEOPLE OF RAJKOT CITY
1. Gender: Male Female
2. Age: Below 30 31-45 46-60 Above 60
3. Education: Undergraduate Graduate Post graduate
4. Occupation: Professional Businessmen
Employees working Govt. Employee
in Pvt. Firms
5. Of this investment options, where do you invest your savings?
Bank FD Postal Scheme Jewellary
Mutual Funds Insurance
Shares/Equity Real Estate
6. If you Invest in stock market which would be your preference from below?
Equity Derivatives (F&O) Commodity
7. Which factor plays crucial role when you make a decision to invest in stock
Risk Reduction Speculative Motive
Leverage Benefit Investment
100. 8. Which Stock exchange would you prefer to carry out your transactions
9. Do you consider investment in stock market are safer than other investment
10. If no than which constraints that are holding you back.
Lack of knowledge Lack of guidance from broker
Lack of fund availability Lack of Risk Taking ability
11. How much time will you be able to devote for learning Stock Market.
1 day 2 days 3 days
2 hrs per day over 1 week Can’t say
12. According to you, which medium is the most reliable for trading in Stock
Market? (Give Rank)
Stock broking cos. (Branded) Brokers