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Online trading india infoline Document Transcript

  • 1. Online TradingCONTENTS CHAPTER – I INTRODUCTION 3 CHAPTER – II COMPANY PROFILE 5 CHAPTER – III METHODOLOGY OF STUDY 12 • Objectives • Need for the Study • Data source • Scope and limitations CHAPTER – IV INDUSTRY PROFILE 17 • Bombay stock exchange • National stock exchange CHAPTER – V 1
  • 2. Online Trading ONLINE TRADING SYSTEM 23 • System for online trading • Trading membership • NSDL • Clearing and settlementCHAPTER – VI CONCLUSION 69 SUGGESTION & RECOMMENDATION 71CHAPTER – VII ANNEXURE 73 BIBLIOGRAPHY 77 2
  • 3. Online Trading INTRODUCTION :- The trading on stock exchanges in India used to take place through open outcrywithout use of information technology for immediate matching or recording of trades.This was time consuming and inefficient. This imposed limits on trading volumesand efficiency. In order to provide efficiency, liquidity and transparency, NSEintroduced a nation-wide on-line fully automated Screen Based Trading System(SBTS) where a member can punch into the computer quantities of securities and theprices at which he likes to transact and the transaction is executed as soon as it finds amatching sale or buy order from a counter party. SBTS electronically matches on astrict price/time priority and hence cuts down on time, cost and risk of error, as wellas on fraud resulting in improved operational efficiency. It allows fasterincorporation of price sensitive information into prevailing prices, thus increasing theinformational efficiency of markets. It enables market participants, irrespective oftheir geographical locations, to trade with one another simultaneously, improving thedepth and liquidity of the market. It provides full anonymity by accepting orders, bigor small, from members without revealing their identity, thus providing equal accessto everybody. It also provides a perfect audit trail, which helps to resolve disputes bylogging in the trade execution process in entirety. This sucked liquidity from otherexchanges and in the very first year of its operation, NSE became the leading stockexchange in the country, impacting the fortunes of other exchanges and forcing themto adopt SBTS also. Today India can boast that almost 100% trading take placethrough electronic order matching. 3
  • 4. Online Trading The trading network in NSE has main computer, which is connectedthrough Very Small Aperture Terminal (VSAT) installed at its office. The maincomputer runs on a fault tolerant STRATUS mainframe computer at the exchange.Brokers have terminals installed at their premises, which are connected throughVSETs/leased lines/modems. An investor informs a broker to place an order on his behalf. The broker entersthe order through his PC, which runs under Windows NT and sends signal to theSatellite via VSAT/leased line/modem. 4
  • 5. Online TradingCOMPANY PROFILE 5
  • 6. Online Trading India Infoline was Launched on 11 May 1999 with SEBI REGN. NO. :INB 231097537 & CODE NO. : 10975, Regd. & Dealing Office : BuildingNo. 24, 1st Floor, Nirlon Limited Compound, Western Express Highway,Goregaon (E), Mumbai - 400 063.www.indiainfoline.com is India’s leadingand most comprehensive business and financial information website. The sitemade available quality information and analysis - earlier restricted to a fewpeople - to the common man absolutely free. The site met with anoverwhelming response and has been reviewed as the most comprehensivefinancial content website in India by BBC World - Money Watch, BusinessWorld, Business Line and others. The company also won the Golden MouseAward in India Internet World 2000 for the Best Finance site. In May 2001,our website was included in the Top 200 Best of the Web list by Forbes Globalunder the Asia Investing category. We were the only website from India to befeatured in any category. Since then it has been nominated twice to this list. Inits last review, Forbes editors have said, "www.indiainfoline.com is a mustread for the investors in South Asia..."Our research is also disseminatedelectronically through Bloomberg, Investext, First Call/Thomson Financial andInternet Securities. On First Call/Thomson Financial, we have been one of thelargest read research houses from Asia, which is a testimony to the quality andtimeliness of our reports. 6
  • 7. Online Trading The offerings on the site include a combination of information and transaction services. Transaction services include mutual funds, personal loans and online broking through www.5paisa.com. India Infoline was the first company to offer many of these services in the country. In online broking, we have emerged as a leading player offering online trading facilities with significant market share. As on date, the Group employs 4000 plus employees, most of them are placed at its various branches across India. About INDIA INFOLINEIt is a one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technologyVisionIts vision is to be the most respected company in the financial services spaceIndia Infoline Ltd. India Infoline Ltd is listed on both the leading stockexchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the NationalStock Exchange (NSE). The India Infoline group, comprising the holdingcompany, India Infoline Ltd and its subsidiaries, straddles the entire financialservices space with offerings ranging from Equity research, Equities andderivatives trading, Commodities trading, Portfolio Management Services,Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other smallsavings instruments to loan products and Investment banking. India Infoline alsoowns and manages the websites, www.indiainfoline.com and www.5paisa.com . 7
  • 8. Online TradingIndia Infoline Ltd, being a listed entity, is regulated by SEBI (Securities andExchange Board of India). It undertakes equities research which isacknowledged by none other than Forbes as Best of the Web and …a must readfor investors in Asia. India Infolines research is available not just over theinternet but also on international wire services like Bloomberg (Code: IILL),Thomson First Call and Internet Securities where it is amongst the most readIndian brokers.Its various subsidiaries are in different lines of business and hence are governedby different regulators. The subsidiaries of India Infoline Ltd are India InfolineSecurities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engagedin the businesses of Equities broking and Portfolio Management Services. Itholds memberships of both the leading stock exchanges of India viz. the StockExchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offersbroking services in the Cash and Derivatives segments of the NSE as well as theCash segment of the BSE.A SEBI authorized Portfolio Manager, it offers 8
  • 9. Online TradingPortfolio Management Services to clients. These services are offered to clients asdifferent schemes, which are based on differing investment strategies made toreflect the varied risk-return preferences of clientIndia Infoline Commodities Pvt Ltd India Infoline Commodities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged in the business of commodities broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us offer commodities broking as a contra-cyclical alternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and recently acquired membership of DGCX. We have a multi-channel delivery model, making it among the select few to online as well as offline trading facilities.India Infoline Distribution Co Ltd (IILD) India Infoline.com Distribution Co Ltd is a 100% subsidiary of India Infoline Ltd and is engaged in the business of distribution of Mutual Funds, IPOs, Fixed Deposits and other small savings products. It is one of the largest vendor-independent distribution houses and has a wide pan-India footprint of over 232 branches coupled with a huge number of feet-on-street, which help source and service customers across the length and breadth of India. Its unique value proposition of free doorstep expert advice coupled with free pick-up and delivery of cheques has been met with an enthusiastic response from customers and fund houses alike. Our business has expanded to include the online distribution of mutual funds, wherein users can view and compare different product offerings and download application forms which they can later submit to the product provider 9
  • 10. Online Trading Mortgages & Loans IILD has also entered the business ot distribution of mortgages and loan products during the year 2005-2006. The business is still in the investing phase and We plan to roll the business out across its pan-Indian network to provide it with a truly national scale in operations.India Infoline Insurance Services Ltd India Infoline Insurance Services Ltd is also a 100% subsidiary of India Infoline Ltd and is a registered Corporate Agent with the Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Ltd, which is Indias largest private Life Insurance CompanyIndia Infoline Investment Services Ltd India Infoline Investment Service Ltd is also a 100% subsidiary of India Infoline Ltd. It has an NBFC licence from the Reserve Bank of India (RBI) and offers margin-funding facility to the broking customersIndia Infoline Insurance Brokers Ltd India Infoline Insurance Brokers Ltd is a 100% subsidiary of India Infoline Ltd and is a newly formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA for the insurance broking licence and the clearance for the same is awaited. 10
  • 11. Online TradingServices Offered By India Infoline. • Here’s a look at the rocketing list of what’s on offer from The IndiaInfoline Group:Equity Trading and Stock Broking :- Cash and Derivatives segments. Member - BSE and NSE, DP with NSDL.Portfolio Management :- SEBI-registered, backed by a pool of analysts with over 200 man-years in managing portfolios.Research & Analysis :- Exhaustive information and data mining, covering the spectrum of Indian business, industry and financial markets.Mutual Funds :- Primary agent for the entire phalanx of leading funds. Something to suit every risk profile.Life Insurance :- Leading corporate agent of ICICI Prudential Life Insurance Company, miles ahead of the runner-up!Commodities Broking :- Member of the Multi- Commodities Exchange (MCX). Again, rock-bottom brokerage and quality research support. Fixed Income Instruments: From Fixed Deposits, Post Office Saving schemes to RBI Tax Saving and Infrastructure Bonds. 11
  • 12. Online TradingMETHODOLOGYOF THE STUDY 12
  • 13. Online TradingOBJECTIVES :-  The primary objective is to analyze the changes in trading procedures after the exchange shifted from outcry system to online trading system.  To know the eon-line screen based trading system and its communication facilities for the appropriate configuration to set network.  The purpose of the study is to understand the complete Gambit of Online Trading.  To highlight the superiority of Online Trading.  To study the services offered by India Info line Securities Pvt Ltd through its various departments.  To focus upon the features provided in the online trading system for the hassle-free functioning of the trading process and to avoid fraudulence.  To understand the working of National Securities Depository Limited. 13
  • 14. Online TradingNEED FOR THE STUDY :- Capital Markets play a vital role in the development of the economy andstock exchanges are the integral part of the Capital Market. With the advance inInformation Technology, age-old methods of stock trading are gradually fading out.They are replaced by the easier and hassle-free method of trading On-Line throughthe Internet. This study is carried out to explore the changes occurring in stock exchangewith the advancements in the information technology. The major need for this studyis to know the effectiveness of online system in comparison with the outcry system.More emphasis is given to bring out the process of online trading behind the screenand its advantages. The study also includes the emergence of the depository systemin the country to rule out the drawbacks of the system of physical transfer of theshares. 14
  • 15. Online TradingDATA SOURCES :-  The study includes the data collected from both the Primary and Secondary sources.  Primary sources include data collected from various department members of the India Info line Securities Pvt Ltd.  Secondary sources are books, website and records from the departments of India Info line Securities Pvt Ltd. 15
  • 16. Online TradingSCOPE AND LIMITATIONS OF THE STUDY :-  The analysis is made on the online trading activities carried out in India Info line Securities Pvt Ltd.  The data is collected from the Primary and Secondary sources so the study will  have slight variation than what the study includes in reality.  The study is limited to current time period.  The study is purely for academic purpose.  Most of the information collected for study is acquired from secondary source. 16
  • 17. Online TradingINDUSTRY PROFILE 17
  • 18. Online TradingBOMBAY STOCK EXCHANGE This stock exchange, Mumbai, popularly known as “BSE” was established in1857 as “The Native share and stock brokers association” as a voluntary non-profit making association. It has an evolved over the years into its present statusas the premier stock exchange in the country. It may be not that the stock 18
  • 19. Online Tradingexchanges the oldest one in Asia, even than the Tokyo Stock Exchange, whichwas founded in 1878. The exchange, while providing an efficient and transparent market fortrading in securities, upholds the interests of the investors and ensures redressedof their grievances, whether against the companies or its own member brokers.It also strives to educate and enlighten the investors by making availablenecessary informative inputs and conducting investor education programmes. A governing board comprising of 9 elected directors, 2 SEBI nominees,7 public representative and executive director is the apex body, which decidesthe policies and regulates the affairs of the exchange. The executive director as the chief executive officer is responsible forthe day to day administration of the exchange. The average daily turnover of theexchange during the year 2000-01 (April – March) was Rs. 3,984.16 crores andaverage number of daily trade 5.69 lakhs. The Ban on all deferral products like BLESS AND ALBM in the IndianCapita Markets by SEBI with effect from 2001, abolition account periodsettlements and introduction of compulsory ruling settlements in all scriptstraded on the exchanges with effect from December 31, 2001 etc, have adverselyimpacted the liquidity and consequently there is a considerable decline in thedaily turnover at the exchange. The average daily turnover of the exchangepresent scenario is 110363 (lakhs) and number of average daily trade 1057(lakhs). 19
  • 20. Online TradingBSE INDICES In order to enable the market participants, etc, to track the various ups anddowns in the Indian stock market, the exchange have introduced in 1986 and equitystock index called BSE – SENSEX that subsequent became the barometer if themoments of the share prices in the Indian stock market. It is a “Market capitalizationweighted” index of 30 component stock representing a sample of large, wellestablished and leading companies. The base year of sensex is1978-79.The Sensex iswidely reported in both domestic and international market through print as well aselectronic media. Sensex is calculated using a market capitalization weighted method. As per thismethodology, the level of the index reflects the total market value of all 30component stocks from different industries related to particular base period. The totalmarket value of the company is determined by multiplying the price of its stock by thenumber of shares outstanding. Statisticians call a index of a set of combined variables(such as price and number of shares) a composite index. An indexed number is usedto represent the result of this calculation in order to make the value easier to workwith the track over a time. It is much easier to graph a chart based on Indexed valuesthan one based on actual values worked over majority of the well known indices areconstructed using “Market capitalization weighted method.” In practice, the daily calculation for SENSEX is done by dividing the aggregatemarket value of the 30 companies in the Index by a number called the index Devisor.The devisor is the only link to the original base period value of the sensex. Thedivisor keeps the Index comparable over a period of time and if the reference point forthe entire index maintains adjustments. SENSEX is widely used to describe the mood 20
  • 21. Online Tradingin the Indian Stock Markets. Base year average is changed as per the formula newbase year average = old base year average*(new market value/ old market value).NATIONAL STOCK EXCHANGE The NSE was incorporated in November 1992 with an equity capital of Rs. 25crores. The International Securities Consultancy (ISC) of Hong Kong has helped insetting up NSE. ISE has prepared the detailed business plans and installation ofhardware and software systems. The promotions for NSE were financial institutions,insurances companies, banks and SEBI Capital Market Ltd. It has been set up to strengthen the move towards professionalizing of the capitalmarket was well as provide nation wide securities trading facilities to investors. NSE is not an exchange in the traditional sense where brokers own and managethe exchange. A two tier administrative set up involving a company board and agoverning board in envisaged. NSE is a national market for shares PSU bonds, debentures and governmentsecurities since infrastructure and trading facilities are provided. 21
  • 22. Online TradingNSE – MIDCAP INDEX The NSE – midcap index or the Junior Nifty comprises 50 that represents 21abroad industry groups and will provide proper representation of the midcap segmentof the Indian Capital Market. All stocks in the index should have marketcapitalization of greater than Rs. 200 crores and should have traded 85% of thetrading days at an impact cost less 2.5%. The base period for the index is November 4 th, 1996, which signifies two yearsfor completion of operation of the capital market segment of the operations. The basevalue of the index has been set at 1000. At present there are 24 stock exchanges recognized under the securities contract(regulation) Act, 1956. They are 22
  • 23. Online TradingName of The Stock Exchange YearBombay Stock Exchange 1875Ahmedabad Share & Stock Brokers Association 1957Calcutta Stock Exchange Association Ltd 1957Delhi Stock Exchange Association Ltd 1957Madras Stock Exchange Association Ltd 1957Indore Stock Brokers Association Ltd 1958Banglore Stock Exchange 1963Hyderabad Stock Exchange 1943Cochin Stock Exchange 1978Pune Stock Exchange 1982UP Stock Exchange 1982Ludhiana Stock Exchange 1983Jaipur Stock Exchange Ltd 1983 – 84Gauhati Stock Exchange Ltd 1984Manglore Stock Exchange Ltd 1985Maghad Stock Exchange Ltd, Patna 1986Bhuwaneshwar Stock Exchange Association Ltd 1989Over the counter Exchange India, Bombay 1989Saurastra Kuth Stock Exchange Ltd 1990Vadodard Stock Exchange Ltd 1991Coimbatore Stock Exchange Ltd 1991The Meerut Stock Exchange 1991National Stock Exchange 1991Integrated Stock Exchange 1999 23
  • 24. Online Trading24
  • 25. Online TradingINTRODUCTION TT Advanced™ as your trading platform for trading on the Indian Exchangesviz National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). This guidewill help you get up and running. TT Advanced™ is a comprehensive trading tool, with superior charting andanalytical capabilities, that allows you to place orders and get them executed atlighting fast pace. If you are a first time user and just installed the software please check outQuick Tour section that will guide you through most important aspects of using TTAdvanced™. The next section - Reference guide - provides detailed description of everywindow and information on how to get the most out of your TT Advanced™ tradingtool. In the Technical analysis guide you will find material that will introduce you tothe world of charting and technical indicators.How do I install the 5pisa TT Advanced Installation of 5paisa TT Advanced™ is very simple. The software itself is asmall file – around than 1MB, which can be sent to you on email or can bedownloaded from the following link: http://www.5paisa.com/download/login.asp (You will need to get the rights todownload the application.) If your operating system is Windows 95 then this software will not work onyour machine. You will have to upgrade your operating system. If your operating system is Windows 98 or Windows 2000 then your systemwill not have the .NET Framework 2.0 installed. You can either get the .NET 25
  • 26. Online TradingFramework 2.0 downloaded from the Web(http://www.microsoft.com/downloads/details.aspx? FamilyID=0856eacb-4362-4b0d-8edd-aab15c5e04f5&displaylang=en) or from the 5paisa download site or have yourhardware engineer install the same for you. Alternatively you can request for the.NET Framework CD from us by sending a mail to info@5pmail.com. Please provideone week for shipping of CDs.If Windows Installer is required you can get from the 5paisa download site. If your operating system is Windows XP make sure that you have Framework2.0. If you have not patched up your operating system or updated Framework, youwill be required to do so now. You could have your hardware engineer help you withthe update and/ or patch. Once you have successfully installed Framework 2.0 or have established thatyou have the right version of Framework running on your system the downloaded exewill run without any need for set up or any additional tasks. On a Windows 2003 machine you don’t need to do anything other than simplydownloading the exe and running it.System requirements :- The 5paisa TT Advanced™ is optimized for use with a modem and an ordinaryinternet connection.Operating system :- The software is tested to work on Windows 2003, Windows 2000, WindowsNT, Windows XP, and Windows 98. It will not work under Windows 95. OnWindows 2000, NT and 98 you will have to download .NET Framework 2.0. In XPyou have ensure that you have upgraded your Framework version from 1.1 to 2.0 26
  • 27. Online TradingProxy Setting :- If the software is being accessed from behind a proxy you will need to open thefollowing 3 ports for any1. 10116 2. 25000 3. 25002Browser versionIE 5.5 or higher.Hardware :- Pentium/Celeron with RAM - 256Mb and above, ideally 512Mb.Display setting :- Minimum : 800 by 600 pixels. Ideally 1024 by 768 pixels. If your displaysetting is below 800 by 600, you can close all windows on the desktop, right click,select properties - settings and change the display settings. If your computer does notsupport 800*600 display setting and above, contact your vendor and replace thedisplay card, which may entail a nominal cost.QUICK TOUR :- Login is essential to access TT Advanced™. Click on the shortcut icon on yourdesktop or directly run the EXE from its location. You will be prompted to login withyour User ID and password. If your login and machine credentials are correct thenyou will be logged into the 5Paisa Trading system. On every login data will besynched with that available on server. You can go ahead and start working on yourterminal as soon as login success message is flashed; synch happens in thebackground. You can logout any time by accessing the ‘Logout’ option from the‘File’ menu. On logout your terminal will still be active. You can login again byaccessing the ‘Login’ option from the ‘File’ menu or invoke the Login window withthe ‘Ctrl+L’ hot key. You can also close the application at any time by clicking on thecross button ‘x’ of the terminal window. Hot key for the same is ‘Alt+F4’. 27
  • 28. Online Trading Market Watch window is the most important window that will help you getyour trading done. Unless you have explicitly closed this window on a previoussession, you will find this window open as soon as login happens successfully. Thiswindow gives a tabular representation of the current market position for selectedscrips. Each scrip makes up a row of data that contains the scrip name, its last tradedprice, last traded quantity, best bid rate, best offer rate, total volume etc. MarketWatch window is highly configurable and you can decide which columns are to beviewed and which not, whether you require row or column separators, determine thesize of all rows or each column, the color used to display data etc. There are a host ofoptions available on a pop-up menu that can be accessed by right clicking on theMarket Watch window. You can quickly Buy/ Sell shares by using the hotkeys ‘F1’and ‘F2’ respectively. When you double-click on any row of the Market Watchwindow it will open the Market Depth window and Real time Intra-day Chart. Allthese windows will be updated dynamically in real time and you need not ‘pull’ orrefresh any information. Adding or removing scrips from Market Watch is extremely simple. Toremove a scrip from Market Watch move to the appropriate row and simply press the‘Del’ key. Obviously this is also available as an option in the pop-up menu. Toremove all scrips simply press ‘Ctrl+Del’. To add a scrip press ‘Ins’ key. You canadd more than one scrip at a go. Select Scrip window will hold all your selections andcommit it to Market Watch window when you confirm the same by clicking on ‘OK’button in the Select Scrip window. There is a specialized window for selecting F&Oscrips. This window can be invoked by the hot key ‘Ctrl+Ins’. You can filter scripsby Name, Type or Expiry or even opt to review only Active options. At a single clickyou can then add these scrips to your Market Watch window. There is an ‘OptionChain’ feature that will quickly dump all the active F&O scrips to a new MarketWatch window from its underlying cash scrip. All these options are arranged in thepop-up menu for intuitive use. 28
  • 29. Online Trading Market Analyser helps you analyse the entire Market and zero-in on scrips thatare amongst the Top Gainers or Top Losers or Top Traded. Or scrips that havetouched their 52 week High or 52 week Low. You can also define your own criteria toidentify scrips. A flexible Criteria Builder is included to help you build your owncriterion. The application also intelligently remembers previously used criterion,obviating the need for you to rebuild the same again later. Indices Bar placed at a convenient location immediately below the Main menudisplays most popular Indices. You can access a Market Watch like window forIndices by clicking on this bar. You can also use this window to configure the IndicesBar. From the Indices Window you can open an intra-day chart for any or all theindices, by simply clicking on the Index Row. Placing an order to Buy/ Sell shares, as stated earlier, is very easy. Through outthe application you can invoke the Buy window by pressing F1 and the Sell windowby pressing F2. Depending on the currently active window the Buy/ Sell (OrderEntry) window will be prefilled with the scrip info. F1 (and similarly F2) willintelligently decide whether to open the Cash Order Entry window or the F&O OrderEntry window. If you wish to explicitly open the F&O Order Entry window thehotkeys are ‘Ctrl+F1’ and ‘Ctrl+F2’. You can ‘modify’ or ‘cancel’ an order from theOrder Book Reports window. You can ‘square off’ your open position from the NetPosition Reports window. You can ‘exercise’ your open long options also from theNet Position Reports window. Order confirmations can be seen in the Messages bar (at the bottom of thescreen) as soon as your order request is sent. Messages are returned at various stages –when it is first received at 5Paisa, when it is accepted or rejected by the 5Paisa RMSEngine, when it is put in queue to Exchange, when it is Sent to Exchange, when it isreceived at the Exchange, when it is acknowledged, rejected, frozen or killed by theExchange. Until orders are acknowledged by the Exchange they cannot be taken upfor modification or cancellation. Trade confirmations are also displayed in the 29
  • 30. Online TradingMessages bar. All Buy messages are shown in blue color, Sell messages in red color.Order/ Trade messages can also be seen in the Activity tab of the Reports window. Ifthe Messages window is open these messages are also shown in the Messageswindow. Exchange Messages, House Calls etc are displayed in the Messages windowin black color. Groups, which are a collection of scrips can be created and retrieved for reuselater. Several pre-defined NSE and BSE index groups help you get started with themost popular scrips in a jiffy. You can create your own portfolio of scrips and save itas a group. Groups are shown in a Tree format and can be expanded to select theGroup of your choice. Scrips belonging to a particular Group are shown in a tabularfashion on the right side of the Group Explorer window. Adding/ removing scrips to/from this list is extremely simple – ‘Ins’ for add and ‘Del’ for remove. Reports comprise of Order Book, Trade Book, Net Positions, Margin, ExerciseBook and Holdings. All these reports are dynamically updated without the need torefresh or pull information. From the Reports window you can ‘Modify’, ‘Cancel’,‘SquareOff’ or ‘Exercise’. The appropriate buttons will be enabled/ disableddepending on which action can be taken based on the currently selected row. You cansave these reports to a file either in text or CSV format. Display Settings and actions are configurable to a large extent. Whereverrelevant, settings can be defined from the window itself, where it is to be applied.Application wide settings can be found in the Settings option of the Tools Menu. Youmay wish to customize the appearance of your TT Advanced™ to suit your tastes.Reference Guide :-Login :- Double- click on the TT Advanced™ icon on your desktop to open up theLogin screen. Enter your Login ID and Password. Neither the Login ID nor the 30
  • 31. Online TradingPassword is case sensitive. The Login ID is displayed in Caps as you type irrespectiveof your caps lock setting or irrespective of whether you enter with the ‘Shift’ keypressed. Similarly passwords entered in lower case are converted to upper case beforesending it to server. If you are connecting through internet and you are behind a proxy server thenon the login screen click on the ‘Setting’ tab. Now click the Use Proxy checkbox,proxy IP box will be enabled. Enter the IP on which your proxy server is installed.Initial Password :- If you are a first time user your password would have been communicated toyou by IIL. This password only allows you to login and establish your credentialswith the server. You will be forced to change your password immediately after thefirst login. The first login is actually a registration process where the server capturescertain key information about your system and compares them with every subsequentlogin. If someone tries to hack into your account from any other system he will not beallowed to login even if he has your password since the machine credentials wouldnot match. Also all such attempts will not be counted towards your unsuccessfulattempts tally and therefore your account will never be locked out due to someoneelse’s mischief or unscrupulous attempt. Since the machine credentials have to match on every subsequent login thisalso poses a small problem. It completely removes your mobility. You can login onlyfrom one PC – the PC which you used to first register yourself. In case you wish tologin from a different PC you will have to generate a Transit Key. Transit Key is a 20character alpha numeric string that will be created on your current PC. You will haveto note down this number and enter it at the time of login in the new PC. As soon asyou successfully login with the Transit Key and your correct login credentials your‘default’ PC will be changed to the new PC. To generate a Transit Key select the 31
  • 32. Online TradingTransit Key option from the File Menu. In case you do not wish to avail of this security feature then you will have tonotify us of the same in writing. Once you have successfully opted out of this featureyou will be able to login from any PC. Only the login credentials will be checked atthe time of each login. We strongly discourage you from opting out of the securityfeature. Also to minimize the chances of anyone else hijacking your identity before youreceive it i.e. registering your ID before you have the chance to register it, login fromone PC is restricted to one ID only. This means that if you have a group of IDstypically belonging to the same family and all of these IDs will require to login fromthe same PC then you again will have to notify us in writing of the same. Please notethat in such cases if you have opted for the security feature then Transit Key will haveto be generated for each ID separately.Changing Password :- Your password is valid only for 14 days, after which you have to compulsorilychange your password. The new password should not be one that was used in theprevious two changes. In other words you cannot recycle a password for next twochanges. Once you have changed your password it cannot be changed again within thenext 24 hours. To change your password, simply click on the ‘Change Password’ button onthe login page. Before attempting to change your password please ensure that youenter your Login ID and Password correctly. Password changes can be done onlyfrom 1 computer i.e the computer that was used at the time of registration. You cannotchange you password from any PC even if you have opted out of the security featuredescribed above.Rules for Password :- 32
  • 33. Online Trading1. Password cannot be same as login ID2. Password has to be at least 8 characters and maximum of 10 characters3. It should contain at least 1 alphabet and 1 numeric4. It can contain special characters5. It cannot start with a space or special character6. It cannot be reused for subsequent two changesSecurity :- Apart from the above mentioned security feature we have added a few othersafeguards. On successful login, you will see in messages window, a messageconfirming your successful login and other messages confirming the super safe 128bit-encrypted connection to our server. You will also see a message showing when and where you logged in from thelast time. If you find anything amiss, immediately change your password.You are now ready to trade @ the speed of thought.Initial Screen :- If this is the first login, your workspace will be filled with a default layout. Thedefault layout loads a Market Watch window for your containing 50 scripts belongingto S&P CNX NIFTY. On subsequent logins TT Advanced™ remembers the state prior to yourexiting the application and restores the same. Your workspace will be loaded with allthe forms that were open the last time you exited the application and each of the formswill contain the same logical data that existed when you exited the application. E.g.Market Watch will have the same scrips loaded as you last left them. The datahowever will be updated to reflect the latest data received from the server.Market Watch :- 33
  • 34. Online Trading • View selected scrips at a glance • Open unlimited Market Watch windows simultaneously • Add multiple groups to the same Market Watch window • Create your own group from Market Watch window • Resize, Add, Remove columns • Resize, Move rows • Sort scrips on any column • Export from Market Watch in variety of formats • Easily customizable font and appearance • Access and save Tick Data from Market Watch window Market Watch window is the prime controlling window from where you canlaunch your trading actions. This window enables you to view market information ofpre-selected scrips that are of interest. The window can be accessed from the menu‘Market à Market Watch’. The shortcut key for opening Market Watch window is‘F4’. You will find the Market Watch window open (you will not need to open it frommenu or hot key) if you left it open when you last quit the application. You can open multiple Market Watch windows by accessing the same option fromyour Main Menu or by pressing ‘F4’ multiple times. The maximum number of MarketWatch windows that you can keep open is limited only by the processing power andmemory size of your PC.i. Buy [hotkey : F1] – Opens the Order Entry Window for Buy. All the required textboxes will be prefilled with information from the selected row of the Market Watchwindow.ii. Sell [hotkey : F2] – Similarly, opens the Order Entry Window for Sell and allrequired text boxes will be prefilled with information from the selected row of theMarket Watch window. 34
  • 35. Online Tradingiii. Historical Chart [hotkey : Ctrl+H] – Opens a chart window with historical data.This depends on the EOD Data server being available. If the server is not available amessage will be displayed and the chart window won’t open.iv. Load Group [hotkey : Ctrl+L] – Opens the Group Window to allow you to selectone of the predefined groups. This option will remove all the currently selected scripsand load the scrips from the selected group into Market Watch window.vi. Market Watch Settings [hothkey : Ctrl+W] – You can define action settingsapplicable to the Market Watch window here. The most often requested windows foreach scrip are the Market Depth window, Intra-day Chart window and HistoricalVhart window. You can define which windows should open on single-click of mouse(or on hitting Enter key), which windows should open on double-click etc. Moredetailed discussion on this can be found at …. (Settings)vii. Grid Settings [hotkey : Ctrl+S] – You can control the appearance of the MarketWatch window from this option. These are specific to the current Market Watchwindow and will be saved to your Group on the ‘Save to Group’ option. If you don’t‘save to group’ then the last applied settings will be available till you explicitly closethe Market Watch window. This means that if you exit the application without closingthe Market Watch window then these settings will be available the next time youaccess the application.Specifically you can change the following settingsa. Show Column Heading – when checked Market Watch window will display a titlefor each column. Default is checked, which means column titles will be displayed.b. Display Column Lines – when checked it will display a line separator for eachcolumn. Default is unchecked, which means no lines will be displayed. Shortcut keyis ‘Ctrl+Shift+V’c. Display Row Lines – when checked it will display a line separator for each row. 35
  • 36. Online TradingDefault is unchecked. Shortcut key is ‘Ctrl+Shift+U’d. Allow Row Select – when checked it will allow you to select a full row. Otherwiseonly current cell is selected. Default is unchecked.e. Allow Column Resize – when checked it will allow you to change the size of any ofthe columns. Default is checked, which means you can change the size of any column.f. Allow Row Resize – when checked it will allow you the change the size of all rows.Default is unchecked.g. Show Row Indicator – when checked it will show a small grey rectangle against theleft of each row. This can be used to drag and size a row.h. Header Settings – You can change the Font, Back Color and Text Color of columnheaders by accessing this option.i. Grid Settings – Similarly you can change the Font, Back Color and Text Color ofthe grid contents by accessing this option.x. Save to File – You can save the current information in your Market Watch to a file.You can save it as a tab delimited file with .txt extension or a CSV (comma separatedvalue) file with .csv extension or an HTML file with a .html extension. If a filealready exists by the file name supplied by you then you will be prompted beforeoverwriting the file.xi. Add Scrip [hotkey : Insert] – This will open the Select Scrip window where youcan select the scrips that you want to add to Market Watch Window. For more detailson selecting a scrip (or using the Select Scrip window) please refer to …xii. Add F&O Scrip [hotkey : Ctrl+Insert] – This will open the Select F&O Scripwindow. This window has more options to help you narrow down your selection listby specifying various filters and options such as • Scrip filter – specific scrip or all scrips. If unchecked it means all scrips are to be considered; 36
  • 37. Online Trading • Type filter – either Futures or Calls or Options or any two or all of them. If unchecked then all Types will be considered; • Expiry filter – either Next, Near or Far or any two or all of them. If unchecked then all Expiry will be considered; • Select Active options – when checked only active options (that is those options which have some volume will be considered; Required scrips can be selected from the scrips listed based on filter and listingcriterion. Selected scrips will be added to Market Watch windowxiii. Remove [hotkey : Delete] – This will remove the scrip on currently selected rowfrom Market Watch window.xiv. Remove All [hotkey : Ctrl+Delete] – This option will remove all the scrips andempty the Market Watch window. You will be prompted to confirm before clearingthe Market Watch window.xv. Option Calculator – This will open the Option Calculator window.xvi. Update Scrip Information – This option will update the information for thecurrently selected row by sending a request to server and fetching fresh data.Option Chain :- • Create Market Watch with all traded options for a given optionable security • Get streaming quotes and updated security list for the sameIntra-day Chart • Streaming intraday tick-by-tick charts & historical data • Ability to chart multiple companies and open unlimited charts simultaneously • Unique draw tools including trend line customization and Fibonacci tools • 3 different chart type options such as Line, OHLC and Candlestick • Lots of analysis options including 14 indicators for price and volume panels. 37
  • 38. Online Trading • See each tick in Excel type grid, which is updated in real-time. Also export to CSV file • Save chart as JPEG file • Get Index charts by clicking on appropriate Index in the Index Watch window If your Market Watch operates with default configuration then you should seean Intra-day Chart opening when you click on any row in the Market Watch window.The Chart will be of the scrip in the currently selected row. Intra-day chart consists ofa line graph drawn using the tick-by-tick data from the start of market. It also containsa panel (bar graph) for volume. You can conduct various studies and technicalanalysis on this chart. You can change the size of the chart window and zoom in orzoom out to get a better view of the price movement.Market depth :-· Sizeable Market Depth window· View Best 5 Bid/ Ask and Open Interest· Colored background gives clear demarcation of information If your Market Watch operates with default configuration then you should seethe Market Depth window also opening up when you click on any row in the MarketWatch window. Unlike intra-day charts you can open only one Market Depthwindow. This window shows the Best 5 Bids and Asks for the currently selectedscrip. As soon as fresh data arrives, this window will be automatically updated. Thiswindow can also be sized.Market Analyser :-• Analyze entire Market (not just the scrips selected in your Market Watch) on Top Traded, Top Gainers, Top Losers, Scrips hitting 52Wk High/ Low or matching user-defined criterion• Save these scrips to a Group• Buy/ Sell from Market Analysis Window 38
  • 39. Online Trading• Export to File in variety of formats Press F6 or Click on Market Analyser" in Market menu to open "MarketAnalyser" window. Market Analyser provides top traded, top gainers and top loserswith % change, value and total quantity. You just need to click on Top Traded, TopGainers and Top Losers tabs respectively. It also provides list of scrips that havetouched their 52 week High or 52 week low. You can also analyse all quotes andextract those where quantity traded exceeds a given figure or transaction valueexceeds a given value. This helps you identify large trades and can give you vitalclues to where or in which scrip activity is currently happening. Not only this you can define your own criteria. This will be applied againsteach quote that this received or on the entire scrip master, depending on what criteriayou have given and matching records will be displayed in the grid. You can access‘Criteria Builder’ to help you build your criteria. Previously defined criterion is storedand can be easily retrieved and reapplied. If you wish to buy or sell any scrip from this list you can press F1 for buy orF2 for sell. The order entry window will be prefilled with data from the row currentlyunder selection.Buy/Sell : The most important operation that you will be doing on this terminal is to Buyor sell shares. Buy or Sell window, also called Order Entry (OE) window can beinvoked from anywhere in the application. Hot key for Buy is F1 and for Sell is F2.These options are also available on the MainMenu under the Market Menu. OEwindow is different for cash and derivatives. If you want to explicitly open thederivates OE window the hotkeys for the same are CTRL + F1 and CTRL + F2. When OE window is invoked the application will sense if there is any activedata that can be populated to the OE window. Eg if you are currently in the Messageswindow, there is no ‘active data’ for the OE window. In such cases, OE window will 39
  • 40. Online Tradingbe filled with scrip data that was contained in the OE window previously. If no scripinformation is available then you will get a blank OE window.Situations :-1. When scrip information is available –a) Scrip belongs to Cash segment :1) You pressed F1 or F2 – Cash OE window is opened with prefilled informationii. You pressed CTRL + F1 or CTRL + F2 – Derivatives OE window is opened blank(without any of the text boxes pre-filled)b) Scrip belongs to Derivatives segment :i. You pressed F1 or F2 – Derivatives OE window is opened with prefilledinformationii. You pressed CTRL + F1 or CTRL + F2 – Derivatives OE window is opened withprefilled information2. When no scrip information is available –a. You pressed F1 or F2 – Cash OE window is opened blankb. You pressed CTRL + F1 or CTRL + F2 – Derivatives OE window is opened blank The orders that can be placed by you when the Market is Open is called aNormal Market Order. These orders will be checked for adequacy of limits and sentdirectly to the Exchange. In Normal Market you can place various types of orders –limit orders, market orders, stop loss orders or IOC (Immediate or Cancel) orders.Post market when Off Market Window is open you can place Offline orders. Theseorders are accumulated at 5Paisa and sent to Exchange as soon as it opens. In OffMarket you can place only limit orders and market orders. Stop Loss and IOC ordersare disallowed 40
  • 41. Online TradingTypes of orders ;-1. Limit Orders – are orders where you specify the price while entering the order intothe system. You have to select the appropriate option to notify whether you areplacing the order at Market or at Limit. If you select the ‘Limit order’ option then youhave to enter a price that is in multiple of regular tick size (multiples of 0.05).2. Market Orders – are when you place an order without a limit price with anintention to get it executed at the best price obtainable at the time of entering theorder. Similar to above you have to select ‘Market order’ option. Limit Price text boxis disabled and any amount in the text box is ignored when the order packet isprepared.3. Stop Loss Orders – are when you place an order with a trigger price. Till the triggerprice specified in the order is reached or surpassed such orders are kept dormant. Theintention for placing a Stop Loss order is to restrict the maximum loss in a particularposition to a predetermined amount. Stop Loss orders are always placed in pairs. The first order has to be a normalorder - either limit order or market order. The second order will be a stop loss orderthat will ensure that maximum loss is restricted. Eg if you place a buy order at Rs100and do not wish to take a loss of more than Rs2 then you will want to sell at Rs98,when the market starts sliding contrary to your expectations. You can obviously keepa watch on the market and sell when it slides and exit your position at Rs98. But thismay not always be possible. By entering a Stop Loss order you achieve the sameobjective without a need to keep a watch on the market.4. IOC Orders – are when you place an order with an IOC instruction i.e. with anintention to get it executed immediately, failing which the order is cancelled. It ispossible that the order gets partially traded, and in such cases the remaining portion of 41
  • 42. Online Tradingthe order is cancelled immediately. Stop loss orders cannot be placed as IOC orders.You can place a normal order (at limit or market) as an IOC order. You must fill the Quantity text box. Quantity has to be in multiple of lot size.In cash market most of the scrips have a lot size of 1. In Derivatives lot sizes varyfrom scrip to scrip. Quantity field cannot be directly entered into in the DerivativesOE window. You have to click on the up/down control next to the Quantity text boxand the quantity will increment/ decrement by lot size.Confirmations :-  Get stage by stage confirmation messages, to help you understand where messages might be getting delayed  Immediate notification if message cannot be sent to particular servers Confirmation messages for Order and Trade related actions, will be displayedin the Messages Panel instantly. You will get confirmation messages for a. Orders sent to 5Paisa b. Orders received by 5Paisa c. Orders accepted or rejected by 5Paisa RMS d. Orders put in queue to Exchange e. Orders sent to Exchange f. Orders accepted, rejected or frozen by the Exchange g. Trade confirmations sent by the Exchange All these messages will display the time and associated order IDs – LocalOrder ID, Broker Order ID and Exchange Order ID. At any point in time you will beable to see only 3 lines in the message panel. These would be the three most recentmessages. If you wish to see all the messages you can double click on the panel toinvoke the messages window. If the messages window is open at the time of writing these messages to the 42
  • 43. Online Tradingterminal, then messages will appear simultaneously at both the message panel as wellas the messages window.Reports :-  View Pending, Executed, Cancelled orders  View Trades done during the day  View Open and Closed Positions, along with MTM and booked Profit/ Loss  View Holdings at a glance  Modify, Cancel orders from Order Book. Also Cancel All orders on a single click  Square off Open Positions from Net Position window  Exercise long open option positions from the Net Position window  Directly Sell from Holdings window  View Margins utilized/ available  Sort all reports by any column  Export all reports individually or together on a single clickGroups Manager :-· See all Groups at a Glance in Vertical Tree format· Create multiple portfolios and save each of them as different groups· Add/ Remove scrips to/ from groups conveniently and easily Groups provide you with several advantages. You need not add scrips that areof interest to you, one at a time. You can select these scrips and save it as a group andadd them at one go to the Market Watch window. Eg you could have your portfoliosaved a group and have the application retrieve it to the Market Watch window onevery login. You can create more than one portfolio and save each of them to a group. The application comes with several pre-defined Groups. These are typically the 43
  • 44. Online TradingIndex scrips as defined by the Exchange. Eg to get the scrips that make up Nifty 50,simply select the NIFTY group. You cannot modify the pre-defined groups. You canhowever save it as a different group and then modify that group. At several instances you will find that you can save the list shown on screen toa Group. Eg Top Traded, Top Gainers, Top Losers etc. Saving them to a group canhelp you put them to a different market watch and study their prices and other marketinformation. To create a new group simply right click on any location on the tree (left sidepanel of the Group Explorer) window, and select the ‘Create New’ option. You willbe asked to provide a name for the Group. You can then begin adding scrips to thisgroup.Symbol Lookup :-· Lookup symbols either by Scrip Code/ Token No or Symbol, or Name· Select Multiple Scrips for inclusion in Market Watch or Group Window Scrip Selection window helps you look up symbols and select scrips. Thiswindow can be invoked by pressing ‘Insert’ key from the Market Watch and GroupExplorer windows. You can add several scrips at one go from this window. To add ascrip by its symbol you should type the first few characters in the text box provided.This will scroll the list to the first symbol starting with the characters entered by you.You can then scroll the list to locate your scrip and press enter. Optionally if you havethe token no, you can directly enter the token no (in the same text box as above) andthe scrip will be selected. Once you are through with your selections you can click on OK button totransfer your selection to the appropriate calling window. In case you wish to discardyour selection then click on ‘Close’ button.Messages Window :-Market News : 44
  • 45. Online Trading· Get Intra day Tips on Buy/ Sell· Get Long term Buy/ Sell/ Hold recommendations· Get Latest news update in your Messages Window Get breaking news from our News Desk by clicking ‘Market News’ in ‘Links’menu. This way you do not waste valuable trading time in looking up business news.You can trade and keep track of the important financial happenings at the same time.Exchange Messages :- Get updated instantly with important messages and notifications sent by theStock Exchange, right on your terminal.Lock/Unlock Your Trading terminal With a view to reduce unathorised users from accessing your terminal whileyou are logged in and away for reason, the terminal will lock itself after a certaininactivity period. When the terminal is in locked state, it will not allow you to performany tasks. The application will however keep receiving broadcast and other messagesand keep updating the display. Explicity you will be prohibited from placing, modifying or canceling orders.You can unlock a locked terminal by entering your password.If you wish to exit the application click on the ‘Exit’ buttonOption Calculator • You can use option calculator to calculate the price of options and othercalculations regarding options. Click on` the Option Calculator in Option menu for thispurpose. Fill in the required information for the calculation and you will get the result at theblink of your eyes. 45
  • 46. Online TradingSave to File You can save the information contained in your Market Watch window,Market Analyser, Reports and Tick List, that will help in analyzing this informationlater or just to keep a record. You can access this option only from the pop-up menuavailable on right click from the respective window. Once you click no ‘Save to File’ you will have to select the type of output inwhich the file is to be created. You have a choice between CSV, HTML or tabdelimited files. After you click on any of these options you will be presented with thestandard Windows Save File Dialog box. You can select the folder where you want tosave the file. By default the folder selected during the last ‘Save to File’ operation willbe displayed. You can browse to a different folder and save the file to that folder. You can either choose to save the file by the suggested name or save it with aname of your choice. If a file already exists by that name, a message box will popupwith an alert that a file by that name already exists and asking you if you want toreplace it. If you are not sure you want to replace it, you can click on cancel andprovide a new file name.Ticker Clicking on the Ticker, you can watch live, real-time quotes of all the scrips incash as well as F&O. You will be shown these quotes as the trades happen. Thespecialty of the ticker is that that it will show you only those scrips that are actuallybeing traded in the marketPrice Alerts Clicking Price Alerts in the Market menu will open up the Price Alert window. Thisallows you to set alerts for any number of scrips as you wish. These alerts are triggered andare designed to remind you of certain benchmarks that you can set as per yourrequirements. 46
  • 47. Online TradingLinksMy Account Summary - Shows you the complete trading summary.My Cash Position - Check your current Cash Market Position.My F&O Position - Analyze your Derivative Market Position.My DP - If you hold a depository account with 5paisa, you can view online all the scrips in your account with a click on ‘My DP’ in ‘Links’ menu. This account is also updated everyday.My Ledger - At one click on ‘My Ledger’ in ‘Links’ menu, you can open your ledger account and view details of each bill, transaction, balance of your ‘Cash’ as well as the ‘Futures and Options’ ledger.Functions :- Keys :Buy Order Entry window F1Sell Order Entry window F2Order Book F3Market Watch F4Market Depth F5Market Analyzer F6Net Position F7Trade Book F8Confirmation Messages F9Main Menu F10Stop Loss Buy(Later) F11Stop Loss Sell(Later) F12F&O Buy Order Entry window CTRL + F1F&O Sell Order Entry window CTRL + F2Log on to the Server CTRL + LLock Workstation CTRL + OGroup Window CTRL + GHistorical Chart CTRL + HAppend from group CTRL + ASave to group CTRL + S 47
  • 48. Online TradingMarket watch setting CTRL + WTo Close a Screen/Window CTRL + F4/EscTo Add a scrip in Market Watch/ Group INSTo Remove a Scrip from MktWatch/ Group DELSnap quote cash CTRL + F9Snap quote F&O SHIFT + F9TECHNICAL ANALYSIS GUIDE :-Chart Overview :- 1. All options can be accessed using the toolbar (bottom of the chart) or from pop-up menu (available on right click). 2. By default, toolbar will not be displayed. To show the toolbar, right click on the chart area and select Toolbar. 3. Pop-up Menu and Toolbar have the following features :- a. Display Properties – To change the display behavior of the chart b. Line Studies – To use the available line studies c. Indicators – To use the available Technical Indicators d. Zoom – Zooming functions e. Chart Type – To change the type of the chart (Line/Bar/Candle) f. Interval – To change chart intervals (Tick, 1 Min, 5, 10 minutes) g. Data Window – To show values at current mouse location on a the chart h. Volume Panel – Toggle On/Off the Volume Bar display i. Best 5 Bid/offer lines - Toggle On/Off the best 5 lines j. Tick listing – Show tick listing window k. Toolbar – Toggle On/Off the Toolbar (Bottom of the chart) 1. Shortcut keys :- 48
  • 49. Online Trading a. ZOOM – ‘+’, ‘-’, CTRL+A (to reset zoom) b. Chart Types – Line (Ctrl+L), Bar (Ctrl+B), Candle (Ctrl+C) c. Chart Interval – Tick (Ctrl+T), 1 Min (Ctrl+1), 5 min (Ctrl+5) d. Data Window – Ctrl+D (Toggle On/Off) e. Volume Panel – Ctrl+V (Toggle On/Off)Indicators :- Indicators are typically used to gauge a particular aspect of price or volumebehavior. It is important to remember that there is no magic indicator that can give theright signal under all market conditions. It is usual to see trend indicators give wrongsignals in a ranging market. In a trending market, momentum indicators may give toomany signals and result in wrong trading decisions. It is always ideal to select a few indicators and use them to confirm signalsfrom each other. Also indicators based on different data elements (for the same timeperiod) are always better than those based on same data. Eg one indicator using theclosing price, one using volume and another using a trading range may be morereliable when they confirm each other.Indicators can be divided into the following categories :-a. Trend indicators, are used to indicate the direction of a trend. Drawing a trend linewill give a general feel of the trend. Trend Indicator provide an objective measure ofthe direction of the trend. The Trend Indicators included in the trading terminal are“Simple Moving Averages, Exponential Moving Averages, Weighted Moving Averages,Moving Average Convergence Divergence (MACD) and Ballinger Bands”.b. Momentum indicators are used to measure the rate at which price is changing. TheMomentum indicators provided are Momentum, ROC, Relative Strength (RSI),Stochastic and Williams %R. 49
  • 50. Online Tradingc. Volume Indicators are used to confirm the strength of trends. Volume Indicatorsprovided are On Balance Volume and Money Flow indexd. Volatility Indicators are used to confirm price behavior. Volatility Indicatorsprovided are Average True Range and Bollinger BandsPrice Rate of Change ROC is a refinement of Momentum and is easier to use, since results fluctuateas percentage around a horizontal median called the zero line or equilibrium. ROC istypically used in ranging markets to identify signs of weakness in trends and potentialtrend reversals. In a trending market it often used in conjunction with a trendindicator. Price ROC shows the difference in percentage terms between current price andthe price ‘n’ days ago. Eg a 12-day Price ROC, that is most often used as anoverbought/oversold indicator, will compare current price with price 12 days ago. Ifcurrent price is higher then ROC value will be above zero and indicate that prices areon the rise. Conversely if current price is lower than that 12 days ago, ROC value willbe lower than zero indicating that prices are falling. To use this indicator you will need to set overbought and oversold levels basedon past observations. The levels should cut across at least two-thirds of the peaks andtroughs.· If ROC crosses below oversold level and rises back above it, then it is a Buy signal· If ROC crosses above overbought level and falls back below it, then it is a Sellsignal· Bullish and bearish divergences indicate trend reversals 50
  • 51. Online TradingONLINE TRADING ADVANTAGES :- • Trading online has revolutionized the stock markets. • The main benefit of trading online is speed. • There is no need dial up your broker, wait to speak somebody, and have him or her enter the order on their computer. • As you can imagine, the convenience of online trading attracts many investors. • You can enter trade orders day or night, from any where in cyberspace. • The internet is full of advice, free technical analysis tools and commentary. • You can formulate your own strategy and run investments yourself. • Most online brokerages will take online orders for a commission of about $5 to $40 US. ONLINE TRADING DISADVANTAGES :- • If you are going to trade online you are obviously the one making all trading choices. • To make your trading decisions, you need to research your stocks and constantly pay attention to market news. This will require sometime as you pursue your sources of market information and use online tools. 51
  • 52. Online TradingBROKERS ADVANTAGES :- 1) Despite the popularity of online trading , not everybody uses the internet to trade stocks. 2) A broker can do everything from making all your stock trading decision for, to give you little advice on what to buy or sell. 3) if you want some investing help, or if you want somebody else to deal with everything, using a broker might be right for you. 4) Brokers are stock professionals, they watch the market and deal with customers like you everyday. 5) Brokers keep in touch with a network of other professional, so news and knowledge constantly come their way. 6) Finally, your broker may offer services other than just trading stocks. If you want you can find a broker that will manage your taxes, estate and business. 7) The personal attention available from broker who knows your full financial situation is very calculable. BROKERS DISADVANTAGES :- 1) Taking a percentage of your assets under management, making stock traders taking a flat fee. 52
  • 53. Online Trading 2) However I must stress that the brokerage industry is highly regulated and most brokers act with integrity, nonetheless, it is best to be aware of the risks. 3) Get a feel for how much time broker spends marketing and how much attention your assets will receive. 4) If your broker gets a paid commission for trading, keep in mind that there may be a conflict of interest. 5) Make sure your broker can consistently justify and all stock trades. 6) Find out about your broker’s background and interests to see if he or she is a good match. 7) Finally, live brokers are more expensive than online brokers. Their presence and personal attention command a price.IMPACT OF ONLINE TRADING ON THE MARKET :- On the number of transaction The number of transaction has increased considerably after introduction of the online trading system. The factor of influence could be: 1) The case of the operation from the point of view of both the members and investors. 2) Facilities better monitoring of the market by the market operations department. 3) The daily that the best price is achieved in buying and selling. 53
  • 54. Online Trading TRADINGMEMBERSHIP 54
  • 55. Online TradingTrading membership :-Stock BrokersIntroduction :- A broker is an intermediary who arranges to buy and sell securities on behalfof clients (the buyers and the sellers). According to rule 2 (e) of SEBI (stock brokersand sub brokers) rules, 1992, a. Stock broker names a number of recognized stock exchanges. No stock broker isallowed to buy, sell or deal in securities, unless he or she holds a certificate ofregistration granted by SEBI. A stock broker applies for registration to SEBI throughstock exchange or stock exchanges of which he or she is admitted as a member. SEBImay grant a certification to stock broker [as per SEBI(stock broker and subbroker)rules,1992] subject to the condition that; 1. He holds the membership of any stock exchange; 2. He shall abide by the rules, regulation and bye laws of the stock exchange or stock exchanges of which he is member; 3. In case of any change in status and constitution, he shall obtain prior permission of SEBI to continue to buy, sell or dealing securities in any stock exchange; 4. He shall pay the amount of fees for registration in the prescribed manner. 55
  • 56. Online TradingEligibility Criteria for Membership :-Particulars WDM CM and CM&WDM CM,WDM& Segment F&O Segments F&O Segments SegmentsConstitution Corporate/ Individuals/ Corporate/ Corporate/ Institutions Fonts/Cropor institutions institutionsPaid-up capital Rs.30 lakh Rs.30 lakh Rs.30 lakh Rs.30 lakhNet worth Rs.200 lakh Rs.100 lakh Rs.200 lakh Rs.200 lakhInterest free Rs.150 lakh Rs.125 lakh Rs.250 lakh Rs.275 lakhsecurity depositCollateral security Rs.25 lakh Rs25 lakh Rs.25 lakhdeposit(CSD)Annual Rs.1 lakh Rs.1 lakh Rs.2 lakh Rs.2 lakhsubscriptionEducation At least 2 Proprietor 2 At least 2 At least 2 directors directors should partners 2 directors directors should should be be graduates. should be be gradates. graduates. Dealer graduates. should also have Dealer should also passed NCFM have passed capital market NCFM capital module. market module.experience Two years experience in securities market 56
  • 57. Online TradingEligibility criteria for professional clearing member of NSCCL. Applicant seeking admission as a professional clearing members on the features and options, capital market segment of NSCCL would be required to meet the capital adequacy norms. Sr. Particulars Clearing membership of segment No. F & O CM CM & F & O 1 Interest free cash 25 25 security deposit with 34 NSCCL 2 Collateral security 25 25 deposit with NSCCL 50 3 Advance annual 2.5 subscription 2.5 4 Net worth 300 300 requirement 300 5 Formula/methodology As per Dr. LC Gupta As per Applicable for Committee Dr. calculation of net LC GUPTA worth recommendation Committee rec ommendationBroker client relations :- 57
  • 58. Online Trading The TM shall enter into an agreement in the specified format provided by NSEwith the client before accepting orders on letters behalf. The said agreement shall beexecuted on non judicial stamp paper of adequate value, duly sign by both the partieson all pages. in addition to the agreement, the TM shall seed information from the client Ithe ‘client registration application form’ obtaining information like; investor riskprofile, financial profile, social profile, investor identification details, income, PANnumber, employment, age, investment other responsibilities, social standing, risktaking ability etc.Unique client code :- SEBI made it mandatory for all brokers to use unique client codes for allclients. Broker shall collect and maintain in their back office the permanent accountnumber (PAN) allotted by income tax department for all their clients. Where anindividual client does not have PAN, such a client shall be required to give adeclaration to that effect and until the PAN is allotted. Where the client does not havea PAN or a passport.Payment/Delivery of securities to the clients Every TM shall make payment to his clients or deliver the securities purchasedwithin 2 working days of pay out unless the client have requested otherwise (refer toSEBI circular no.SMD/SED/CIR/23321 dated November 18,1993)Brokerage :- The maximum brokerage chargeable by TM in respect of trade effected in thesecurities admitted to dealing on the TM segment of the exchange is fixed at 2.5 % ofthe contract price, exclusive of statutory levies like, SEBI turn over fee, service taxand duty. 58
  • 59. Online Trading NSDL( National Security Depository Limited ) 59
  • 60. Online Trading NATIONAL SECURITIES DEPOSITORY LIMITED: NSDL was inaugurated in 1996, as the first depository in the country to avoid themyriad problems in settlements. In depository system, securities are held in securities (depository) accounts, which ismore or less similar to holding funds in bank account. Transfer of ownership is donethrough simple account transfer.Trading in dematerialized securities in quite similar to trading in physical securities.Exclusive Demat segment follows rolling settlement (T+2) cycle and unified segmentfollows account period settlement cycle.From Jan 4,1999, all categories of investors can deliver only in dematerialized formwith respect to a select list of securities. In a span of about nine years, investors have switched over to electronic[demat] settlement and National Securities Depository Limited (NSDL) stands at thecentre of this change. In order to provide quality service to the users of depository,NSDL launched a certification programme in depository operations in May 1999.This certification is conducted using NCFM infrastructure created by NSE and iscalled "NSDL - Depository Operations Module". The programme is aimed atcertifying whether an individual has adequate knowledge of depository operations, tobe ableto service investors. Depository Participants are required to appoint at least oneperson who has qualified in the certification programme at each of their servicecentres. This handbook is meant to help the candidates in their preparation for thecertification programme. 60
  • 61. Online Trading This handbook has been divided into four volumes for readers convenience. Thefirst volume gives an overview of the Indian capital market and NSDL depositorysystem. The second volume deals with admission procedure for different businesspartners of NSDL, their obligations, practices, systems and procedures to be followedby them and benefits and safety of depository system. The third volume helps inacquiring a working level understanding of certain basic services offered by NSDLlike account opening, dematerialisation, and transfer of securities and relatedoperations. The last volume deals with special services offered by NSDL like Pledge,Stock Lending and Borrowings, Corporate Actions, National Savings Certificates /Kisan Vikas Patra (NSC/KVP) in demat form, Warehouse Receipts, MarketParticipants and Investor Database (MAPIN) and Tax Information Network (TIN).The procedures explained in the handbook are based on the Depositories Act,Securities and Exchange Board of India (Depositories & Participants) Regulations andByelaws & Business Rules of NSDL. The book contains illustrations, flow charts andchecklists for better understanding of various concepts and procedures.A sample test paper is given at the end of the fourth volume to help the candidatesappearing for NCFM test form an assessment of their preparedness. A thoroughunderstanding of this handbook will form a good base for qualifying the certificationtest.Readers may like to visit NSDL website www.nsdl.co.in for updates and to know thenew procedures introduced or changes brought about in the existing procedures.A feedback form is given at the end of the fourth volume. Readers may give theirfeedback,which will be of great help in enhancing the value of this Handbook in itssubsequent editions.The Indian Capital Market :- 61
  • 62. Online Trading The function of the financial market is to facilitate the transfer of funds fromsurplus sectors (lenders) to deficit sectors (borrowers). Normally, households haveinvestible funds or savings, which they lend to borrowers in the corporate and publicsectors whose requirement of funds far exceeds their savings. A financial marketconsists of investors or buyers of securities, borrowers or sellers of securities,intermediaries and regulatory bodies. Financial market does not refer to a physicallocation. Formal trading rules, relationships and communication networks fororiginating and trading financial securities link the participants in the market.Organised money market :- Indian financial system consists of money market and capital market. Themoney market has two components - the organised and the unorganised. Theorganized market is dominated by commercial banks. The other major participants arethe Reserve Bank of India, Life Insurance Corporation, General InsuranceCorporation, Unit Trust of India, Securities Trading Corporation of India Ltd.,Discount and Finance House of India, other primary dealers, commercial banks andmutual funds. The core of the money market is the inter-bank call money marketwhereby short-term money borrowing/lending is effected to manage temporaryliquidity mismatches. The Reserve Bank of India occupies a strategic position ofmanaging market liquidity through open market operations of government securities,access to its accommodation, cost (interest rates), availability of credit and othermonetary management tools. Normally, monetary assets of short-term nature,generally less than one year, are dealt in this market.Un-organised money market :- Despite rapid expansion of the organised money market through a largenetwork of banking institutions that have extended their reach even to the rural areas,there is still an active unorganised market. It consists of indigenous bankers andmoneylenders. In the unorganised market, there is no clear demarcation between 62
  • 63. Online Tradingshort-term and long-term finance and even between the purposes of finance. Theunorganised sector continues toprovide finance for trade as well as personal consumption. The inability of the poor tomeet the "creditworthiness" requirements of the banking sector make them takerecourse to the institutions that still remain outside the regulatory framework ofbanking. But this market is shrinking.The Capital market :- The capital market consists of primary and secondary markets. The primarymarket deals with the issue of new instruments by the corporate sector such as equityshares, preference shares and debt instruments. Central and State governments,various public sector industrial units (PSUs), statutory and other authorities such asstate electricity boards and port trusts also issue bonds/debt instruments. 63
  • 64. Online Trading CLEARING AND SETTLEMENTWhat is a Rolling Settlement? 64
  • 65. Online Trading In a Rolling Settlement trades executed during the day are settled based on the net obligations for the day. In NSE, the trades pertaining to the rolling settlement are settled on a T+2 day basis where T stands for the trade day. Hence trades executed on a Monday are typically settled on the following Wednesday (considering 2 working days from the trade day). The funds and securities pay-in and pay-out are carried out on T+2 day.What is Pay-in? In Pay-in securities all the shares obligations are picked up from the clients beneficiary account and transferred to IL&FS INVESTSMART SECURITIES LIMITED pool account. All the shares are then delivered to the National Securities Clearing Corporations Limited (NSCCL) as per obligation. In Pay-in of funds , the funds are transferred from a clients bank account to IL&FS INVESTSMART SECURITIES LIMITED bank account. All the funds are then transferred to the NSCCL as per obligationWhat is Pay-out? In Pay-out of securities, shares are received from the NSCCL and the same is transferred to IL&FSINVESTSMART SECURITIES LIMITED pool account. All the shares are then transferred to the client beneficiaryaccount. In Pay-out of funds , funds are transferred from the NSCCL to IL&FS INVESTSMART SECURITIES LIMITEDBank a/c . All the funds are than transferred to the client bank a/c. Pay-out(securities) Pay-out(securities) Brokers Client Beneficiary/bank Pool/Ban NSSCL a/c. << << k a/c 65
  • 66. Online TradingWhat is a settlement cycle? Settled by the exchange on A settlement cycle is a period from the day the sharesare bought/sold till the obligation of each client is T+ 2 day, where T indicates thetrading/transaction day.What is a settlement number? Settlement number is a specified number given by the exchange for the tradessettled on a particular day. For example, Settlement no: 2004077 on April 28, 2009What is a settlement date? Settlement date is a specified date on which pay-in and pay-out ofsecurities/funds are settledWhat is a rolling settlement cycle? In a rolling settlement, each trading day is considered as a trading period andtrades executed during the day are settled based on the net obligations for the day. AtNSE and BSE, trades in rolling settlement are settled on a T+2 basis, i.e. on thesecond working day. Typically trades taking place on Monday are settled onWednesday, Tuesdays trades are settled on Thursday and so on. For arriving at thesettlement day all intervening holidays, which include bank holidays, NSE/BSEholidays, Saturdays and Sundays are excluded.What is an auction? The exchange can initiate an auction in case the selling trading member is unableto deliver the shares, for various reasons such as short delivery, bad delivery andobjections. The exchange purchases the requisite quantity in the auction market andgives the delivery to the buying trading member. This process takes three to five days 66
  • 67. Online Tradingto complete and thus in case if you have a purchase position and the shares are notdelivered by the opposite selling member, then there could be a delay in receiving theshares, until such time that the exchange completes the auction process Note:Internal shortage: in internal shortage the broker repurchases securities from theexchange at market rate and the shares are transferred to the clients account. Thiscycle is completed in T+3 days.Exchange shortage: here there is a shortage in the exchange for which the client getscredit and the account is settled by the exchange. This cycle is completed in T+ 5days.What happens if no one offers shares in the auction market? In case there is no offer for shares in the auction market, then as per the rules ofthe NSE the sell trade is squared off at the highest price for the scrip in the relevantsettlement or at 20% above the last available trading price on the NSE, whichever ishigher.The settlement process The Settlement department carries out the pay-in and pay-out confirmationprocess of securities on a settlement basis. The purpose of this process is to transferthe securities to and fro, from the Client Beneficiary account to NSE/BSE via thebrokers (IL&FS INVESTSMART SECURITIES LIMITED) pool account. 67
  • 68. Online Trading CONCLUSIONSConclusion: 1. The online trading system can increase efficiency, free up time and, most importantly, increase profits. 68
  • 69. Online Trading2. Online trading is a concept which has emerged in today phenomenon is only beneficial to the urban investors. This concept has not reach yet the semi urban and rural population.3. Online trading facility can be avail easily by just opening an account with the broker and depository participant.4. The broker delivers the shares from his clearing member account to clients account when the client take the delivery of the shares.5. Online trading concept is not very common to the general investors, they still rely upon fact sheets and news paper and published information investment avenues.6. For an investor to avail online facility has to takeout help of broker. It can not be done on his part.7. Online trading facility is good boon to the investors. Investor can easily updated information about their securities (shares etc) day to day. 69
  • 70. Online Trading SUGGESTIONSuggestion 70
  • 71. Online Trading1. The online trading should be useful to each and every part of the world, this facility should be supplied to the semi urban and rural population.2. Outcry system is obsolete, since a fast face of life, caught up with trading activity, electronic media as simplified with trading procedures. The advantages obviously, are speed, accuracy, and memory.3. It is advisable to have both outcry and online trading to supplement each other as and when need arises.4. The advantages of online trading should be made now to every one and day to day information should published in news papers about online trading. 71
  • 72. Online TradingANNEXURE 72
  • 73. Online Trading73
  • 74. Online TradingWhat we Learnt We learnt that stock market have many ups and downs. There are many losersand gainers. In the month of January 2008 there is a big crash in the markets i.e, froma healthy 21000 to it has fallen nearly 16000’s. There aremany traders who faced theconsequences. An image showing a person dejected with the market crash. The profitsare unlimited because the markets may go up or down. The person dejected with the market crash. 74
  • 75. Online Trading RELIANCE POWERRecently reliance power has entered in to the market. It’s IPO was issued in the monthof January. And in February it has hit the screen. Nearly they issued eleven croreshares in the IPO. And its price range was between 405 to 455. And it also issuedbonus shares to the traders after hitting the market. But after coming in to the marketit’s value was decreased up to 330. And it came in to the market on Feb 11, 2008. The logo of the reliance power is shown above. 75
  • 76. Online TradingBIBLIOGRAPHY 76
  • 77. Online TradingBIBLIOGRAPHYCapital Market (dealers) Module Work Book.(NSEs certification in financial markets)ODIN Softwarewww.nseindia.comwww.sebi.comwww.indiainfolinesecurities.comwww.bse.comwww.5paisa.com 77