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Kotak securities

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for MBA summer training

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  • 1. A PROJECT REPORT ON SUMMER TRAINING UNDERTAKEN AT KOTAK SECURITIES LTD. TITLED “ONLINE EQUITY TRADING” Submitted in partial fulfilment for the Award of degree of Master of Business AdministrationSUBMITTED BY: - SUBMITTED TO:-Virendra kumar Mrs. Anushruti PareekMBA IIyear (III Sem) 2011-2013 SUBODH INSTITUTE OF MANAGEMENT & CAREER STUDIES, JAIPUR 1
  • 2. ACKNOWLDGEMENTTalent and capabilities are of course necessary but opportunities and right guidanceis two very important back-ups without which any person cannot climb the ladder tosuccess.I wish to express my most sincere thanks to “Mr. Taj Mohammed” (ClusterManager) kotak securities, Vaishali Nagar, Jaipur, providing me the opportunity towork with renowned organization and enabling me to gain practical knowledge in thefield of Finance and Operations. I also owed my profound gratitude to my field guideMrs. Vartika (back office staff) and Mr. Naveen gupta (relationship manger) for theirguidance during the duration of project.Moreover I am also indebt to Dr Joytsana Dewan Mehta “Director” and my collegementor Mrs. Anushruti Pareek, SIMCS, Rambagh Campus, Jaipur for their kindhelp and co-operation for completing this project work.I indeed thanks to kotak securities ltd. Vaishali nagar, Jaipur and Simcs Jaipur forgiving me opportunity to have experience in a professionally run organization.Indebted to my parents, friends and relatives for their physical, psychological andmoral support extended by them at all time.Virendra Kumar 2
  • 3. PREFACEAny kind of learning is incomplete till it is practically applied in the concerned field.Only then does a person understand and get hold of even the minutest details ofwhat he/she has learnt in his stay at the institute doing his /her MBA. So, topractically apply what I had gained in the past one year in the MBA programme, Iunderwent two months summer training at Kotak Securities, Vaishali Nagar, Jaipur.It has been a wonderful learning experience, which has given me an insight intoManagement of modern business which requires an appreciation of multidisciplinaryconcept and in-depth knowledge of specific analytical tools, geared to the solution ofreal life problems. No doubt every real situation is unique but a set of theoreticaltools of knowledge, itself based on empirical foundation, can help in developing themechanism for handling such situation.So the MBA curriculum has been desired to provide to the future manager’s amplepractical exposure to the business world.The summer training is essential for the fulfillment of MBA curriculum; it provides anopportunity to the student to understand the industry with special emphasis on thedevelopment of skills in analyzing interpreting practical problems throughapplications of management. 3
  • 4. The whole study has been divided into various parts: The First Chapter includes the introduction about derivatives and history of kotak securities ltd. Its award and recognitions and its business in online trading. The Second chapter includes the objectives, significance, and research methodology and data collection. The Third chapter has reported facts and information gathered by student in the course of study of topic. The Fourth chapter is about online trading and the software KEAT used by the organization. The Fifth chapter is about SWOT analysis, which can help the organization to solidify its position in the market. The Sixth chapter includes the Suggestions and Recommendations for the further development and pointing out the weak points so that changes can be made. Lastly, there is Bibliography of the books, which was used by the researcher. 4
  • 5. TABLE OF CONTENTS.No TOPIC PAGE No.1. OVERVIEW 6 A) BASIC INTRODUCTION OF DERIVATIVE B) INTRODUCTION OF KOTAK MAHINDRA GROUP C) HISTORY OF KOTAK MAHINDRA GROUP D) INTRODUCTION OF KOTAK SECURITIES LTD. E) PRODUCTS ANS SERVICES OF KOTAK2. RESEARCH PROFILE 17 A) OBJECTIVE OF STUDY B) SIGNIFICANCE OF STUDY C) RESEARCH METHODOLOGY AND DATA COLLECTION3. FACTS AND FINDINGS 21 A) INTRODUCTION OF SEBI,BSE AND NSE B) INTRODUCTION ABOUT DERIVATIVES C) WHAT ARE FUTURE AND THEIR TRADING STRATEGIES D) WHAT ARE OPTIONS AND THEIR TRADING STRATEGIES4. ONLINE TRADING 30 A) BASIC INTRODUCTION ABOUT ONLINE TRADING B) PRODUCTS AVAILABLE FOR TRADING C) TRADING TOOLS PROVIDED BY KEAT5. SWOT ANALYSIS 476. SUGGESTIONS AND RECOMMENDATIONS 487. BIBLIOGRAPHY 50 5
  • 6. BASIC INTRODUCTION OF DERIVATIVESA derivative is a financial instrument whose value depends on the values of otherunderlying variables. As the name suggests it derives its value from an underlyingasset. A feature common to all underlying assets is that they carry the risk of changein value. For ex-a derivative may be created for a share, or any material object. Themost common underlying assets include stocks, bonds, commodities etc.INTRODUCTION OF KOTAK MAHINDRA GROUPThe Kotak Mahindra GroupKotak Mahindra is one of Indias leading banking and financial servicesorganizations, offering a wide range of financial services that encompass everysphere of life. From commercial banking, to stock broking, to mutual funds, to lifeinsurance, to investment banking, the group caters to the diverse financial needs ofindividuals and corporate sector.The group has a net worth of over Rs. 100.6 billion and has a distribution network ofbranches, franchisees, representative offices and satellite offices across cities andtowns in India, and offices in New York, London, San Francisco, Dubai, Mauritiusand Singapore servicing around 8 million customer accounts.The group specializes in offering top class financial services, catering to everysegment of the industry. The various companies include :Kotak Mahindra Bank Ltd 6
  • 7. Kotak Mahindra Old Mutual Life Insurance LtdKotak Securities LtdKotak Mahindra Capital Company (KMCC)Kotak Mahindra Prime Ltd (KMPL)Kotak International BusinessKotak Mahindra Asset Management Company Ltd (KMAMC)Kotak Private Equity Group (KPEG)Kotak Realty Fund Kotak Mahindra Bank Ltd Kotak Mahindra Bank Ltd is a one stop shop for all banking needs. The bank offers personal finance solutions of every kind from savings accounts to credit cards, distribution of mutual funds to life insurance products. Kotak Mahindra Bank offers transaction banking, operates lending verticals, manages IPOs and provides working capital loans. Kotak has one of the largest and most respected Wealth Management teams in India, providing the widest range of solutions to high net worth individuals, entrepreneurs, business families and employed professionals. Kotak Mahindra Old Mutual Life Insurance Ltd 7
  • 8. Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual plc. ACompany that combines its international strengths and local advantages to offer itscustomers a wide range of innovative life insurance products, helping them takeimportant financial decisions at every stage in life and stay financially independent.The company covers over 3 million lives and is one of the fastest growinginsurance companies in India. www.kotaklifeinsurance.comKotak Securities Ltd Kotak Securities is one of the largest broking houses inIndia with a wide geographical reach. Kotak Securities operations include stockbroking and distribution of various financial products including private andsecondary placement of debt, equity and mutual funds.Kotak Securities operate in five main areas of business:Stock Broking (retail and institutional)Depository ServicesPortfolio Management ServicesDistribution of Mutual FundsDistribution of Kotak Mahindra Old Mutual Life Insurance Ltd productsFor more information, please visit the Kotak Securitieswebsite www.kotaksecurities.com 8
  • 9. Kotak Mahindra Capital Company (KMCC) Kotak Investment Banking (KMCC) is a full-serviceinvestment bank in India offering a wide suite of capital market and advisorysolutions to leading domestic and multinational corporations, banks, financialinstitutions and government companies.Our services encompass Equity & Debt Capital Markets, M&A Advisory, PrivateEquity Advisory, Restructuring and Recapitalization services, Structured Financeservices and Infrastructure Advisory & Fund Mobilization.For more information, please visit the Kotak Investment Bankingwebsite www.kmcc.co.inKotak Mahindra Prime Ltd (KMPL) Kotak Mahindra Prime Ltd is among Indias largestdedicated passenger vehicle finance companies. KMPL offers loans for the entirerange of passenger cars, multi-utility vehicles and pre-owned cars. Also on offerare inventory funding and infrastructure funding to car dealers with strategicarrangements via various car manufacturers in India as their preferred financier.For more information, please visit the KMPL website http://carloan.kotak.comKotak International Business Kotak International Business specializes in 9
  • 10. providing a range of services to overseas customers seeking to invest in India. Forinstitutions and high net worth individuals outside India, Kotak InternationalBusiness offers asset management through a range of offshore funds with specificadvisory and discretionary investment management services.For more information, please visit the Kotak Mahindra International Businesswebsitewww.investindia.kotak.comKotak Mahindra Asset Management Company Ltd (KMAMC) Kotak Mahindra Asset Management Companyoffers a complete bouquet of asset management products and services that aredesigned to suit the diverse risk return profiles of each and every type of investor.KMAMC and Kotak Mahindra Bank are the sponsors of Kotak Mahindra PensionFund Ltd, which has been appointed as one of six fund managers to managepension funds under the New Pension Scheme (NPS).For more information, please visit the KMAMCwebsite www.kotakmutual.com/kmw/main.htmKotak Private Equity Group (KPEG) Kotak Private Equity Group helps nurture emergingbusinesses and mid-size enterprises to evolve into tomorrows industry leaders.With a proven track record of helping build companies, KPEG also offers expertisewith a combination of equity capital, strategic support and value added services.What differentiates KPEG is not merely funding companies, but also having aclose involvement in their growth as board members, advisors, strategists andfund-raisers. 10
  • 11. For more information, please visit the KPEG website www.privateequityfund.kotak.com Kotak Realty Fund Kotak Realty Fund deals with equity investments covering sectors such as hotels, IT parks, residential townships, shopping centre’s, industrial real estate, health care, retail, education and property management. The investment focus here is on development projects and enterprise level investments, both in real estate intensive businesses. For more information, please visit the Kotak Realty Fund website www.realtyfund.kotak.comHistory of Kotak Mahindra GroupThe Kotak Mahindra group was born in 1985 as kotak Capital Management FinanceLimited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotakand company. Industrialists Harish Mahindra and Mahindra took a stake in 1986, andthat’s when the company changed its name to Kotak Mahindra Finance Limited.It has been a steady and confident journey leading to growth and success. Themilestones of the group growth story are listed below year wise:1986 Kotak Mahindra Finance Ltd started the activity of Bill Discounting 11
  • 12. 1987 Kotak Mahindra Finance Ltd entered the Lease and Hire Purchase market1990 The Auto Finance division was started1991 The Investment Banking Division was started. Took over FICOM, one of Indias largest financial retail marketing networks1992 Entered the Funds Syndication sector1995 Brokerage and Distribution businesses incorporated into a separate company - Securities. Investment banking division incorporated into a separate company - Kotak Mahindra Capital Company1996 The Auto Finance Business is hived off into a separate company - Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Groups entry into information distribution.1998 Entered the mutual fund market with the launch of Kotak Mahindra Asset Management Company.2000 Kotak Mahindra tied up with Old Mutual plc. For the Life Insurance business. Kotak Securities launched its on-line broking site. Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.2001 Matrix sold to Friday Corporation. Launched Insurance Services. Kotak Securities Ltd. was incorporated 12
  • 13. 2003 Kotak Mahindra Finance Ltd. converted into a commercial bank - the first Indian company to do so.2004 Launched India Growth Fund, a private equity fund.2005 Kotak Group realigned joint venture in Ford Credit; their stake in Kotak Mahindra Prime was bought out (formerly known as Kotak Mahindra Primus Ltd) and Kotak group’s stake in Ford credit Kotak Mahindra was sold. Launched a real estate fund.2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities. Launched a Pension Fund under the New Pension System.2008 Kotak Mahindra Bank Ltd. opened a representative office in Dubai2009 Entered Ahmadabad Commodity Exchange as anchor investor. Ahmadabad Derivatives and Commodities Exchange, a Kotak anchored2010 enterprise, became operational as a national commodity exchange. INTRODUCTION OF KOTAK SECURITIES LTD. Originally established in 1994, Kotak Securities is a subsidiary of Kotak 13
  • 14. Mahindra Bank, which services more than 7.4 lakh customers. The firm has awide network of more than 1400 branches, franchisees representative offices,and satellite offices across 448 cities in India and offices in New York, London,Dubai, Mauritius and Singapore.We process more than 400000 trades a day which is much higher than someof the renowned international brokers.The company is a corporate member of both The Bombay Stock Exchange(BSE) and The National Stock Exchange of India (NSE). Our operationsinclude stock broking services for trading in stock markets through branches &internet and distribution of various financial products including investments inIPOs, Mutual Funds and Currency Derivatives. Currently, Kotak Securities isone of the largest broking houses in India with substantial geographical reachto Asia Pacific, Europe, Middle East and America.Kotak Securities Limited has Rs. 1,202 crore of Assets Under Management(AUM) as of 31st Dec, 2011.Innovators:We have been the pioneers in providing many products and services whichhave now become industry standards for stock broking in India. Some of theminclude: Mobile stock trading application to keep track of your investments even on the go Facility of Margin Finance to the customers for online stock trading 14
  • 15. Investing in IPOs and Mutual Funds on the phone SMS alerts before execution of depository transactions Auto Invest - A systematic investing plan in Equities and Mutual funds Provision of margin against securities automatically against shares in your Demat accountResearch Expertise:We specialize in Fundamental and Technical analysis backed by a team ofhighly trained and qualified individuals.Our full-fledged research division is involved in Macro Economic studies,Sectorial research and Company Specific Equity Research which publishes in-depth stock market analysis. This is combined with a strong and wellnetworked sales force which helps deliver current and up to date marketinformation and news.We are also a depository participant with National Securities DepositoryLimited (NSDL) and Central Depository Services Limited (CDSL). By being astock broker and depositary participant, we provide dual benefit in our serviceswherein the investors can avail our stock broking services for executing thetransactions and the depository services for settling them.Our Portfolio Management Service comes as an answer to those who wouldlike to grow exponentially on the crest of the stock market, with the backing ofan expert.Board of Directors of Kotak Securities Ltd : 15
  • 16. Chairman: Mr. Uday Kotak.Managing Director: Mr. Narayan S.A.Directors: Mr. C. Jayaram Mrs. Falguni Nayar. Mr. Vikram Sud.Executive Director & Chief operating Officer: Mr. D. KannanKOTAK GROUP PRODUCTS AND SERVICES :BankLife InsuranceMutual FundCar FinanceSecuritiesInstitutional EquitiesInvestment BankingKotak Mahindra InternationalKotak Private EquityKotak Realty FundAWARDS AND RECOGNITION OF KOTAK SECURITIES LTD.AwardsBest Broker in India by Finance Asia for 2010 & 2009 16
  • 17. UTI MF - CNBC TV18 Financial Advisor Awards - Best Performing EquityBroker (National) for the year 2009Best Brokerage Firm in India by Asia money in 2009, 2008, 2007 & 2006Best Performing Equity Broker in India - CNBC Financial Advisor Awards 2008Avaya Customer Responsiveness Awards (2007 & 2006) in Financial ServicesSectorThe Leading Equity House in India in Thomson Extel Surveys Awards for theyear 2007Euro money Award (2007 & 2006) - Best Provider of Portfolio Management:EquitiesEuro money Award (2005)-Best Equities House In IndiaFinance Asia Award (2005)-Best Broker In IndiaFinance Asia Award (2004)- Indias best Equity HouseWe specialize in Fundamental and Technical analysis backed by a team ofhighly trained and qualified individuals.Our full-fledged research division is involved in Macro Economic studies,Sectorial research and Company Specific Equity Research which publishesin-depth stock market analysis. This is combined with a strong and wellnetworked sales force which helps deliver current and up to date marketinformation and news.We are also a depository participant with National Securities DepositoryLimited (NSDL) and Central Depository Services Limited (CDSL). By being astock broker and depositary participant, we provide dual benefit in ourservices wherein the investors can avail our stock broking services for 17
  • 18. executing the transactions and the depository services for settling them.Our Portfolio Management Service comes as an answer to those who wouldlike to grow exponentially on the crest of the stock market, with the backing ofan expert.TITLE OF THE STUDYThe title of the study undertaken by the researcher is “operation and servicesoffered by Kotak Securities Ltd. and the procedure involved in online equitytrading with more emphasis on customer preference.”The title given to the researcher found to be very interesting and learning innature. Although researcher faced various problem seeking information fromvarious source due to the competition of various bank, but due to co-operationfrom various friends, colleagues and specially the staff of Kotak Securities Ltd.she had completed the report.OBJECTIVE OF THE STUDYTo help the researcher in knowing out the various kinds of services providedby Kotak group. To study the different products of Kotak Securities Ltd. To maintain the database regarding various. To give an in depth knowledge about security, Derivatives; future and option, capital market; primary and secondary, NSE and BSE. To study how to determine various Pricing Strategies involved in online 18
  • 19. trading. To study the software KEAT used by the company for trading.SIGNIFICANCE OF THE STUDYEveryone put his or her time, money and efforts because to have somesignificance. My studies have some significance to:The organizationAs organization has got valuable data regarding customer preference andmarket share of Kotak Securities Ltd. in finance industry. Now theOrganization can some significant actions in the direction of customersatisfaction so that the customer can avail more benefits and the organizationcan get good customer and more business.The StudentIt also has signification to me that I got the precious knowledge about variousoperations of different department, policies and data regarding variousschemes provided by the Kotak Securities Ltd. It will help me in my future forthe practical application in real life.RESEARCH METHODOLOGYResearch Methodology is way to systematically solve the research problem. Itmay be understood as a science of studying how researcher is done 19
  • 20. scientifically. In it we study the various steps that are generally adopted by aresearcher in studying his research problem along with the logic behind them.Entire data has been collected and calculated up to the accurate extent isfrom primary as well as secondary sources i.e. no previous data was availableon the basis of which calculation for graphical presentation is done. As it wasassured to the respondents that their response would be kept confidential sothey were very free and frank while giving their response.It was descriptive research. The researcher –collected data from personalinterviewed with official of different banks, by filling questionnaires, surfing onInternet, articles published in magazines, literature available with KotakSecurities Ltd.METHODOLOGY OF DATA COLLECTIONTo make the report more authentic and valid, the collection of data should bethrough reliable sources and the approach is very important. For the purposeof his report, the data and information were collected in the following manner:Direct contact with the organization:-The organization was visited daily to collect the information about theirservices and products offered. Their pamphlets were obtained and studied.Websites and search Engines :-The internet, being the largest source of information and knowledge proved tobe biggest help in data collection. The website of the Kotak Securities Ltd.gave the information regarding the industry in general.Books Available :-The data was also collected from the book with us and the brochures also 20
  • 21. proved very useful.The data so collected was then sorted and classified to make it suitable foranalysis. Several questions proved to be reluctant and were dropped in finalanalysis. Conclusions were drawn on the basis of the majority opinion. Somepoints were the conclusions were ambiguous were also removed fromanalysis.DIAGRAM OF RESEARCH METHODOLOGY : DEFINE RESEARCH PROBLEM REVIEW THE LITERATURE FORMULATE HYPOTHESIS DESIGN RESEARCH COLLECT DATA ANALYSIS DATA 21
  • 22. INTERPRET AND REPORTSEBI – IntroductionIn 1988 the Securities and Exchange Board of India (SEBI) was establishedby the Government of India through an executive resolution, and wassubsequently upgraded as a fully autonomous body (a statutory Board) in theyear 1992 with the passing of the Securities and Exchange Board of India Act(SEBI Act) on 30th January 1992.In place of Government Control, statutory and autonomous regulatory boardwith defined responsibilities, to cover both development & regulation of themarket, and independent powers have been set up. Paradoxically this is apositive outcome of the Securities Scam of 1990-91.The basic objectives of the Board were identified as:• to protect the interests of investors in securities;• to promote the development of Securities Market;• to regulate the securities market and• for matters connected therewith or incidental thereto.Since its inception SEBI has been working targeting the securities and is 22
  • 23. attending to the fulfilment of its objectives with commendable zeal anddexterity. The improvements in the securities markets like capitalizationrequirements, margining, establishment of clearing corporations etc. reducedthe risk of credit and also reduced the market. SEBI has introduced thecomprehensive regulatory measures, prescribed registration norms, theeligibility criteria, the code of obligations and the code of conduct for differentintermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers, registrars, portfolio managers, credit rating agencies, underwritersand others. It has framed bye-laws, risk identification and risk managementsystems for Clearing houses of stock exchanges, surveillance system etc.which has made dealing in securities both safe and transparent to the endinvestor. Another significant event is the approval of trading in stock indices(like S&P CNX Nifty & Sensex) in2000. A market Index is a convenient andeffective product because of the following reasons:• It acts as a barometer for market behaviour;• It is used to benchmark portfolio performance;• It is used in derivative instruments like index futures and index options;• It can be used for passive fund management as in case of Index Funds.Two broad approaches of SEBI is to integrate the securities market at thenational level, and also to diversify the trading products, so that there is anincrease in number of traders including banks, financial institutions, insurancecompanies, mutual funds, primary dealers etc. to transact through theExchanges. In this context the introduction of derivatives trading throughIndian Stock Exchanges permitted by SEBI in 2000 AD is a reallandmark.SEBI appointed theL. C. Gupta Committee 23
  • 24. in 1998 to recommend the regulatory framework for derivatives trading andsuggest bye-laws for Regulation and Control of Trading and Settlement ofDerivatives Contracts. The Board of SEBI in its meeting held on May 11, 1998accepted the recommendations of the committee and approved the phasedintroduction of derivatives trading in India beginning with Stock Index Futures.The Board also approved the "Suggestive Bye-laws" as recommended by theDr LC Gupta Committee for Regulation and Control of Trading and Settlementof Derivatives Contracts.SEBI then appointed theJ. R. Verma Committeeto recommend Risk Containment Measures (RCM) in the Indian Stock IndexFutures Market. The report was submitted in November 1998.However theSecurities Contracts (Regulation) Act, 1956 (SCRA) required amendment toinclude” derivatives" in the definition of securities to enable SEBI to introducetrading in derivatives. The necessary amendment was then carried out by theGovernment in 1999. The Securities Laws(Amendment) Bill, 1999 wasintroduced. In December 1999 the new framework was approved. Derivativeshave been accorded the status of `Securities. The ban imposed on trading inderivatives in1969 under a notification issued by the Central Government wasrevoked. Thereafter SEBI formulated the necessary regulations/bye-laws andintimated the Stock Exchanges in the year 2000. The derivative trading startedin India at NSE in 2000 and BSE started trading in the year 2001.Introduction of BSEBSE Limited is the oldest stock exchange in Asia What is now popularlyknown as the BSE was established as "The Native Share & Stock BrokersAssociation" in 1875. 24
  • 25. Over the past 135 years, BSE has facilitated the growth of the Indiancorporate sector by providing it with an efficient capital raising platform.Today, BSE is the worlds number 1 exchange in the world in terms of thenumber of listed companies (over 4900). It is the worlds 5th most active interms of number of transactions handled through its electronic trading system.And it is in the top ten of global exchanges in terms of the marketcapitalization of its listed companies (as of December 31, 2009). Thecompanies listed on BSE command a total market capitalization of USDTrillion 1.28 as of Feb, 2010.BSE is the first exchange in India and the second in the world to obtain an ISO9001:2000 certification. It is also the first Exchange in the country and secondin the world to receive Information Security Management System Standard BS7799-2-2002 certification for its BSE On-Line trading System (BOLT).Presently, we are ISO 27001:2005 certified, which is a ISO version of BS 7799for Information Security.The BSE Index, SENSEX, is Indias first and most popular Stock Marketbenchmark index. Exchange traded funds (ETF) on SENSEX, are listed onBSE and in Hong Kong. Futures and options on the index are also traded atBSE.BSE continues to innovate: Became the first national exchange to launch its website in Gujarati and Hindi and now Marathi Purchased of Marketplace Technologies in 2009 to enhance the in- house technology development capabilities of the BSE and allow faster 25
  • 26. time-to-market for new products Launched a reporting platform for corporate bonds christened the ICDM or Indian Corporate Debt Market Acquired a 15% stake in United Stock Exchange (USE) to drive the development and growth of the currency and interest rate derivatives markets Launched BSE Star MF Mutual fund trading platform, which enables exchange members to use its existing infrastructure for transaction in MF schemes. BSE now offers AMFI Certification for Mutual Fund Advisors through BSE Training Institute (BTI) Co-location facilities for Algorithmic trading BSE also successfully launched the BSE IPO index and PSU website BSE revamped its website with wide range of new features like Live streaming quotes for SENSEX companies, Advanced Stock Reach, SENSEX View, Market Galaxy, and Members Launched BSE SENSEX MOBILE STREAMERWith its tradition of serving the community, BSE has been undertakingCorporate Social Responsibility (CSR) initiatives with a focus on Education,Health and Environment. BSE has been awarded by the World Council ofCorporate Governance the Golden Peacock Global CSR Award for itsinitiatives in Corporate Social Responsibility (CSR).Other Awards: The Annual Reports and Accounts of BSE for the year ended March 31, 2006 and March 31, 2007 have been awarded the ICAI awards for excellence in financial reporting. The Human Resource Management at BSE has won the Asia - Pacific HRM awards for its efforts in employer branding through talent management at work, health management at work and excellence in HR through technologyDrawing from its rich past and its equally robust performance in the recent 26
  • 27. times, BSE will continue to remain an icon in the Indian capital market.Introduction of NSEThe National Stock Exchange (NSE) is Indias leading stock exchangecovering various cities and towns across the country. NSE was set up byleading institutions to provide a modern, fully automated screen-based tradingsystem with national reach. The Exchange has brought about unparalleledtransparency, speed & efficiency, safety and market integrity. It has set upfacilities that serve as a model for the securities industry in terms of systems,practices and procedures.NSE has played a catalytic role in reforming the Indian securities market interms of microstructure, market practices and trading volumes. The markettoday uses state-of-art information technology to provide an efficient andtransparent trading, clearing and settlement mechanism, and has witnessedseveral innovations in products & services viz. demutualisation of stockexchange governance, screen based trading, compression of settlementcycles, dematerialisation and electronic transfer of securities, securitieslending and borrowing, professionalisation of trading members, fine-tuned riskmanagement systems, emergence of clearing corporations to assumecounterparty risks, market of debt and derivative instruments and intensiveuse of information technology.Getting Familiar with Market Related ConceptsOnce you enter the Stock market, you will frequently come across terms likeMarket Capitalization, Small-Cap Stocks, Mid-Cap Stocks and Large-CapStocks. In this section you will get an understanding of what these terms meanin the context of stock markets. 27
  • 28. Let us first understand MARKET CAPITALIZATION MARKET CAPITALIZATIONA: "Cap" is short for capitalization, the market value of a stock, indicating thesize of the stock available.Calculating a stocks capitalizationMarket Capitalization = Market Price of the stock x The number of the stocksoutstanding* shares*Outstanding means the shares held by the publicFor example, if Stock A has a Current Market Price of Rs 20 per share, andthere are 1,00,000 shares in the hands of public investors, then Stock A has acapitalization of 20,00,000.The companys capitalization is an effective parameter to group corporatestocks.In the US, mid-cap shares are those stocks that have a market capitalizationranging from Rs 9,000 crore to Rs 45,000 crore. In India, these shares wouldbe classified as large-cap shares. Thus, classification of shares into large-cap,mid-cap, small-cap is made on the basis of the relative size of the market inthat particular country. The total market capitalization of US markets is $15trillion. In India, the market capitalization of listed companies is around$600bn. 28
  • 29. SMALL-CAP STOCKSA: The stocks of small companies that have the potential to grow rapidly areclassified as small-cap stocks. These stocks are the best option for an investorwho wishes to generate significant gains in the long run; as long he does notrequire current dividends and can withstand price volatility. Generallycompanies that have a market Capitalization in the range of up to 250 Cororesare small cap stocks As many of these companies are relatively new, it isdifficult to predict how they will perform in the market. Being small enterprises,growth spurts dramatically affect their values and revenues, sending pricessoaring.On the other hand, the stocks of these companies tend to be volatile and maydecline dramatically.Most Initial Public Offerings are for small-cap companies, although these dayslarge companies do tend to source the capital markets for expansion plans.Aggressive mutual funds are also enthusiastic about adding small-cap stocksin their portfolios. Because they have the advantage of being highly growthoriented, small-cap stocks can forego paying dividends to investors, whichenables the profits earned to be reinvested for future growth. MID-CAP STOCKSA: Mid-cap stocks are typically stocks of medium-sized companies. These arestocks of well-known companies, recognized as seasoned players in themarket. They offer you the twin advantages of acquiring stocks with goodgrowth potential as well as the stability of a larger company. Generallycompanies that have a market Capitalization in the range of 250-4000 croresare mid cap stocks 29
  • 30. Mid-cap stocks also include baby blue chips; companies that show steadygrowth backed by a good track record. They are like blue-chip stocks (whichare large-cap stocks) but lack their size. These stocks tend to grow well overthe long term. LARGE-CAP STOCKSA: Stocks of the largest companies (many being blue chip firms) in the marketsuch as Tata, Reliance, ICICI are classified as large-cap stocks. Beingestablished enterprises, they have at their disposal large reserves of cash toexploit new business opportunities.The sheer volume of large-cap stocks does not let them grow as rapidly assmaller capitalized companies and the smaller stocks tend to outperform themover time. Investors, however gain the advantages of reaping relatively higherdividends compared to small- and mid-cap stocks while also ensuring thelong-term preservation of their capital.Futures Trading What are Derivatives?A: A derivative is a financial instrument whose value depends on the values ofother underlying variables. As the name suggests it derives its value from anunderlying asset. For Ex-a derivative, may be created for a share, or any 30
  • 31. material object. The most common underlying assets include stocks, bonds,commodities etc.Let us try and understand a Derivatives contract with an example: A: Anil buys a futures contract in the scrip "Satyam Computers". He willmake a profit of Rs.500 if the price of Satyam Computers rises by Rs 500. Ifthe price remains unchanged Anil will receive nothing. If the stock price ofSatyam Computers falls by Rs 800 he will lose Rs 800.As we can see, the above contract depends upon the price of the SatyamComputers scrip, which is the underlying security. Similarly, futures tradingcan be done on the indices also. Nifty futures is a very commonly tradedderivatives contract in the stock markets. The underlying security in the caseof a Nifty Futures contract would be the Index-Nifty. What are the different types of Derivatives?A: Derivatives are basically classified into the following: Futures/Forwards Options Swaps What are Futures? 31
  • 32. A: A futures contract is a type of derivative instrument, or financial contractwhere two parties agree to transact a set of financial instruments or physicalcommodities for future delivery at a particular price.The example stated below will simplify the concept of futures trading:Case1:Ravi wants to buy a Laptop, which costs Rs 50,000 but owing to cashshortage at the moment, he decides to buy it at a later period say 2 monthsfrom today.However,he feels that after 2 months the prices of Lap tops mayincrease due to increase in input/Manufacturing costs .To be on the safer side,Ravi enters into a contract with the Laptop Manufacturer stating that 2 monthsfrom now he will buy the Laptop for Rs 50,000. In other words he is beingcautious and agrees to buy the Laptop at todays price 2 months from now.The forward contract thus entered into will be settled at maturity. Themanufacturer will deliver the asset to Ravi at the end of two months and Raviin turn will pay cash delivery.Thus a forward contract is the simplest mode of a derivative transaction. It isan agreement to buy or sell a specific quantity of an asset at a certain futuretime for a specified price. No cash is exchanged when the contract is enteredinto. What are Index Futures?A: As Stated above, Futures are derivatives where two parties agree to 32
  • 33. transact a set of financial instruments or physical commodities for futuredelivery at a particular price. Index futures are futures contracts where theunderlying is a stock index (Nifty or Sensex) and helps a trader to take a viewon the market as a whole. What is meant by Lot size?A: Lot size refers to the quantity in which an investor in the markets can tradein a derivative of a particular scrip. For Ex-Nifty Futures have a lot size of 100or multiples of 100.Hence if a person were to buy 1 lot of Nifty Futures , thevalue would be 100*Nifty Index Value at that point of time.Similarly lots of other scrips such as Infosys, reliance etc can be bought andeach may have a different lot size. NSE has fixed the minimum value as twolakhs for an Futures and Options contract. Lot sizes are fixed accordinglywhich will be the minimum shares on which a trader can hold positions. What is meant by expiry period in Futures Trading?A: Each contract entered into has an expiry period. This refers to the periodwithin which the futures contract must be fulfilled. Futures contracts may havedurations of 1 month,2 months or at the most 3 months. Each contract expireson the last Thursday of the expiry month and simultaneously a new contract isintroduced for trading after expiry of a contract. What are the uses of Derivatives? What are the various derivativestrategies that I can use? 33
  • 34. A: Derivatives have a multitude of uses namely:a)Hedgingb)Speculation&c)ArbitrageChapter 1:OPTIONS What are options?A: Before you begin options trading it is critical to have a clear idea of whatyou hope to accomplish. Only then will you be able to narrow down on anoptions trading strategy. Let us first understand the concept of options.An option is part of a class of securities called derivatives.The concept of options can be explained with this example. For instance,when you are planning to buy some property you might have placed anonrefundable deposit to hold it for a short time while you evaluate otheroptions. That is an example of a type of option.Similarly, you have probably heard about Bollywood buying an option on anovel. In optioning the novel, the director has bought the right to make thenovel into a movie before a specified date. In both cases, with the house and 34
  • 35. the script, somebody put down some money for the right to buy a product at aspecific price before a specific date.Buying a stock option is quite similar. Options are contracts that give theholder the right to buy or sell a fixed amount of a certain stock at a specifiedprice within a specified time. A put option gives the holder the right to sell thesecurity, a call option gives the right to buy the security. However, this type ofcontract gives the holder the right, but not the obligation to trade stock at aspecific price before a specific date. Several individual investors find optionsuseful tools because they can be used either as:A) A type of leverage orB) A type of insurance.Trading in options lets you benefit from a change in the price of the sharewithout having to pay the full price of the share. They provide you with limitedcontrol over the shares of a stock with substantially less capital than would berequired to buy the shares outright.When used as insurance, options can partially protect you from the specificsecuritys price fluctuations by granting you the right to buy or sell shares at afixed price for a limited amount of time.Options are inherently risky investment vehicles and are suitable only forexperienced and knowledgeable investors who are prepared to closelymonitor market conditions and are financially prepared to assume potentiallysubstantial losses. 35
  • 36. What are the different types of Options? How can Options be used as astrategic measure to make profits/reduce losses?A: Options may be classified into the following types:a)Call Optionb)Put OptionAs mentioned before, there are two types of options, calls and puts. A calloption gives the holder the right to buy the underlying stock at the strike priceanytime before the expiration date. Generally Call options increase in value asthe value of the underlying instrument increases.By contrast, the put option gives the holder the right to sell shares of theunderlying stock at the strike price on or before the expiry date. The put optiongains in value as the value of the underlying instrument decreases. A putoption is one where one can insure a stock against subsequent price fall. If thevalue of your stocks goes down, you can exercise your put option and sell it atthe price level decided upon earlier. If in case the stock price moves higher, allyou lose is just the premium amount that was paid.Note that in newspaper and online quotes you will see calls abbreviated as Cand puts abbreviated as P.The examples stated below will explain the use of Put options clearly:Case 1: 36
  • 37. Rajesh purchases 1 lot of Infosys Technologies MAY 3000 Put and pays apremium of 250 This contract allows Rajesh to sell 100 shares of Infosys at Rs3000 per share at any time between the current date and the end ofMay.Inorder to avail this privilege, all Rajesh has to do is pay a premium of Rs25,000 (Rs 250 a share for 100 shares).The buyer of a put has purchased a right to sell. The owner of a put option hasthe right to sell.Case 2:If you are of the opinion that a particular stock say "Ray Technologies" iscurrently overpriced in the month of February and hence expect that there willbe price corrections in the future. However you dont want to take a chance ,just in case the prices rise. So here your best option would be to take a Putoption on the stock.Lets assume the quotes for the stock are as under:Spot Rs 1040May Put at 1050 Rs 10May Put at 1070 Rs 30So you purchase 1000 "Ray Technologies" Put at strike price 1070 and Putprice of Rs 30/-. You pay Rs 30,000/- as Put premium.Your position in two different scenarios have been discussed below:1. May Spot price of Ray Technologies = 10202. May Spot price of Ray Technologies = 1080 37
  • 38. In the first situation you have the right to sell 1000 "Ray Technologies" sharesat Rs 1,070/- the price of which is Rs 1020/-. By exercising the option you earnRs (1070-1020) = Rs 50 per Put, which amounts to Rs 50,000/-. Your netincome in this case is Rs (50000-30000) = Rs 20,000.In the second price situation, the price is more in the spot market, so you willnot sell at a lower price by exercising the Put. You will have to allow the Putoption to expire unexercised. In the process you only lose the premium paidwhich is Rs 30,000. What is open interest?A: The total number of option contracts and/or futures contracts that are notclosed or delivered on a particular day and hence remain to be exercised,expired or fulfilled through delivery is called open interest. What are Index Futures?A: As Stated above, Futures are derivatives where two parties agree totransact a set of financial instruments or physical commodities for futuredelivery at a particular price. Index futures are futures contracts where theunderlying is a stock Index (Nifty or Sensex) and helps a trader to take a viewon the market as a whole. What is meant by the terms Option Premium, strike price and spot price?A: The price that a person pays for a call option/Put Option is called theOption Premium. It secures the right to buy/sell that particular stock at a 38
  • 39. specified price called the strike price. In other words the strike price is thespecified price at which the holder of a stock option may purchase the stock. Ifyou decide not to use the option to buy the stock, and you are not obligated to,your only cost is the option premium. Premium of an option = Options intrinsicvalue + Options time value The stated price per share for which underlyingstock may be purchased (for a call) or sold (for a put) by the option holderupon exercise of the option contract is called the Strike price. Spot Price is thecurrent price at which a particular commodity can be bought or sold at aspecified time and place. What is meant by settlement price?A: The last price paid for a contract on any trading day. Settlement prices areused to determine open trade equity, margin calls and invoice prices fordeliveries. How does one determine the price of an option?A: A variety of factors determine the price of an option.The behavior of the underlying stock considerably affects the value of anoption. Investors have different opinions about how a particular stock willbehave in the future and hence may disagree about the value of any givenoption.In addition, the value of an option decreases as its expiration dateapproaches. Thus, its value is also highly dependent on the amount of timeleft before the option expires.Intrinsic & Time ValueAn options price is composed of its intrinsic value and time value.What a particular option contract is worth to a buyer or seller is measured byhow likely it is to meet their expectations. In the language of options, thats 39
  • 40. determined by whether or not the option is, or is likely to be, in the money orout-of-the-money at expiration. Intrinsic value is how far an option is in-the-money. Thus, the phrase is an adjective used to describe an option with anintrinsic value. A call option is in- the-money if the spot price is above thestrike price. A put option is in the money if the spot price is below the strikeprice.It is calculated by subtracting the options strike price from the spot price. Anout-of-the-money option has an intrinsic value of zero.For example if XYZ is trading at Rs 58 and the June 55 call is trading at Rs 4,to calculate the intrinsic value subtracts Rs 55 from 58, leaving you with Rs 3of intrinsic value. The remaining Rs 1 is known as extrinsic or time value.Time value is the amount over intrinsic value that a buyer pays for the option.While buying time value, an options purchaser assumes that the option willincrease in value before it expires. As the option nears expiration, its timevalue starts decreasing toward zero.Theoretical ValueTheoretical value is the objective value of an option. It shows how much time-value is left in an option. The most commonly used formula to calculate thetheoretical value of an option is known as the Black-Scholes model. 40
  • 41. This model considers the price of the stock, the options strike price, the timeremaining before expiration, the volatility of the underlying stock, the stocksdividends and the current interest rate while arriving at the theoretical value ofthe option.Although an option may trade for more or less than its theoretical value, themarket views the theoretical value as the objective standard of an optionsvalue. This makes the price of all options tilt toward their theoretical value overtime.The Components of Theoretical ValueVolatilityThe volatility of the underlying stock is one of the key factors in determiningthe value of an option. Often, the options price increases as the volatility of thestock increases. The difficulty in predicting the behavior of a volatile stockpermits the option seller to command a higher price for the additional risk.There are two types of volatility, historical and implied. As the term suggests,historical volatility is a measurement of the stocks movement based on its pastbehavior.By contrast, implied volatility is calculated using option prices. It is ameasurement of the stocks movement as implied by how the market iscurrently valuing options. 41
  • 42. DividendsAs an owner of a call option you can always exercise your right to the stockand receive any dividend it might pay.Interest RateIf you buy an option rather than a stock, you invest less money upfront.Days Until ExpirationAn option, being a wasted asset; wastes a little as each day lapses. Thus itsvalue is calculated in accordance to the amount of days left in its life. What are swaptions?A: A swaption is an option on an interest rate swap. Swaptions are optionscontracts, which give you the right to enter into a swap agreement at theoption expiration, in return for a one-off premium payment. What is meant by Covered Call, Covered Put, In the Money, Out Of theMoney, At the Money?A: Ø In-the-moneyA call option is in the money if the strike price is less than the market price ofthe underlying security. A put option is in-the-money if the strike price isgreater than the market price of the underlying security.Ø Out of the moneyA call option is out-of-the-money if the price of the underlying instrument islower than the exercise/strike price. A put option is out-of-the-money if theprice of the underlying instrument is above the exercise/strike price. 42
  • 43. Ø At-the-moneyAt the money is a condition in which the strike price of an option is equal to (ornearly equal to) the market price of the underlying security.Ø Covered CallYou can take a covered call if you take a long position in an asset combinedwith a short position in a call option on the same underlying asset.Ø Covered PutThe selling of a put option while being short for an equivalent amount in theunderlying security.Online Trading Basic introduction about online trading Trading tools provided by KEAT Easy usage of the softwareWHAT IS ONLINE TRADING?Online trading is a service offered on the internet for purchase and sale ofequity, derivatives and commodities. In Online trading, you ill accessstockbroker’s website through your internet –enabled PC and place ordersthrough broker’s internet-based trading engine. These orders are routed to theconcerned Stock or commodity Exchange without manual intervention andexecution thereon in a matter of a few seconds. 43
  • 44. Trinity Account:Trinity Account is a unique integrated account that helps you enjoythe benefits of a Online Trading Account, Bank Account,Demat Account on a single platform for your securities transaction.This account gives you a convenience of fund transfer andonline trading with our multiple logins.Benefits of Trinity Account:Single application to open three different account i.e. Bank Account,Demat A/c & Online Trading Account. 44
  • 45. Get all the three different account with single entity. 2 in 1 Account 3 in 1 ( Trinity ) Account Banks to Link Kotak , Axis , HDFC , Kotak Mahindra Bank Citi, IndusInd, ICICI , SBI Fund transfer Manual transfer done No manual transfer facility via payment gateway required Payment Fund transfer through Direct fund transfer Gateway payment gateway possible Limits on fund Limited transfer Unlimited transfer transferHow to open a Kotak Securities Ltd. Demat account:Approach your nearest Kotak Securities Ltd. Branch.Fill up the Demat Account Opening Form.If your shares are held in joint names, be sure to open your account in thesame order of names. If A, Band C jointly hold 100 shares in the company andhave three share certificatesall named as ABC, one DP account will suffice.For different combinations of names, open separate accounts for eachcombination if the three certificates are held as ABC, BAC and CBA, threeaccounts are required.There is no limit to the number of accounts you can open.You can even open a multiple-sign Depository Participant - Client Agreement,which each investor must sign at the time of account opening. 45
  • 46. You will receive an account number and a DP ID number with each account.Quote both these in all future correspondence with Kotak Securities Ltd.After opening the account, you can hold shares of any number of companies inyour account, provided all such companies have entered the depositorysystem.Submit a completely filled up Demat Request Form (DRF) in triplicatefor each ISIN along with defaced physical securities. Kotak Securities Ltd.provides you with one blankDematerialization Request Form (DRF). Additional forms are available at anyof the KotakSecurities Ltd. branches offering Demat Services.Documents Required: Two passport size photographs. One Xerox of ID proof (PAN card, Passport etc). One Xerox of address proof (Driving License, Recent 2 months Bankstatement etc.). One cancelled cheque. One cheque of margin amount + application fee.BROKERAGE STRUCTURE:BROKERAGE STRUCTUREBROKERAGE STRUCTURE FOR INTERNET BASED TRADINGDelivery - Brokerage applicable both side 46
  • 47. < 1lakh 0.59% Gateway A/C1 - 5 lakh 0.55%5 - 10 lakh 0.45%10 - 20 lakh 0.36%20 - 60 lakh 0.27%60 lakh - 2 0.23%crore> 2 crore 0.18% Privilege A/CIntraday brokerages< 25 lakhs 0.06% both sides Gateway A/C25 lakhs - 2 0.05% both sidescrores2 crores - 5 0.04% both sidescrores 47
  • 48. > 5 crores 0.03% both sides Privilege A/CFutures Intraday brokerages Settlement Gateway< 2 crores 0.07% both sides 0.09% both sides A/C2 - 5.5 crores 0.045% both sides 0.073% both sides5.5 - 10 crores 0.036% both sides 0.046% both sides Privilege10 - 25 crores 0.027% both sides 0.046% both sides A/C> 25 crores 0.023% both sides 0.032% both sidesOptions - Brokerage applicable both side 48
  • 49. Minimum MinimumMonthly Intraday Settlement Brokerage Brokerage PerPremium Brokerage% Brokerage% Per Lot LotVolume (Intraday) (Settlement)Upto 2.5 2.5 100 100 Gateway4Lacs4Lacs- 2.25 2.5 100 10011Lacs11Lacs- 1.8 2.3 100 10020Lacs20Lacs- 1.35 2.3 80 100 Privilege50Lacs< 50Lacs 1.15 1.6 70 100Here Premium Volume is considered as (Premium x Lot Size x No. of Lots).As per this new structure you will be charged either a fixed minimumbrokerage per lot or the new brokerage rate based on the monthly premiumvalue slabs you achieve, whichever is higher. Kindly note that this newbrokerage structure for option contracts will be applicable with effect from 23rdFebruary 2007. 49
  • 50. Note:1 Even if a client starts with a Gateway/ value trading account, it ispossible that he may avail brokerages as low as 0.18%in the cash deliverysegment (and 0.03% in the intraday cash square up segment)depending onhis trading volumes.Kotak securities.com will regularly monitor client accountson a frequent basis and upgrade accounts to the next higher level so thatclients may be entitled to higher benefits . The minimum brokerage that isapplicable in Kotak Gateway Account is 4 paise on delivery and 4 paise in thecash segment.Note:2 Brokerage will be charged based on your account type at the start ofthe month. Based on the monthly volume your effective slab will be calculatedand the brokerage difference will be debited or credited.Note:3 Service Tax of 12.36 % of brokerage will be charged in addition. Thebrokerages charged are as per the volumes that are achieved. Based on thesevolumes a client can be either debited or credited an amount which is as perthe volumes he/she may achieve at the end of the month.Securities Transaction Tax (STT) @ 0.125% of turnover will be charged inaddition to the brokerage on all delivery tradesSTT @ 0.025% of turnover will be charged in addition to the brokerage on sellleg of all non delivery trades in the cash marketSTT @ 0.017% of turnover will be charged in addition to the brokerage on sellleg of all non delivery trades in the derivative marketKEAT Software provides the best Terminal for the investors. With the help of 50
  • 51. KEAT investor get profile of any company and see sensex, share prices, niftyand up and downmarket position. KEAT is a dynamic, trading terminal thatfacilities instant order placement and more.Things you can do with KEAT – Live ticker rates. Speedy transactions. Script alerts. Customize watch list. View status of orders. Intraday alerts and exchange messages. Trade report, net position report, exercises report. Company research.KEAT Pro XA free, easy-to-use web based tool for all our online trading customers, KEATPro X is a high speed trading tool that allows you to monitor what is happeningin the market at real time speed. KEAT Pro X allows you to check live marketrates of scrips on NSE, BSE & NSE Currency. You can create multiplewatchlists and simultaneously place orders, view order reports etc.This platform is powered with many features that make your tradingexperience faster and easier.Features Real time streaming data : 51
  • 52. Watch the market at real time with free streaming stock quotes from NSE,BSE & NSE Currency. Available information also has details of Market Lot,Top Gainers/Losers, Indices Update, Top Active Scrips, and OptionCalculator. Charting Tools :With available charting facility you can study and understand the pattern ofthe stock of your choice. This gives you the option of viewing different kinds ofcharts like Area, Candlestick etc. Live Account Information :Track your account information live, view placed orders; get tradeconfirmation; view limits, positions, changing profit and loss etc. You cancustomize the reports as per your convenience. Customizable :KEAT Pro X allows you to create your own personalised view of the Indianshare market so you can watch the data you want. You can create multiplewatch lists that can have up to 50 scrips in each of them; these watch listscan be set in tabs. Speed :KEAT Pro X is a high speed trading platform which provides you real tradingand reporting that helps you to take advantage of changing stock prices. Stock Recommendations : 52
  • 53. This share trading software i.e. KEAT Pro X also provides yourecommendation on stocks which are researched by our research analysts onreal-time basis as and when a call is made by the research analyst. Watchlists :It gives more control on your investment decisions by allwing you to createyour personalised watchlists for tracking your favourite stocks on real-timebasis. This share trading software also allows you to do in-depth research onany stock of your choice.KEAT Pro X allows you to view NSE, BSE and currency prices all on a singlewatch list. Highly Integrated :KEAT Pro X is a highly integrated platform, this means you can access todifferent exchanges and instruments like, Equities, Derivatives and CurrencyDerivatives from this single platform. It also allows each of your created watchlists to be available on Website and Mobile Stock Trader as well and vice-versa.Benefits It comes free of charge with you online trading account 53
  • 54. Set multiple watch lists Create tab-wise access to watch list View placed order and trade confirmation Select indices/sectors or business groups Trade long contracts Facility to sell from existing stocks Limits, Positions tabs available in the Risk Report View changing profit and loss Fast and convenient User Interface Customizable User Interface View live Market Depth Predefined watch list to create personalised watch listHow to DownloadTo download KEAT Pro X, login to your trading account onwww.kotaksecurities.com by using your User Id, Password & SecurityKey/Access Code. Click on the tab Trading Tools and Select KEAT Pro X.Click "Download" button to install it on your machine.Note: The Operating system supported is Windows.Version and UpdateIf KEAT Pro X is installed on your computer, go to Help option and then go to 54
  • 55. the link About Us to view the version of KEAT Pro X. You can also check theversion on the top header of the main terminal screen.Auto update: Since Kotak Securities constantly introduces new features in thisonline trading platform KEAT Pro X, we have provided our customers with anauto update facility in which every new feature will get updated automaticallywhen it is started on the computer.SWOT ANALYSISStrengthWeaknessOpportunitiesThreatsSTRENGTHSKotak securities ltd is one of the largest players in distribution of IPO’sIt’sbrokerage charges are almost half of other Web trade.Highly co-operative and skilled staff.Sales oriented organization.Aggressiveness of sales force in selling products.The company has expertise in managing big business.Effective and wider distribution network.It has a wide network of more than 1400 branches, franchisees representativeoffices, and satellite offices across 448 cities in India and offices in New York,London, Dubai, Mauritius and Singapore.Process more than 400000 trades a day which is much higher than some of 55
  • 56. the renowned international brokers.Product designed for every area of personal.The office hours of the company for the customers are 9am to 6pm.The company enjoys a very high brand loyalty and recall value among itscustomers .The company has a presence in all metros as well as in the most of the majorcities in the country.WEAKNESSNo presence in the rural and semi-urban segment.Lack in making follow-ups.Lack of corporate agents.Lack of customer services and promotional activities.OPPORTUNITIESThere is continuous growth in this sector.People have started turning towards the organization as they know thatfacilities are far better than the others.Market is fully vacant to capture because the branch has recently setup itsbusiness.THREATSCompetition in the sector is increasing in the entry of lots of private giants withthe collaboration of foreign giants. 56
  • 57. Selling attitude for the company always has to be maintained in order tocompete with other companies.Continuous follow up of the clients and customers.As other organizations like Icici web trade, India Info line, etc are there in thecity so is a little bit difficult for them to capture the market.SUGGESTIONS AND RECOMMENDATIONSSome of the Suggestions and recommendations for improving the presentimage as well as the Services of kotak securities Ltd. are as follows:More Branches:Some more branches should be opened so it becomes more easy andapproachable for the people to do their transaction. The branches should havewell trained employees.Customer awareness:The people should be updated with the new issues and the schemes startedby the organizations to the existing customers. The customers should beinformed about the newly issued scrip’s as well as be given daily basistips/news for profitable transactions. Regular contact with the customersthrough telephone can be maintained for smooth running of the business.Feedback:A proper feedback system should be designed to take care of the dissatisfiedcustomers and solving their problem as their bad works of mouth publicity canmake Kotak Securities Ltd loose its potential as well as existing customers. 57
  • 58. Well Trained Customer Care Staff:For satisfactory handling queries to establish more good standards in tradingcan be done through outstanding performance , courteous services and a highethical benchmarkHigher Penetration in the Untapped Market:Approaching all the potential clients, making them aware that variousinstruments and convincing them.Newspaper and Agents:Newspaper and agents are most effective tools for awareness, so KotakSecurities Ltd should use these tools more for advertisement. 58
  • 59. QUESTIONNAIREI AM STUDENT OF M.B.A FROM SUBODH INSTITUTE OFMANAGEMENT AND CAREER STUDIES, JAIPUR. OU AREREQUIRED TO FILL THIS QUESTIONNAIRE TO ENABLE METO UNDERTAKE THE STUD ON THE SAID PROJECT.NAME :CONTACT NUMBER:OCCUPATION:ADDRESS: 1. Are you aware of stock market? (a) Yes (b) No 2. Do you deal in share? (a) Yes (b) No 3. Are you aware of Demat account? (a) Yes (b) No 59
  • 60. 4. How long have you been transacting in the stock exchange?(a)Less than 1 year (c) 1 year(b)2 year (d) More than 3 year5. Do you transfer frequently or occasionally? (a) Frequently (b) Occasionally6. In which securities do you trade frequently? (a)Equity (b) Bonds (c) Debentures (d)Future and Options (e) All7. Do you like to convert your shares electronically?(a) Yes (b) No8. On what basis you have taken your decisions of opening of demat account?(a) Services (b) Charges (c) Convenience9. Are you satisfied with your demat service provider?(a) Yes (b) No 60
  • 61. 10. What type of problems do you centrally face when you trade in securities? (a) Non transfer of shares (b) Other type of options (c) Bad transfer of shares (d) No ProblemBIBLIOGRAPHYResearch Methodology : C.R.KothariFinancial Management: Khan and JainInvestment management : Preeti SinghAnnual report, Kotak securities Ltd.Pamphlets and Brochures of Kotak securities Ltd.Organizational Profile of Kotak Securities Ltd.WEBSITES USED:www.kotak.comwww.kotaksecurities.comwww.goggle.comwww.businesstoday.comwww.nseindia.comwww.bseindia.com 61
  • 62. 62