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A PROJECT REPORT ON STRATEGIES FOR TRADE IN CASH AND DELIVERY AT KOTAK SECURITIES LTD, NAVSARI. IN PARTIAL FULFILLMENT FOR BACHELORS DEGREE IN BUSINESS ADMINISTRATION. PREPARED BY: MITAL.A.NAIK [T.Y.B.B.A.] GUIDED BY: MS CHINTAL MODH
S.S.AGRAWAL COLLEGE OF ARTS, COMMERCE AND MANAGEMENT, NAVSARI VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURAT [YEAR-2010-11]
DECLARATION
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This project report entitled THE WINTER TRANING At KOTAK SECURITIES LTD. Submitted to S.S.Agrawal College of arts, Commerce and management. Affiliated to veer Narmad South Gujarat University, Surat. BBA is being running by me under Guidance of all faculties Members of S.S.Agrawal College Of arts, commerce and management, Navsari. The project report study is entirely an outcome of my efforts And is not submitted in part or in any university or institute for any other Degree.
ACKNOWLEDGEMENT
I am the student of T.Y.B.B.A. and I study in S.S.agrawal College of Arts, commerce and management. I honestly feel that this report of my study
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Would not have been possible without the support, guidance and Direction of Those who are associated with my academic and personal life. It was a golden opportunity to carry out my training in prestigious Company. KOTAK SECUREITIES LTD. has allowed me to study all the Department of the company and has also enabled me together information About knowledge in various fields. I also he is he artful thanks to All staff Members as without their co-operation it would not have been possible to Carry out my training successfully with all required information. I also convey my thanks to all the executives, managers, officers, Supervisor for parting their previous time for us. I also convey thanks to Deputy Manager Mr. Jignesh Thakkar who gives me Guidence.
I also convey my thanks to my college and veer Narmad south Gujarat University who arranged this training programme for us.
SYNOPSIS
The subject of the project work is strategies for trade in cash and delivery of KOTAK SECURITIES LTD. At navsari. The objective of project is to Study Companys history in brief. Methodology to be used to carry out the data is collection of data through secondary data and conclusion there of sources of information are companys annual report and other financial report.
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There are two parts in the project work. First part is general information i.e. profile, product profile and organizational structure. Second part is strategies for trade in cash and delivery. Project work period: 14th December to 7th February. Mital.A.Naik Student of T.Y.B.B.A. [6th semester] finance
TABLE OF CONTENT
NUMBER 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. TOPIC TITLE PAGE COLLEGE CERTIFICATE COMPANY CERTIFICATE DECLARATION ACKNOWLEDMENT SYNOPSIS TABLE OF CONTENT OBJECTIVES COMPANY PROFILE PRODUCT PROFILE RESEARCH METHOLOGY DATA PRESENTATION
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13.
STRATEGIES FOR TRADE IN CASH AND DELIEVERY A.SCALPING TRADING B.MOMENTUM TRADING C. TECHNICAL TRADING D.FUNDAMENTAL TRADING E.SWING TRADING.
21 21 23 24 33 35
14. 15.
CONCLUSION BIBLIOGRAPHY
39. 40.
OBJECTIVES
To provide an opportunity to apply the concepts learnt in real-life situation. To provide a platform to take up Executive Training and develop a network which will be useful in enhancing career prospects To gain a deeper understanding of the work, culture, deadlines, pressures, etc. To know how to interact effectively with different kinds of people and convincing people To learn different techniques of selling the product.
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Kotak Mahindra is one of Indias leading financial organizations, offering a wide range of financial service that encompasses every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the diverse financial needs of individuals and corporate. The group has a net worth of over Rs. 7100 Crore and has a distribution network of branches, franchisees, representative offices in New York, London, San Francisco, Dubai, Mauritius and Singapore. The group services around 6.5 million customer accounts. Kotak Mahindra Bank wins the prestigious Best Bank Award in IT Framework and Governance among Other Banks at the IDRBT Banking Technology Excellence Awards 2009. Kotak Investment Bank has bagged two Awards at the Finance Asia Country Awards 2010.
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Kotak Investment Bank has been awarded the Best Domestic Equity House by Asia Money Best Domestic Bank Awards 2010.
Most of the services provided by the company are available through its internet portal. In early 2009 company launched Saxos global trading platform in India. This platform provide direct access to equities, ETFs and REITS spanning 24 stock exchanges across the USA, Europe, Asia and Australia.
Kotak Securities has been adjudged as the Best Broker at the Finance Asia Country Awards 2010. UTI MF- CNBC TV18 Financial Advisor Awards Best performing Equity broker (National)for the year 2009 Best Brokerage Firm in India by Asia0money in 2009, 2008, 2007 & 2006 Finance Asia Award (2009) Best Brokerage Firm in India
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CNBC Financial Advisor Awards (2008) - Best performing Equity Broker in India
Avaya Customer Responsiveness Awards (2007 & 2006) in Financial Services Sector The Leading Equity House in India in Thomson Extel Surveys Awards for the year 2007 Euro money Award (2007 & 2006) - Best Provider of Portfolio Management : Equities Euro money Award (2005) - Best Equities House in India Finance Asia Award (2005) - Best Broker in India
Finance Asia Award(2004) - Indias best Equity House Prime Ranking Award (2003 & 2004)
Bank Life Insurance Mutual fund Car finance Securities Institutional Equities Investment Banking International Business
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WHY INVEST:
Planning for your future relies on planning the right kinds of long term investments. There are many different types of long term financial investments, and everyone needs to have some sort of investments for their future. Let's face it. You will not be able to work forever. No matter how healthy you are, there will come a time when you will not be able to work, due to health problems or simply aging. What will you do for an income when the time comes to retire? This is why planning your long term investments carefully is so important. There are many reasons to invest. You can create wealth, beat inflation, achieve financial goals like buying a car or paying for college, and retirement. You can choose from many investing options. You can invest in Market, Equities, and IPOs, Mutual Funds, Insurance and other several asset classes.
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Kotak Super Saver Flat Kotak Gateway Kotak Privilege Circle Kotak High Trader Portfolio Management Services Kotak Assist Kotak Freeway Kotak Freedom NRI Account
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Want your capital to appreciate fast? Invest in Easy Equity. Easy Derivatives: The higher your risk, the greater the returns on your investments. Easy IPO: Invest early for greater returns. Easy Mutual Fund: Looking to diversify your risk? Invest in Easy Mutual Fund. Easy Insurance: Secure your future and your familys. Theres more to insurance than just security. Kotak Portfolio Management: The Portfolio Management Service combines competent fund management, dedicated research and technology.
RESEARCH METHODOLOGY:
Research always starts with a question or a problem. Its purpose is to question through the application of scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studied.
STATEMENT OF PROBLEM:
Analysis of cost & benefits of online shares trading is required to increase investors profits and to reduce operational cost.
RESARCH TYPES:
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Research design is the conceptual design with in which the research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. For this study a descriptive research design was used in the research technique used in the project is descriptive type. As descriptive research is a fact finding research. This research was aimed towards gathering descriptive information and data was collected by using one or more appropriate methods.
SAMPLING TECHNIQUES:
Sample size has taken by convenience sampling convenience sampling is a random non probability process in which the selection of a unit, form the population is based on availability company sampling is sometimes knows as grab or opportunity sample. It is a type of non probability sampling which involves the sample being drawn from that part of the population which is readily available and convenient. The research using such a sample cannot scientifically make generalization about the total population from this sample because it would not be representative enough.
SOURCES OF DATA:
The research methodology used was descriptive types. The research mechanism for collection of primary data and secondary data collected of various sources.
PRIMARY DATA:
Primary data was collected also from discussion with the investors of the companies. Investors give me detail of the company and their services.
RAFFLED OF COMPANIES:
I used company raffled for taking some information. It helps a lot in my project.
DATA PRESENTATION
A Kotak security limited is a corporate member of both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Kotak Securities distributes a range of financial products, including company fixed deposits, mutual funds, initial public offerings, secondary debt, equity, and small savings schemes. Most of the services provided by the company are available through its internet portal. In early 2009 company launched Saxos global trading platform in India. This platform provide direct access to equities, ETFs and REITS spanning 24 stock exchanges across the USA, Europe, Asia and Australia.
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TYPES OF ACCOUNT:
Kotak offers different account types according to users requirement:
SUPER DERIVATIVES:
Super Derivatives account is specially made for those investors who are averse to taking risks and trade high volumes in futures and options. Risk would be reduced in this account is mainly focused on derivative investments. In Super Derivatives account an investor also will be able to use advanced strategies. Kotaks experts suggest strategies to their investors position where the risk return ratio is much lower. One can activate Kotak Securities Super Derivatives account with minimum amount Rs.25 lakh as margin, by way of cash or stock. For Derivative Brokerage-In Futures is 0.05% both sides and In Option s is 0.05% or Rs. 150 per contract whichever is higher (both sides). For Delivery Brokerage is 0.45%.
Auto Invest:
Auto Invest is a unique Online Trading Account which provides investment planning in Gold ETFs is mutual fund schemes that will invest the money collected from their investors in standard gold bullion. Kotaks advisor gives the recommendation according to investors 5000 required for Auto invest account.
KOTAK GATEWAY:
Kotak Gateway account opens the gateway to a world of investing opportunities for beginners. Kotak Gateway user can trade anywhere, anytime using internet. Kotak also offers call and trade facility. Kotak Securities provide SMS alert, research report, free news and market updates to the account holders. Best feature of kotak gateway is call and trade facility. Anybody can activate Kotak Gateway account with any amount between Rs.20, 000 to 5, 00,000. This can be in form of cash deposit or the value of the shares you buy. Brokerage will be charged based on the account type. For intraday trading brokerage is 0.06% both sides for less than 25 lake and0.023% for more than 25 corers.]
Kotak privilege Circle is the premium investment account offered by Kotak Securities. Along with Kotak Gateway account benefit kotak provides independent market expertise and support through a dedicated relationship manager and a dedicated customer service desk which provides assistance in opening accounts, handling day-to-day problems, and more. They provides KEAT premium which is an exclusive online tool that lets you monitor what is happening in the market and view your gains and losses in real-time. One can activate Kotak Privilege Circle account more than Rs.10, 00,000 as margin, by way of cash or stock. For intraday trading brokerage is 0.06% both sides for less than 25 lake and 0.03% for more than 25 corers. Other then above 4 accounts, Kotak Securities also provide following accounts: 1 Kotak Freedom for Mutual Fund Investment 2 Kotak Super Saver, a Flat Brokerage and a Low Margin account. 3 PMS (Portfolio Management Service), an account for people who need an expert to help to manage their investment. 4 NRI Account, an online trading an investment account for NRI Investors.
SCALPING:The investment practice of holding a position for a very short period of time and selling it for a small gain. That is, a trader who buys and instantly sells a security hoping to profit from the bid-ask spread is said to scalp that security. A
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scalper hopes that the series of small gains over the course of the trading day will result in a much larger gain.
Scalping Psychology
Scalping is most suitable for a specific type of trading personality. Scalpers must be much disciplined, especially in the case of system scalpers, as they must be capable of following their trading system precisely no matter what. Scalpers must be able to make decisions without any hesitation, and without questioning their decisions once they have been made. However, scalpers must also be flexible enough to recognize when a trade is not proceeding as expected (or hoped), and take action to rectify the situation (i.e. exit the trade).
FACTOR AFFECTING SCALPING TRADING: LIQUIDITY The liquidity of a market affects the performance of scalping. Each product within the market receives different spread, due to popularity differentials. The more liquid the markets and the products are, the tighter the spreads are. Scalpers like to trade in a more liquid market since they can make thousands of trades a day to add up their small profits offered on each trade. If they are to trade in less liquid markets, they will try to cover their risks by widening their bid and ask prices.
- Unlike momentum traders, scalpers like stable or silent
VOLATILITY
products. Imagine if its price does not move all day, scalpers can profit all day simply by placing their orders on the same bid and ask, making
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hundreds or thousands of trades. They do not need to worry about sudden price changes.
RISK MANAGEMENT
way a trend trader might, the scalper looks for hundreds of small profits throughout the day. In this process the scalper might also take hundreds of small losses during the same time period. For this reason a scalper must have very strict risk management never allowing a loss to accumulate.
Momentum day trading can be extremely profitable when done correctly.Day trading momentum stocks can be a very risky adventure. You can lose a lot of money when you pick the wrong opportunities.
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By studying long-term monthly and weekly charts, spanning over several years, will provide you more general overview of the direction where the markets are going. Do not start and limit your research to analyzing short-term charts only, even if you are trading shorter periods.
As you read in Stock Market Trend article, trend comes in many sizes: long-term, intermediate-term and short-term. What you should do is to focus on the trend
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you trade and make sure to trade in its direction. In the uptrend, you should buy dips and sell rallies. Shorter chart periods are use for timing, while long-term charts research will help you determine the trend.
Look at the chart and determine support and resistance levels as explained in Support and Resistance article. Buying should occur near support levels and selling near resistance levels. Once the resistance (support) is broken, it will usually provide support (resistance) to future pullbacks. Determining support and resistance levels form basis of technical stock analysis.
Markets usually correct significant portion of previous trend. The retracement can be minimally one-third, half or maximally two thirds of the prior trend. Help yourself with Fibonacci levels. Retracement levels should be marked as buying points. We have written a detailed article about how retracement levels of technical stock analysis can be useful in forming successful trading strategy.
Simple trend lines are one of the most effective charting tools. Connect two successive lows to get up trend line or two successive tops to get down trend line. Stock prices often pull back to trend lines before they continue in the direction of the trend. The more times the trend line is touched and not broken, the more important it is. Once broken, it signals a change in the trend.
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Moving averages tell you if the trend is still in motion, however, they provide a confirmation of trend change, they do not tell you anything in advance. Two moving averages crossovers can provide you objective buy and sell signals. Traders often use 4/9, 9/18 and 5/20 crossovers, the crossing of 40-day MA also provides good signals. Since moving averages are trend following indicators, they provide best results in trending markets.
Oscillators are helpful when determining overbought and oversold situations. They are popular indicators since they warn you of possible trend change in advance. Most often used oscillators are RSI and Stochastic, both plotted on a scale of 0 to 100. Crossing the 70 (80) RSI (Stochastic) reading signals overbought conditions and 30 (20) RSI (Stochastic) signals oversold conditions. Oscillators perform best in trading market range, when there is an absence of market trend.
MACD (Moving Average Convergence Divergence) indicator combines moving averages with overbought/oversold conditions of oscillators. You should buy (sell) when faster line crosses above (bellow) the slower line and both are bellow (above) zero. If you plot a MACD histogram on your chart, you can get even earlier warnings of possible changes in the trend.
9. TRADING OR TRENDING?
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ADX (Average Directional Movement Index) measures the degree of market trend and tells you, which set of indicators are best to follow. A raising ADX signals a strong trend, while a falling ADX signals no-trend or trading conditions. When ADX is raising, you should favor moving averages, when it is falling, you should favor oscillators.
Volume is often preceding the price change. Heavier volume is confirming up trend on up days and vice versa. Another important factor to watch is open interest in the futures market. Raising open interest (fresh money coming in) is supporting uptrend, while declining open interest is a warning of trend completion.
LINE CHART:
The most basic of the four charts is the line chart because it represents only the closing prices over a set period of time. The line is formed by connecting the closing prices over the time frame. Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening
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prices. However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why it is the only value used in line charts.
BAR CHARTS:
The bar chart expands on the line chart by adding several more key pieces of information to each data point. The chart is made up of a series of vertical lines that represent each data point. This vertical line represents the high and low for the trading period, along with the closing price. The close and open are represented on the vertical line by a horizontal dash. The opening price on a bar chart is illustrated by the dash that is located on the left side of the vertical bar. Conversely, the close is represented by the dash on the right. Generally, if the left dash (open) is lower than the right dash (close) then the bar will be shaded black, representing an up period for the stock, which means it has gained value. A bar that is colored red signals that the stock has gone down in value over that period. When this is the case, the dash on the right (close) is lower than the dash on the left (open).
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CANDLESTICK CHARTS:
The candlestick chart is similar to a bar chart, but it differs in the way that it is visually constructed. Similar to the bar chart, the candlestick also has a thin vertical line showing the period's trading range. The difference comes in the formation of a wide bar on the vertical line, which illustrates the difference between the open and close. And, like bar charts, candlesticks also rely heavily on the use of colors to explain what has happened during the trading period. A major problem with the candlestick color configuration, however, is that different sites use different standards; therefore, it is important to understand the candlestick configuration used at the chart site you are working with. There are two color constructs for days up and one for days that the price falls. When the price of the stock is up and closes above the opening trade, the candlestick will usually be white or clear. If the stock has traded down for the period, then the candlestick will usually be red or black, depending on the site. If the stock's price has closed above the previous days close but below the day's open, the candlestick will be black or filled with the color that is used to indicate an up day.
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When first looking at a point and figure chart, you will notice a series of Xs and Os. The Xs represent upward price trends and the Os represent downward price trends. There are also numbers and letters in the chart; these represent months, and give investors an idea of the date. Each box on the chart represents the price scale, which adjusts depending on the price of the stock: the higher the stock's price the more each box represents. On most charts where the price is between $20 and $100, a box represents $1, or 1 point for the stock. The other critical point of a point and figure chart is the reversal criteria. This is usually set at three but it can also be set according to the chartist's discretion. The reversal criteria set how much the price has to move away from the high or low in the price trend to create a new trend or, in other words, how much the price has to move in order for a column of Xs to become a column of Os, or vice versa. When the price trend has moved from one trend to another, it shifts to the right, signaling a trend change.
FUNDAMENTAL TRADING:16
FUNDAMENTAL ANALYSIS
Fundamental analysis is about using real data to evaluate a security's value. Although most analysts use fundamental analysis to value stocks, this method of valuation can be used for just about any type of security. For example, an investor can perform fundamental analysis on a bond's value by looking at economic factors, such as interest rates and the overall state of the economy, and information about the bond issuer, such as potential changes in credit ratings. For assessing stocks, this method uses revenues, earnings, future growth, return on equity, profit margins and other data to determine a company's underlying value and potential for future growth. In terms of stocks, fundamental analysis focuses on the financial statements of the company being evaluated. One of the most famous and successful fundamental analysts is the Oracle of Omaha, Warren Buffett, who is well known for successfully employing fundamental analysis to pick securities. His abilities have turned him into a billionaire
Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis. The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:
To conduct a company stock valuation and predict its probable price evolution,
To make a projection on its business performance, To evaluate its management and make internal business decisions,
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VALUE SPOTTING
Sound fundamental analysis will help identify companies that represent a good value. Some of the most legendary investors think long-term and value. Graham and Dodd, Warren Buffett and John Neff are seen as the champions of value investing. Fundamental analysis can help uncover companies with valuable assets, a strong balance sheet, stable earnings, and staying power.
SWING TRADING:Swing trading is commonly defined as a speculative activity in financial markets whereby instruments such as stocks, indexes, bonds, currencies, or commodities
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are repeatedly bought or sold at or near the end of up or down price swings caused by price volatility. A swing trading position is typically held longer than a day, but shorter than trend following trades or buy and hold investment strategies that can be held for weeks or months. Profits can be sought by engaging in either long or short trading.
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A SWING TRADING EXAMPLE: A swing trader looking at this chart might have made the following analysis and ended up with a 20% profit in 20 days. The chart above is a swing trader's map to making money. Swing traders use charts like this one to manage their entry and exit points and maximize their chances for the highest profits. The trick is to buy in one of three places: At the bottom of the channel, within narrow bars at the top of the channel, or right above the channel if the stock breaks through. See how a late September rally pushed Microsoft through its 50-day moving average (MA) into resistance at the 200-day MA. A swing trader might plan an exit near the 200-day MA, and if it works, he may come away with good profits that wouldn't necessarily be found by other trading strategies. In this example, an alert swing trader could have bought at channel bottom, just around 52, and sold when the stock reached the 200-day MA, just above 62, for a 20% profit in just 20 days. Charts like these are familiar to veteran swing traders. What may not be so familiar to you is Alan Farley's brilliance in finding where he believes the profits are hidden in those charts before they play out. But then, he's been doing it awhile...
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CONCLUSION
According to my topic strategies for trade in cash and delivery, the best strategies are technical and fundamental trading. And these strategies are very useful in near future. T.Y.B.B.A. practical training is essential part of circular the importance and usefulness. The importance of such training is very needed by us to get and practical expose to real and working firm. KOTAK SECURITIES LTD. is the perfect firm for me to undertake the task of training. The atmosphere was nice and pleasant.presense of such people who are ready to sacrifice their precious time in order to assist me and to meet
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our work simple. The staff of Kotak securities ltd. was very supportive and cooperative which provided to be boon for us. At the end of my practical training at Kotak securities I feel accomplish of real essence which had to be maintained for my practical training. I was greatly delighted while visiting this company. The rapid growth and that development are due to the dedication and hard work of the subordinates of this organization.
BIBLIOGRAPHY
WWW.KOTAK.COM WWW.KOTAK SECURITIES.COM Icharts Times of India Securities and portfolio management
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I.m.pandey
APPENDIX
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