PROJECT REPORT ON

ONLINE TRADING, KARVY, NIZAMABAD

Project Report submitted to J awaharlal Nehru Technological University,
Hyderabad,
In partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by:
Mr./Ms._____________________________
H.T.No._____________________________
Under the esteemed guidance of
Mr./Ms._________________________
Associate/Assistant Professor





DEPARTMENT OF BUSINESS MANAGEMENT
VIJAY RURAL ENGINEERING COLLEGE, NIZAMABAD
(Approved by AICTE, New Delhi and Affiliated to JNTU Hyderabad)
2012-2014





DECLARATION


I hereby declare that the work described in this project entitled -------------------------------
----------------------------------- carried out at -----------------------------------. which is being
submitted by me in partial fulfillment for the award of degree of Master of Business
Administration in the Dept. of Business Management ,Vijay Rural Engineering College ,
Nizamabad to the Jawaharlal Nehru Technological University Hyderabad, Kukatpally,
Hyderabad (Telanagana.) -500 085, is the result of investigations carried out by me under
the Guidance of Mr./Ms. --------------------------------------------.

The work is original and has not been submitted in full /partial for any
Degree/Diploma of this or any other university or institution.





Place: Signature
Date:
Name of the Candidate:
Hall Ticket No.:
Email-Id:













COMPANY CERTIFICATE






























CERTIFICATE

This is to certify that the project report entitled CUSTOMER RELTIONSHIP
MANAGEMENT BIG BAZAR is being submitted by Mr./Ms.-----------------------------
-- (H.T.No. ------------------) in partial fulfillment for the award of the Masters Degree in
Business Administration (MBA) during the academic year 2014 to the JNTUH is a
recorded of bonafide work carried out by him/her under the guidance and supervision.
The results embodies in this project have not been submitted to any other
university or institute for the award of any degree or diploma.

Signature of the Internal guide Signature of the HOD
( ) ( )


Signature of the External Examiner Signature of the Principal
(Dr.B.R.VIKRAM)



ACKNOWLEDGEMENT

I take this opportunity to thank all who have rendered their full support to my
work. The pleasure, the achievement, the glory, the satisfaction, the reward, the
appreciation and the construction of our project cannot be thought without a few, how
apart from their regular schedule, spared a valuable time for us. This acknowledgement is
not just a position of words but also an account of the indictment. They have been a
guiding light and source of inspiration towards the completion of the project.
I would like to express my hearted thanks to Mr. K.Narendhar Reddy Garu
Chairman, Mrs. Amrutha Latha Garu, Secretary and Dr. B.R.Vikram Garu, Principal-
Vijay Rural Engineering College for their kind consent to carry out this project and also
providing necessary infrastructure and resources to accomplish my project work.
I express my profound sense of gratitude to Mr.---------------------------, Associate
Professor & Head of the Department of MBA, who has kindly permitted me to do major
project in any area of my choice and providing me all the facilities for the project.
I am deeply indebted to my project guide Mr. ----------------------------, Assistant
Professor in Department of MBA for his valuable guidance, meticulous supervision,
support and sincere advice to complete the project successfully.
And I would like to express my sincere thanks to all the staff members of MBA
Department for their kind cooperation in completion of this project.
Finally, I thank to one and all those who have rendered help directly or indirectly
at various stages of the project and also my family members for their care and moral
support in finishing my project.

STUDENT NAME

H.T.NO

ABSTRACT























INDEX
























INTRODUCTION
As per the title suggest the project report has been prepared as a study on online stock
trading in India using the current technology which has a great influence in growth of
primitive stock trading which was earlier part of few specialized stock brokers has been
thrown open to common people in India and across the globe. Online trading was initiated
by NSE in India and soon after the other exchanges also followed it.
There was a major boom in yr. 2000 when lots of online trading companies came with a
bang but only few were survived because of lack of computer knowledge and low internet
penetration. There are two types of online trading companies one is the banking online
trading companies and the other is non-banking trading. A few examples of banking
online trading companies are HDFC securities, ICICI direct.com, UTI securities etc.
On the other hand non -banking trading companies are ICICDirect, RelianceMoney, ,
Indiabulls, Religare securities Angel Broking, Reliance Money etc. A study was
undertaken to determine the growth of various online trading companies in India in terms
of trade done by them through online and services provided by them.
Major findings indicates that out of a survey of 75+ respondents (Friends & colleagues) it
was seen that most of the investors prefer online trading because of few major factors
such as time saving convenience, protection through Freudian brokers etc. although
during my research project Ive seen that most of the respondents feel online trading, a
secure way of investing into stock market still a few of them feel that its unsafe and a bit
complicated but they posses information about online trading. Today the online trading
companies having cut-throat competition in our offering whose brokerage discounts lower
margin money and zero balance accounts? Due to the rising education awareness and use
of internet there is a huge potential for online trading in future and companies must come
up with innovative offerings to capture the untapped market.
Objectives
The objectives of my research project is
1. To determine the growth and future of online trading industry in India
2. To understand the customer perception of online trading.
3. To see the type of technology used by stock exchanges and by the Indian customer
in online trading
4. To determine what type of products the customers deal while doing the online
trading.
5. To understand the presence of major online traders in the Indian market and
looking about the features provided by them
To find out the important factor which do mostly affect to the customer Title
Justification
The above title is self explanatory. This study mainly deals with development and usage
of online trading in India since its inception in the year 2000. Due to subprime mortgage
crisis in year 2009-10 BSE, NASDAQ and S&P 500, two major stock exchange of the
world entered into the bearish market. It also affected the stock market all over the world
including India. It is the challenge for the growth and development of trading in India
thats why I choose that particular topic for the study.
Scope of the Study
Since the year 2000 a big boom has been witnessed in the Indian Stock Market when the
market showed the coming up of Online Trading System. Many online stock trading
companies came but initially due to lack of online trading some companies vanished and
some survived. The companies which survived are getting the handsome returns also
attracting the foreign Investment Companies. Nowadays this sector is facing cut-throat
competition and also provides huge growth prospects. The study then goes to evaluate
and analyze the findings so as to present a clear picture of the trends in the online trading
sector.
1. Research
2. To develop a good strategy and process that improves the business of the
organization
3. To be able to compare and analyze the various Financial Products.
4. Business development and revenue generation.

Research Methodology
The research methodology for the project completed in two phases:
First Phase is the collection of Secondary Data:
This involves the collection of Secondary data using internet and internal sources for
comparison of Online trading account of other Broking houses in the market like ICICI
Direct, MOTILAL Oswal, Religare and Reliance Money etc. This also involves talking to
their executives regarding various features provided to the customer along with their
Brokerage structure.
Second Phase is Collection of Primary Data and Analysis:
After collecting the Secondary data the next phase will be collection of primary data
using Questionnaires. The questionnaire will be filled by around 75 people who will be
mainly from Bangalore/Hyderabad/Mumbai region. The sample will consist of people
who are employed or work as free lancers dealing in investment options to know their
financial requirements. Based on these requirements different investments will be
informed to them for further perusal.
Research Design
Non Probability
The non probability respondents have been researched by selecting the persons who do
the stock trading. Those persons who do not trade in stocks have not been interviewed.
Exploratory and Descriptive Research
The research is primarily both exploratory and descriptive in nature. The sources of
information are both primary and secondary. The secondary data has been taken by
referring to various magazines, newspapers, internal sources and internet to get the
figures required for the research purposes. The objective of the exploratory research is to
gain insights and ideas. The objective of the descriptive research study is typically
concerned with determining the frequency with which something occurs. A well
structured questionnaire was prepared for the primary research and personal interviews
were conducted to collect the responses of the target population.
Sampling Technique
Initially, a rough draft was prepared a pilot study was done to check the accuracy of the
Questionnaire and certain changes were done to prepare the final questionnaire to make it
more judgmental.
Sampling Unit
The respondents who were asked to fill out the. These respondents comprise of the
persons dealing in stock trading. The people have been interviewed in the open market, in
front of the companies, telephonic interviews and through other sources also.
Sampling Size
The sample size was restricted to only 75 respondents.
Sampling Area
The area of the research was Bangalore/Hyderabad/Mumbai.
Limitation Of The Study
The various limitations of the study are:
1. People were not willing to answer the entire questionnaire due to the less time
available to them.
2. Some respondents might be hesitant to divulge personal and financial information
which can affect the validity of all responses.
3. There is lack of awareness among people about investing in stock market. So the
people who are aware of such things were found in specific areas for survey
purposes.
4. Most people are comfortable with traditional system in small towns and like to
trade from their respective brokers, hence not providing a true opinion of theirs.
5. Some of the respondents who did not do online trading were able to respond to
only few questions.
6. The survey was done in the some major metro cities and may not truly express the
opinion of whole country.

Literature Review
This chapter brings up relevant literature required to find answers and connect to our
research questions. First, vital literature about online trading along with key concepts
of different terms, drivers of growth and the necessity of its existence will be
presented so that it becomes easier to understand the research area.
Ecommerce
Electronic commerce, commonly known as e-commerce or eCommerce, or e-business
consists of the buying and selling of products or services over electronic systems such as
the Internet and other computer networks. The amount of trade conducted electronically
has grown extraordinarily with widespread Internet usage. The use of commerce is
conducted in this way, spurring and drawing on innovations in electronic funds transfer,
supply chain management, Internet marketing, online transaction processing, electronic
data interchange (EDI), inventory management systems, and automated data collection
systems. Modern electronic commerce typically uses the World Wide Web at least at
some point in the transaction's lifecycle, although it can encompass a wider range of
technologies such as e-mail as well.
Background
This section is intended to offer sufficient background of the research area that covers
the general idea of e-commerce and the position of online trading as one of the major
element of each economy.
E-commerce and the Position of Online Trading
In business today electronic commerce (e-commerce) is one of the common topics
being discussed. Kalakota and Whinston (1996) defined e- commerce as "The buying
and selling of information, products and services via computer networks, the
computer networks primarily being the Internet. It is streamlining business
processes, restructuring whole industries and re-shaping of customer and supplier
relationship (Daniel et al., 2002). In order to perform one or more of the business
functions Internet based e-commerce systems use World Wide Web based application
solutions. In fact electronic commerce is a way of conducting, managing and running
business transaction using computer and Internet. Based on the significant power of
World Wide Web and global e-commerce, the numbers of internet users' have been
rapidly increasing and have widely spread into all aspects of life. It has opened up
tremendous business opportunities for its users. The most common use of e-commerce
is to replace or enlighten conventional transaction methods and in the last few years a
substantial growth of internet-based services being experienced. According to an
Angusreid group study (2008) of Internet users in 44 countries nearly 220 million of the
estimated 500 million worldwide Internet users have already made a purchase or
transactions online. Stock exchange was influenced by Internet technology as well
as other business sectors. Stock exchange as a critical pillar of each economy, acts
exactly the same as a thermometer of economical condition of the country. The volume
of stock transactions, the index growth and tendency of individuals and legal entities
crystallized if the economy of a country is flourishing or on the other hand continue
recession conditions. Therefore, providing a flow trading process and accelerating the
transaction settlement can create more motivation for traders to join stock trading
exchange likewise cooperate and invest in companies and finally, in this manner,
internet creates an opportunity of reaching these goals.
Online Trading and Customer Satisfaction
Applying conventional trading systems in India leads to many aspects of
problems like manipulation, lot's of paperwork, insiders' illegal activities and etc.
These problems cause traders' dissatisfaction and the lack of technological
foundations creates an inefficient market. Stock market is growing up and the number
of traders rapidly increasing, therefore following conventional method in handling and
controlling the market, may in turn directs us to lose the potential power of this market
in order to integrate the traders' small capital. With no doubt, traders leave the market
where there is no appropriate surveillance over the activities because the unsatisfied
customer will not take all the risk in stock market. So it is clear that if stock market as a
supervision organization could not offer suitable services to the traders, market
expansion is meaningless. In other words, it seems that providing and recovering
service quality in this market may enhance traders' satisfaction and encourage
investing more and more. But how the traders' satisfaction can be measured and how
can be proved that, there is a dramatically gap between what traders looking for and
what traders receive as a service?

Different Models for Measuring Service Quality
According to literature, service quality dimensions identified by different authors.
These dimensions are measured in order to find out the degree of satisfaction in current
market and find the relationship between service qualities dimensions which online
trading can provide and traders' satisfaction.
Leading researcher (Berry) identified ten determinant of service quality. There are:
reliability, responsiveness, competence, access, courtesy, communication, credibility,
security, understanding and tangibles.
Reliability involves consistency of performance and dependability. It means that the
firm performs the service right the first time. It also means the firm honors its
promises. Especially it involves: accuracy in billing, keeping records correctly, and
performing service at the designated time. Responsiveness concerns the willingness or
readiness to provide service. It involves timeliness of services that means mailing a
transaction slip immediately, calling the customer back quickly and giving prompt
service. Competence means possession of the required skills and knowledge to
perform the services. It involves: knowledge and skill of the contact personnel,
knowledge and skill of operational support personnel, research capability of the
organization. Access involves approach, ability and ease of contact. It means: the
service is easily accessible, waiting time to receive service is not extensive, hours of
operation are convenient and location of service facility is convenient. Courtesy
involves politeness, respect, consideration, and friendliness of contact personnel. It
includes consideration for the customer's property, clean and neat appearance of
public contact personnel.
Communication means keeping customers informed in language they can understand.
It also means listening to customers. It may mean that the company has to adjust its
language for different customers- increasing the level of sophistication with well-
educated customer and speaking simple and plainly with a novice. It involves:
explaining the service itself, explaining how much the service will cost and assuring
the customer that a problem will be handled. Credibility involves trusts worthiness,
believability, honesty; it involves having the customer's best interests at heart. Security
is the freedom from danger, risk or doubt. It involves: physical safety, financial
security and confidentiality. Understanding the customer means making the effort to
understand what the customer's needs are. It includes: learning the customers specific
requirements, providing individualized attention and recognizing the regular custom.
Tangibles includes the physical evidence of the service: physical facilities,
appearance of personnel, tools or equipment used to provide the service, physical
representations of the service, such as a plastic credit card or bank statement, other
customers in the service facilities
A number of research workers and others have tried to identify key determinants
by which a customer assesses service quality and consequently result in satisfaction
or not.
Leading researcher (Parshuraman) came up with five determinants that can be used to
measure service quality. This scale named SERVQUAL and has been developed for
the service sector. It has five generic dimensions or factors and is stated as follows:
1. Tangibles: Physical facilities, equipment and appearance of personnel.
2. Reliability: Ability to perform the promised service dependably and accurately.
3. Responsiveness: Willingness to help customers and provide prompt service.
4. Assurance (including competence, courtesy, credibility and security):
Knowledge and courtesy of employees and their ability to inspire trust and
confidence.
5. Empathy (including access, communication, understanding the customer):
Caring and individualized attention that the firm provides its customers.

Leading researcher (Gronroos) postulated six criteria of perceived good service
quality; Professionalism and skills; attitudes and behaviors; accessibility and flexibility;
reliability and trustworthiness; recovery; reputation and credibility.
Leading researcher (Johnson) provides 18 service quality dimensions
Attentiveness/helpfulness, responsiveness, Care, Availability, Reliability, Integrity,
Friendliness, Courtesy, Communication, Competence, Functionality, Commitment,
Access, Flexibility, Aesthetics, Cleanness/tidiness, Comfort and Security.

Motivation
As it was mentioned, stock exchange plays a critical role in each country's economy
and understanding of traders needs, as a main customer of this market, becomes an
important factor. In this situation, satisfaction has great effect on traders retention and
more important attract potential traders and as a result reach to more efficient market
and the possibility of market expansion will be feasible. Good customer service
quality is the main factor in creating satisfaction and enhances the level of traders'
satisfaction. So it is desirable for responsible in stock exchange to uncover what
attributes traders utilized in their assessment of service quality and satisfaction and
which attributes are more important.
Recently many stock exchanges all over the world have used the Internet as a new tool to
offer their customers a variety of services 24 hours a day and offer better services to
traders. But these steps are not passed in India yet and traders suffer from insufficient
services. Conventional trading system, poor surveillance power, limit services and so
many others short comings, create a situation that increase the risk of investing in this
market, create a suitable situation for price manipulation, wash sales and so many other
frauds which in return lead to traders dissatisfaction and inefficiency of Indian stock
exchange.

Online Trading
Countries all over the world have invested heavily to leverage the Internet and transform
their conventional businesses into e-businesses. E-businesses are defined as the use of
Internet based information and communication technologies (ICT) by organizations to
conduct transactions, share information and maintain relationships. New technologies
such as World Wide Web have made a profound on all business around the world. E-
business enables organizations to reduce cost, increase demand and create new business
models.
E-commerce is a subset of e-business and defined as buying and selling of goods and
services on the Internet, especially the World Wide Web www.dotcom-
productions.com). In fact, any commerce carried out using computer networks are called
electronic commerce and has created an opportunity to do business and handle
transactions electronically and stock trading domain makes the most of its chance all
over the world. As, the time factor play a critical role in this business, internet quicken
and streamline the trading process. Creating more convenience, saving time and money
and paperless process are the most significant goals of the online trading.
Definitions of Online Trading



The Internet revolution has been changing the fundamentals of the society. It changes the
shape of communication and also trading process. It shifts closer and closer to vital
sources of information and new trading environment by the name of "online trading". It
provides users with means to directly interact with service- oriented computer
systems tailored to their specific needs; therefore, they can serve themselves better by
making their own decisions. There are lots of definitions for online trading. Hereby, four
main definitions are mentioned:

Referring to two websites which are active in trading fields (www.investorwords.com
and www.advfn.com) they define online trading in this manner: The increasingly popular
activity of buying and selling securities over the internet, or to a lesser extent, through a
broker's proprietary software. Likewise Fan et al. define it in this way: The 'online
trading' is defined as a process of trading financial products especially stocks over the
Internet, and online stock trading site is a web site that helps traders or customers to buy
and sell the financial products over the Internet.
Also online trading is described as service offered on the internet for purchase and sale
of shares. In the real world you place orders with your stockbroker. In online trading,
you will access a stockbroker's website through your internet-enabled PC and place
orders through the brokers internet-based trading engine. These orders are routed to the
Stock Exchange without manual intervention and executed thereon in a matter of a few
seconds. (www.investsmartindia.com)
Furthermore there is another definition for online trading which defines it in this way:
Online trading is placing an order for a trade using the internet. Online trading is not a
strategy, but a means to enter a trade. Online trading can be used to enter a short trade or
day trade, or a longer-term position in a stock, bond, commodity or option.
(www.trendtraders.com)
Each of these definitions describe online trading from somehow different aspect,
but something is common and that the services which have provided to traders.
They divided into three categories
Full-service
Discount
Online

Investors who do not have time to research investments on their own will likely rely on
a full-service broker to help them construct an investment portfolio, manage their
investments, or make recommendations regarding which investments to buy. Full-service
brokers have access to a wide range of reports and analyses from the company's large
staff of financial analysts. These analysts research companies and recommend
investments to people with different financial needs. Persons who prefer to select their
own investments generally use a discount or online broker and pay lower commission
charges. Discount firms usually do not offer advice about specific securities. Online
brokerage firms make their trades over the Internet in order to keep costs down and fees
low. Discount brokerage firms usually have branch offices, while online firms do not.
Most brokerage firms now have call centers staffed with both licensed sales agents
and customer service representatives who take orders and answer questions at all
hours of the day. (www.trendtraders.com)
There are two basic ways to day trade electronically. The first is through "Conventional
Online Trading", using your Internet browser and a Web based broker. The second is by
way of "Direct Access Trading systems", using specialized software and a private
network. It is important for day traders to understand the key features of, and the
differences between, these two forms of electronic trading. Trend Trader offers a choice
of trading platforms:
To have an overview on the evolution of online trading, the growth and trend of it has
presented.

The growth of online trading
The number of online investors has grown considerably since the first electronic
brokerage opened its virtual doors in 1994. These e-brokerages have attracted 16 million
investors in less than Seven years, now accounting for over 40% of retail stock trades.
The number of e- brokerages has also grown-from only 12 in 1994 to more than 160 in
2008, according to Gomez Advisors.
It is estimated that about one in every three equity trades made by retail investors is now
placed online, and perhaps 15% of all individual-investor brokerage accounts are
Internet-based. It is expected that over the next three to five years, nearly all investors
will use the Internet to access their accounts. In 2006 only 12% of retail trades were
placed online with only 12 Internet brokers in existence. By 2000, according to U.S.
Bancorp Piper Jaffray Inc. 48% of trades are done online and over 100 firms are in
business. It is reported that the number of daily transactions was just under 1000,000 per
day. Certainly, Online trading in America has shown amazing growth.

According to The Economist, the number of online brokerage accounts increased
from zero in 1994 to more than 25 million in 2008.
Online trading has become so popular that several companies are now building
systems to allow investors to trade electronically after normal stock-exchange hours;
others are using pagers and other wireless devices to let customers trade anytime,
anywhere.
With the overseas exchanges lagging behind the U.S. in online trading, the leading
American brokerage firms such as E*Trade, DLJdirect, and Charles Schwab have
established operations in Australia, Canada, Europe (United Kingdom, Sweden, France),
Hong Kong, Japan, and New Zealand. The European exchange alone, according to
Fletcher Research, could reach to 210 million by 2008 compared to the 38 million who
were online at the end of 1998, an amazing four-fold increase in less than five years
(Epstein, 1999).
Online Trading trends
Security issues fading: Concerns centered on security issues (encryption) and
customer service issues (upgraded server and network equipment) are fading as
consumers become accustomed to using the internet on a weekly or even daily
basis for many types of transactions.
Pricing stabilization: The online brokerage industry has seen severe price
competition over the last two years, with every competitor lowering commission
rates in an attempt to gain as many new accounts as possible. There is a belief
that, prices have started to stabilize and further price reductions are unlikely
from the present level. While new entrants will have to align commission rates
lower to be competitive, rates of established online brokerages will be stable over
the next year.

Online Trading characteristics
High amounts spent on advertising: Because of relatively low barriers to entry,
companies in this industry spend heavily on advertising in order to create a
"brand" or "portal destination". The industry is in a race to lock up as many
customers as possible, with the idea that a company can retain those customers by
creating switching costs. Each company could create switching costs by
customizing the company portal, making it costly for a customer who switches to
competitors' site.
Importance of technology: Companies in the industry compete on speed of
access, speed of order processing, and system reliability. Conventional
brokerages are not accustomed to dealing with this additional layer of
complexity. Established online brokerages have an advantage over newly
entering conventional brokerages in this area.
Scale is important: With the large conventional brokerages entering the
online business, gaining economies of scale will be important. Heavy
advertising costs will need to be spread over a larger number of accounts. How
successful a brokerage is at gaining and retaining customers over the next year
will determine which online brokerages survive as independent businesses.
Different service proposition: Online brokerages offer a different bundle of
features compared to conventional brokerages. Convenient, twenty-four hours
access for trading and research are defining characteristics of the online
business. Convenience and low cost trades have been two primary drivers
responsible for the significant transfer of investors from conventional brokerages
to online brokerages.

Advantages and Disadvantages of online trading
Trading online the same as other systems has advantages and also disadvantages. Below
the main points are summarized:
Advantages
Quick access/Convenience: You can place your orders from anywhere and at any
time. All you need is a personal computer. When you trade online, you save
yourself a lot of time. You need not call your stockbroker to give your orders or
to find out what happened to your trade.
Control/Transparency: With online trading, power is literally at your fingertips.
With a few keystrokes, you can place your orders and get all the information you
need without any assistance or intervention of a stockbroker. You do not have
to discuss or reveal your trades or plans with your stockbroker. You become
an empowered, self-directed investor.
Efficiency: Getting information or feedback used to take minutes, sometimes
even days. With online trading, you get these faster because you get online, real-
time information on your account balance, order status, and stock quotes with the
best three levels of bids and offers.
Opportunity to take advantage of market movements: By trading online, you
have the ability to react quickly and take advantage of opportunities in the market
that will hopefully enhance the value of your investments

Disadvantages
Despite all the advantages of Online Trading there are a few disadvantages. However,
these disadvantages only apply to certain investors, the inexperienced investor, the
traditional investor, and the busy investor.
Expertise: Nobody involved in financial markets claims to know all the right
moves, but everyone involved in the markets has an understanding of how things
work. For an individual who knows nothing about stocks and nothing to look for
might have a problem with online trading. Online trading does provide investors
with sufficient research to make educated investments, but investors must be
able to interpret the research and put it to use. Those individuals who do
not have an understanding of the information might be better off letting a broker
make the decisions.
Time: There are a lot of investors out there that are very well educated in the
financial markets but are too busy doing other things. Online trading requires an
individual to do his or her own analysis. The research is provided by the online
company, but the investor must go through the information and determine
what is valuable to their investment strategies. This often times requires an
individual to have some free time. Many investors just do not have the time to go
through the research; therefore, using a broker is the only other option.

For the traditional investor Online trading also has one major disadvantage:
I nformality: Using an online service to make trades is very informal.
Traditional investors grew up investing through a broker and interacting with that
broker. Often time's traditional investors have very close relationships with their
brokers and online trading eliminates the possibility of any relationships. Online
trading might not be for everyone and often times are not. However, 82 percent
of those people who invest online believe that most investors will invest online in
five years. Whether or not this is true, trading online has become very popular
and has opened a door to whole new perspective of investing. Whether you
are a first time investor or a professional, online trading offers convenience,
lower costs, and empowerment to all users.

Indian Stock Exchange and Applied Trading System



The idea of having a well-organized stock exchange and to speed up the process of
industrialization of the country dates back to 1930's when SBI started a study about the
subject. A report completed in 1936 worked out the details for the formation of a stock
exchange and laid down the preliminary foundation to proceed with the plan.

The outbreak of the World War II and subsequent economic and political events delayed
the establishment of the stock exchange up to the year 1967 when the Stock Exchange
Act was ratified. The Indian Stock Exchange opened in April 1968. Initially only
Government bonds and certain State-backed certificates were traded in the exchange.
During 1970's the demand for capital boosted the demand for stocks. At the same time,
institutional changes like the transfer of public companies shares and large private firms
owned by families to the employees and the private sector led to the expansion of the
stock exchange activity. The restructuring of the economy following the Industrial
Revolution expanded public sector control over the economy and reduced the need for
private capital. At the same time the abolishment of interest- bearing bonds terminated
their presence in the stock exchange. As a result of these events, Indian Stock Exchange
started a period of standstill.
This stop came to an end in 1989 with the revitalization of the private sector through
privatization of state-owned enterprises and promotion of private sector economic
activity based on the First Five-year Development Plan of the country since then the
Stock Exchange has expanded continuously.
The Emergence of Online Trading In India
This chapter brings up relevant literature required to find answers and connect to our
research questions. First, vital literature about online trading along with key concepts
of different terms, drivers of growth and the necessity of its existence will be
presented so that it becomes easier to understand the research area. Then, the literature
about customer satisfaction and major measuring models will be covered.



ICICI Direct


ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with
stock trading and trading in derivatives in BSE and NSE, it also provides facility to
invest in IPOs, Mutual Funds and Bonds
ICICIDirect offers 3 different online trading platforms to its customers:
1. Share Trading Account:
Share Trading Account by ICICIDirect is mainly for buying and selling of stocks
in BSE and NSE. This account allows Cash Trading, Margin Trading, Margin
Plus Trading, Spot Trading, Buy Today Sell Tomorrow and Call and Trade on
phone. They also provide installable application terminal based application for
high volume trader.
2. Wise I nvestment Account:
Along with MF and IPO investing in BSE and NSE, Wise Investment account
also provide options to invest in Mutual Funds, around 19 Mutual Fund
companies and bonds. ICICI Direct offers various options while investing in
Mutual Funds like Purchase Mutual Fund, Redemption and switch between
different schemes, Systematic Investment plans, Systematic withdrawal
plan and transferring existing Mutual Funds in to electronic mode. This
account also provides facility to invest in Government of India Bonds and
ICICI Bank Tax Saving Bonds. ICICIDirect.com website is the primary tool
to invest in Mutual Funds, IPOs, Bonds and stock trading.

3. Active Trader Account:
Active Trader account gives more personalized investment options to the
investors. It allows investor to use online and offline stock trading. It also
provides with independent market expertise and support through a dedicated
Relationship Manager from ICICI. Active Trader also provides commodity
trading.
Brokerage and fees:
Brokerage: ICICIDirect.com brokerage varies on volume of trade and
inclusive of demats transaction charges, service taxes and courier charges
for contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2%
to 0.425% for squared off trades and 0.4% to 0.75% on delivery based
trades.
Advantages of ICICIDirect:
3-in-1 account integrates your banking, broking and demat accounts. All accounts
are from ICICI and very well integrated. This feature makes ICICI the most
interesting player in online trading facility.
Unlike most of the online trading companies in India which require transferring
money to the brokers pool or towards deposits, at ICICI Direct you can manage
your own demat and bank accounts through ICICIdirect.com.
Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings
Schemes all from one website. General Insurance is also available from ICICI
Lombard.
Trading is available in both BSE and NSE.

Disadvantages of ICICIDirect:
Getting access to ICICIDirect.com website during market session can be
frustrating.
ICICI Direct brokerage is high and not negotiable.
Not all stocks are available under Margin Plus
Facility for linking account of ICICI Bank Only

Reliance Money

Reliance Money, A group company of Reliance Capital Limited, is the financial services
division of the Rs 10000 crores Reliance Anil Dhirubhai Ambani Group. Reliance
Money has over 22 lakhs customers and more than 10'000 branches in around 5000 cities
in India. Company is among the largest broking and distribution house of financial
products and having share of more than 3% of total stock market volume at BSE & NSE.
RelianceMoney.com enables its customer to invest & manage most of the services
provided by Reliance Money including Equity (Stock) Trading, Commodity Trading,
Derivatives, Mutual Fund Investment, IPO Investment, Life Insurances, General
insurances, Money Transfer, Forex exchange, Gold Coins and Credit Cards Services.
Company recently entered in to Wealth Management with tools like investment in
equity-linked portfolio management services, structured products, insurance and mutual
funds.
The Reliance Money stock trading websites uses special security features Security
Token which makes online trading more secure without complexity. Stock Trading
through RelianceMoney.com is available for BSE and NSE stock exchanges. Offline
trading is also available through Reliance Money partners in more than 5000 city across
India and through phone by dialing 022-39886000
The investment options available with Reliance Money online portal are as below:
Equity (Stock) Trading at BSE, NSE and NSE F&O
IPO Investment
Derivatives Trading
Forex Trading
Commodity Trading (Gold, Silver, Crude etc....) at MCX, NCDEX and NMCE.
Mutual Fund Investment
Life & General Insurance
Pure Swiss' Gold Coins (99.99% pure, 24 carat)

Trading platforms:
Reliance Money provides 3 different trading platforms for equity trading:
1. Insta Trade
2. Fast Trade
3. Easy trade
Reliance Money Technical Analysis (A paid service):
Reliance Money offers a simplified, automated, sophisticated technical analysis to Indian
retail broking consumers with the help of Recognia's Technical Analysis tools.
Recognia, a Canada based company, has proprietary pattern recognition technology
capable of recognizing patterns in the price charts of any publicly traded financial
instrument including stocks, bonds, funds, commodities, currencies and indexes.
The technical services are available for introductory free 7-day trial period to Reliance
Money users. Post the trail period, this service is available to users at a nominal
subscription of Rs. 99 for 3 months/ Rs. 179 for 6 months/ Rs. 299 for a year, i.e., less
than Re 1 a day.
Reliance Money Brokerage and fees:
Reliance Money offers lowest brokerage rates in today's online stock trading industry in
India. The brokerages are as low as 0.075% for delivery based trading and 0.02 for now
delivery. For more detail about Reliance Moneys brokerage and fees visit the below
section of this webpage.
Advantages of Reliance Money

Extra security features with 'Security Token', which is the most secure and tested
technology in computer world.
Simple, easy and fast online stock trading.
Almost all investment options are available under one account including Equity
Trading, Derivatives, Forex, Commodity, IPO, Mutual Funds and Insurance.
Branches are available in all major cities and the number is growing.

Disadvantages of Reliance Money
Customer Service is not that good.
Small cap stocks are not available for trading.

Share Khan


Sharekhan is online stock trading company of SSKI Group, provider of India-based
investment banking and corporate finance service. Sharekhan is one of the largest stock
broking houses in the country. S.S. Kantilal Ishwarlal Securities Limited (SSKI) has
been among Indias leading broking houses for more than a century.
Sharekhan's equity related services include trade execution on BSE, NSE, Derivatives,
commodities, depository services, online trading and investment advice. Trading is
available in BSE and NSE. Along with Sharekhan.com website, Sharekhan has around
510 offices (share shops) in 170 cities around the country.
Share khan has state of art web portal providing fundamental and statistical information
across equity, mutual funds and IPOs. You can surf across 5,500 companies for in-depth
information, details about more than 1,500 mutual fund schemes and IPO data. You can
also access other market related details such as board meetings, result announcements,
FII transactions, buying/selling by mutual funds and much more.


Type of Account:

1. Sharekhan Classic account:
Allow investor to buy and sell stocks online along with the following features
like multiple watch lists, Integrated Banking, demat and digital contracts, Real-
time portfolio tracking with price alerts and Instant credit & transfer.
2. Sharekhan Speed Trade account
This account for active traders who trade frequently during the days trading
session. Following are few popular features of Speed Trade account:
o Single screen interface for cash and derivatives
o Real-time streaming quotes with Instant order Execution & Confirmation
o Hot keys similar to a traditional broker terminal
o Alerts and reminders
o Back-up facility to place trades on Direct Phone lines

Brokerage:
Some stock trading companies charge direct percentage while others charge a fixed
amount per Rs 100. Sharekhan charges 0.5% for inter day shares and 0.1% for intraday
or you could say Sharekhan charges 50 paise per Rs 100.
Advantages of Sharekhan:
Online trading is very user friendly and one doesn't need any software to access.
They provide good quality of services like daily SMS alerts, mail alerts, stock
recommendations etc.
Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct,
HDFC Sec, etc., so investor not really needs to open an account with a particular
bank as it can establish link with most modern banks.


Disadvantages of Sharekhan:
They charge minimum brokerage of 10 paisa per stock would not let you trade
stocks below 20 Rs. (If you trade, you will lose majority of your money in
brokerage).
Hidden conditions and charges.
They do not provide facility to book limit order trades during after-hours.
Classic account holders cannot trade commodities.
Cannot purchase mutual funds online.
Kotak Securities


Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, was set up in 1994.
Kotak Securities is a corporate member of both Bombay Stock Exchange (BSE) and
National Stock Exchange (NSE). Currently, Kotak Securities is one of the largest
broking houses in India with wide geographical reach.
Kotak securities online trading is the online trading portal of the Kotak Securities Ltd,
the leading stock broking house of India. The online division of Kotak Securities
Limited provides services like internet broking services, online IPO and mutual fund
investments.
Types of accounts:
Kotak offers different account types according to users requirement:
1. Kotak Gateway
Kotak securities 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.
They provide sms alert, research report, free news and market updates. Best
feature of Kotak gateway is call and trade facility. Anybody can activate
Kotak securities 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 .06% both sides for less than 25 lakhs and .023% for
more than 25 crores.
2. Kotak Privilege Circle
This is the premium account for its users. Along with kotak gateway account
benefits they 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 securities privilege circle account with any amount
more than Rs. 10, 00,000/- as margin, by way of cash or stock. For intraday
trading brokerage is .06% both sides for less than 25 lakhs and .03% for more
than 25 crores.
3. Kotak High Trader
This is the best offer for daily trader or intraday traders. This is an Auto
Square Off product where you can enjoy the benefits of intra-day trading.
Trader can get the 6 times exposure on the margin. They provide all the
benefits which kotak gateway and privilege account provides. Trader can
apply paper free order for IPO.
One can activate Kotak securities high trader with any amount less than Rs 5,
00,000/- as margin, by way of cash or stock. The minimum brokerage that is
applicable in the Kotak high trader account is 4 paisa on delivery and 4 paisa
in the cash segment.


Below is the analysis done while doing the study on Online Trading in India.

Ans.1 What is your education qualification?



INTERPRETATION

The people who are dealing with the stock market either online or offline. mort of them
are graduate, 49%of the total respondent who are dealing with the stock market are
graduate, then 16% are post graduate and 22% people is having professional degree. So
here this is showing that qualification up to graduation or more than that is in the favor
of the online trading pattern

Ans. 2 What is your annual income?


INTERPRETATION

58% respondent are having the income level of 100000-200000 ,21% is having 200000-
300000 , 12% in having 300000-400000 , 7% of the total respondent are having income
more than 400000 per annum and only 2% are having less than 100000 per annum.

To invest in the stock market minimum 100000 or more than this should be the annual
income level of the people. In India the per capita income in also increasing so we can
say that there is a good opportunity for the online trading market

Ans.3 What percentage of your monthly household income could be
available for investment?



INTERPRETATION

According to the data 23% of the total respondent invest less than 5% of their income,
41% respondents are saying that they invest 5%-10% of their monthly income (which is
highest) Whereas the 21% investor do the investment 10%-15% of their total monthly
income,13 invest between 15%-20% of the total income and only 2% does more than
20% of their income invest in the market

We can easily understand that 75% of the total population is having a good amount of
investment, so the investment is there in the market, good number of people are ready to
invest a good amount in the market 91% of respondent is in the income level of 100000
300000 (according to the last question analysis).

So we can say that stock brokerage houses will have to do a good business with the help
of Online trading system with few value addition services
Ans.4 Where do you often invest your money?



INTERPRETATION

Highest number of respondent is having their investment in the equity that is 65%
whereas the investment available for the mutual fund, term deposit and insurance is 14%,
12% and 9% So the investor for equity is high which is again showing the n number of
opportunity for online trading

Ans.5 What is the primary objective of your investment?



INTERPRETATION

13% of the respondent invests the money for the reason capital appreciation but most of
the investor is having same motive that is source of income and retirement plan, wealth
preservation and education funding for children or other are only 10%

From the analysis we can have idea that the main objective of the investor to earn the
money through trading in stock market 77% of the respondent achieves their objective
with the help of investment in the equity market, because most of the investment takes
place in the form of equity (explanation of 4th ans.)

So we can say that there is a huge potential in the market for the trading in the stock
market

Ans.6 Do you owe a Computer?



INTERPRETATION

78% of the total respondent who are dealing with the stock market is having computer in
their house and only 22% is not having computer in their house

The people who is having computer that is 78% can also go for online trading which can
be a large number of people who will go for online trading they dont need to do a
additional investment for computer to go for online trading
Ans.7 To operate a computer is easy for me


INTERPRETATION

76% (26+51) of the total respondent believe that operate a computer is easy for me
whereas 20%(13+7) of the respondent is having problem to operate a computer out of
that 20% , 75 believe that they cant go for computer

So, if 78% of the people who are dealing with the stock market is having computer at
their house and around 76% of the same population dont have any problem to operate a
computer

So around 60 % is there who is having computer and they dont have problem to operate
a computer

Ans.8 Online trading is a secure way of trading?



INTERPRETATION

71% of the respondent is having a positive thinking that online trading is a secure way of
trading whereas 185 of the respondent believes that online trading is not a secure way of
trading Satisfaction about the process, by which they will be going to do a trading that is
online trading, should be there in the mind of the customer.
If they believe that there is no risk over the money which they are going to invest in the
market with the help of online trading, there will be a perception to go for online trading
at least one time.

Ans.9 online trading is easy and fast way of trading?


INTERPRETATION

51% of the total respondent believe that online trading is a easy task Whereas 41% of the
respondent believes that to deal with online Trading is not a easy task and 85 was
confused to anything about that the trading via internet is an easy task or not.

There is a difference between the people who believe and who dont believe is not very
big that is only 10% , the reason of this problem can be if a person is doing its
investment on its own he or she think of the problem of being mistaken in the
transaction. So there is a need of proper training to do trading online.


Ans.10 At what time do you trade?



INTERPRETATION

45% of the total respondents do trading in office timing while 32% do trading in non
office timing and 23% of the respondents do the trading in free time

Here the people who do the trading in office timing they face the problem of not in the
continuous touch of the stock market, so online trading can be one of the good solution
of this problem.


Ans.11 Introduction of online trading helped to attract the new
Investors thus increasing the trading volumes at Stock Market?


INTERPRETATION

76% of the respondents believe that the introduction of online trading helped to attract
the new customer became the reason to increase the trading volume of the market

On the other side 16% of the respondents believe that it doesnt affect the trading volume

Ans 12. What factor would you consider before choosing an account in
a brokerage house?

RELIABILITY ANALYSIS OF THE DATA

We calculate the value of cronbachs Alpha to calculate how reliable the data collected
by the sampling

Reliability Statistics

Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items
.880 .875 21


we also look for that if the value of cronbachs Alpha is more than average so that data
collected by the sample is showing the habit of the population the data is representing the
whole population we are having the value of cronbachs Alpha of 21 features that is .880
that is more than good , so here we can say that data is reliable enough to go further
analysis


DESCRIPTIVE STATISTICS ANALYSIS OF THE DATA

In the descriptive statistics analysis we calculate the MEAN and STANDARD
DEVIATION Where low mean shows the average of the respondent who think that these
quality should be in the product and deviation showing the differentiation in opinion of
the respondent Low S.D. means small difference in the opinion about the particular
factor which should in the product.



If we do the analysis the data through value, we will find that few features are most
important for the customer. These are Brand, Compliance system, infrastructure,

Regular delivery of contract notes, Efficiency at peak hours, Time to open an account,
Variety of products offered Helpline services, Guidance, Research reports and Access to
back office.

The mean of the given component is around 1.5 1.99. That is showing that customer is
looking theses component in the product.

S.D. of the product features Guidance, Variety of products offered, Efficiency at peak
hours, Brand, Compliance system, infrastructure is less than 1. Here the respondent is
not having different opinion about these components.
FACTOR NANLYSIS the factor analysis we look for the few component and
each component is having 1 or more than 1 features of the product





If we analyze the given Rotated Component Matrix and Component Transformation
Matrix we will find that there are six component are coming and each of them
component include one or more than 1 features in its own

If we talk of component 1 it include few features which are most important while
designing the product Variety of products offered, Time to open an account, Brokerage
charged, Customer services, Software, Research reports and infrastructure

In component 2 it include four features of the online trading product that is Efficiency at
peak hours, Customer relationship, Market exposure, Helpline services. In component 3
it include four features of the online trading product that is Effective execution, Regular
delivery of contract notes. In component 4 there are three factor which are most
important for the product and they are Access to back office, Comprehensive stock
trading portal, Employees skill According to component 5 there is only a single feature
which is Time to open an account is important And the component 6 is also having only
a single product feature that is Recording confirmation. If we gone through the all
component of the product we will find that there are few quality or features which a
product like online trading should have.

These are Variety of products offered, Time to open an account, Brokerage charged,
Customer services, Software, Research reports
FINDINGS

My research project is quite relevant to the today generation of online trading
community. The following things can be useful for online trading community

They should know their market position with other competitors.
They should probe the broking company to get know some areas of improvement.
The changing perception of market and the companies will also be made clear.
They should get the broking companies to do effective segmentation of their
market based their research analysis teams for better trading.
Everyone should understand the effects & advantages of todays changing
technology and should keep themselves abreast with the changing & upcoming
technology.
Recommendations

The companies should come up with more and more innovative features in their web
portals.
We came to know about most important factor about the product with the help of
factor analysis, so we should go for change the product according to the customer
need.
We should also focus upon the value added services. Generally company does
claim that if you will by the product you will get these benefits but company
doesnt provide the services here. So services always does matter when we talk of
ONLINE TRADING
Company should also look for the problem which customer generally face when
they do trading (like problem of operating properly)
The customer should be educated regularly regarding the new technologies and
techniques of trading online and also other relevant information.
The companies should look after to develop more safe and secure ways of
transacting business online.
The companies should make maximum efforts to detect fraud cases and minimize
them


Conclusion

The online trading is growing with a rapid pace with the rising level of education among
the customers. The other factors being that the Indian Investor nowadays wants to deal
himself in trading rather than depending upon other middlemen. They also consider the
factors like time saving in doing the online transactions, convenience etc. Although some
people feel that online trading is not secure but the people doing the trading online is
happy about the increasing security concerns among the companies.

The year 2008 has not been so good for the stock market and the Sensex and Nifty has
been dipping and affecting the business negatively for these companies but the same
trend reversed in 2009 - 2010. This is due to the fact that at these times people do not
prefer to open the DMAT and Trading accounts. So the companies have to reduce their
account opening fees to attract more and more customers. Also people trade very less in
the bearish market and the companys profits against brokerage fees soars downwards. It
is also a found fact that during the bearish market the ratio of online trading becomes
very less. Also there is an intense competition among the companies and the companies
come up with new and new promotion schemes such as discounted and negotiable
brokerages, Zero balance accounts, waiving a/c opening fee and AMC etc. As the
internet penetration is growing in India this business holds a huge potential for growth.

Now if the existing company will have to capture the market they will have to look for
the innovation in their product as well as service mix.

The mantra for success in the current situation will be educating the customers about the
benefits of online trading and the amount of ROI that can be generated through it.

Bibliography

money.rediff.com
www.reliancemoney.com
www.icicidirect.com
www.kotakstreet.com
www.bseindia.com
www.nseindia.com
www.bseindia.com
www.sebi.co.in
www.investorwords.com
www.advfn.com
www.investsmartindia.com
www.trendtraders.com
www.indiainfoline.com
www.sharekhan.com
www.kotaksecurities.com
www.indiabulls.com
www.motilaloswal.com/home
www.religaresecurities.com
http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India
http://www.world-exchanges.org/statistics/ytd-monthly
http://www.nse-india.com/content/us/us_factsfigures.htm