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  • 8/4/2019 2421 Stock Markets Operations

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    Lal Bahadur Shastri Institute of Management, DelhiTwo Year Full Time Post Graduate Programme in Management (Finance)

    Trimester IV

    Course Code: 2421 Course: Stock Market Operations

    Academic Session: 2010-11 Instructor:Dr. Deepak Tandon

    Learning Objectives Course Objectives: The course aims at giving an in-depththeoretical and practical understanding of Stock Market/Secondary Market working,

    Depository systems /Developments in Stock Markets trading and settlement system. The

    objectives can be summarized

    To study the growth of the Indian Stock Markets vis a vis tools available for Risk

    Management and investor protection in light of SEBI Guidelines

    To study the Organization, functions of the stock Exchanges in India , enrollmentof the members

    To study the market mechanism of Buying & selling in an Online trading system

    To be equipped with the Margin System,VaR and Mark to Market Concept .

    To study the transparency and full disclosure in terms of structural changes in the

    Capital Market

    To study the functionary of Stock Exchanges , Depositories ( NSDL/CDSL),SHCIL

    To have an overall view of the Secondary Market operations , Trading Clearingand Settlement, Rolling Settlement, Dematerialisation of Shares, Surveillance,Sensex and Other Indices, Futures and Options, Primary Markets, Book Building& IPOs, Listing, Debt Market.

    .

    SESSION PLAN

    1

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    Module Session Topic

    1. Introduction toStock Exchange/

    Stock Markets in

    India

    1-3

    1.1Organization of Stock Exchanges in India and the legalregulations ,

    1.2 Features and functions of Stock Exchanges in India .How

    SCAMS can be circumvented in Capital Market Operations1.3 BSE / NSE and OTCEI Framework and workings

    2. Risk Managementin Stocks. Holding

    period return. Stock

    Exchange

    Terminology

    4-6

    2.1 Risk Management in Stocks . Tradings in listed securities

    2.2 Stock Market Glossary

    Numericals

    3. Capital Market

    Regulators7-9

    3.1 Repeal of CCI and shift to SEBI Act ,1992. Structural

    changes in Capital Market .Critical appraisal of SEBI3.2. Depository system CDSL and NSDL

    CASE:

    4. Stock MarketIndices

    10-13

    4.1 Construction of Stock Market index (Sensex) and Nifty,Methodology and maintenance of SENSEX.

    4.2 About NSE Nifty, Nifty Jr, CNX 1004.3 Introduction to Foreign Stock Exchanges and Indices

    NASDAQ ( National Association of Securities Dealers

    Automated Quotation),NYSE (New York Stock Exchange )

    and LSE ( London Stock Exchange ). Concept of Order vsQuote Driven Market. Role of SEC ( Securities Exchange

    Commission)

    CASELETS & CASE Stock Market Index Calculation inTelecom Industry using Market Capitalisation Weighted

    Methodology

    NUMERICALS

    5. The brokeragebusiness and share

    trading through

    Broker, Selection of

    Broker 14-15

    5.1 Trading through Member broker Concepts . Placing ofan order , execution of the order

    5.2 Trading Clearing and Settlement, Rolling Settlement,BOLT vs NEAT5.3 Dematerialisation of Shares- Concepts ofdematerialization and rematerialisation ,5.3 Functional Specialisation of the Brokers

    5.4 Settlement in stock trading and Intraday Trading

    DEMO OF A TRADING IN STOCKS (1 Session)

    6. Margin System&

    Recent Developments

    16-17

    6.1 Margin Trading in Stocks , Initial / Exposure Margin /MTM

    6.2 Derivative Trading in India - F & O Trading on NSE

    ( Futures & Options). Short vs Long positions CurrencyDerivatives ( NCDEX).

    6.3 Option premium in NIFTY (Application of Black and

    Scholes Model)

    2

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    7. Primary Market

    Operations IPO/Rights / FPO

    187.1 Primary Markets, Book Building & IPOs, Listing, DebtMarket,

    8 Revision

    19-20

    Multiple choice Class Test // Caselet on IPO financing /

    Mock Trading

    Suggested Readings

    Compulsory:

    Brealey and Myers and Pitabas Mohanty,Principles of Corporate Finance 8h

    Edition (Tata Mc Graw Hill)

    Reference: Machi Raju, H.R: Merchant Banking; Wiley Eastern Ltd.; New Delhi.

    Machi Raju, H.R: Working of Stock Exchanges in India; Wiley Eastern Ltd.

    New Delhi.

    Dalton, John M.: How the Stock Market Works, Prentice Hall, New Delhi

    Dr JN Dhankar (2009):The Indian Capital Market Operations ;skylark

    Publications New Delhi

    Websites

    www.bseindia.com

    www.nseindia.com www.otcei.net

    www.capitalmarket.com

    www.indiabulls.com., www.angelbroking.com,www.sharekhan.com

    www.indiainfoline.com

    money.rediff.com/companies

    www.smcindiaonline.com/smcsite/tradedemo.asp

    Evaluation Parameters

    Class Tests (2) 10 marks

    Attendance 10 marksIndividual assignments 10 marks

    Group assignments and presentation 10 marks

    End term examination 60 marks

    3

    http://www.bseindia.com/http://www.bseindia.com/http://www.bseindia.com/http://www.nseindia.com/http://www.nseindia.com/http://www.nseindia.com/http://www.otcei.net/http://www.otcei.net/http://www.otcei.net/http://www.capitalmarket.com/http://www.capitalmarket.com/http://www.capitalmarket.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.smcindiaonline.com/smcsite/tradedemo.asphttp://www.smcindiaonline.com/smcsite/tradedemo.asphttp://www.smcindiaonline.com/smcsite/tradedemo.asphttp://www.bseindia.com/http://www.nseindia.com/http://www.otcei.net/http://www.capitalmarket.com/http://www.indiainfoline.com/http://www.smcindiaonline.com/smcsite/tradedemo.asp
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    Pedagogy

    The teaching methodology is a judicious blend of lectures, Guest lecture and real life

    situation analysis, case discussion and presentation by students of their project work andfield study

    _______________________________________________________________________

    4