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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.

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SESSION PLAN

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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)

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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

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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

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