online trading india infoline
Post on 20-Oct-2014
2.891 views
DESCRIPTION
TRANSCRIPT
Online Trading
CONTENTS
CHAPTER – I
INTRODUCTION 3
CHAPTER – II
COMPANY PROFILE 5
CHAPTER – III
METHODOLOGY OF STUDY 12
Objectives
Need for the Study
Data source
Scope and limitations
CHAPTER – IVINDUSTRY PROFILE 17
Bombay stock exchange National stock exchange
CHAPTER – V
1
Online Trading
ONLINE TRADING SYSTEM 23
System for online trading Trading membership NSDL Clearing and settlement
CHAPTER – VI
CONCLUSION 69
SUGGESTION & RECOMMENDATION 71
CHAPTER – VII
ANNEXURE 73
BIBLIOGRAPHY 77
2
Online Trading
INTRODUCTION :-
The trading on stock exchanges in India used to take place through open outcry
without use of information technology for immediate matching or recording of trades.
This was time consuming and inefficient. This imposed limits on trading volumes
and efficiency. In order to provide efficiency, liquidity and transparency, NSE
introduced a nation-wide on-line fully automated Screen Based Trading System
(SBTS) where a member can punch into the computer quantities of securities and the
prices at which he likes to transact and the transaction is executed as soon as it finds a
matching sale or buy order from a counter party. SBTS electronically matches on a
strict price/time priority and hence cuts down on time, cost and risk of error, as well
as on fraud resulting in improved operational efficiency. It allows faster incorporation
of price sensitive information into prevailing prices, thus increasing the informational
efficiency of markets. It enables market participants, irrespective of their
geographical locations, to trade with one another simultaneously, improving the depth
and liquidity of the market. It provides full anonymity by accepting orders, big or
small, from members without revealing their identity, thus providing equal access to
everybody. It also provides a perfect audit trail, which helps to resolve disputes by
logging in the trade execution process in entirety. This sucked liquidity from other
exchanges and in the very first year of its operation, NSE became the leading stock
exchange in the country, impacting the fortunes of other exchanges and forcing them
to adopt SBTS also. Today India can boast that almost 100% trading take place
through electronic order matching.
3
Online Trading
The trading network in NSE has main computer, which is connected
through Very Small Aperture Terminal (VSAT) installed at its office. The main
computer runs on a fault tolerant STRATUS mainframe computer at the exchange.
Brokers have terminals installed at their premises, which are connected through
VSETs/leased lines/modems.
An investor informs a broker to place an order on his behalf. The broker enters
the order through his PC, which runs under Windows NT and sends signal to the
Satellite via VSAT/leased line/modem.
4
Online Trading
COMPANY PROFILE
5
Online Trading
India Infoline was Launched on 11 May 1999 with SEBI REGN. NO. :
INB 231097537 & CODE NO. : 10975, Regd. & Dealing Office : Building
No. 24, 1st Floor, Nirlon Limited Compound, Western Express Highway,
Goregaon (E), Mumbai - 400 063.www.indiainfoline.com is India’s leading
and most comprehensive business and financial information website. The site
made available quality information and analysis - earlier restricted to a few
people - to the common man absolutely free. The site met with an
overwhelming response and has been reviewed as the most comprehensive
financial content website in India by BBC World - Money Watch, Business
World, Business Line and others. The company also won the Golden Mouse
Award in India Internet World 2000 for the Best Finance site. In May 2001,
our website was included in the Top 200 Best of the Web list by Forbes Global
under the Asia Investing category. We were the only website from India to be
featured in any category. Since then it has been nominated twice to this list. In
its last review, Forbes editors have said, "www.indiainfoline.com is a must
read for the investors in South Asia..."Our research is also disseminated
electronically through Bloomberg, Investext, First Call/Thomson Financial and
Internet Securities. On First Call/Thomson Financial, we have been one of the
largest read research houses from Asia, which is a testimony to the quality and
timeliness of our reports.
6
Online Trading
The offerings on the site include a combination of information and
transaction services. Transaction services include mutual funds, personal loans
and online broking through www.5paisa.com. India Infoline was the first
company to offer many of these services in the country. In online broking, we
have emerged as a leading player offering online trading facilities with
significant market share. As on date, the Group employs 4000 plus employees,
most of them are placed at its various branches across India. About INDIA
INFOLINEIt is a one-stop financial services shop, most respected for quality
of its advice, personalized service and cutting-edge technology
Vision
Its vision is to be the most respected company in the financial services space
India Infoline Ltd. India Infoline Ltd is listed on both the leading stock
exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National
Stock Exchange (NSE). The India Infoline group, comprising the holding
company, India Infoline Ltd and its subsidiaries, straddles the entire financial
services space with offerings ranging from Equity research, Equities and
derivatives trading, Commodities trading, Portfolio Management Services,
Mutual Funds, Life Insurance, Fixed deposits, GoI bonds and other small
savings instruments to loan products and Investment banking. India Infoline also
owns and manages the websites, www.indiainfoline.com and www.5paisa.com .
7
Online Trading
India Infoline Ltd, being a listed entity, is regulated by SEBI (Securities and
Exchange Board of India). It undertakes equities research which is
acknowledged by none other than Forbes as 'Best of the Web' and '…a must read
for investors in Asia'. India Infoline's research is available not just over the
internet but also on international wire services like Bloomberg (Code: IILL),
Thomson First Call and Internet Securities where it is amongst the most read
Indian brokers.
Its various subsidiaries are in different lines of business and hence are governed
by different regulators. The subsidiaries of India Infoline Ltd are India Infoline
Securities Pvt Ltd is a 100% subsidiary of India Infoline Ltd, which is engaged
in the businesses of Equities broking and Portfolio Management Services. It
holds memberships of both the leading stock exchanges of India viz. the Stock
Exchange, Mumbai (BSE) and the National Stock Exchange (NSE). It offers
broking services in the Cash and Derivatives segments of the NSE as well as the
Cash segment of the BSE.A SEBI authorized Portfolio Manager, it offers
8
Online Trading
Portfolio Management Services to clients. These services are offered to clients as
different schemes, which are based on differing investment strategies made to
reflect the varied risk-return preferences of client
India Infoline Commodities Pvt Ltd
India Infoline Commodities Pvt Ltd is a 100% subsidiary of India
Infoline Ltd, which is engaged in the business of commodities broking. Our
experience in securities broking empowered us with the requisite skills and
technologies to allow us offer commodities broking as a contra-cyclical
alternative to equities broking. We enjoy memberships with the MCX and
NCDEX, two leading Indian commodities exchanges, and recently acquired
membership of DGCX. We have a multi-channel delivery model, making it
among the select few to online as well as offline trading facilities.
India Infoline Distribution Co Ltd (IILD)
India Infoline.com Distribution Co Ltd is a 100% subsidiary of India
Infoline Ltd and is engaged in the business of distribution of Mutual Funds,
IPOs, Fixed Deposits and other small savings products. It is one of the largest
'vendor-independent' distribution houses and has a wide pan-India footprint of
over 232 branches coupled with a huge number of 'feet-on-street', which help
source and service customers across the length and breadth of India. Its unique
value proposition of free doorstep expert advice coupled with free pick-up and
delivery of cheques has been met with an enthusiastic response from customers
and fund houses alike. Our business has expanded to include the online
distribution of mutual funds, wherein users can view and compare different
product offerings and download application forms which they can later submit
to the product provider
9
Online Trading
Mortgages & Loans IILD has also entered the business ot distribution of
mortgages and loan products during the year 2005-2006. The business is still in
the investing phase and We plan to roll the business out across its pan-Indian
network to provide it with a truly national scale in operations.
India Infoline Insurance Services Ltd
India Infoline Insurance Services Ltd is also a 100% subsidiary of India
Infoline Ltd and is a registered Corporate Agent with the Insurance Regulatory
and Development Authority (IRDA). It is the largest Corporate Agent for
ICICI Prudential Life Insurance Co Ltd, which is India's largest private Life
Insurance Company
India Infoline Investment Services Ltd
India Infoline Investment Service Ltd is also a 100% subsidiary of India
Infoline Ltd. It has an NBFC licence from the Reserve Bank of India (RBI) and
offers margin-funding facility to the broking customers
India Infoline Insurance Brokers Ltd
India Infoline Insurance Brokers Ltd is a 100% subsidiary of India Infoline
Ltd and is a newly formed subsidiary which will carry out the business of
Insurance broking. We have applied to IRDA for the insurance broking licence
and the clearance for the same is awaited.
10
Online Trading
Services Offered By India Infoline.
Here’s a look at the rocketing list of what’s on offer from The India Infoline Group:
Equity Trading and Stock Broking :-
Cash and Derivatives segments. Member - BSE and NSE, DP with NSDL.
Portfolio Management :-
SEBI-registered, backed by a pool of analysts with over 200 man-years in managing portfolios.
Research & Analysis :-
Exhaustive information and data mining, covering the spectrum of Indian business, industry and financial markets.
Mutual Funds :-
Primary agent for the entire phalanx of leading funds. Something to suit every risk profile.
Life Insurance :-
Leading corporate agent of ICICI Prudential Life Insurance Company, miles ahead of the runner-up!
Commodities Broking :-
Member of the Multi- Commodities Exchange (MCX). Again, rock-bottom brokerage and quality research support. Fixed Income Instruments: From Fixed Deposits, Post Office Saving schemes to RBI Tax Saving and Infrastructure Bonds.
11
Online Trading
12
METHODOLOGY
OF THE STUDY
Online Trading
OBJECTIVES :-
The primary objective is to analyze the changes in trading procedures
after the exchange shifted from outcry system to online trading system.
To know the eon-line screen based trading system and its communication
facilities for the appropriate configuration to set network.
The purpose of the study is to understand the complete Gambit of Online
Trading.
To highlight the superiority of Online Trading.
To study the services offered by India Info line Securities Pvt Ltd through
its various departments.
To focus upon the features provided in the online trading system for the
hassle-free functioning of the trading process and to avoid fraudulence.
To understand the working of National Securities Depository Limited.
13
Online Trading
NEED FOR THE STUDY :-
Capital Markets play a vital role in the development of the economy and
stock exchanges are the integral part of the Capital Market. With the advance in
Information Technology, age-old methods of stock trading are gradually fading out.
They are replaced by the easier and hassle-free method of trading On-Line through the
Internet.
This study is carried out to explore the changes occurring in stock exchange
with the advancements in the information technology. The major need for this study
is to know the effectiveness of online system in comparison with the outcry system.
More emphasis is given to bring out the process of online trading behind the screen
and its advantages. The study also includes the emergence of the depository system
in the country to rule out the drawbacks of the system of physical transfer of the
shares.
14
Online Trading
DATA SOURCES :-
The study includes the data collected from both the Primary and
Secondary sources.
Primary sources include data collected from various department members
of the India Info line Securities Pvt Ltd.
Secondary sources are books, website and records from the departments
of India Info line Securities Pvt Ltd.
15
Online Trading
SCOPE AND LIMITATIONS OF THE STUDY :-
The analysis is made on the online trading activities carried out in India Info
line Securities Pvt Ltd.
The data is collected from the Primary and Secondary sources so the study
will
have slight variation than what the study includes in reality.
The study is limited to current time period.
The study is purely for academic purpose.
Most of the information collected for study is acquired from secondary
source.
16
Online Trading
INDUSTRY PROFILE
17
Online Trading
BOMBAY STOCK EXCHANGE
This stock exchange, Mumbai, popularly known as “BSE” was established in
1857 as “The Native share and stock brokers association” as a voluntary non-
profit making association. It has an evolved over the years into its present status
as the premier stock exchange in the country. It may be not that the stock
exchanges the oldest one in Asia, even than the Tokyo Stock Exchange, which
was founded in 1878.
18
Online Trading
The exchange, while providing an efficient and transparent market for
trading in securities, upholds the interests of the investors and ensures redressed
of their grievances, whether against the companies or its own member brokers.
It also strives to educate and enlighten the investors by making available
necessary informative inputs and conducting investor education programmes.
A governing board comprising of 9 elected directors, 2 SEBI nominees,
7 public representative and executive director is the apex body, which decides
the policies and regulates the affairs of the exchange.
The executive director as the chief executive officer is responsible for
the day to day administration of the exchange. The average daily turnover of the
exchange during the year 2000-01 (April – March) was Rs. 3,984.16 crores and
average number of daily trade 5.69 lakhs.
The Ban on all deferral products like BLESS AND ALBM in the Indian
Capita Markets by SEBI with effect from 2001, abolition account period
settlements and introduction of compulsory ruling settlements in all scripts
traded on the exchanges with effect from December 31, 2001 etc, have adversely
impacted the liquidity and consequently there is a considerable decline in the
daily turnover at the exchange. The average daily turnover of the exchange
present scenario is 110363 (lakhs) and number of average daily trade 1057
(lakhs).
19
Online Trading
BSE INDICES
In order to enable the market participants, etc, to track the various ups and downs
in the Indian stock market, the exchange have introduced in 1986 and equity stock
index called BSE – SENSEX that subsequent became the barometer if the moments of
the share prices in the Indian stock market. It is a “Market capitalization weighted”
index of 30 component stock representing a sample of large, well established and
leading companies. The base year of sensex is1978-79.The Sensex is widely reported
in both domestic and international market through print as well as electronic media.
Sensex is calculated using a market capitalization weighted method. As per this
methodology, the level of the index reflects the total market value of all 30
component stocks from different industries related to particular base period. The total
market value of the company is determined by multiplying the price of its stock by the
number of shares outstanding. Statisticians call a index of a set of combined variables
(such as price and number of shares) a composite index. An indexed number is used
to represent the result of this calculation in order to make the value easier to work
with the track over a time. It is much easier to graph a chart based on Indexed values
than one based on actual values worked over majority of the well known indices are
constructed using “Market capitalization weighted method.”
In practice, the daily calculation for SENSEX is done by dividing the aggregate
market value of the 30 companies in the Index by a number called the index Devisor.
The devisor is the only link to the original base period value of the sensex. The
divisor keeps the Index comparable over a period of time and if the reference point for
the entire index maintains adjustments. SENSEX is widely used to describe the mood
in the Indian Stock Markets. Base year average is changed as per the formula new
base year average = old base year average*(new market value/ old market value).
NATIONAL STOCK EXCHANGE
20
Online Trading
The NSE was incorporated in November 1992 with an equity capital of Rs. 25
crores. The International Securities Consultancy (ISC) of Hong Kong has helped in
setting up NSE. ISE has prepared the detailed business plans and installation of
hardware and software systems. The promotions for NSE were financial institutions,
insurances companies, banks and SEBI Capital Market Ltd.
It has been set up to strengthen the move towards professionalizing of the capital
market was well as provide nation wide securities trading facilities to investors.
NSE is not an exchange in the traditional sense where brokers own and manage
the exchange. A two tier administrative set up involving a company board and a
governing board in envisaged.
NSE is a national market for shares PSU bonds, debentures and government
securities since infrastructure and trading facilities are provided.
NSE – MIDCAP INDEX
21
Online Trading
The NSE – midcap index or the Junior Nifty comprises 50 that represents 21
abroad industry groups and will provide proper representation of the midcap segment
of the Indian Capital Market. All stocks in the index should have market
capitalization of greater than Rs. 200 crores and should have traded 85% of the
trading days at an impact cost less 2.5%.
The base period for the index is November 4th, 1996, which signifies two years
for completion of operation of the capital market segment of the operations. The base
value of the index has been set at 1000.
At present there are 24 stock exchanges recognized under the securities contract
(regulation) Act, 1956. They are
Name of The Stock Exchange Year
22
Online Trading
Bombay Stock Exchange 1875
Ahmedabad Share & Stock Brokers Association 1957
Calcutta Stock Exchange Association Ltd 1957
Delhi Stock Exchange Association Ltd 1957
Madras Stock Exchange Association Ltd 1957
Indore Stock Brokers Association Ltd 1958
Banglore Stock Exchange 1963
Hyderabad Stock Exchange 1943
Cochin Stock Exchange 1978
Pune Stock Exchange 1982
UP Stock Exchange 1982
Ludhiana Stock Exchange 1983
Jaipur Stock Exchange Ltd 1983 – 84
Gauhati Stock Exchange Ltd 1984
Manglore Stock Exchange Ltd 1985
Maghad Stock Exchange Ltd, Patna 1986
Bhuwaneshwar Stock Exchange Association Ltd 1989
Over the counter Exchange India, Bombay 1989
Saurastra Kuth Stock Exchange Ltd 1990
Vadodard Stock Exchange Ltd 1991
Coimbatore Stock Exchange Ltd 1991
The Meerut Stock Exchange 1991
National Stock Exchange 1991
Integrated Stock Exchange 1999
23
Online Trading
24
Online Trading
INTRODUCTION
TT Advanced™ as your trading platform for trading on the Indian Exchanges
viz National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). This guide
will help you get up and running.
TT Advanced™ is a comprehensive trading tool, with superior charting and
analytical capabilities, that allows you to place orders and get them executed at
lighting fast pace.
If you are a first time user and just installed the software please check out
Quick Tour section that will guide you through most important aspects of using TT
Advanced™.
The next section - Reference guide - provides detailed description of every
window and information on how to get the most out of your TT Advanced™ trading
tool.
In the Technical analysis guide you will find material that will introduce you to
the world of charting and technical indicators.
How do I install the 5pisa TT Advanced
Installation of 5paisa TT Advanced™ is very simple. The software itself is a
small file – around than 1MB, which can be sent to you on email or can be
downloaded from the following link:
http://www.5paisa.com/download/login.asp (You will need to get the rights to
download the application.)
If your operating system is Windows 95 then this software will not work on
your machine. You will have to upgrade your operating system.
If your operating system is Windows 98 or Windows 2000 then your system
will not have the .NET Framework 2.0 installed. You can either get the .NET
25
Online Trading
Framework 2.0 downloaded from the Web
(http://www.microsoft.com/downloads/details.aspx? FamilyID=0856eacb-4362-4b0d-
8edd-aab15c5e04f5&displaylang=en) or from the 5paisa download site or have your
hardware engineer install the same for you. Alternatively you can request for
the .NET Framework CD from us by sending a mail to [email protected]. Please
provide one week for shipping of CDs.
If Windows Installer is required you can get from the 5paisa download site.
If your operating system is Windows XP make sure that you have Framework
2.0. If you have not patched up your operating system or updated Framework, you
will be required to do so now. You could have your hardware engineer help you with
the update and/ or patch.
Once you have successfully installed Framework 2.0 or have established that
you have the right version of Framework running on your system the downloaded exe
will run without any need for set up or any additional tasks.
On a Windows 2003 machine you don’t need to do anything other than simply
downloading the exe and running it.
System requirements :-
The 5paisa TT Advanced™ is optimized for use with a modem and an ordinary
internet connection.
Operating system :-
The software is tested to work on Windows 2003, Windows 2000, Windows
NT, Windows XP, and Windows 98. It will not work under Windows 95. On
Windows 2000, NT and 98 you will have to download .NET Framework 2.0. In XP
you have ensure that you have upgraded your Framework version from 1.1 to 2.0
26
Online Trading
Proxy Setting :-
If the software is being accessed from behind a proxy you will need to open the
following 3 ports for any
1. 10116 2. 25000 3. 25002
Browser version
IE 5.5 or higher.
Hardware :-
Pentium/Celeron with RAM - 256Mb and above, ideally 512Mb.
Display setting :-
Minimum : 800 by 600 pixels. Ideally 1024 by 768 pixels. If your display
setting is below 800 by 600, you can close all windows on the desktop, right click,
select properties - settings and change the display settings. If your computer does not
support 800*600 display setting and above, contact your vendor and replace the
display card, which may entail a nominal cost.
QUICK TOUR :-
Login is essential to access TT Advanced™. Click on the shortcut icon on your
desktop or directly run the EXE from its location. You will be prompted to login with
your User ID and password. If your login and machine credentials are correct then
you will be logged into the 5Paisa Trading system. On every login data will be
synched with that available on server. You can go ahead and start working on your
terminal as soon as login success message is flashed; synch happens in the
background. You can logout any time by accessing the ‘Logout’ option from the
‘File’ menu. On logout your terminal will still be active. You can login again by
accessing the ‘Login’ option from the ‘File’ menu or invoke the Login window with
the ‘Ctrl+L’ hot key. You can also close the application at any time by clicking on the
cross button ‘x’ of the terminal window. Hot key for the same is ‘Alt+F4’.
27
Online Trading
Market Watch window is the most important window that will help you get
your trading done. Unless you have explicitly closed this window on a previous
session, you will find this window open as soon as login happens successfully. This
window gives a tabular representation of the current market position for selected
scrips. Each scrip makes up a row of data that contains the scrip name, its last traded
price, last traded quantity, best bid rate, best offer rate, total volume etc. Market
Watch window is highly configurable and you can decide which columns are to be
viewed and which not, whether you require row or column separators, determine the
size of all rows or each column, the color used to display data etc. There are a host of
options available on a pop-up menu that can be accessed by right clicking on the
Market Watch window. You can quickly Buy/ Sell shares by using the hotkeys ‘F1’
and ‘F2’ respectively. When you double-click on any row of the Market Watch
window it will open the Market Depth window and Real time Intra-day Chart. All
these windows will be updated dynamically in real time and you need not ‘pull’ or
refresh any information.
Adding or removing scrips from Market Watch is extremely simple. To
remove a scrip from Market Watch move to the appropriate row and simply press the
‘Del’ key. Obviously this is also available as an option in the pop-up menu. To
remove all scrips simply press ‘Ctrl+Del’. To add a scrip press ‘Ins’ key. You can
add more than one scrip at a go. Select Scrip window will hold all your selections and
commit it to Market Watch window when you confirm the same by clicking on ‘OK’
button in the Select Scrip window. There is a specialized window for selecting F&O
scrips. This window can be invoked by the hot key ‘Ctrl+Ins’. You can filter scrips
by Name, Type or Expiry or even opt to review only Active options. At a single click
you can then add these scrips to your Market Watch window. There is an ‘Option
Chain’ feature that will quickly dump all the active F&O scrips to a new Market
Watch window from its underlying cash scrip. All these options are arranged in the
pop-up menu for intuitive use.
28
Online Trading
Market Analyser helps you analyse the entire Market and zero-in on scrips that
are amongst the Top Gainers or Top Losers or Top Traded. Or scrips that have
touched their 52 week High or 52 week Low. You can also define your own criteria to
identify scrips. A flexible Criteria Builder is included to help you build your own
criterion. The application also intelligently remembers previously used criterion,
obviating the need for you to rebuild the same again later.
Indices Bar placed at a convenient location immediately below the Main menu
displays most popular Indices. You can access a Market Watch like window for
Indices by clicking on this bar. You can also use this window to configure the Indices
Bar. From the Indices Window you can open an intra-day chart for any or all the
indices, by simply clicking on the Index Row.
Placing an order to Buy/ Sell shares, as stated earlier, is very easy. Through out
the application you can invoke the Buy window by pressing F1 and the Sell window
by pressing F2. Depending on the currently active window the Buy/ Sell (Order
Entry) window will be prefilled with the scrip info. F1 (and similarly F2) will
intelligently decide whether to open the Cash Order Entry window or the F&O Order
Entry window. If you wish to explicitly open the F&O Order Entry window the
hotkeys are ‘Ctrl+F1’ and ‘Ctrl+F2’. You can ‘modify’ or ‘cancel’ an order from the
Order Book Reports window. You can ‘square off’ your open position from the Net
Position Reports window. You can ‘exercise’ your open long options also from the
Net Position Reports window.
Order confirmations can be seen in the Messages bar (at the bottom of the
screen) as soon as your order request is sent. Messages are returned at various stages –
when it is first received at 5Paisa, when it is accepted or rejected by the 5Paisa RMS
Engine, when it is put in queue to Exchange, when it is Sent to Exchange, when it is
received at the Exchange, when it is acknowledged, rejected, frozen or killed by the
Exchange. Until orders are acknowledged by the Exchange they cannot be taken up
for modification or cancellation. Trade confirmations are also displayed in the
29
Online Trading
Messages bar. All Buy messages are shown in blue color, Sell messages in red color.
Order/ Trade messages can also be seen in the Activity tab of the Reports window. If
the Messages window is open these messages are also shown in the Messages
window. Exchange Messages, House Calls etc are displayed in the Messages window
in black color.
Groups, which are a collection of scrips can be created and retrieved for reuse
later. Several pre-defined NSE and BSE index groups help you get started with the
most popular scrips in a jiffy. You can create your own portfolio of scrips and save it
as a group. Groups are shown in a Tree format and can be expanded to select the
Group of your choice. Scrips belonging to a particular Group are shown in a tabular
fashion on the right side of the Group Explorer window. Adding/ removing scrips to/
from this list is extremely simple – ‘Ins’ for add and ‘Del’ for remove.
Reports comprise of Order Book, Trade Book, Net Positions, Margin, Exercise
Book and Holdings. All these reports are dynamically updated without the need to
refresh or pull information. From the Reports window you can ‘Modify’, ‘Cancel’,
‘SquareOff’ or ‘Exercise’. The appropriate buttons will be enabled/ disabled
depending on which action can be taken based on the currently selected row. You can
save these reports to a file either in text or CSV format.
Display Settings and actions are configurable to a large extent. Wherever
relevant, settings can be defined from the window itself, where it is to be applied.
Application wide settings can be found in the Settings option of the Tools Menu. You
may wish to customize the appearance of your TT Advanced™ to suit your tastes.
Reference Guide :-
Login :-
Double- click on the TT Advanced™ icon on your desktop to open up the
Login screen. Enter your Login ID and Password. Neither the Login ID nor the
30
Online Trading
Password is case sensitive. The Login ID is displayed in Caps as you type irrespective
of your caps lock setting or irrespective of whether you enter with the ‘Shift’ key
pressed. Similarly passwords entered in lower case are converted to upper case before
sending it to server.
If you are connecting through internet and you are behind a proxy server then
on the login screen click on the ‘Setting’ tab. Now click the Use Proxy checkbox,
proxy IP box will be enabled. Enter the IP on which your proxy server is installed.
Initial Password :-
If you are a first time user your password would have been communicated to
you by IIL. This password only allows you to login and establish your credentials
with the server. You will be forced to change your password immediately after the
first login.
The first login is actually a registration process where the server captures
certain key information about your system and compares them with every subsequent
login. If someone tries to hack into your account from any other system he will not be
allowed to login even if he has your password since the machine credentials would
not match. Also all such attempts will not be counted towards your unsuccessful
attempts tally and therefore your account will never be locked out due to someone
else’s mischief or unscrupulous attempt.
Since the machine credentials have to match on every subsequent login this
also poses a small problem. It completely removes your mobility. You can login only
from one PC – the PC which you used to first register yourself. In case you wish to
login from a different PC you will have to generate a Transit Key. Transit Key is a 20
character alpha numeric string that will be created on your current PC. You will have
to note down this number and enter it at the time of login in the new PC. As soon as
you successfully login with the Transit Key and your correct login credentials your
‘default’ PC will be changed to the new PC. To generate a Transit Key select the
31
Online Trading
Transit Key option from the File Menu.
In case you do not wish to avail of this security feature then you will have to
notify us of the same in writing. Once you have successfully opted out of this feature
you will be able to login from any PC. Only the login credentials will be checked at
the time of each login. We strongly discourage you from opting out of the security
feature.
Also to minimize the chances of anyone else hijacking your identity before you
receive it i.e. registering your ID before you have the chance to register it, login from
one PC is restricted to one ID only. This means that if you have a group of IDs
typically belonging to the same family and all of these IDs will require to login from
the same PC then you again will have to notify us in writing of the same. Please note
that in such cases if you have opted for the security feature then Transit Key will have
to be generated for each ID separately.
Changing Password :-
Your password is valid only for 14 days, after which you have to compulsorily
change your password. The new password should not be one that was used in the
previous two changes. In other words you cannot recycle a password for next two
changes. Once you have changed your password it cannot be changed again within the
next 24 hours.
To change your password, simply click on the ‘Change Password’ button on
the login page. Before attempting to change your password please ensure that you
enter your Login ID and Password correctly. Password changes can be done only
from 1 computer i.e the computer that was used at the time of registration. You cannot
change you password from any PC even if you have opted out of the security feature
described above.
Rules for Password :-
32
Online Trading
1. Password cannot be same as login ID
2. Password has to be at least 8 characters and maximum of 10 characters
3. It should contain at least 1 alphabet and 1 numeric
4. It can contain special characters
5. It cannot start with a space or special character
6. It cannot be reused for subsequent two changes
Security :-
Apart from the above mentioned security feature we have added a few other
safeguards. On successful login, you will see in messages window, a message
confirming your successful login and other messages confirming the super safe 128
bit-encrypted connection to our server.
You will also see a message showing when and where you logged in from the
last time. If you find anything amiss, immediately change your password.
You are now ready to trade @ the speed of thought.
Initial Screen :-
If this is the first login, your workspace will be filled with a default layout. The
default layout loads a Market Watch window for your containing 50 scripts belonging
to S&P CNX NIFTY.
On subsequent logins TT Advanced™ remembers the state prior to your
exiting the application and restores the same. Your workspace will be loaded with all
the forms that were open the last time you exited the application and each of the forms
will contain the same logical data that existed when you exited the application. E.g.
Market Watch will have the same scrips loaded as you last left them. The data
however will be updated to reflect the latest data received from the server.
Market Watch :-
33
Online Trading
View selected scrips at a glance
Open unlimited Market Watch windows simultaneously
Add multiple groups to the same Market Watch window
Create your own group from Market Watch window
Resize, Add, Remove columns
Resize, Move rows
Sort scrips on any column
Export from Market Watch in variety of formats
Easily customizable font and appearance
Access and save Tick Data from Market Watch window
Market Watch window is the prime controlling window from where you can
launch your trading actions. This window enables you to view market information of
pre-selected scrips that are of interest. The window can be accessed from the menu
‘Market à Market Watch’. The shortcut key for opening Market Watch window is
‘F4’. You will find the Market Watch window open (you will not need to open it from
menu or hot key) if you left it open when you last quit the application.
You can open multiple Market Watch windows by accessing the same option from
your Main Menu or by pressing ‘F4’ multiple times. The maximum number of Market
Watch windows that you can keep open is limited only by the processing power and
memory size of your PC.
i. Buy [hotkey : F1] – Opens the Order Entry Window for Buy. All the required text
boxes will be prefilled with information from the selected row of the Market Watch
window.
ii. Sell [hotkey : F2] – Similarly, opens the Order Entry Window for Sell and all
required text boxes will be prefilled with information from the selected row of the
Market Watch window.
iii. Historical Chart [hotkey : Ctrl+H] – Opens a chart window with historical data.
34
Online Trading
This depends on the EOD Data server being available. If the server is not available a
message will be displayed and the chart window won’t open.
iv. Load Group [hotkey : Ctrl+L] – Opens the Group Window to allow you to select
one of the predefined groups. This option will remove all the currently selected scrips
and load the scrips from the selected group into Market Watch window.
vi. Market Watch Settings [hothkey : Ctrl+W] – You can define action settings
applicable to the Market Watch window here. The most often requested windows for
each scrip are the Market Depth window, Intra-day Chart window and Historical
Vhart window. You can define which windows should open on single-click of mouse
(or on hitting Enter key), which windows should open on double-click etc. More
detailed discussion on this can be found at …. (Settings)
vii. Grid Settings [hotkey : Ctrl+S] – You can control the appearance of the Market
Watch window from this option. These are specific to the current Market Watch
window and will be saved to your Group on the ‘Save to Group’ option. If you don’t
‘save to group’ then the last applied settings will be available till you explicitly close
the Market Watch window. This means that if you exit the application without closing
the Market Watch window then these settings will be available the next time you
access the application.
Specifically you can change the following settings
a. Show Column Heading – when checked Market Watch window will display a title
for each column. Default is checked, which means column titles will be displayed.
b. Display Column Lines – when checked it will display a line separator for each
column. Default is unchecked, which means no lines will be displayed. Shortcut key
is ‘Ctrl+Shift+V’
c. Display Row Lines – when checked it will display a line separator for each row.
Default is unchecked. Shortcut key is ‘Ctrl+Shift+U’
35
Online Trading
d. Allow Row Select – when checked it will allow you to select a full row. Otherwise
only current cell is selected. Default is unchecked.
e. Allow Column Resize – when checked it will allow you to change the size of any of
the columns. Default is checked, which means you can change the size of any column.
f. Allow Row Resize – when checked it will allow you the change the size of all rows.
Default is unchecked.
g. Show Row Indicator – when checked it will show a small grey rectangle against the
left of each row. This can be used to drag and size a row.
h. Header Settings – You can change the Font, Back Color and Text Color of column
headers by accessing this option.
i. Grid Settings – Similarly you can change the Font, Back Color and Text Color of
the grid contents by accessing this option.
x. Save to File – You can save the current information in your Market Watch to a file.
You can save it as a tab delimited file with .txt extension or a CSV (comma separated
value) file with .csv extension or an HTML file with a .html extension. If a file
already exists by the file name supplied by you then you will be prompted before
overwriting the file.
xi. Add Scrip [hotkey : Insert] – This will open the Select Scrip window where you
can select the scrips that you want to add to Market Watch Window. For more details
on selecting a scrip (or using the Select Scrip window) please refer to …
xii. Add F&O Scrip [hotkey : Ctrl+Insert] – This will open the Select F&O Scrip
window. This window has more options to help you narrow down your selection list
by specifying various filters and options such as
Scrip filter – specific scrip or all scrips. If unchecked it means all scrips are to
be considered;
Type filter – either Futures or Calls or Options or any two or all of them. If
36
Online Trading
unchecked then all Types will be considered;
Expiry filter – either Next, Near or Far or any two or all of them. If unchecked
then all Expiry will be considered;
Select Active options – when checked only active options (that is those options
which have some volume will be considered;
Required scrips can be selected from the scrips listed based on filter and listing
criterion. Selected scrips will be added to Market Watch window
xiii. Remove [hotkey : Delete] – This will remove the scrip on currently selected row
from Market Watch window.
xiv. Remove All [hotkey : Ctrl+Delete] – This option will remove all the scrips and
empty the Market Watch window. You will be prompted to confirm before clearing
the Market Watch window.
xv. Option Calculator – This will open the Option Calculator window.
xvi. Update Scrip Information – This option will update the information for the
currently selected row by sending a request to server and fetching fresh data.
Option Chain :-
Create Market Watch with all traded options for a given optionable security
Get streaming quotes and updated security list for the same
Intra-day Chart
Streaming intraday tick-by-tick charts & historical data
Ability to chart multiple companies and open unlimited charts simultaneously
Unique draw tools including trend line customization and Fibonacci tools
3 different chart type options such as Line, OHLC and Candlestick
Lots of analysis options including 14 indicators for price and volume panels.
See each tick in Excel type grid, which is updated in real-time. Also export to
CSV file
37
Online Trading
Save chart as JPEG file
Get Index charts by clicking on appropriate Index in the Index Watch window
If your Market Watch operates with default configuration then you should see
an Intra-day Chart opening when you click on any row in the Market Watch window.
The Chart will be of the scrip in the currently selected row. Intra-day chart consists of
a line graph drawn using the tick-by-tick data from the start of market. It also contains
a panel (bar graph) for volume. You can conduct various studies and technical
analysis on this chart. You can change the size of the chart window and zoom in or
zoom out to get a better view of the price movement.
Market depth :-
· Sizeable Market Depth window
· View Best 5 Bid/ Ask and Open Interest
· Colored background gives clear demarcation of information
If your Market Watch operates with default configuration then you should see
the Market Depth window also opening up when you click on any row in the Market
Watch window. Unlike intra-day charts you can open only one Market Depth
window. This window shows the Best 5 Bids and Asks for the currently selected
scrip. As soon as fresh data arrives, this window will be automatically updated. This
window can also be sized.
Market Analyser :-
Analyze entire Market (not just the scrips selected in your Market Watch) on Top
Traded, Top Gainers, Top Losers, Scrips hitting 52Wk High/ Low or matching
user-defined criterion
Save these scrips to a Group
Buy/ Sell from Market Analysis Window
Export to File in variety of formats
Press F6 or Click on 'Market Analyser" in Market menu to open "Market
38
Online Trading
Analyser" window. Market Analyser provides top traded, top gainers and top losers
with % change, value and total quantity. You just need to click on 'Top Traded', 'Top
Gainers' and 'Top Losers' tabs respectively. It also provides list of scrips that have
touched their 52 week High or 52 week low. You can also analyse all quotes and
extract those where quantity traded exceeds a given figure or transaction value
exceeds a given value. This helps you identify large trades and can give you vital
clues to where or in which scrip activity is currently happening.
Not only this you can define your own criteria. This will be applied against
each quote that this received or on the entire scrip master, depending on what criteria
you have given and matching records will be displayed in the grid. You can access
‘Criteria Builder’ to help you build your criteria. Previously defined criterion is stored
and can be easily retrieved and reapplied.
If you wish to buy or sell any scrip from this list you can press F1 for buy or
F2 for sell. The order entry window will be prefilled with data from the row currently
under selection.
Buy/Sell :
The most important operation that you will be doing on this terminal is to Buy
or sell shares. Buy or Sell window, also called Order Entry (OE) window can be
invoked from anywhere in the application. Hot key for Buy is F1 and for Sell is F2.
These options are also available on the MainMenu under the Market Menu. OE
window is different for cash and derivatives. If you want to explicitly open the
derivates OE window the hotkeys for the same are CTRL + F1 and CTRL + F2.
When OE window is invoked the application will sense if there is any active
data that can be populated to the OE window. Eg if you are currently in the Messages
window, there is no ‘active data’ for the OE window. In such cases, OE window will
be filled with scrip data that was contained in the OE window previously. If no scrip
information is available then you will get a blank OE window.
39
Online Trading
Situations :-
1. When scrip information is available –
a) Scrip belongs to Cash segment :
1) You pressed F1 or F2 – Cash OE window is opened with prefilled information
ii. You pressed CTRL + F1 or CTRL + F2 – Derivatives OE window is opened blank
(without any of the text boxes pre-filled)
b) Scrip belongs to Derivatives segment :
i. You pressed F1 or F2 – Derivatives OE window is opened with prefilled
information
ii. You pressed CTRL + F1 or CTRL + F2 – Derivatives OE window is opened with
prefilled information
2. When no scrip information is available –
a. You pressed F1 or F2 – Cash OE window is opened blank
b. You pressed CTRL + F1 or CTRL + F2 – Derivatives OE window is opened blank
The orders that can be placed by you when the Market is Open is called a
Normal Market Order. These orders will be checked for adequacy of limits and sent
directly to the Exchange. In Normal Market you can place various types of orders –
limit orders, market orders, stop loss orders or IOC (Immediate or Cancel) orders.
Post market when Off Market Window is open you can place Offline orders. These
orders are accumulated at 5Paisa and sent to Exchange as soon as it opens. In Off
Market you can place only limit orders and market orders. Stop Loss and IOC orders
are disallowed
40
Online Trading
Types of orders ;-
1. Limit Orders – are orders where you specify the price while entering the order into
the system. You have to select the appropriate option to notify whether you are
placing the order at Market or at Limit. If you select the ‘Limit order’ option then you
have to enter a price that is in multiple of regular tick size (multiples of 0.05).
2. Market Orders – are when you place an order without a limit price with an
intention to get it executed at the best price obtainable at the time of entering the
order. Similar to above you have to select ‘Market order’ option. Limit Price text box
is disabled and any amount in the text box is ignored when the order packet is
prepared.
3. Stop Loss Orders – are when you place an order with a trigger price. Till the trigger
price specified in the order is reached or surpassed such orders are kept dormant. The
intention for placing a Stop Loss order is to restrict the maximum loss in a particular
position to a predetermined amount.
Stop Loss orders are always placed in pairs. The first order has to be a normal
order - either limit order or market order. The second order will be a stop loss order
that will ensure that maximum loss is restricted. Eg if you place a buy order at Rs100
and do not wish to take a loss of more than Rs2 then you will want to sell at Rs98,
when the market starts sliding contrary to your expectations. You can obviously keep
a watch on the market and sell when it slides and exit your position at Rs98. But this
may not always be possible. By entering a Stop Loss order you achieve the same
objective without a need to keep a watch on the market.
4. IOC Orders – are when you place an order with an IOC instruction i.e. with an
intention to get it executed immediately, failing which the order is cancelled. It is
possible that the order gets partially traded, and in such cases the remaining portion of
41
Online Trading
the order is cancelled immediately. Stop loss orders cannot be placed as IOC orders.
You can place a normal order (at limit or market) as an IOC order.
You must fill the Quantity text box. Quantity has to be in multiple of lot size.
In cash market most of the scrips have a lot size of 1. In Derivatives lot sizes vary
from scrip to scrip. Quantity field cannot be directly entered into in the Derivatives
OE window. You have to click on the up/down control next to the Quantity text box
and the quantity will increment/ decrement by lot size.
Confirmations :-
Get stage by stage confirmation messages, to help you understand where
messages might be getting delayed
Immediate notification if message cannot be sent to particular servers
Confirmation messages for Order and Trade related actions, will be displayed
in the Messages Panel instantly. You will get confirmation messages for
a. Orders sent to 5Paisa
b. Orders received by 5Paisa
c. Orders accepted or rejected by 5Paisa RMS
d. Orders put in queue to Exchange
e. Orders sent to Exchange
f. Orders accepted, rejected or frozen by the Exchange
g. Trade confirmations sent by the Exchange
All these messages will display the time and associated order IDs – Local
Order ID, Broker Order ID and Exchange Order ID. At any point in time you will be
able to see only 3 lines in the message panel. These would be the three most recent
messages. If you wish to see all the messages you can double click on the panel to
invoke the messages window.
If the messages window is open at the time of writing these messages to the
42
Online Trading
terminal, then messages will appear simultaneously at both the message panel as well
as the messages window.
Reports :-
View Pending, Executed, Cancelled orders
View Trades done during the day
View Open and Closed Positions, along with MTM and booked Profit/ Loss
View Holdings at a glance
Modify, Cancel orders from Order Book. Also Cancel All orders on a single
click
Square off Open Positions from Net Position window
Exercise long open option positions from the Net Position window
Directly Sell from Holdings window
View Margins utilized/ available
Sort all reports by any column
Export all reports individually or together on a single click
Groups Manager :-
· See all Groups at a Glance in Vertical Tree format
· Create multiple portfolios and save each of them as different groups
· Add/ Remove scrips to/ from groups conveniently and easily
Groups provide you with several advantages. You need not add scrips that are
of interest to you, one at a time. You can select these scrips and save it as a group and
add them at one go to the Market Watch window. Eg you could have your portfolio
saved a group and have the application retrieve it to the Market Watch window on
every login. You can create more than one portfolio and save each of them to a group.
The application comes with several pre-defined Groups. These are typically the
Index scrips as defined by the Exchange. Eg to get the scrips that make up Nifty 50,
43
Online Trading
simply select the NIFTY group. You cannot modify the pre-defined groups. You can
however save it as a different group and then modify that group.
At several instances you will find that you can save the list shown on screen to
a Group. Eg Top Traded, Top Gainers, Top Losers etc. Saving them to a group can
help you put them to a different market watch and study their prices and other market
information.
To create a new group simply right click on any location on the tree (left side
panel of the Group Explorer) window, and select the ‘Create New’ option. You will
be asked to provide a name for the Group. You can then begin adding scrips to this
group.
Symbol Lookup :-
· Lookup symbols either by Scrip Code/ Token No or Symbol, or Name
· Select Multiple Scrips for inclusion in Market Watch or Group Window
Scrip Selection window helps you look up symbols and select scrips. This
window can be invoked by pressing ‘Insert’ key from the Market Watch and Group
Explorer windows. You can add several scrips at one go from this window. To add a
scrip by its symbol you should type the first few characters in the text box provided.
This will scroll the list to the first symbol starting with the characters entered by you.
You can then scroll the list to locate your scrip and press enter. Optionally if you have
the token no, you can directly enter the token no (in the same text box as above) and
the scrip will be selected.
Once you are through with your selections you can click on OK button to
transfer your selection to the appropriate calling window. In case you wish to discard
your selection then click on ‘Close’ button.
Messages Window :-
Market News :
44
Online Trading
· Get Intra day Tips on Buy/ Sell
· Get Long term Buy/ Sell/ Hold recommendations
· Get Latest news update in your Messages Window
Get breaking news from our News Desk by clicking ‘Market News’ in ‘Links’
menu. This way you do not waste valuable trading time in looking up business news.
You can trade and keep track of the important financial happenings at the same time.
Exchange Messages :-
Get updated instantly with important messages and notifications sent by the
Stock Exchange, right on your terminal.
Lock/Unlock Your Trading terminal
With a view to reduce unathorised users from accessing your terminal while
you are logged in and away for reason, the terminal will lock itself after a certain
inactivity period. When the terminal is in locked state, it will not allow you to perform
any tasks. The application will however keep receiving broadcast and other messages
and keep updating the display.
Explicity you will be prohibited from placing, modifying or canceling orders.
You can unlock a locked terminal by entering your password.
If you wish to exit the application click on the ‘Exit’ button
Option Calculator
You can use option calculator to calculate the price of options and other
calculations regarding options. Click on` the 'Option Calculator' in 'Option' menu for this
purpose. Fill in the required information for the calculation and you will get the result at the
blink of your eyes.
45
Online Trading
Save to File
You can save the information contained in your Market Watch window,
Market Analyser, Reports and Tick List, that will help in analyzing this information
later or just to keep a record. You can access this option only from the pop-up menu
available on right click from the respective window.
Once you click no ‘Save to File’ you will have to select the type of output in
which the file is to be created. You have a choice between CSV, HTML or tab
delimited files. After you click on any of these options you will be presented with the
standard Windows Save File Dialog box. You can select the folder where you want to
save the file. By default the folder selected during the last ‘Save to File’ operation will
be displayed. You can browse to a different folder and save the file to that folder.
You can either choose to save the file by the suggested name or save it with a
name of your choice. If a file already exists by that name, a message box will popup
with an alert that a file by that name already exists and asking you if you want to
replace it. If you are not sure you want to replace it, you can click on cancel and
provide a new file name.
Ticker
Clicking on the Ticker, you can watch live, real-time quotes of all the scrips in
cash as well as F&O. You will be shown these quotes as the trades happen. The
specialty of the ticker is that that it will show you only those scrips that are actually
being traded in the market
Price Alerts
Clicking Price Alerts in the Market menu will open up the Price Alert window. This
allows you to set alerts for any number of scrips as you wish. These alerts are triggered and
are designed to remind you of certain benchmarks that you can set as per yourrequirements.
46
Online Trading
Links
My Account Summary - Shows you the complete trading summary.
My Cash Position - Check your current Cash Market Position.
My F&O Position - Analyze your Derivative Market Position.
My DP - If you hold a depository account with 5paisa, you can view online all the scrips in your account with a click on ‘My DP’ in ‘Links’ menu. This account is also updated everyday.
My Ledger - At one click on ‘My Ledger’ in ‘Links’ menu, you can open your ledger account and view details of each bill, transaction, balance of your ‘Cash’ as well as the ‘Futures and Options’ ledger.
Functions :- Keys :
Buy Order Entry window F1
Sell Order Entry window F2
Order Book F3
Market Watch F4
Market Depth F5
Market Analyzer F6
Net Position F7
Trade Book F8
Confirmation Messages F9
Main Menu F10
Stop Loss Buy(Later) F11
Stop Loss Sell(Later) F12
F&O Buy Order Entry window CTRL + F1
F&O Sell Order Entry window CTRL + F2
Log on to the Server CTRL + L
Lock Workstation CTRL + O
Group Window CTRL + G
Historical Chart CTRL + H
Append from group CTRL + A
Save to group CTRL + S
47
Online Trading
Market watch setting CTRL + W
To Close a Screen/Window CTRL + F4/Esc
To Add a scrip in Market Watch/ Group INS
To Remove a Scrip from MktWatch/ Group DEL
Snap quote cash CTRL + F9
Snap quote F&O SHIFT + F9
TECHNICAL ANALYSIS GUIDE :-
Chart Overview :-
1. All options can be accessed using the toolbar (bottom of the chart) or from
pop-up menu (available on right click).
2. By default, toolbar will not be displayed. To show the toolbar, right click on
the chart area and select Toolbar.
3. Pop-up Menu and Toolbar have the following features :-
a. Display Properties – To change the display behavior of the chart
b. Line Studies – To use the available line studies
c. Indicators – To use the available Technical Indicators
d. Zoom – Zooming functions
e. Chart Type – To change the type of the chart (Line/Bar/Candle)
f. Interval – To change chart intervals (Tick, 1 Min, 5, 10 minutes)
g. Data Window – To show values at current mouse location on a the chart
h. Volume Panel – Toggle On/Off the Volume Bar display
i. Best 5 Bid/offer lines - Toggle On/Off the best 5 lines
j. Tick listing – Show tick listing window
k. Toolbar – Toggle On/Off the Toolbar (Bottom of the chart)
1. Shortcut keys :-
48
Online Trading
a. ZOOM – ‘+’, ‘-’, CTRL+A (to reset zoom)
b. Chart Types – Line (Ctrl+L), Bar (Ctrl+B), Candle (Ctrl+C)
c. Chart Interval – Tick (Ctrl+T), 1 Min (Ctrl+1), 5 min (Ctrl+5)
d. Data Window – Ctrl+D (Toggle On/Off)
e. Volume Panel – Ctrl+V (Toggle On/Off)
Indicators :-
Indicators are typically used to gauge a particular aspect of price or volume
behavior. It is important to remember that there is no magic indicator that can give the
right signal under all market conditions. It is usual to see trend indicators give wrong
signals in a ranging market. In a trending market, momentum indicators may give too
many signals and result in wrong trading decisions.
It is always ideal to select a few indicators and use them to confirm signals
from each other. Also indicators based on different data elements (for the same time
period) are always better than those based on same data. Eg one indicator using the
closing price, one using volume and another using a trading range may be more
reliable when they confirm each other.
Indicators can be divided into the following categories :-
a. Trend indicators, are used to indicate the direction of a trend. Drawing a trend line
will give a general feel of the trend. Trend Indicator provide an objective measure of
the direction of the trend. The Trend Indicators included in the trading terminal are
“Simple Moving Averages, Exponential Moving Averages, Weighted Moving Averages,
Moving Average Convergence Divergence (MACD) and Ballinger Bands”.
b. Momentum indicators are used to measure the rate at which price is changing. The
Momentum indicators provided are Momentum, ROC, Relative Strength (RSI),
Stochastic and Williams %R.
49
Online Trading
c. Volume Indicators are used to confirm the strength of trends. Volume Indicators
provided are On Balance Volume and Money Flow index
d. Volatility Indicators are used to confirm price behavior. Volatility Indicators
provided are Average True Range and Bollinger Bands
Price Rate of Change
ROC is a refinement of Momentum and is easier to use, since results fluctuate
as percentage around a horizontal median called the zero line or equilibrium. ROC is
typically used in ranging markets to identify signs of weakness in trends and potential
trend reversals. In a trending market it often used in conjunction with a trend
indicator.
Price ROC shows the difference in percentage terms between current price and
the price ‘n’ days ago. Eg a 12-day Price ROC, that is most often used as an
overbought/oversold indicator, will compare current price with price 12 days ago. If
current price is higher then ROC value will be above zero and indicate that prices are
on the rise. Conversely if current price is lower than that 12 days ago, ROC value will
be lower than zero indicating that prices are falling.
To use this indicator you will need to set overbought and oversold levels based
on past observations. The levels should cut across at least two-thirds of the peaks and
troughs.
· If ROC crosses below oversold level and rises back above it, then it is a Buy signal
· If ROC crosses above overbought level and falls back below it, then it is a Sell
signal
· Bullish and bearish divergences indicate trend reversals
50
Online Trading
ONLINE TRADING ADVANTAGES :-
Trading online has revolutionized the stock markets.
The main benefit of trading online is speed.
There is no need dial up your broker, wait to speak somebody, and have him
or her enter the order on their computer.
As you can imagine, the convenience of online trading attracts many
investors.
You can enter trade orders day or night, from any where in cyberspace.
The internet is full of advice, free technical analysis tools and commentary.
You can formulate your own strategy and run investments yourself.
Most online brokerages will take online orders for a commission of about $5
to $40 US.
ONLINE TRADING DISADVANTAGES :-
If you are going to trade online you are obviously the one making all
trading choices.
To make your trading decisions, you need to research your stocks and
constantly pay attention to market news. This will require sometime as you
pursue your sources of market information and use online tools.
51
Online Trading
BROKERS ADVANTAGES :-
1) Despite the popularity of online trading , not everybody uses the internet
to trade stocks.
2) A broker can do everything from making all your stock trading decision
for, to give you little advice on what to buy or sell.
3) if you want some investing help, or if you want somebody else to deal
with everything, using a broker might be right for you.
4) Brokers are stock professionals, they watch the market and deal with
customers like you everyday.
5) Brokers keep in touch with a network of other professional, so news and
knowledge constantly come their way.
6) Finally, your broker may offer services other than just trading stocks. If
you want you can find a broker that will manage your taxes, estate and
business.
7) The personal attention available from broker who knows your full
financial situation is very calculable.
BROKERS DISADVANTAGES :-
1) Taking a percentage of your assets under management, making stock traders
taking a flat fee.
52
Online Trading
2) However I must stress that the brokerage industry is highly regulated and
most brokers act with integrity, nonetheless, it is best to be aware of the risks.
3) Get a feel for how much time broker spends marketing and how much
attention your assets will receive.
4) If your broker gets a paid commission for trading, keep in mind that there
may be a conflict of interest.
5) Make sure your broker can consistently justify and all stock trades.
6) Find out about your broker’s background and interests to see if he or she is a
good match.
7) Finally, live brokers are more expensive than online brokers. Their presence
and personal attention command a price.
IMPACT OF ONLINE TRADING ON THE MARKET :-
On the number of transaction
The number of transaction has increased considerably after introduction of the
online trading system. The factor of influence could be:
1) The case of the operation from the point of view of both the members and
investors.
2) Facilities better monitoring of the market by the market operations
department.
3) The daily that the best price is achieved in buying and selling.
53
Online Trading
TRADING
MEMBERSHIP
54
Online Trading
Trading membership :-
Stock Brokers
Introduction :-
A broker is an intermediary who arranges to buy and sell securities on behalf
of clients (the buyers and the sellers). According to rule 2 (e) of SEBI (stock brokers
and sub brokers) rules, 1992, a.
Stock broker names a number of recognized stock exchanges. No stock broker is
allowed to buy, sell or deal in securities, unless he or she holds a certificate of
registration granted by SEBI. A stock broker applies for registration to SEBI through
stock exchange or stock exchanges of which he or she is admitted as a member. SEBI
may grant a certification to stock broker [as per SEBI(stock broker and sub
broker)rules,1992] subject to the condition that;
1. He holds the membership of any stock exchange;
2. He shall abide by the rules, regulation and bye laws of the stock exchange or
stock exchanges of which he is member;
3. In case of any change in status and constitution, he shall obtain prior
permission of SEBI to continue to buy, sell or dealing securities in any stock
exchange;
4. He shall pay the amount of fees for registration in the prescribed manner.
55
Online Trading
Eligibility Criteria for Membership :-
Particulars WDM
Segment
CM and
F&O
Segments
CM&WDM
Segments
CM,WDM&
F&O
Segments
Constitution Corporate/
Institutions
Individuals/
Fonts/Cropor
Corporate/
institutions
Corporate/
institutions
Paid-up capital Rs.30 lakh Rs.30 lakh Rs.30 lakh Rs.30 lakh
Net worth Rs.200 lakh Rs.100 lakh Rs.200 lakh Rs.200 lakh
Interest free
security deposit
Rs.150 lakh Rs.125 lakh Rs.250 lakh Rs.275 lakh
Collateral security
deposit(CSD)
Rs.25 lakh Rs25 lakh Rs.25 lakh
Annual
subscription
Rs.1 lakh Rs.1 lakh Rs.2 lakh Rs.2 lakh
Education At least 2
directors should
be graduates.
Proprietor 2
partners 2 directors
should be
graduates.
Dealer should also
have passed
NCFM capital
market module.
At least 2
directors should
be gradates.
At least 2 directors
should be
graduates. Dealer
should also have
passed NCFM
capital market
module.
56
Online Trading
experience
Two years experience in securities market
Eligibility criteria for professional clearing member of NSCCL.
Applicant seeking admission as a professional clearing members on the
features and options, capital market segment of NSCCL would be required to
meet the capital adequacy norms.
Sr.
No.
Particulars Clearing membership of segment
F & O CM
CM & F & O
1 Interest free cash
security deposit with
NSCCL
25 25
34
2 Collateral security
deposit with NSCCL
25 25
50
3 Advance annual
subscription
2.5
2.5
4 Net worth
requirement
300 300
300
5 Formula/methodology
Applicable for
calculation of net
worth
As per Dr. LC Gupta As per
Committee Dr.
LC GUPTA
recommendation
Committee
57
Online Trading
rec
ommendation
Broker client relations :-
The TM shall enter into an agreement in the specified format provided by NSE
with the client before accepting orders on letters behalf. The said agreement shall be
executed on non judicial stamp paper of adequate value, duly sign by both the parties
on all pages.
in addition to the agreement, the TM shall seed information from the client I
the ‘client registration application form’ obtaining information like; investor risk
profile, financial profile, social profile, investor identification details, income, PAN
number, employment, age, investment other responsibilities, social standing, risk
taking ability etc.
Unique client code :-
SEBI made it mandatory for all brokers to use unique client codes for all
clients. Broker shall collect and maintain in their back office the permanent account
number (PAN) allotted by income tax department for all their clients. Where an
individual client does not have PAN, such a client shall be required to give a
declaration to that effect and until the PAN is allotted. Where the client does not have
a PAN or a passport.
Payment/Delivery of securities to the clients
Every TM shall make payment to his clients or deliver the securities purchased
within 2 working days of pay out unless the client have requested otherwise (refer to
SEBI circular no.SMD/SED/CIR/23321 dated November 18,1993)
Brokerage :-
58
Online Trading
The maximum brokerage chargeable by TM in respect of trade effected in the
securities admitted to dealing on the TM segment of the exchange is fixed at 2.5 % of
the contract price, exclusive of statutory levies like, SEBI turn over fee, service tax
and duty.
NSDL( National Security Depository Limited )
59
Online Trading
NATIONAL SECURITIES DEPOSITORY LIMITED:
NSDL was inaugurated in 1996, as the first depository in the country to avoid the
myriad problems in settlements.
In depository system, securities are held in securities (depository) accounts, which is
more or less similar to holding funds in bank account. Transfer of ownership is done
through simple account transfer.
Trading in dematerialized securities in quite similar to trading in physical securities.
Exclusive Demat segment follows rolling settlement (T+2) cycle and unified segment
follows account period settlement cycle.
From Jan 4,1999, all categories of investors can deliver only in dematerialized form
with respect to a select list of securities.
In a span of about nine years, investors have switched over to electronic
[demat] settlement and National Securities Depository Limited (NSDL) stands at the
centre of this change. In order to provide quality service to the users of depository,
NSDL launched a certification programme in depository operations in May 1999.
This certification is conducted using NCFM infrastructure created by NSE and is
called "NSDL - Depository Operations Module". The programme is aimed at
certifying whether an individual has adequate knowledge of depository operations, to
be able
60
Online Trading
to service investors. Depository Participants are required to appoint at least one
person who has qualified in the certification programme at each of their service
centres. This handbook is meant to help the candidates in their preparation for the
certification programme.
This handbook has been divided into four volumes for readers' convenience. The
first volume gives an overview of the Indian capital market and NSDL depository
system. The second volume deals with admission procedure for different business
partners of NSDL, their obligations, practices, systems and procedures to be followed
by them and benefits and safety of depository system. The third volume helps in
acquiring a working level understanding of certain basic services offered by NSDL
like account opening, dematerialisation, and transfer of securities and related
operations. The last volume deals with special services offered by NSDL like Pledge,
Stock Lending and Borrowings, Corporate Actions, National Savings Certificates /
Kisan Vikas Patra (NSC/KVP) in demat form, Warehouse Receipts, Market
Participants and Investor Database (MAPIN) and Tax Information Network (TIN).
The procedures explained in the handbook are based on the Depositories Act,
Securities and Exchange Board of India (Depositories & Participants) Regulations and
Byelaws & Business Rules of NSDL. The book contains illustrations, flow charts and
checklists for better understanding of various concepts and procedures.
A sample test paper is given at the end of the fourth volume to help the candidates
appearing for NCFM test form an assessment of their preparedness. A thorough
understanding of this handbook will form a good base for qualifying the certification
test.
Readers may like to visit NSDL website www.nsdl.co.in for updates and to know the
new procedures introduced or changes brought about in the existing procedures.
61
Online Trading
A feedback form is given at the end of the fourth volume. Readers may give their
feedback,which will be of great help in enhancing the value of this Handbook in its
subsequent editions.
The Indian Capital Market :-
The function of the financial market is to facilitate the transfer of funds from
surplus sectors (lenders) to deficit sectors (borrowers). Normally, households have
investible funds or savings, which they lend to borrowers in the corporate and public
sectors whose requirement of funds far exceeds their savings. A financial market
consists of investors or buyers of securities, borrowers or sellers of securities,
intermediaries and regulatory bodies. Financial market does not refer to a physical
location. Formal trading rules, relationships and communication networks for
originating and trading financial securities link the participants in the market.
Organised money market :-
Indian financial system consists of money market and capital market. The
money market has two components - the organised and the unorganised. The
organized market is dominated by commercial banks. The other major participants are
the Reserve Bank of India, Life Insurance Corporation, General Insurance
Corporation, Unit Trust of India, Securities Trading Corporation of India Ltd.,
Discount and Finance House of India, other primary dealers, commercial banks and
mutual funds. The core of the money market is the inter-bank call money market
whereby short-term money borrowing/lending is effected to manage temporary
liquidity mismatches. The Reserve Bank of India occupies a strategic position of
managing market liquidity through open market operations of government securities,
access to its accommodation, cost (interest rates), availability of credit and other
monetary management tools. Normally, monetary assets of short-term nature,
generally less than one year, are dealt in this market.
62
Online Trading
Un-organised money market :-
Despite rapid expansion of the organised money market through a large
network of banking institutions that have extended their reach even to the rural areas,
there is still an active unorganised market. It consists of indigenous bankers and
moneylenders. In the unorganised market, there is no clear demarcation between
short-term and long-term finance and even between the purposes of finance. The
unorganised sector continues to
provide finance for trade as well as personal consumption. The inability of the poor to
meet the "creditworthiness" requirements of the banking sector make them take
recourse to the institutions that still remain outside the regulatory framework of
banking. But this market is shrinking.
The Capital market :-
The capital market consists of primary and secondary markets. The primary
market deals with the issue of new instruments by the corporate sector such as equity
shares, preference shares and debt instruments. Central and State governments,
various public sector industrial units (PSUs), statutory and other authorities such as
state electricity boards and port trusts also issue bonds/debt instruments.
63
Online Trading
CLEARING AND
SETTLEMENT
64
Online Trading
What is a Rolling Settlement?
In a Rolling Settlement trades executed during the day are settled based on the
net obligations for the day. In NSE, the trades pertaining to the rolling settlement
are settled on a T+2 day basis where T stands for the trade day. Hence trades
executed on a Monday are typically settled on the following Wednesday
(considering 2 working days from the trade day).
The funds and securities pay-in and pay-out are carried out on T+2 day.
What is Pay-in?
In Pay-in securities all the shares' obligations are picked up from the client's
beneficiary account and transferred to IL&FS INVESTSMART SECURITIES
LIMITED pool account. All the shares are then delivered to the National Securities
Clearing Corporations Limited (NSCCL) as per obligation. In Pay-in of funds , the
funds are transferred from a client's bank account to IL&FS INVESTSMART
SECURITIES LIMITED bank account. All the funds are then transferred to the
NSCCL as per obligation
What is Pay-out?
In Pay-out of securities, shares are received from the NSCCL and the
same is transferred to IL&FS INVESTSMART SECURITIES LIMITED pool
account. All the shares are then transferred to the client beneficiary account. In Pay-
out of funds , funds are transferred from the NSCCL to IL&FS INVESTSMART
65
Online Trading
SECURITIES LIMITED Bank a/c . All the funds are than transferred to the client
bank a/c.
Pay-out(securities) Pay-out(securities)
Client Beneficiary/bank a/c.
<<Brokers Pool/Bank a/c
<< NSSCL
What is a settlement cycle?
Settled by the exchange on A settlement cycle is a period from the day the shares
are bought/sold till the obligation of each client is T+ 2 day, where T indicates the
trading/transaction day.
What is a settlement number?
Settlement number is a specified number given by the exchange for the trades
settled on a particular day.
For example, Settlement no: 2004077 on April 28, 2009
What is a settlement date?
Settlement date is a specified date on which pay-in and pay-out of
securities/funds are settled
What is a rolling settlement cycle?
66
Online Trading
In a rolling settlement, each trading day is considered as a trading period and
trades executed during the day are settled based on the net obligations for the day. At
NSE and BSE, trades in rolling settlement are settled on a T+2 basis, i.e. on the
second working day. Typically trades taking place on Monday are settled on
Wednesday, Tuesday's trades are settled on Thursday and so on. For arriving at the
settlement day all intervening holidays, which include bank holidays, NSE/BSE
holidays, Saturdays and Sundays are excluded.
What is an auction?
The exchange can initiate an auction in case the selling trading member is unable
to deliver the shares, for various reasons such as short delivery, bad delivery and
objections. The exchange purchases the requisite quantity in the auction market and
gives the delivery to the buying trading member. This process takes three to five days
to complete and thus in case if you have a purchase position and the shares are not
delivered by the opposite selling member, then there could be a delay in receiving the
shares, until such time that the exchange completes the auction process
Note:
Internal shortage: in internal shortage the broker repurchases securities from the
exchange at market rate and the shares are transferred to the client's account. This
cycle is completed in T+3 days.
Exchange shortage: here there is a shortage in the exchange for which the client gets
credit and the account is settled by the exchange. This cycle is completed in T+ 5
days.
What happens if no one offers shares in the auction market?
In case there is no offer for shares in the auction market, then as per the rules of
the NSE the sell trade is squared off at the highest price for the scrip in the relevant
settlement or at 20% above the last available trading price on the NSE, whichever is
higher.
The settlement process
67
Online Trading
The Settlement department carries out the pay-in and pay-out confirmation
process of securities on a settlement basis. The purpose of this process is to transfer
the securities to and fro, from the Client Beneficiary account to NSE/BSE via the
broker's (IL&FS INVESTSMART SECURITIES LIMITED) pool account.
CONCLUSIONS
68
Online Trading
Conclusion:
1. The online trading system can increase efficiency, free up time and, most
importantly, increase profits.
2. Online trading is a concept which has emerged in today phenomenon is only
beneficial to the urban investors. This concept has not reach yet the semi urban
and rural population.
3. Online trading facility can be avail easily by just opening an account with the
broker and depository participant.
4. The broker delivers the shares from his clearing member account to clients
account when the client take the delivery of the shares.
5. Online trading concept is not very common to the general investors, they still
rely upon fact sheets and news paper and published information investment
avenues.
6. For an investor to avail online facility has to takeout help of broker. It can not
be done on his part.
7. Online trading facility is good boon to the investors. Investor can easily
updated information about their securities (shares etc) day to day.
69
Online Trading
SUGGESTION
70
Online Trading
Suggestion
1. The online trading should be useful to each and every part of the world, this
facility should be supplied to the semi urban and rural population.
2. Outcry system is obsolete, since a fast face of life, caught up with trading
activity, electronic media as simplified with trading procedures. The
advantages obviously, are speed, accuracy, and memory.
3. It is advisable to have both outcry and online trading to supplement each other
as and when need arises.
4. The advantages of online trading should be made now to every one and day to
day information should published in news papers about online trading.
71
Online Trading
ANNEXURE
72
Online Trading
73
Online Trading
What we Learnt
We learnt that stock market have many ups and downs. There are many losers
and gainers. In the month of January 2008 there is a big crash in the markets i.e, from
a healthy 21000 to it has fallen nearly 16000’s. There aremany traders who faced the
consequences. An image showing a person dejected with the market crash. The profits
are unlimited because the markets may go up or down.
74
Online Trading
The person dejected with the market crash.
RELIANCE POWER
Recently reliance power has entered in to the market. It’s IPO was issued in the month
of January. And in February it has hit the screen. Nearly they issued eleven crore
shares in the IPO. And its price range was between 405 to 455. And it also issued
bonus shares to the traders after hitting the market. But after coming in to the market
it’s value was decreased up to 330.
75
Online Trading
And it came in to the market on Feb 11, 2008. The logo of the reliance power is shown above.
76
Online Trading
77
BIBLIOGRAPHY
Online Trading
BIBLIOGRAPHY
Capital Market (dealers) Module Work Book.
(NSEs certification in financial markets)
ODIN Software
www.nseindia.com
www.sebi.com
www.indiainfolinesecurities.com
www.bse.com
www.5paisa.com
78