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PROJECT ON COMPARISON BETWEEN ONLINE STOCK TRADING & OFFLINE STOCK TRADING

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SUBMITTED BYKishan rana

BATCH NO. 2012-14,

ENROLLMENT NO. 128050592087

MBA SEMESTER III

Under the guidance of Ms. Delnaz Dastoor

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What is Investment? Investment is the employment of funds on assets with the

aim of earning income or capital appreciation..

Two Attributes of Investment

Risk

Time

Introduction

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WHY SHOULD ONE INVEST?

•To earn return on your idle resources.• To generate a specified sum of money for a specific goal in life.• To make a provision for an uncertain future.

One of the Important reasons why one needs to invest wisely is to meet the cost of Inflation. Inflation is the rate at which the cost of living increases.

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INVESTMENT OBJECTIVES

•The main objectives are increasing the rate of return and reducing the risk.

•Other objectives like safety, liquidity and hedge against inflation can be considered as subsidiary objectives.

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ONLINE TRADING

•The net is used as a medium of trading in internet trading. Orders are communicated to the stock exchange through website.

• Internet trading started on 1st April 2000 with 79 members seeking permission for online trading.

• The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction.

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OFFLINE TRADING

•Before 1st April 2000, there was only offline trading. An investor can do trade either by going to broker or by doing call to broker. There is no internet involved in this. In this the broker has the rights.

• There is one benefit in this type of trading is that exposure limit is much more as compared to online trading.

•In offline trading in the initial period, an investor has to give only opening charges cheque and there is no need to pay any margin amount.

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Industry Profile

There are two major stock exchanges in India are:

-NSE (National Stock Exchange)-BSE(Bombay Stock Exchange)

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NSE:

•NSE is a Mumbai-based largest stock exchange in India in terms of daily turnover and number of trades.

•It is the second fastest growing stock exchange in the world with a recorded growth rate of 16.6%.

BSE:

BSE is the oldest stock exchange in Asia and also the biggest in the world in terms of listed companies with 4800 listed companies as of August 2007.

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PESTEL analysis

•P- Political

•E- Economical

•S- Social

•T- Technological

•E- Environmental

•L- Legal

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INDIA INFOLINE LTD.VISION

MISSION

To become a full-fledged financial services company known for its quality of advice personalized service and cutting-edge technology. PUNCH LINE

“IT’S ALL ABOUT MONEY, HONEY!”

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Details of the top management 

Management Team

Names Designation

Mr. Nirmal Jain Chairman & Managing Director

Mr. R. Vanketraman Executive Director

Mr. Sat Pal Khatar Non executive Director

Mr. Snjiv Ahuja Independent Director

Mr. Kranti Sinha Independent Director

Mr. Nilesh Vikamsev Independent Director

Products and Services It is a one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technology.

1. Equity2. PMS3. Research4. Commodities5. Mortgages6. SMS Service7. Wealth Management Service

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SWOAT analysis

Strength  Wide range of financial products.

Successful implementation of “Insurance broking” model.

Online portal’s successful branding as “5paisa.com”.

Have over  2500 offices in India in over 500 cities.

First Indian brokerage house to get membership of Singapore Exchange.

IIFL has been awarded the ‘Best Broker, India’ , ‘Most improved brokerage, India’ , ‘Fastest Growing Equity Broking House’

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Weakness 1.  High risk exposure as seen by conservative population2.  Less emphasis on advertising causes lack of brand visibility

Opportunity 1. High income urban families2. More penetration into the growing cities Threats 1.  Stringent Economic measures by Government and RBI2.  Entry of foreign finance firms in Indian Market

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Impact of Online Trading on customer Satisfaction in Tehran Stock Exchange

Result shows that there is meaningful difference between traders’ satisfaction in conventional stock exchange and stock exchange based on online trading system;

Literature Review

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Findings

From Traders’ point of view• Information Access and internet as an information highway.• Low commission.• Privacy

From Brokerage point of view• Distribution channel• Lower Interaction cost• Efficient information access

From other point of view• Efficient Transaction• Globalization (Referred from, Delbar Jafarpour, Lunea

University of Technology)

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Problem statement There are two types of method through which Investors do trade in stock market. Online and offline. Which method is more preferable by investors?

Research Topic Comparison between Online Trading & Offline Stock Trading in Surat.

Research Objectives•To evaluate customer perception in terms of secondary market trading services offered by broking companies.

•To know Investor’s satisfaction level in stock trading.

•The secondary objective of the study is to know parameters, on the basis of which investors invest in stock market and to know Investor’s satisfaction level in stock trading.

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Description

There are 2 ways for Stock Trading: •Online Trading•Offline Trading

Sampling Methodology •Sampling locations – Surat.•Sampling units – People investing in stock market.•Sampling techniques – Non-probability sampling (convenient sampling).•Sample size – 200•Mode of survey – Questionnaires.

Time frame: 1st June to 31st July

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DATA ANALYSIS

Are you trading in stock market?

Option Response

Yes 200

No 0

100%

Trading in stock market

YESNO

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In which category does your income fall?Income Category No. Of People

<20000 57

20000 to 30000 75

30000 to 50000 24

>50000 44

28%

38%

12%

22%

Income Category of Investors

less than 2000020000 to 3000030000 to 50000More than 50000

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What percentage of your income do you invest in Stock trading?

Option Response

<10% 69

10 to 20% 76

20 to 30% 25

>30% 30

35%

38%

13%

15%

Part of income invested in trading

less than 10%10 to 20%20 to 30%More than 30%

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Since how long you are in Stock Market?

Option Response

<1 month 20

1 to 3 months 64

3 to 6 Months 41

>6 months 15

10%

32%

21%

38%

Time period since the person is investing in stock market

LESS THAN 1 MONTH1 TO 3 MONTHS3 TO 6 MONTHSMORE THAN 6 MONTHS

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How often do you trade?

Option Response

Daily 53

Weekly 68

Monthly 60

Yearly 19

27%

34%

30%

10%

Trading Period

DAILYWEEKLYMONTHLYYEARLY

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Which of the following method you prefer?

Option Response

Online 75

Offline 52

Both 73

38%

26%

37%

Method of trading

ONLINEOFFLINEBOTH

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Since how long have been you in Online & Offline Stock Trading?

Online

42%

38%

7%

12%

LESS THAN 1 YEAR1 TO 3 YEARS3 TO 5 YEARSMORE THAN 5 YEARS

Time Period Of Trading

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Offline

46%

32%

19%

4%

LESS THAN 1 YEAR1 TO 3 YEARS3 TO 5 YEARSMORE THAN 5 YEARS

Time Period Of Trading

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Both

41%

36%

9%

14%

LESS THAN 1 YEAR1 TO 3 YEARS3 TO 5 YEARSMORE THAN 5 YEARS

Time Period Of Trading

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In which of the following instruments do you trade?

Option Response

Equity 156

Commodity 45

Currency 33

67%

19%

14%

EQUITYCOMMODITYCURRENCY

Trading Instruments

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Findings

1. From the above research we can conclude that out of 200 investors 70 investors are trading through Online and only 52 investors are trading through Offline.

2. Investors give importance to Online Stock trading.

3. Investors are aware about both method Online and Offline but more than 35% investors prefer to trade through Online stock trading.

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4. The proportions of investors who are trading through Online Stock trading are satisfied as compared to trading through Offline stock trading.

5. In online trading, they give more preference to online fund transfer facility, trading anywhere and speed.

6. In offline trading, they give more importance to simplicity, more services from broker, and easy to understand and operate

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Limitation1. Sometimes there are unknown reasons on the basis of which markets

operate and the findings of the project may not hold true in such cases. That is the reason why the market is sometimes called as “Irrational creature”.

2. Mostly investors who invest in the stock market have money and they just want to invest with no predefined objectives in mind and hence they rely upon the suggestions of the distributors and marketing executives, which deviates the actual behavior from the expected behavior.

3. Lack of awareness of stock market: since the area is not known before, it takes a lot of time unconvincing people to invest in share market.

 

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4. Some respondents are unwilling to talk or they don’t have time to respond.

 5. Misleading concepts: some people think that shares are too risky and

are just another name of gamble. But it’s not at all risky for long term investors.

6.Inherent limitations of sampling, such as limited time, limited sample, limitations of area etc., are bound to be there which may limit the purpose of market survey.

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Conclusion1. The research clearly shows that Online Stock trading is more

preferable by Investors. Investors who are trading through Offline stock trading are not satisfied with time saving, privacy maintain, brokerage cost so investors like to trade through Online.

2. In online trading, as respondents are getting online fund transfer facility, more speed is there and they can trade from anywhere.

3. Students have mostly preferred to do online trading.

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4.In offline trading, respondents are getting benefit of simplicity and more services from broker.

5. Respondents have preferred more to do online trading as compared to offline trading.

6. Retired people have preferred to do off-line trading.

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Recommendations1. In online trading, more credit exposure should be given

same as given in off-line trading.

2. In offline trading, brokers should be faithful with their clients.

3. Retired people should be guided as it has been seen that they are doing off-line trading and not online trading.

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4. In online trading, clients should be given proper demo.

5. Retired people should be made aware with the benefits of online trading so they may be attracted towards online trading.

6. People can give more importance to Offline Stock trading if Investors are satisfied with time saving, Brokerage cost.

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Thank you…