Angel Final K J.vikas

Trading and work in Stock
market
“TRADING AND WORK IN STOCK MARKET”
With reference to Angel Broking ,

Mehsana
A Project Report Submitted in partial Fulfillment of

Award of the MBA Degree
SUBMITTED BY:
Patel Vikaschandra
Roll No. 947
Enrollment no. 097210592039
SUBMITTED TO:
K. J. INSTITUTE OF MANAGEMENT
Vadasma
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K.J Institute of
Management, Vadasma
market
(Gujarat Technological University)
July, 2010
DECLARATION
I, hereby, declare that Summer that the Summer Project on TRADING AND WORK IN
STOCK MARKET is original to the best of my knowledge and has not been published
elsewhere. This is for the purpose of partial fulfillment of M.B.A degree affiliated with
Gujarat Technological University.
Student Name:- Signature
Patel Vikaschandra
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PREFACE
A project report on stock market is being prepared in attempts to interpret in-depth study of
stock market. This report helps us to understand various terminologies in stock market. This
report gave me opportunity to have complete idea about trading in stock market. This gave me
idea about technical and fundamental analysis in stock market and how trading is being done
in stock market.
This project report helps in following aspects,
✔ Build understanding of central ideas and theories of stock market.
✔ Develop familiarity with the analysis of stock market.
✔ Furnish institutional material relevant for understanding the environment in which trading
decisions are taken.
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✔ This project will guide to investors for an investment in stock market. This project
deployed a lot time for collections of information from various sources. This project will
be very helpful to know how trading is done.
ACKNOWLEDGEMENT
This report is most important for my MBA degree and I am really thankful to executive staff
of ANGEL BROKING LTD, MEHSANA.
Mr. piyush suthar who is the manager, who is diligently provide the most information about
stock market and his experience in this field.
Mr.viral patel who is the marketing manager, who provide the market current condition and
the customer flow in an investment.
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I am really thankful to Mr. Harshil shah,Mr.Rajesh prajapati and Mr. fulkesh patel, who are
the customer relationship executives. They provide us most knowledge of commodities
market, the factor affected to the share price and the investor perception.
EXECUTIVE SUMMARY
The project is an attempt to trading and work procedure of stock exchanges in

detail. It provides thorough knowledge of different aspects of trading in stock exchanges.
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The focus is basically with Indian context. Its mention the information about the securities
market, concept of stock exchanges, their role in economy, their characteristics, role of SEBI
etc.
There is also added the different methods of trading and In all they offer 9 different
avenues for investing, which have been explained in depth
.
This survey Is mainly targeted towards the trading behaviour of people of various
occupation group, various age and to know about the awareness level and experience of the
people of mahesana city.
TABLE OF CONTENTS
CHAPTERS PARTICULARS PAGE NO.

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Chapter-1 Introduction of 8
the project
Chapter-2 Liturature survey 10
Chapter-3 Research 15
methodology
3.1 Research 15
objective 16
3.2 Research 19
process
3.3 Limitation of the
study
Chapter- 4 Inteoduction of 20
capital market
4.1 Overview of 21
capital market
4.2 Introduction of 23
stock market
4.3 Introduction of 32
BSE & NSE
Chapter-5 Profile of the 38

organization
Chapter-6 Theory of trading 44

process
Chapter-7 Data analysis and 59

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Interpretation
67
Chapter-8 Findings and
Conclusions
8.1 Findings 67
8.2 Suggestions 68
8.3 Conclusion 69
Chapter-9 Annexture 70
Chapter-10 Bibliography 73
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TABLE OF ILLUSTRATION
No. Particulars Page no.

1 Transaction cycle 46
2 Settlement Process 48
3 Ques:1 60
4 Ques:2 60
5 Ques:3 61
6 Ques:4 61
7 Ques:5 62
8 Ques:6 62
9 Ques:7 63
10 Ques:8 63
11 Ques:9 64
12 Ques:10 64
13 Ques:11 65
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Chapter:1
INTRODUCTION
Angel Broking Limited is one of the leading and professionally managed stock broking
firm involved in quality services and research. Angel Broking Limited is a corporate member
of The Stock Exchange, Mumbai.
The membership of the company with The Stock Exchange Mumbai was originally in the
name of Mukesh R. Gandhi, which was eventually turned into a corporate membership in the
name of Angel Broking Limited.
Angel Broking Limited is managed by Mr. Dinesh Thakkar and he is well supported by Mr.
Mukesh Gandhi, a fifteen years veteran in the market.
The group is well supported by a professional and qualified research team and efficient
operations and back office team, which comprises of highly dedicated and qualified
individuals. Angel has an in-house, state of art research department.
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Angel believes in reaching out to the customer at the farthest end rather than by reaching out
to them.
The company in its endeavour to give its client the best has opened up several branches all
over Mumbai, which are efficiently integrated with the Head Office.
Angel Broking Limited is primarily into retail stock broking, with a customer base of retail
investors, which has been increasing at a compounded growth rate of 100% every year. The
company has huge network sub-brokers in Mumbai and other places outside Mumbai,
registered with SEBI, who act as chanel partners for the company. The company presently has
a total staff strength of around 150 employees
who are spread accordingly across the head office and all the branches.
Angel has empowered its physical presence throughout India through various strategies which
it has been adopting efficiently and effectively over a period of time, like opening up of
branches at various places, tie-ups with various agencies and sales agents, buy-outs of smaller
regional outfits and appointment of sub-brokers and franchisees. Moreover Angel has been
tapping and including high net-worth and self-employed individuals it its vast array of clients.
Angel has always strived in the direction of delivering ultimate client satisfaction and
developing stronger bonds with its customers and chose partners. Angel has a vision to
introduce new and innovative products and services regularly. Moreover Angel has been one
among the pioneers to introduce the latest technological innovations and integrate it efficiently
within its business.
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Chapter:2
Literature Survey
The past decade in many ways has been remarkable for securities market in India.It has grown
exponentially as measured in terms of amount raised from the market, number of stock
exchanges and other intermediaries, the number of listed stocks, market capitalization, trading
volumes and turnover on stock exchanges, and investor population.
Along with this growth, the profiles of the investors, issuers and intermediaries have changed
significantly. The market has witnessed Fundamental institutional changes resulting in drastic
reduction in transaction costs and significant improvements in efficiency, transparency and
safety.
Dependence on Securities Market
Three main sets of entities depend on securities market. While the corporate and Governments
raise resources from the securities market to meet their obligations. The households invest
their savings in the securities.
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Corporate Sector:
The 1990s witnessed emergence of the securities market as a major source of finance for trade
and industry. A growing number of companies are accessing the securities market rather than
depending on loans from FIIs/banks. The corporate sector is increasingly depending on
external sources for meeting its funding requirements.
There appears to be growing preference for direct financing (equity and debt) to indirect
financing (bank loan) with in the external sources. According to CMIE data, the share of
capital market based instruments in resources raised externally increased to 53% in 1993-94,
but declined thereafter to 33% by 1999-00 and further to 21% in 2001-02. In the sector-wise
shareholding pattern of companies listed on NSE, it is observed that on an average the
promoters hold more than 55% of total shares. Though the nonpromoter holding is about 44%,
Indian public held only 17% and the public float (holding by FIIs, MFs, Indian public) is at
best 25%.
Governments:
Along with increase in fiscal deficits of the governments, the dependence on market
borrowings to finance fiscal deficits has increased over the Years. During the year 1990-91,
the state governments and the central government financed nearly 14% and 18% respectively
of their fiscal deficit by market borrowing. In percentage terms, dependence of the state
governments on market borrowing did not increase much during the decade 1991-2001. In
case of central government, it increased to 77.6% by 2002-03, and 82.3% in 2007-08.
Households:
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According to RBI data, household sector accounted for 82.4% of gross domestic savings
during 2001-02. They invested 38% of financial savings in deposits, 33% in
insurance/provident funds, 11% on small savings, and 8% in securities, including government
securities and units of mutual funds during 2001- 02. Thus the fixed income bearing
instruments are the most preferred assets of the household sector.
Their share in total financial savings of the household sector witnessed an increasing trend in
the recent past and is estimated at 82.4% in 2001- 02. In contrast, the share of financial
savings of the household sector in securities (shares, debentures, public sector bonds and units
of UTI and other mutual funds and government securities) is estimated to have gone down
from 22.9% in 1991-92 to 4.3% in 2000-01, which increased to 8% in 2001-02. in 2007-08
that is 12.3%.
Investor Population
The Society for Capital Market Research and Development carries out periodical surveys of
household investors to estimate the number of investors. Their first survey carried out in 1990
placed the total number of share owners at 90-100 lakh. Their second survey estimated the
number of share owners at around 140-150 lakh as of mid-1993.
Their latest survey estimates the number of shareowners at around 2 crore at 1997 end, after
which it remained stagnant up to the end of 1990s. The bulk of increase in number of
investors took place during 1991-94 and tapered off thereafter. 49% of the share owners at the
end of 2000 had, for the first time, entered the market before the end of 1990, 44% entered
during 1991-94, 6.3% during 1995-96 and 0.8% since 1997.
The survey attributes such tapering off to persistent depression in the share market and
investors’ bad experience with many unscrupulous company promoters and managements.
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Distribution of Investors:
The Society for Capital Market Research & Development estimates that 15% of urban
households and only 0.5-1.0% of semi-urban and rural households own shares. It is estimated
that 4% of all households own shares.
Distribution of Beneficial Accounts with NSDL at the end of Feb.2007 An indirect, but very
authentic source of information about distribution of
Table - 1
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Investors are the data base of beneficial accounts with the depositories. By February 2006,
there were 3 million beneficial accounts with the National Securities Depository Limited
(NSDL). The state-wise distribution of beneficial accounts with NSDL is presented in Table.
As expected Maharashtra and Gujarat account for nearly 45% of total beneficial accounts.
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Table – 2
Market Participants in securities market
It is not that the users and suppliers of funds meet each other and exchange funds for
securities. It is difficult to accomplish such double coincidence of wants. The amount of funds
supplied by the supplier may not be the amount needed by the user. Similarly, the risk,
liquidity and maturity characteristics of the securities issued by the issuer may not match
preference of the supplier.
Source: (www.stock market.com)
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CHAPTER:3
RESEARCH METHODOLOGY
OBJECTIVE OF THE STUDAY
The objective of the study was:-
1. To study the investors satisfaction level for the various services provided by the broker
relationship.
2. To get the brief knowledge of trading system in securities.
3. To get the detail information about the company and to analysis the
learning in past six weeks at Angel Broking.
4. To gain the knowledge about the market conditions.
5. To learn how to convince the client to buy a Demate at Angel Broking.
6. How to handle the various questions raised by them and how to deal with them.
7. To learn how corporate world works, and what people things about it.
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Research Process
The research process consists of series of steps necessary to effectively carryout the research
and the desired sequencing of these steps. It consists of closely related activities but these
activities overlap continuously rather than strictly prescribed sequence. Each step will have an
influence over the following steps so the researcher always has to think a few steps ahead.
These steps are not distinct and separate but are interwoven. The researcher has a difficult task
of anticipating the requirements of the subsequent steps, with each step he takes. His focus is
not concentrated only on one single activity or operation at a particular point of time.
However the following order concerning various steps provides useful procedural guideline
regarding the research process:-
1) Formulating research problem:
Find out customer reacting in the practice in live situation in the market. To gain a practical in
sight to market and improve one’s knowledge base where in we will expose to many kinds of
people interesting in securities.
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Revenue is directly linked to market valuations, so a major fall in asset prices causes a
precipitous decline in revenues relative to costs. Successful fund managers are expensive and
may be head hunted by competitors.
2) Choice of research design:
Since, research design is simply the frame work or plan for a study. It is a blue print that of a
house devised by an architect. My approach to research is descriptive and quite specific.
Out of various research methods the research method, which was most suitable to my research,
was Exploratory Research.
“Exploratory Research is offer conducted because a problem has not been clearly defined as
yet, or its real scope is as yet unclear.
It allows the research to familiarize him/herself with the problem or concept to be studied.
3) Determining the sources of data:
After selection of research design, next step is to determine sources of data, whether primary
data or secondary data should be used.
The researcher should critically evaluate the secondary data or primary data so as to avoid the
possible sources of error. The researcher should know about the authentic sources of relevant
data, their periodicity, agency publishing data, etc. it is only when the secondary data is not
available or not reliable that the researcher should use primary data.
4) Data Collection Methods:
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A researcher should keep in mind the following factors while deciding on the data collection
methods. Nature, scope and objectives of research, availability of funds and time and the
precision needed.
Primary Sources
These include the Continuous interaction with the staff.

as well as the personal interview methods of data collection.
Secondary Data
✔ BSE & NSE official web site where all information regarding secondary market
✔ Angel Broking web site
✔ SEBI official web site
✔ Magazines
✔ Financial market materials
5) Determining the sample design and sample size:
Another aspect which forms a part of research process is the sampling plan. When a researcher
has decided to carryout a field survey, he has to decide whether it is to be a Non probability or
Probability sampling method.
In my research selected to, The Primary Methods of Non-Probability Sampling Methods are:-
1. Convenience Or Accidental Sampling:-
When a population can’t be defied or a list of population is notavailable, there is no other
alternative than to use convenient sampling.
2. Purposive or Judgments Sampling:-
The method is appropriate when what is important is the typicality &specific relevance of the
sampling units to the study & not their overall representativeness to the population
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6) Organizing and conducting field survey:
✔ To gain the knowledge about the market conditions.

✔ To learn how to convince the client to buy a demate at Angel Broking.
✔ To learn how corporate world works, and what people things about it.
7) Processing and analyzing the collected data:
After the completion of field survey, The next task is to aggregate the data in a meaningful
manner. The Data is prepared to bring out the main characteristics of the data.
8) Preparing the research report:
Research report is defined as written / oral presentation of a research

project which includes all possible details about research objectives,
research design, research process, compilation of data, presentation of data, analysis &
interpretation, conclusions & suggestion & above all, limitation of research.
It is a formal statement & documentation of the process & results of research.
LIMITATIONS OF STUDY
✔ The study was restricted to mehsana City so it is difficult to generalize. The

interpretation made out of the findings.
✔ This research is dependent on the information provided by the respondents and
sometimes the respondents are very reluctant in providing right information and often
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provide it carelessly and the result drawn out by only this information, so sometimes
all efforts might not find direction and results.
✔ This conclusion and recommendations made are based on a very less experience of
researcher in this field.
✔ Time was the biggest constraints as the study was limited for a period of 45 days only
as per the curriculum of researcher, which means that any relevant market
phenomenon before and after this duration of time might have been skipped in the
study.
✔ Many respondents did not reply and didn’t give accurate answer.
CHAPTER- 4
INTRODUCTION OF CAPITAL MARKET
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The pattern of growth in the Indian capital markets in the post independence regime can be
analyzed from the following graphs.
From the above

graph we find
that the number
of stock
exchanges in
India increased
at a crawling pace till 1980 but witnessed a sharp rise thereafter till 1995. The following
diagram shows the trend in the no. of listed companies participating in the Indian Capital
Market. Here again we register a sharp rise after 1980. The numbers of stocks issued by the
listed companies also show a similar trend.
OVERVIEW OF THE SECURITIES MARKET
INTRODUCTIONS
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Securities markets provide a channel for allocation of savings to those who have areductive
need for them. As a result, the savers and investors are not constrained by their individual
abilities, but by the economy’s abilities invest and save respectively, which inevitably
enhance saving and investment in the economy.
Market segment
The securities market has to interdependent and inseparable segments; the primary and the
secondary market. The primary market provides to channel for creation of new securities
through issuance of financial instrument by public companies as well as Government and
government agencies and bodies whereas the secondary market helps the holders of these
financial instruments to sale for exiting from the investment.
This business including associated risk, generated in the secondary market, help the primary
market in allocation of the funds and its follows the company act 1956.
The corporate entities issue mainly debt and equity instrument (shares, debentures, etc.),
while the governments (central & state Government) issue debt securities (dated securities,
treasury bills). The secondary enables participant who hold securities adjust their assessment
of risk and return. They also sell securities for cash to meet their liquidity needs.
Trades taking place over a trading cycle (one day under rolling settlement) are settled together
after a certain time all the 23 stock exchange in the country provide facilities for trading of
corporate securities. Trades executed on NSE only are cleared and selected by a clearing
corporation which provides innovations and settlement guarantee. Nearly 100% the trades in
capital segment are settled through demat delivery.
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NSE also provides a formal trading platform for trading of a wide range of debt securities
including government securities in both retail and wholesale mode. NSE also provides trading
in derivatives of equities, interest rate as well indices.
In derivatives market (F&O market segment of NSE), standardized contracts are traded for
future settlement. These futures can be on a basket of securities like an index or an individual
security. In case of options, securities are traded for conditional future delivery.
There are two types of options – a put option permits the owner to sell a security to the writer
of options at a predetermined price while a call option permits the owner to purchase a
security from the writer of the option at a predetermined price. These options can also be on
individual stocks or baskets of stocks like index. Two exchanges namely NSE and the stock
exchange, Mumbai (BSE) provide trading of derivatives of securities.
Today the participants have the flexibility of choosing from a basket a products likes:
✔ Equities
✔ Bond issued by both government and companies
✔ Futures on benchmark indices as well as stocks
✔ Options on benchmark indices as well as stocks
✔ Future on interest rate products like national 91 – day T-bills, 10 year national zero
coupon bond and 6% national 10 year bond.
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INTRODUCTION OF STOCK MARKET

Of all the modern service institutions, stock exchanges are perhaps the most crucial
agents and facilitators of entrepreneurial progress. After the industrial revolution, as the size
of business enterprises grew, it was no longer possible for proprietors or partnerships to raise
colossal amount of money required for undertaking large entrepreneurial ventures.
Such huge requirement of capital could only be met by the participation of a very large
number of investors; their numbers running into hundreds, thousands and even millions,
depending on the size of business venture. In general, small time proprietors, or partners of a
proprietary or partnership firm, are likely to find it rather difficult to get out of their business
should they for some reason wish to do so. This is so because it is not always possible to find
buyers for an entire business or a part of business, just when one wishes to sell it. Similarly, it
is not easy for someone with savings, especially with a small amount of savings, to readily
find an appropriate business opportunity, or a part thereof, for investment. These problems
will be even more magnified in large proprietorships and partnerships.
Nobody would like to invest in such partnerships in the first place, since once invested, their
savings would be very difficult to convert into cash. And most people have lots of reasons,
such as better investment opportunity, marriage, education, death, health and so on for
wanting to convert their savings into cash. Clearly then, big enterprises will be able to raise
capital from the public at large only if there were some mechanism by which the investors
could purchase or sell their share of business as ands they wished to do so.
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This implies that ownership in business has to be “broken up” into a lager number of small
units, such that each unit may be independently & easily bought and sold without hampering
the business activity as such. Also, such breaking of business ownership would help mobilize
small savings in the economy into entrepreneurial ventures.
What is a share?
A share represents the smallest recognized fraction of ownership in a publicly held business.
Each such fraction of ownership is represented in the form of a certificate known as a share
certificate. The breaking up of total ownership of a business into small fragments, each
fragment represented by a share certificate, enables them to be easily bought and sold.
What is a stock exchange?

The institution where this buying and selling of shares essentially takes place is the Stock
Exchange. In the absence of stock exchanges, i.e. Institutions where small chunks of
businesses could be traded, there would be no modern business in the form of publicly held
companies.
Today, owing to the stock exchanges, one can be part owners of one company today and
another company tomorrow; one can be part owners in several companies at the same time;
one can be part owner in a company hundreds or thousands of miles away; one can be all of
these things. Thus by enabling the convertibility of ownership in the product market into
financial assets, namely shares, stock exchanges bring together buyers and sellers (or their
representatives) of fractional ownerships of companies. And for that very reason, activities
relating to stock exchanges are also appropriately enough, known as stock market or security
market.
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The stock exchanges are the exclusive centers for the trading of securities. The regulatory
framework encourages this by virtually banning trading of securities outside exchanges.
Until recently, the area of operation/ jurisdiction of exchange were specified at the time of its
recognition, which in effect precluded competition among the exchanges. These are called
regional exchanges. In order to provide an opportunity to investors to invest/ trade in the
securities of local companies, it is mandatory foe the companies, wishing to list their
securities, to list on the regional stock exchange nearest to their registered office.
Characteristics of Stock Exchanges in India

✔ Traditionally, a stock exchange has been an association of individual members called
member brokers (or simply members or brokers), formed for the express purpose of
regulating and facilitating buying and selling of securities by the public and institution
at large.
✔ A stock exchange in India operates with due recognition from the government under
the Securities and Contracts (Regulations) Act, 1956. the member brokers are
essentially the middlemen who carry out the desired transactions in securities on
behalf of the public(for a commission) or on their own behalf. New membership to a
Stock Exchange is through election by the governing board of that stock exchange.
✔ At present, there areTHE BUYING 23 stock exchanges in India, the largest among
them being the Bombay Stock Exchange. BSE alone accounts for over 80% of the
total volume of transactions in shares.
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✔ Typically, a stock exchange is governed by a board consisting of directors largely
elected by the member brokers, and a few nominated by the government. Government
nominee include representatives of the ministry of finance, as well as some public
representatives, who are expected to safeguard the public interest in the functioning of
the exchanges. A president, who is an elected member, usually nominated by the
government from among the elected members, heads the board.
The executive director, who is usually appointed by the stock exchange with the government
approval is the operational chief of the stock exchange. His duty is to ensure that the day to
day operations the Stock Exchange are carried out in accordance with the various rules and
regulations governing its functioning.
✔ The overall development and regulation of the securities market has been entrusted to
the Securities and Exchange Board of India (SEBI) by an act of parliament in 1992.
✔
✔ All companies wishing to raise capital from the public are required to list their
securities on at least one stock exchange. Thus, all ordinary shares, preference shares
and debentures of the publicly held companies are listed in the stock exchange.
Exchange Management
Made some attempts in this direction, but this did not materially alter the situation. In view of
the less than satisfactory quality, of administration of brokermanaged exchanges, the finance
minister in March 2001 proposed demutualization of exchanges by which ownership,
management and trading membership would be segregated from each other.
Role of SEBI
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The SEBI, that is, the Securities and the Exchange Board of India, is the national regulatory
body for the securities market, set up under the securities and Exchange Board of India act,
1992, to “protect the interest of investors in securities and to promote the development of, and
to regulate the securities market and for matters connected therewith and incidental too.”
SEBI has its head office in Mumbai and it has now set up regional offices in the metropolitan
cities of Kolkatta, Delhi, and Chennai. The Board of SEBI comprises a Chairman, two
members from the central government representing the ministries of finance and law, one
member from the Reserve Bank of India and two other members appointed by the central
government.
As per the SEBI act, 1992, the power and functions of the Board encompass the regulation of
Stock Exchanges and other securities markets; registration and regulation of the working
stock brokers, sub-brokers, bankers to an issue (a public offer of capital), trustees of trust
deeds, registrars to an issues, merchant bankers, under writers, portfolio managers, investment
advisors and such other intermediaries who may be associated with the stock market in any
way; registration and regulations of mutual funds; promotion and regulation of self-regulatory
organizations; prohibiting Fraudulent and unfair trade practices and insider trading in
securities markets; regulating substantial acquisition of shares and takeover of companies;
calling for information from, undertaking inspection, conducting inquiries and audits of stock
exchanges, intermediaries and self- regulatory organizations of the securities market;
performing such functions and exercising such powers as contained in the provisions of the
Capital Issues (Control) Act,1947 and the Securities Contracts (Regulation) Act, 1956,
levying various fees and other charges, conducting necessary research for above purposes and
performing such other functions as may be prescribes from time to time.
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SEBI as the watchdog of the industry has an important and crucial role in the market in
ensuring that the market participants perform their duties in accordance with the regulatory
norms. The Stock Exchange as a responsible Self Regulatory Organization (SRO) function to
regulate the market and its prices as per the prevalent regulations.
SEBI and the Exchange play complimentary roles to enhance the investor protection and the
overall quality of the market.
Membership
The trading platform of a stock exchange is accessible only to brokers. The broker enters into
trades in exchanges either on his own account or on behalf of clients. The clients may place
their order with them directly or a sub-broker indirectly. A broker is admitted to the
membership of an exchange in terms of the provisions of the SCRA, the SEBI act 1992, the
rules, circulars, notifications, guidelines, etc.
prescribed there under and the byelaws, rules and regulations of the concerned exchange. No
stockbroker or subbroker is allowed to buy, sell or deal in securities, unless he or she holds a
certificate of registration granted by SEBI. A broker/sub-broker compiles with the code of
conduct prescribed by SEBI.
The stock exchanges are free to stipulate stricter requirements for its members than those
stipulated by SEBI. The minimum standards stipulated by NSE for membership are in excess
of the minimum norms laid down by SEBI. The standards for admission of members laid
down by NSE stress on factors, such as, corporate structure, capital adequacy, track record,
education, experience, etc. and reflect the conscious endeavors to ensure quality broking
services.
Listing
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Listing means formal admission of a security to the trading platform of a stock exchange,
invariably evidenced by a listing agreement between the issuer of the security and the stock
exchange. ; Listing of securities on Indian Stock Exchanges is essentially governed by the
provisions in the companies act, 1956, SCRA, SCRR, rules, bye-laws and regulations of the
concerned stock exchange, the listing agreement entered into by the issuer and the stock
exchange and the circulars/ guidelines issued by central government and SEBI.
Index services
Stock index uses a set of stocks that are representative of the whole market, or a specified
sector to measure the change in overall behavior of the markets or sector over a period of
time. India Index Services & Products Limited (IISL), promoted by NSE and CRISIL, is the
only specialized organization in the country to provide stock index services.
Trading Mechanism
All stock exchanges in India follow screen-based trading system. NSE was the first stock
exchange in the country to provide nation-wide order-driven, screen-based trading system.
NSE model was gradually emulated by all other stock exchanges in the country. The trading
system at NSE known as the National Exchange for Automated Trading (NEAT) system is an
anonymous order-driven system and operates on a strict price/time priority. It enables
members from across the countries to trade simultaneously with enormous ease and
efficiency.
NEAT has lent considerable depth in the market by enabling large number of members all
over the country to trade simultaneously and consequently narrowed the spreads significantly.
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A single consolidated order book for each stock displays, on a real time basis, buy and sell
orders originating from all over the country.
The bookstores only limit orders, which are orders to buy or sell shares at a stated quantity and
stated price. The limit order is executed only if the price quantity conditions match. Thus, the
NEAT system provides an open electronic consolidated limit order book (OECLOB).
The trading system provides tremendous flexibility to the users in terms of kinds of orders
that can be placed on the system. Several time-related (Good- Till-Cancelled, Good-Till-Day,
Immediate-or-Cancel), price related (buy/sell limit and stop-loss orders) or volume related
(All-or-None, Minimum Fill, etc.) conditions van be easily built into an order. Orders are
sorted and match automatically by the computer keeping the system transparent, objective and
fair. The trading system also provides complete market information on-line, which is updated
on real time basis.
The trading platform of the CM segment of NSE is accessed not only from the computer
terminals from the premises of brokers spread over 420 cities, but also from the personal
computers in the homes of investors through the internet and from the hand-held devices
throughWAP. The trading platform of BSE is also accessible from 400 cities.
Internet trading is available on NSE and BSE, as of now. SEBI has approved the use of
Internet as an order routing system, for communicating clients’ orders to the exchanges
through brokers. SEBI- registered brokers can introduce internet-based trading after obtaining
permission from the respective Stock Exchanges.
SEBI has stipulated the minimum conditions to be fulfilled by trading members to start
internet-based trading and services.
NSE was the first exchange in the country to provide web-based access toinvestors to trade
directly on the exchange. It launched Internet trading in February 2000.
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It was followed by the launch of Internet trading by BSE in March 2001. The orders
originating from the personal computers (PCs) of investors are routed through the Internet tot
eh trading terminals of the designated brokers with whom they have relations and further to
the exchange of trade execution. Soon after these orders get matched and result into trades,
the investors get confirmation about them on their PCs through the same Internet routes.
SEBI approved trading through wireless medium or WAP platform. NSE is the only exchange
to provide access to its order book through the hand held devices, which use WAP
technology. This serves primarily retail investors who are mobile and want to trade from any
place when the market prices for stock of their choice are attractive.
Demat Trading
A depository holds securities in dematerialized form. It maintains ownership records of

securities in a book entry form and also effects transfer of ownership through book entry.
SEBI has introduced some degree of compulsion in trading and settlement of securities in
dematerialized form. While the investors have a right to hold securities in either physical or
demat form, SEBI has mandated compulsory trading and settlement of securities in
dematerialized form.
This was initially introduced for institutional investors and was later extended to all investors.
Starting with 12 scrips on January 15, 1998, all investors are required to mandatorily trade in
dematerialized form in respect of 2,335 securities as at end-June, 2001.
Since the introduction of the depository system, dematerialization has progressed at a fast
pace and has gained acceptance among the participants in the market. All actively traded
scrips are held, traded and settled in demat form.
The details of progress in dematerialization in two depositories, viz., NSDL and CDSL, are
presented as below: In a SEBI working paper titled ‘Dematerialization: A Silent Revolution in
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the Indian Capital Market’ released in April 2000, it has been observed that India has
achieved a very high level of dematerialization in less than three years’ time, and currently
more than 99% of trades settle in demand form.
Competition and regulatory developments facilitated reduction in custodial charges and

improvements in qualities of service standards.
The paper observes that one imminent and apparent immediate benefit of competition
between the two depositories is fall in settlement and other charges. Competition has been
driving improvement in service standards.
Depository facility has effected changes in stock market microstructure.
Breadth and depth of investment culture has further got extended to interior areas of the
country faster. Explicit transaction cost has been falling due to dematerialization.
Dematerialization substantially contributed to the increased growth in the turnover.
Dematerialization growth in India is the quickest among all emerging markets and also among
developed markets excepting for the U.K and Hong Kong.
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INTRODUCTION OF BSE & NSE
BOMBAY STOCK EXCHANGE LIMITED (BSE):-
The Stock Exchange, Mumbai, popularly known as "BSE" was established in 1875 as "The
Native Share and Stock Brokers Association", as a voluntary non-profit making association. It
has evolved over the years into its present status as the premier Stock Exchange in the
country. It may be noted that the Stock Exchanges is the oldest one in Asia, even older than
the Tokyo Stock Exchange, which was founded in 1878.
The Exchange, while providing an efficient and transparent market for trading insecurities,
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 programmers.
A Governing Board comprising of 9 elected directors (one third of them retire every year by
rotation), two SEBI nominees, a Reserve Bank of India nominee, six public representatives
and an 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 today
administration of the Exchange.
The average daily turnover of the Exchange during the year 2000-2001 (April- March), was
Rs.3984.19 crores and average number of daily trades was 5.69 lakhs.
However, the average daily turnover of the Exchange during the year 2001- 2002 has declined
to Rs. 1244.10 crores and number of average daily trades during the period to 5.17 lakhs. The
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ban on all deferral products like BLESS and ALBM in the Indian capital Markets by SEBI
W.E.F July 2, 2001, abolition of account period settlements, introduction of Compulsory
Rolling Settlements in all scrips traded on the Exchanges W.E.F. December 31, 2001, etc.
have adversely impacted the liquidity and consequently there is a considerable decline in the
daily turnover at the Exchange.
NATIONAL STOCK EXCHANGE OF INDIA LTD .( NSE):-
The National Stock Exchange (NSE) is India's leading stock exchange covering around 400
cities and towns all over India. NSE introduced for the first time in India, fully automated
screen based trading.
It provides a modern, fully computerized trading system designed to offer investors across
the length and breadth of the country a safe and easy way to invest or liquidate investments in
securities.
Sponsored by the industrial development bank of India, the NSE has been cosponsored by
other development/ public finance institutions, LIC, GIC, banks and other financial
institutions such as SBI Capital Market, Stockholding corporation, Infrastructure leasing and
finance and so on. India has had a history of stock exchanges limited in their operating
jurisdiction to the cities in which they were set up.
NSE started equity trading on November 3, 1994 and within a short span of 1 year became the
largest exchange in India in terms of volumes transacted. Trading volumes in the equity
segment have grown rapidly with average daily turnover increasing from Rs.7 crores in
November 1994 to Rs.6797 crores in February 2001 with an average of 9.6 lakh trades on a
daily basis. During the year 2000-2001, NSE reported a turnover of Rs.13,39,510 crores in the
equities segment accounting for 45% of the total market.
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The NSE represented an attempt to overcome the fragmentation of regional markets by

providing a screen-based system, which transcends geographical barriers.
Having operationalized both the debt and equity markets, the NSE is planning for aderivative
market, which will provide futures and options in equity. Its main objectives has been to set
up comprehensive facilities for the entire range of securities under a single umbrella, namely,
✔ To set up a nation wide trading facility for equities, debt instruments and Hybrids;
✔ To ensure equal access to investors across the country through an appropriate
Communication network;
✔ To provide a fair, efficient and transparent securities market to investors using the
electronic trading system;
✔ To ensure shorter settlement cycles and book entry settlement systems; and
✔ To meet the current international standards prevalent in the securities
✔ Industry/markets.
Our Mission:-
NSE's mission is setting the agenda for change in the securities markets in India.
The NSE was set-up with the main objectives of:
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✔ Establishing a nation-wide trading facility for equities, debt instruments and
hybrids,
✔ Ensuring equal access to investors all over the country through an appropriate
communication network,
✔ Providing a fair, efficient and transparent securities market to investors using

electronic trading systems,
✔ Enabling shorter settlement cycles and book entry settlements systems, and
✔ Meeting the current international standards of securities markets.

The standards set by NSE in terms of market practices and technology have become industry
benchmarks and are being emulated by other market participants. NSE is more than a mere
market facilitator. It's that force which is guiding the industry towards new horizons and
greater opportunities.
Corporate Structure:-
NSE is one of the first de-mutualised stock exchanges in the country, where the ownership and
management of the Exchange is completely divorced from the right to trade on it. Though the
impetus for its establishment came from policy makers in the country, it has been set up as a
public limited company, owned by the leading institutional investors in the country.
From day one, NSE has adopted the form of a demutualised exchange – the ownership,
management and trading is in the hands of three different sets of people.
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NSE is owned by a set of leading financial institutions, banks, insurance companies and other
financial intermediaries and is managed by professionals, who do not directly or indirectly
trade on the Exchange. This has completely eliminated any conflict of interest and helped
NSE in aggressively pursuing policies and practices within a public interest framework.
The NSE model however, does not preclude, but in fact accommodates
involvement, support and contribution of trading members in a variety of ways. Its Board
comprises of senior executives from promoter institutions, eminent professionals in the fields
of law, economics, accountancy, finance, taxation, etc, public representatives, nominees of
SEBI and one full time executive of the Exchange.
While the Board deals with broad policy issues, decisions relating to market operations are
delegated by the Board to various committees constituted by it. Such committees includes
representatives from trading members, professionals, the public and the management.The day-
to-day management of the Exchange is delegated to the Managing Director who is supported
by a team of professional staff.
The following are likely BSE/NSE holidays for calender year 2010, from
January to December 2010
1 - Moharram - 4th January 2010 - Monday

2 - Republic Day - 26th January 2010 - Tuesday
3 - Mahashivratri - 12th February 2010 - Friday
4 - Holi - 1st March 2010 - Monday
5 - Ram Navmi - 24th March 2010 - Wednesday
6 - Good Friday - 2nd April 2010 - Friday
7- Dr. Ambedkar Jayanti - 14th April 2010 - Wednesday
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8 - Ramzan Id - 10th September 2010 - Friday
9 - Diwali (Diwali) - 5th November 2010 - Monday
10 - Bakri - Id (Diwali) - 17th November 2010 - Wednesday
Note :
✔ This is a tentative list of Holidays of BSE / NSE. This year most of the holidays fall on
Saturday or Sunday.
✔ Soon we will update this list after official holiday list is declared by BSE /NSE.
✔ Muhurat Trading will be on 5th November 2010
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At the end it is concluded that following are Major factors, which have generally contributed
to fall & rise in stock market.
✔ US economic growth
✔ Crude oil prices
✔ Emerging market valuations
✔ Foreign direct investment (FDI)
✔ Capital spending
✔ Equity supply
✔ Government policy toward foreign firms
✔ Politics
✔ Domestic risk
✔ Foreign institutional investors (FII) withdrawals
✔ US Fed interest rates
✔ Indian industry growth
✔ Budget 2006-07 and finance bill
✔ Tax circular regarding transaction tax to FII.
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CHAPTER- 5
PROFILE OF THE ORGANISATION
Angel Broking's tryst with excellence in customer relations began in 1987. Today,Angel has
emerged as one of the most respected Stock-Broking and Wealth Management Companies in
India. With its unique retail-focused stock trading business model, Angel is committed to
providing ‘Real Value for Money’ to all its clients.
The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock
Exchange (NSE) and the two leading Commodity Exchanges in the country:NCDEX & MCX.
Angel is also registered as a Depository Participant with CDSL.
Angel Group
✔ Angel Broking Ltd.

✔ Angel Commodities Broking Ltd.
✔ Angel Securities Ltd.
Our Business
✔ Equity Trading
✔ Commodities
✔ Portfolio Management Services
✔ Mutual Funds
✔ Life Insurance
✔ Personal Loans
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✔ IPO
✔ Depository Services
✔ Investment Advisory
VISION OF THE COMPANY
To provide best value for money to investors through innovative products,trading / investment
strategies, state-of-the-art technology and personalized service
PHILOSOPHY OF THE COMPANY

Ethical practices & transparency in all our dealings customer interest above our own always
deliver what we promise effective cost management.
QUALITY ASSURANCE POLICY
We are committed to being the leader in providing World Class Product &Services which
exceed the expectations of our customers Achieved by teamwork and a process of continuous
improvement
CRM POLICY
A Customer is the most important visitor on our premises. He is not dependent on us but we
are dependent on him. He is not interruption in our work, but is the Purpose of it. We are not
doing him a favour by serving. He is doing us afavour by giving us an opportunity to do so
RESEARCH COVERAGE
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✔ Active coverage of political developments, economy changes.

✔ Sector wise investment strategies are in place.
✔ Stock ideas are presented from time to time in tune with overall strategy.
✔ Total coverage exceeds some 100 stocks spread over 20 sectors.
✔ Coverage includes all GDR stocks.
It is amongst the widest coverage broking houses in India.
Product and Service
The products of Angel Broking can be broadly classified into three types suiting the clients
trading habits.
Three Key Products

✔ IT-Enabled call center for servicing clients.
✔ Integrated depository services / Demat account for transparency.
✔ Online fund transfer facility with HDFC, Citibank, GTB, IDBI Bank. Regularb
banking facility with any bank in India.
Derivatives Trading
Angel Broking is a significantly large player in this with over 5 % market share. It offers
complete intellectual support to the clients. The trading facility is available through the ground
network as well as over the internet. It has also created proprietary intellectual material for
client servicing- Derivative digest, Derivatives info kit, Options calculator.
Derivative Product
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For Buyers
✔ Going with the brave heart view.

✔ Advantage option.
For Portfolio Hedging
✔ Nifty futures and using the beta factor.

✔ Flex option.
✔ SDS(Structured Derivatives Strategy)
Research Product
The research is varied but focused in each of the area of the operation. These are tailor made to
suit the following needs of customers.
✔ Intra-day trading.
✔ Short term trading
✔ Long term investing
✔ High Yield product.
Hedging products
Research based on fundamental view, Technical view and dealing room information. The
delivery is through the website, Branch, E-mail, SMS and instant messenger. Investment Ideas
Angel Broking has a broad based distribution of funds across various sectors covering major
companies in these sectors. Some of the important sectors are
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✔ Automobile
✔ Petrochemicals
✔ Banking
✔ Pharma
✔ Home Textile
✔ Retail Finance
✔ Media
✔ IT Services
✔ Oil and gas
✔ Telecom
AWARD AND ACHIVEMENT
We have been in information services since inception and have assiduously built the data and
skill set necessary for the business.
✔ Mar,2002 Angel Broking develops web-enabled back office software to

maximize its operational efficiency
✔ Nov,2002 Angel Broking successfully conducts its first Investor Seminar to

increase investor awareness
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✔ Apr,2003 Angel Broking publishes its first research report
✔ Apr,2004 Angel Broking expands its basket of services by establishing the

Commodity Broking division
✔ Sep,2004 Angel Broking launches Online Trading Platform facilitating easy

and hassle-free trading for its customers
✔ Oct,2005 Angel Broking wins the prestigious ‘Major Volume Driver’

Award by BSE for 2004-2005
✔ Mar,2006 Angel Broking on expansion drive crosses 1,00,000 mark in

unique trading accounts
✔ Jul,2006 Angel Broking launches Portfolio Management Services (PMS)
✔ Oct,2006 Angel Broking bags the coveted ‘Major Volume Driver’ Award by
BSE for 2005- 2006
✔ Decr,2006 Angel Broking expands its network by creating 2500 business

associates
✔ Mar,2007 Angel Broking crosses the benchmark of 2,00,000 unique trading

accounts
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✔ Nov,2007 Angel Broking wins the honoured ‘Major Volume Driver’ Award by
BSE for 2006-2007
✔ Nov,2008 Angel Broking wins the esteemed ‘Major Volume Driver’ Award by
BSE for 2007-2008
✔ Aug2008 Angel Broking crosses 5,00,000 mark in unique trading accounts
✔ May,2009 Angel Broking wins two prestigious awards for 'Broking House with
Largest Distribution Network' and 'Best Retail Broking House' at Dun &
Bradstreet Equity Broking Awards
✔ Oct,2009 Angel Broking bags the coveted ‘Major Volume Driver’ Award by
BSE for 2008-09
✔ We have leveraged our content to create our Angel Broking, brand, which is
synonymous with high quality and credible information on business and finance.
✔ Our top management team represents a skill set, which is mutually exclusive
butcollectively exhaustive.
✔ The strength of the organization is that the organizations has been continuously
innovating and reinvent
CHAPTER- 6
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THEORY OF TRADING PROCESS
The clearing and settlement mechanism in Indian securities market has witnessed significant
changes and several innovations during the last decade. These include use of the state-of-art
information technology, emergence of clearing corporations to assume counterparty risk,
shorter settlement cycle, dematerialization and electronic transfer of securities, fine-tuned risk
management system, etc., though many of these are yet to permeate the whole market. Till
recently, the stock exchanges in India were following a system of account period settlement
for cash market transactions. T+2 rolling settlement has now been introduced for all securities.
The members receive the funds/securities in accordance with the pay-in/pay-out schedules
notified by the respective exchanges. Given the growing volume of trades and market
volatility, the time gap between trading and settlement gives rise to settlement risk. In
recognition of this, the exchanges and their clearing corporations employ risk management
practices to ensure timely settlement of trades. The regulators have also prescribed elaborate
margining and capital adequacy standards to secure market integrity and protect the interests
of investors. The trades are settled irrespective of default by a member and the exchange
follows up with the defaulting member subsequently for recovery of his dues to the exchange.
Due to setting up of the Clearing Corporation, the market has full confidence that settlements
will take place on time and will be completed irrespective of possible default by isolated
trading members. Movement of securities has become almost instantaneous in the
dematerialized environment. Two depositories viz., National Securities Depositories Ltd.
(NSDL) and Central Depositories Services Ltd.
(CDSL) provide electronic transfer of securities and more than 99% of turnover is settled in
dematerialised form. All actively traded scrips are held, traded and settled in demat form.
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The obligations of members are downloaded to members/custodians by the clearing agency.

The members/custodians make available the required securities in their pool accounts with
depository participants (DPs) by the prescribed pay-in time for securities.
The depository transfers the securities from the pool accounts of members/custodians to the
settlement account of the clearing agency. As per the schedule determined by the clearing
agency, the securities are transferred on the pay-out day by the depository from the settlement
account of the clearing agency to the pool accounts of members/custodians. The pay-in and
pay-out of securities is effected on the same day for all settlements. Select banks have been
empanelled by clearing agency for electronic transfer of funds.The members are required to
maintain accounts with any of these banks. The members are informed electronically of their
pay-in obligations of funds. The members make available required funds in their accounts with
clearing banks by the prescribed pay-in day. The clearing agency forwards funds obligations
file to clearing banks which, in turn, debit the accounts of members and credit the account of
the clearing agency. In some cases, the clearing agency runs an electronic file to debit
members’ accounts with clearing banks and credit its own account. On pay-out day, the funds
are transferred by the clearing banks from the account of the clearing agency to the accounts of
members as per the member’s obligations. In the T+2 rolling settlement, the pay-in and pay-
out of funds as well as securities take place 2 working days after the trade date.
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TRANSACTION CYCLE
CHART : 2
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A person holding assets (securities/funds), either to meet his liquidity needs or to reshuffle his
holdings in response to changes in his perception about risk and return of the assets, decides to
buy or sell the securities. He selects a broker and instructs him to place buy/sell order on an
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exchange. The order is converted to a trade as soon as it finds a matching sell/buy order. At the
end of the trade cycle, the trades are netted to determine the obligations of the trading
members to deliver securities/funds as per settlement schedule. Buyer/seller delivers
funds/securities and receives securities/ funds and acquires ownership of the securities. A
securities transaction cycle is presented in Figure.
Settlement Process
While NSE provides a platform for trading to its trading members, the National Securities
Clearing Corporation Ltd. (NSCCL) determines the funds/securities obligations of the trading
members and ensures that trading members meet their obligations. NSCCL becomes the legal
counterparty to the net settlement obligations of every member. This principle is called
``novation'' and NSCCL is obligated to meet all settlement obligations, regardless of member
defaults, without any discretion.
Once a member fails on any obligations, NSCCL immediately cuts off trading and initiates
recovery. The clearing banks and depositories provide the necessary interface between the
custodians/clearing members (who clear for the trading members or their own transactions) for
settlement of funds/securities obligations of trading members. The core processes involved in
the settlement process are:
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CHART :3
Figure 2.2: Settlement Process in CM segment of NSE
(a) Determination of Obligation:

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NSCCL determines what counter-parties owe, and what counter-parties are due to receive on
the settlement date. The NSCCL interposes itself as a central counterparty between the
counterparties to trades and nets the positions so that a member has security wise net
obligation to receive or deliver a security and has to either pay or receive funds.
(b) Pay-in of Funds and Securities:
The members bring in their funds/securities to the NSCCL. They make available required
securities in designated accounts with the depositories by the prescribed pay-in time. The
depositories move the securities available in the accounts of members to the account of the
NSCCL. Likewise members with funds obligations make available required funds in the
designated accounts with clearing banks by the prescribed pay-in time. The NSCCL sends
electronic instructions to the clearing banks to debit member’s accounts to the extent of
payment obligations. The banks process these instructions, debit accounts of members and
credit accounts of the NSCCL.
(c) Pay-out of Funds and Securities:
After processing for shortages of funds/securities and arranging for movement of funds from
surplus banks to deficit banks through RBI clearing, the NSCCL sends electronic instructions
to the depositories/clearing banks to release pay-out of securities/funds.
The depositories and clearing banks debit accounts of NSCCL and credit settlement accounts
of members. Settlement is complete upon release of pay-out of funds and securities to
custodians/members. The settlement process for transactions in securities in the CM segment
of NSE is presented in the Figure 2.2.
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(d) Risk Management:
A sound risk management system is integral to an efficient

settlement system. NSCCL has put in place a comprehensive risk management system, which
is constantly monitored and upgraded to pre-empt market failures. It monitors the track record
and performance of members and their net worth; undertakes on-line monitoring of members’
positions and exposure in the market, collects margins from members and automatically
disables members if the limits are breached.
Settlement Agencies:-
The NSCCL, with the help of clearing members, custodians, clearing banks and
depositories settles the trades executed on exchanges. The roles of each of these entities are
explained below:
(a) NSCCL:
The NSCCL is responsible for post-trade activities of a stock exchange. Clearing and
settlement of trades and risk management are its central functions. It clears all trades,
determines obligations of members, arranges for pay-in of funds/securities, receives
funds/securities, processes for shortages in funds/securities, arranges for pay-out of
funds/securities to members, guarantees settlement, and collects and maintains
margins/collateral/base capital/other funds.
(b) Clearing Members:
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They are responsible for settling their obligations as determined by the NSCCL. They have to
make available funds and/or securities in the designated accounts with clearing
bank/depository participant, as the case may be, to meet their obligations on the settlement
day. In the capital market segment, all trading members of the Exchange are required to
become the Clearing Member of the Clearing Corporation.
(c) Custodians:
A custodian is a person who holds for safekeeping the documentary evidence of the title to
property belonging like share certificates, etc. The title to the custodian’s property remains
vested with the original holder, or in their nominee(s), or custodian trustee, as the case may be.
In NSCCL, custodian is a clearing member but not a trading member. He settles trades
assigned to him by trading members. He is required to confirm whether he is going to settle a
particular trade or not. If it is confirmed, the NSCCL assigns that obligation to that custodian
and the custodian is required to settle it on the settlement day. If the custodian rejects the trade,
the obligation is assigned back to the trading / clearing member.
Explanations:
✔ Trade details from Exchange to NSCCL (real-time and end of day trade file).
✔ NSCCL notifies the consummated trade details to CMs/custodians who affirm back.
✔ Based on the affirmation, NSCCL applies multilateral netting and determines
obligations.
✔ Download of obligation and pay-in advice of funds/securities.
✔ Instructions to clearing banks to make funds available by pay-in time.
✔ Instructions to depositories to make securities available by pay-in-time.
✔ Pay-in of securities (NSCCL advises depository to debit pool account of
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✔ custodians/CMs and credit its account and depository does it).
✔ Pay-in of funds (NSCCL advises Clearing Banks to debit account of custodians/CMs
and credit its account and clearing bank does it).
✔ Pay-out of securities (NSCCL advises depository to credit pool account of custodians/
CMs and debit its account and depository does it).
✔ Pay-out of funds (NSCCL advises Clearing Banks to credit account of custodians/ CMs
and debit its account and clearing bank does it).
✔ Depository informs custodians/CMs through DPs.
✔ Clearing Banks inform custodians/CMs.
(d) Clearing Banks:
Clearing banks are a key link between the clearing members and NSCCL for funds settlement.
Every clearing member is required to open a dedicated settlement account with one of the
clearing banks. Based on his obligation as determined through clearing, the clearing member
makes funds available in the clearing account for the pay-in and receives funds in case of a
pay-out. Multiple clearing banks provide advantages of competitive forces, facilitate
introduction of new products viz. working capital funding, anywhere banking facilities, the
option to members to settle funds through a bank, which provides the maximum services
suitable to the member.
The clearing banks are required to provide the following services as a single window to all
clearing members of National Securities Clearing Corporation Ltd. as also to the Clearing
Corporation:
✔ Branch network in cities that cover bulk of the trading cum clearing members
✔ High level automation including electronic funds transfer (EFT) facilities
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✔ Facilities like (a) dedicated branch facilities (b) software to interface with the Clearing
Corporation (c) access to accounts information on a real time basis
✔ Value-added services to members such as free-of-cost funds transfer across centers etc.
✔ Providing working capital funds
✔ Stock lending facilities
✔ Services as Professional Clearing Members
✔ Services as Depository Participants
✔ Other Capital Market related facilities
✔ All other banking facilities like issuing bank guarantees / credit facilities etc.
(e) Depositories:
A depository is an entity where the securities of an investor are held in electronic form. The
person who holds a demat account is a beneficiary owner. In case of a joint account, the
account holders will be beneficiary holders of that joint account. Depositories help in the
settlement of the dematerialised securities. Each custodian/clearing member is required to
maintain a clearing pool account with the depositories. He is required to make available the
required securities in the designated account on settlement day.
The depository runs an electronic file to transfer the securities from accounts of the
custodians/clearing member to that of NSCCL. As per the schedule of allocation of securities
determined by the NSCCL, the depositories transfer the securities on the pay-out day from the
account of the NSCCL to those of members/custodians.
(f) Professional Clearing Member:
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NSCCL admits special category of members namely, professional clearing members.
Professional Clearing Member (PCM) may clear and settle trades executed for their clients
(individuals, institutions etc.). In such an event,the functions and responsibilities of the PCM
would be similar to Custodians.
PCMs may also undertake clearing and settlement responsibility for trading members. In such
a case, the PCM would settle the trades carried out by the trading members connected to them.
The onus for settling the trade would be thus on the PCM and not the trading member.
APCM has no trading rights but has only clearing rights, i.e. he just clears the trades of his
associate trading members and institutional clients.
Risks in Settlement
The following two kinds of risks are inherent in a settlement system:
(1) Counterparty Risk:
This arises if parties do not discharge their obligations fully when due or at any time
thereafter. This has two components, namely replacement cost risk prior to settlement and
principal risk during settlement.
(a) The replacement cost risk arises from the failure of one of the parties to
transaction. While the non-defaulting party tries to replace the original transaction at current
prices, he loses the profit that has accrued on the transaction between the date of original
transaction and date of replacement transaction. The seller/buyer of the security loses this
unrealized profit if the current price is below/above the transaction price. Both parties
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encounter this risk as prices are uncertain. It has been reduced by reducing time gap between
transaction and settlement and by legally binding netting systems.
(b) The principal risk arises if a party discharges his obligations but the
counterparty defaults. The seller/buyer of the security suffers this risk when he delivers/makes
payment, but does not receive payment/delivery.
This risk can be eliminated by delivery vs. payment mechanism which ensures delivery only
against payment. This has been reduced by having a central counterparty (NSCCL) which
becomes the buyer to every seller and the seller to every buyer. A variant of counterparty risk
is liquidity risk which arises if one of the parties to transaction does not settle on the settlement
date, but later.
The seller/buyer who does not receive payment/delivery when due, may have to borrow
funds/securities to complete his payment/delivery obligations.
Another variant is the third party risk which arises if the parties to trade are permitted or
required to use the services of a third party which fails to perform. For example, the failure of
a clearing bank which helps in payment can disrupt settlement.
This risk is reduced by allowing parties to have accounts with multiple banks. Similarly, the
users of custodial services face risk if the concerned custodian becomes insolvent, acts
negligently, etc.
(2) System Risk:
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This comprises of operational, legal and systemic risks. The operational risk arises from
possible operational failures such as errors, fraud, outages etc. The legal risk arises if the laws
or regulations do not support enforcement of settlement obligations or are uncertain. Systemic
risk arises when failure of one of the parties to discharge his obligations leads to failure by
other parties. The domino effect of successive failures can cause a failure of the settlement
system. These risks have been contained by enforcement of an elaborate margining and capital
adequacy standards to secure market integrity, settlement guarantee funds to provide counter-
party guarantee, legal backing for settlement activities and business continuity plan, etc.
Dematerialization and Electronic Transfer of Securities
Traditionally, settlement system on Indian stock exchanges gave rise to settlement risk due to
the time that elapsed before trades were settled by physical movement of certificates. There
were two aspects: First relating to settlement of trade in stock exchanges by delivery of shares
by the seller and payment by the buyer.
The stock exchange aggregated trades over a period of time and carried out net settlement
through the physical delivery of securities. The process of physically moving the securities
from the seller to his broker to Clearing Corporation to the buyer’s broker and finally to the
buyer took time with the risk of delay somewhere along the chain.
The second aspect related to transfer of shares in favour of the purchaser by the issuer. This
system of transfer of ownership was grossly inefficient as every transfer involved the physical
movement of paper securities to the issuer for registration, with the change of ownership being
evidenced by an endorsement on the security certificate. In many cases the process of transfer
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took much longer than the two months as stipulated in the Companies Act, and a significant
proportion of transactions wound up as bad delivery due to faulty compliance of paper work.
Theft, mutilation of certificates and other irregularities were rampant, and in addition the
issuer had the right to refuse the transfer of a security.
Thus the buyer did not get good title of the securities after parting with good money. All this
added to the costs and delays in settlement, restricted liquidity and made investor grievance
redressal time-consuming and at times intractable.
To obviate these problems, the Depositories Act, 1996 was passed to provide for the
establishment of depositories in securities with the objective of ensuring free Transferability of
securities with speed, accuracy and security by
(a) Making securities of public limited companies freely transferable subject to Certain
exceptions;
(b) Dematerializing the securities in the depository mode; and
(c) Providing for maintenance of ownership records in a book entry form.
In order to streamline both the stages of settlement process, the
Depositories Act
Envisages transfer of ownership of securities electronically by book entry without Making the
securities move from person to person. The Act has made the securities Of all public limited
companies freely transferable by restricting the company’s right To use discretion in effecting
the transfer of securities, and dispensing with the Transfer deed and other procedural
requirements under the Companies Act. A depository holds securities in dematerialised form.
It maintains ownership Records of securities and effects transfer of ownership through book
entry. By Fiction of law, it is the registered owner of the securities held with it with the
Limited purpose of effecting transfer of ownership at the behest of the owner.
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The Name of the depository appears in the records of the issuer as registered owner of
Securities. The name of actual owner appears in the records of the depository as Beneficial
owner. The beneficial owner has all the rights and liabilities associated With the securities.
The owner of securities intending to avail of depository services Opens an account with a
depository through a depository participant (DP).
The Securities are transferred from one account to another through book entry only on The
instructions of the beneficial owner. In order to promote dematerialisation of securities, NSE
joined hands with leading Financial institutions to establish the National Securities Depository
Ltd. (NSDL), The first depository in the country, with the objective of enhancing the
efficiency in Settlement systems as also to reduce the menace of fake/forged and stolen
Securities. This has ushered in an era of dematerialised trading and settlement. SEBI has made
dematerialised settlement mandatory in an ever-increasing number Of securities in a phased
manner, thus bringing about an increase in the proportion Of shares delivered in
dematerialised form. There is an increasing preference to Settle trades, particularly in high
value securities in demat form. Such high level of Demat settlement reassures success of
rolling settlement.
CDSL was set up in February, 1999 to provide depository services. All leading Stock
exchanges like the National Stock Exchange, Calcutta Stock Exchange, and Delhi Stock
Exchange, The Stock Exchange, Ahmedabad, etc have established Connectivity with CDSL.
Trading Membership
Stock Brokers
A broker is an intermediary who arranges to buy and sell securities on behalf of Clients (the
buyer and the seller). According to Rule 2 (e) of SEBI (Stock Brokers and Sub-Brokers)
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Rules, 1992, a Stockbroker means a member of a recognized stock exchange. No stockbroker
is Allowed to buy, sell or deal in securities, unless he or she holds a certificate of Registration
granted by SEBI.
A stockbroker applies for registration to SEBI through a stock exchange or stock Exchanges of
which he or she is admitted as a member. SEBI may grant a Certificate to a stock-broker [as
per SEBI (Stock Brokers and Sub-Brokers) Rules, 1992] subject to the conditions that:
✔ He holds the membership of any stock exchange;
✔ He shall abide by the rules, regulations and bye-laws of the stock exchange or Stock
exchanges of which he is a member;
✔ In case of any change in the status and constitution, he shall obtain prior Permission of
SEBI to continue to buy, sell or deal in securities in any stock Exchange;
✔ He shall pay the amount of fees for registration in the prescribed manner; and
✔ He shall take adequate steps for redressal of grievances of the investors within One month
of the date of the receipt of the complaint and keep SEBI Informed about the number,
nature and other particulars of the complaints. While considering the application of an
entity for grant of registration as a stock Broker, SEBI shall take into account the
following namely, whether the stock Broker applicant -
○ Is eligible to be admitted as a member of a stock exchange;
○ Has the necessary infrastructure like adequate office space, equipment and man power
to effectively discharge his activities;
○ Has any past experience in the business of buying, selling or dealing in securities;
○ Is being subjected to any disciplinary proceedings under the rules, regulations and
byelaws of a stock exchange with respect to his business as a stockbroker involving
either himself or any of his partners, directors or employees.
Sub-Brokers
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A Sub-broker is a person who intermediates between investors and stock brokers.
He acts on behalf of a stock-broker as an agent or otherwise for assisting the investors for
buying, selling or dealing in securities through such stock-broker. No sub-broker is allowed to
buy, sell or deal in securities, unless he or she holds a certificate of registration granted by
SEBI. A sub-broker may take the form of a sole proprietorship, a partnership firm or a
company. Stockbrokers of the recognised stock exchanges are permitted to transact with sub-
brokers. Sub-brokers are required to obtain certificate of registration from SEBI .
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CHAPTER-7
DATA ANALISYS AND
INTERPRETATION
SAMPLE SIZE CALCULATION
population 100000
Assume maxmm sample= 500
so, p=700/100000
= 0.007
1-p = 0.993
Conf. interval=0.95/2
So, by the table z=1.96
And error is=5%
So, n= z² pq
e²
n =(1.96)² (0.007) (0.993)

(0.05)²
n = 10.68 = 11.
So, the range of the sample is between 11 to 700, and I have taken my sample as 182
respondants.
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Que1. occupation
Interpretation: most people about 63% are service man, other are business man and other
are 29% who is interested in that which is define by graph.
Que2. INCOME
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Interpretation: there is a 51% havea below 20000 income 33% have amoderate income , and
other have good income and interested in trading
Que:3 A/C BALANCE
Interpretation: the graph depicted most have a high volume in a/c and up to 50000
30%people.and the other have a high volume in 20000-50000 between.
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Que. 4 TRADING
Interpretation: most of are trading daily and most of part trading is not certain which we can
understand that easily by the graph.almost more than half people trading daily.
Que:5 Are you satisfy by the service provide by stock exchange.
Interpretation: graph depict the most are satisfy by the service provide by exchange. And
other have a moderate satisfaction.
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Que:6 Are you getting all right provide by SEBI
Interpretation: by the graph the person who are trading in exchang they are satisfy about
service. and getting allright .
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Que:7 you can get you’re A/C report every week.
Interpretation: the graph depict most person are easily get all report every week.and some
time there isa trouble arise because of system.or may be delay in service.
Que: 8 Are you satisfy the rate wich cut off by your stock exchange.
Interpretation: the graph show most are satisfy and other are moderate.and some are not
satisfy about that.
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Que 9 Are you follow the rules of SEBI such as clear the A/C in 3 month or give bank
statement.
Interpretation: graph show the most of person are follow the rules and regulation. And
provide document as per requirement of exchange.
Que10: Any unfair trade practice you fill any time.
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Inpreation: there is most have a satisfaction about the service and they have a very few
experience about unfair trade practices because of system folt but it can solve by exchange.
Que:11 Are you getting satisfactory answer on your terminal point. And Solve your
querry.
INTERPRETATION: the graph clearly show most are getting good response to point and
solve the querry by help of them.
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Calculation of Hypothesis:- [Ques: 5]
This test is used validly only when there is sample

size is large enough such that n*p> 5 and n*q> 5.
H0: ( Null ) 80 % of the customers are satisfied
H1: ( Alternate ) < 80% of the customers are

satisfied
In this question the sample size is n=182 and

p=0.80
Therefore n*p=145.6 which is greater than 5.
p^= sample proportion
p= population proportion
q= 1-p
One tailed Hypothesis

∴ P^= x/n =128/182 =0.7030
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∴ z = p^-p /pqn =0.7033- 0.8/0.0296 = -3.27

Assumed if error rate is 5% then α=0.05
∴ Z value is: -1.645 (0.5-0.05=0.45)
0.5
-3.27
pNon- 0.5
Rejection -1.645
Area
rejection
= 0.80
Area
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The Observed Value -3.27 is less than tabulated value -1.645.

Therefore the null hypothesis is rejected because the observed value is
less than -1.645 tabulated value.
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CHAPTER:8
Findings
✔ Most of the customers are experienced in stock market
✔ More Customers do daily trading and very few customers trade occasionally
✔ Experience of the customers is helping them to trade
✔ Customers do not invest only in those companies they like but they invest in arious
other companies that give return
✔ Angel Broking gives tips to its clients, tips are given to earn profit and these tips are
rated excellent and good by customers
✔ Customers those who trade on a daily basis short sell to earn profit
✔ Less customers who trade daily take delivery and customers trading occasionally do
take delivery shares and hold them.
✔ The customers those who do not make analysis follow dealers analysis
✔ Customers who do analysis, analyse technical i.e., graphs and more, analysis from
news, and make company analysis.
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SUGGESTIONS
We believe that to be successful in stock trading you would require following certain strict
guidelines, rules and regulations. Sticking to these will certainly be rewarding in the long run
after all it is the discipline thatcan help you make huge profits. Hence spend some time to
understand these guidelines before you enter the share market. We recommend you to
strictly follow these guidelines while trading in stock market.
✔ Trade with stocks that are in news and have a good near term orlong-term prospect.
✔ Trade with stocks with high liquidity means high volume of trade.
✔ Short/long/near term traders don’t need to trade every day.
✔ Always trade with half of the money you have invested. Keep theother half intact to
buy again incase the stock dips.
✔ Always place stop loss orders in the system not in your mind in order to minimize loss.
✔ Keep stoploss relative to your target price.e.g. if you have bought 100 shares of ‘X’ at
a price of RS. 100/- with a stoploss of RS. 90/- (10% stoploss) and a tArget price of
RS. 120 /-. Once the stock reaches to a particular price say 108 change stoploss to 97.
✔ Book profit 50% quantity at first target and change stoploss to near recommended price
for remaining quantity, Remaining 50% you can take decision depending on
momentum of stock, place first target order in advance, some times prices may touch
and govery quickly.
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✔ If you are well informed about the market economics then you canmake profits even if
market is not that promising .
✔ Don't panic even if you've suffered losses as they can turn into profits in long run. Seek
and follow advice from your consultant.
✔ Go with the morning calls.
✔ The best time to trade is morning (9:30 AM-11:00 AM) and evening (2:30PM-3:
30PM).
CONCLUSION
The corporate exposure and learning was done at Angel Broking, mehsana The stock market
has assumed a greater importance over the years. As the stock market has undergone a
considerable change and has evolved over the years.
The electronic age has come to stock market. Nearly 100% of all transactions are executed
through electronic media and online trading system. The advantage of online trading is it
offers seamless and paperless transaction method as you can integrate your banking, broking
and demat accounts and trade without the bother of tracking and settlement cycles. It has also
eliminated the scope for brokers to manipulate the prices.
The investor acquires different sets of assets of financial nature such as gold, silver, real estate
etc. They are making provision for futures. Many times the investor go on acquiring these
assets in ad-hoc and unplanned manner and the result is high risk, low return profit that they
may face.
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ANNEXURE
Questionnaires
About the “trading and work in stock market”
Name :
ID, No:
Contact No :
( TICK MARK (√ ) AS A ANSWER)
1. Occuption :
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service
Business
Other
2..Income : Below 20,000
Between 20,000 to 30,000
Up to 30,000
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3. A/C Balance: Below 20,000
Between 20,000 to 50,000
Up to 50,000
4. Are you trading:
Daily Or not
Not certain
5. Are you satisfy about service which is provide by stock exchange.
Yes No Moderate
6. Are you getting all right provide by SEBI.
YES NO
7. you can get you’re a/c report every week.

YES No
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8. Are you satisfy the rate which is cut off by your stock exchange.
YES NO MODERATE
9. Are you follow the rules of SEBI such as clear the a/c in every 3 month, give
your bank state statement etc.
Yes No moderate
10. Any unfair trade practice you fill any time.
Yes no
11. Are you getting satisfactory answer on your terminal point. And solve your
query.
Yes no moderate
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BIBLIOGRAPHY
Web Side:
WWW.ANGEL BROKING LTD

WWW.CAPITAL MARKET.COM
WWW.STOCK MARKET.COM
WWW.NSEINDIA.COM
WWW.BSEINDIA.COM
WWW.SEBI.GOV.IN
WWW.ECONOMYWATCH.COM
BOOK
FINANCIAL MARKETS INSTITUTIONS AND FINANCIAL SERVICES

BY GOMEZ
FUNDAMENTALS OF THE STOCK MARKET
BY B. O'NEILL WYSS
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Trading and work in Stock

“TRADING AND WORK IN STOCK MARKET”

With reference to Angel Broking ,

A Project Report Submitted in partial Fulfillment of

Student Name:- Signature

This project report helps in following aspects,

✔ Build understanding of central ideas and theories of stock market.

✔ Develop familiarity with the analysis of stock market.

The project is an attempt to trading and work procedure of stock exchanges in

CHAPTERS PARTICULARS PAGE NO.

Chapter-2 Liturature survey 10

Chapter-5 Profile of the 38

Chapter-6 Theory of trading 44

Chapter-7 Data analysis and 59

No. Particulars Page no.

Dependence on Securities Market

OBJECTIVE OF THE STUDAY

The objective of the study was:-

2. To get the brief knowledge of trading system in securities.

4. To gain the knowledge about the market conditions.

5. To learn how to convince the client to buy a Demate at Angel Broking.

1) Formulating research problem:

2) Choice of research design:

3) Determining the sources of data:

4) Data Collection Methods:

These include the Continuous interaction with the staff.

5) Determining the sample design and sample size:

6) Organizing and conducting field survey:

✔ To gain the knowledge about the market conditions.

7) Processing and analyzing the collected data:

8) Preparing the research report:

Research report is defined as written / oral presentation of a research

It is a formal statement & documentation of the process & results of research.

✔ The study was restricted to mehsana City so it is difficult to generalize. The

INTRODUCTION OF CAPITAL MARKET

From the above

OVERVIEW OF THE SECURITIES MARKET

INTRODUCTION OF STOCK MARKET

What is a stock exchange?

Characteristics of Stock Exchanges in India

A depository holds securities in dematerialized form. It maintains ownership records of

Competition and regulatory developments facilitated reduction in custodial charges and

Dematerialization substantially contributed to the increased growth in the turnover.

INTRODUCTION OF BSE & NSE

BOMBAY STOCK EXCHANGE LIMITED (BSE):-

NATIONAL STOCK EXCHANGE OF INDIA LTD .( NSE):-

The NSE represented an attempt to overcome the fragmentation of regional markets by

✔ To meet the current international standards prevalent in the securities

✔ Providing a fair, efficient and transparent securities market to investors using

✔ Meeting the current international standards of securities markets.

1 - Moharram - 4th January 2010 - Monday

PROFILE OF THE ORGANISATION

✔ Angel Broking Ltd.

VISION OF THE COMPANY

PHILOSOPHY OF THE COMPANY

QUALITY ASSURANCE POLICY

✔ Active coverage of political developments, economy changes.

Product and Service

Three Key Products

✔ Going with the brave heart view.

For Portfolio Hedging

✔ Nifty futures and using the beta factor.

AWARD AND ACHIVEMENT