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(Graph 3)
Where one firm looses out to other:-
• Lack of well established branches put smaller brokers at a
disadvantage when compared to larger Brick and Mortar
players who have presence in every corner of the country.
• Bulk of client base is made up of retail investors. Institutional
and other high value high volume investors prefer to trade with
so called blue chip brokers. Retail investors are “easy come
easy go” accompanied with inconsistent trading habits. In Bull
Run they gain confidence to invest but in correction phase they
lose confidence easily.
• High competition among Stock brokers has put significant
pressure on the prices.
• Market consolidation and merger are expected to keep the
broking industry viable in the long run.
• Demanding customers asks for 24/7/365 access to information
and transaction capability. Providing it with minimum overheads
is very challenging especially for newer firms who are yet to
realize margin of scale.
Since then, the country's capital markets have passed through both
good and bad periods. The journey in the 20th century has not been
an easy one. Till the decade of eighties, there was no scale to
measure the ups and downs in the Indian stock market. The Stock
Exchange, Mumbai (BSE) in 1986 came out with a stock index that
subsequently became the barometer of the Indian stock market.
• SENSEX
SENSEX is not only scientifically designed but also based on
globally accepted construction and review methodology. First
compiled in 1986, SENSEX is a basket of 30 constituent stocks
representing a sample of large, liquid and representative
companies. The base year of SENSEX is 1978-79 and the base
value is 100. The index is widely reported in both domestic and
international markets through print as well as electronic media
The index is calculated on the “Free-float Market Capitalization”
methodology. The "Free-float Market Capitalization"
methodology of index construction is regarded as an industry
best practice globally. All major index providers like NIKKEI,
NASDAQ and DOW JONES use the
Which shows the investor is taking the position of Rs. 180000/- in just
Rs. 60000/- in future market which the area of attraction of this
particular market.
These holdings are taken for 1 month, 2 months and three months
according to the investor’s preference. The beauty of this contract is
that the remaining 2/3rd money of the holdings is paid by the broking
house the investors dealing with. Investor coming into this contract
should know that by the time of contract he is in like of 1 or 2 months
investor should clear its position before the last Thursday of the
expiry month.
• OPTIONS – Option is a contract where the investor has two
options to deal with CALL and PUT. The concept of call and put
is opposite to each other call is the contract where the investors
believe that the market is going to be BULLISH in near future
and put option is taken when he thinks that the market is going
to be BEARISH in the future.
In the call option investors is benefited if market drives up in future
and in put will be benefited if it slips down.
• Funds mobilized in primary market rose to Rs 1, 74,143 cr
through 558 issues in 2007-08 against Rs 55,654 cr through
451 issues in 2006-07. Out of this Rs 87,029 cr were raised
through 124 public and right issues against Rs 33,508 cr
through 124 issues in 2006-07. Total of Rs 42,595cr
Stock Exchanges 2
(Derivative Market)
FII 1319
Custodians 15
Depositories 2
Bankers to an Issue 50
Underwriters 35
Mutual Funds 40
Stock Trading:-
Traditionally stock trading is done through stock brokers, personally
or through telephones. As number of people trading in stock market
increase enormously in last few years, some issues like location
constrains, busy phone lines, miss communication etc start growing
in stock broker offices. Information technology (Stock Market
Software) helps stock brokers in solving these problems with Online
Stock Trading.
Online Stock Market Trading is an internet based stock trading
facility. Investor can trade shares through a website without any
manual intervention from Stock Broker.
In this case these Online Stock Trading companies are stock broker
for the investor. They are registered with one or more Stock
Exchanges. Mostly Online Trading Websites in India trades in BSE
and NSE.
Installable software based Stock Trading Terminals.
• This trading environment requires software to be installed on
investor’s computer.
• This software is provided by the stock broker. This software’s
require high speed internet connection. These kind of trading
terminals are use by high volume intraday equity traders.
Advantages:-
• Orders directly send to stock exchanges rather than stock
broker. This makes order execution very fast.
• It provide almost each and every information which is
required to a trader on a single screen including stock
market charts, live data, alerts, stock market news etc.
Disadvantages:-
• Location constrains - You cannot trade if you are not on
the computer where you have installed trading terminal
software.
• It requires high speed internet connection.
• These trading terminals are not easily available for low
volume share traders.
• Web (INTERNET) based trading application
These kind of trading environment doesn't require any
additional software installation. They are like other internet
websites which investor can access from around the world
through normal internet connection.Below are few advantages
and disadvantages of Online Stock Market Trading: