Summer Internship Project

A PROJECT REPORT ON ONLINE TRADING

Prepared by:-Ritesh Kumar

Roll No: 22FMPCHPN01034

MBA Batch: 2022- 2024

Submitted To
The Institute of Chartered Financial Analysts of India

BADDI, HIMACHAL PRADESH

1
 Certificate
This is to Certify that Mr. Ritesh Kumar Student of M.B.A. Batch

2022- 2024, Worked on the topic “Study of Online Trading”

He Completed the Summer Internship Project as per the

Guidelines of The Institute of Financial Analysts of India , Baddi,

Himachal Pradesh.

FACULTY GUIDE
Dr. NISHA CHANANA
(Head of Department)

INSTITUTE ADDRESS:- VVGF+MRF, The ICFAI UNIVERSITY, Kalujhanda, Baddi, Himachal Pradesh 174103
Email : https://www.iuhimachal.edu.in/,

2
Certificate of Completion

3
 Student’s Declaration

I undersigned Ritesh kumar a student of ICFAI MBA 2nd semester, declare that summer
internship project titled “Study on Online Trading” is a result of my own work and my
indebtedness to other work publications, references, if any, have been duly
acknowledged. If I found guilty of copying any other report or published information and
showing as my original work, I understand that I shall be liable and punishable by
Institute or University, which may include ‘Fail’ in examination, ‘Repeat study & re-
submission of the report’ or any other punishment that Institute or University may decide.

RITESH KUMAR
Roll Number: 22FMPCHPN01034 Signature

4
 ACKNOWLEDGEMENT

One of the most pleasant aspects of writing an acknowledgement is the

opportunity to thank all those who have contributed to it. Unfortunately, the
list of expression of gratitude no matter how extensive- is always incomplete
and inadequate. This acknowledgement is no exception.

I would, at the very onset, like to thank Mr. Varun Verma, Motilal Oswal
Financial Services for providing me the opportunity to perform my Summer
Internship Project in the Company. I would like to give special thanks and
gratitude to monitoring and provide necessary data and information as a
when required throughout the project.

I also wish to express my sincere gratitude to Under super vision of Dr.

NISHA CHANANA THE INSTITUTE OF CHARTERED FINANCIAL
ANALYSTS OF INDIA,
BADDI HIMACHAL PRADESH, for giving me an opportunity to do the
project and providing me all support and guidance which made me complete
the project on time. I am extremely grateful to her for providing such a nice
support and guidance. Because of her inspiring guidance, motivation, positive
criticism, continuous encouragement and untiring supervision this work could
be brought to its present shape

I would like to thank all of them who in one way or the other have helped me.

RITESH KUMAR

Roll No.-22FMPCHPN01034
5
 TABLE OF CONTENTS

S.No. Title Page No.

1. List of Tables 5

2. List of Graph/Charts 7

3. Executive Summary 8

PART-1

4. Company Profile 10

PART-2

5. Introduction to the project (In Online Trading in Stock Market) 27

6. Review of Literature 43

7. Objectives of Study 58

8. Research Methodology 60

10. Data Analysis & Interpretation 63

11. Findings 83

12. Conclusion 85

13. Recommendation 87

14. Limitations of the Study 89

15. Bibliography 91

16. Annexure 94

6
 LIST OF TABLES
S.No Title Page No.
.
1. Type Of Demat Account Terminal 13

2. Brokerage Structure 14

3. Investment 14

4. Comparative Analysis of Cash Market Market and 39

Segment on NSE Derivatives

5. Table -5 65

6. Table -6 66

7. Table -7 67

8. Table -8 68

9. Table -9 69

10. Table -10 70

11. Table -11 71

12. Table -12 72

13. Table -13 73

14. Table -14 74

15. Table -15 75

16. Table -16 76

17. Table -17 77

18. Table -18 78

19. Table -19 79

20. Table -20 80

21. Table -21 81

7
 LIST OF GRAPHS/CHARTS
S.No. Title Page No.

1. Products And Service Of Motilal Oswal Financial Services 25

2. Figure -1 66

3. Figure -2 67

4. Figure -3 68

5. Figure -4 69

6. Figure -5 70

7. Figure -6 71

8. Figure -7 72

9. Figure -8 73

10. Figure -9 74

11. Figure -10 75

12. Figure -11 76

13. Figure -12 77

14. Figure -13 78

15. Figure -14 79

16. Figure -15 80

17. Figure -16 81

18. Figure -17 82

8
 Executive Summary
This project is based on “STUDY ON ONLINE TRADING” at Motilal Oswal
Financial Services. Further, this Project includes review of literature & the
introduction of the company wherein this project tells about the profile of Motilal
Oswal Financial Services, Situation Review wherein it has been shown SWOT
analysis of company, financial analysis of company and finally Learning’s &
Findings.

Motilal Oswal Financial Services Basically work to educate and empower the
individual investor to make better investment decisions through quality advice and
superior service. Motilal Oswal Financial Services is a depository participant. This
means that the shares are kept in dematerialized form in Motilal Oswal Financial
Services.

RITESH KUMAR

9
PART-1

10
COMPANY

PROFILE

11
 COMPANY PROFILE

Name of the company:- Motilal Oswal Financial Services ltd.

Year of Establishment:- 1988

Vision:-

To be the best retail brokering Brand in the retail business of stock

market

Mission:-

To educate and empower the individual investor to make better

investment decisions through quality advice and superior service

Motilal Oswal Financial Services is infact :-

• Among the top 3 branded retail service providers.

• Best player in online business.

• Largest network of branded broking outlets in the country serving

more than 8,00,000 clients.

12
.

Motilal Oswal Financial Services First Step

The Motilal Oswal Financial Services First Step is a brand new program designed
especially for those who are new to investing in shares. All one have to do is open
a Motilal Oswal Financial Services First Step account and they guide us through
the investing process.

Demat Account:-

Motilal Oswal Financial Services is a depository participant. This means that

we can keep the shares in dematerialized form in Motilal Oswal Financial
Services. But for this one has to the demat account in Motilal Oswal
Financial Services. Dematerialization is the process by which a client can get
physical certificates converted into electronic balances maintained in his
account with the DP.
In Motilal Oswal Financial Services, under demat account there are two types
of terminals:-

TABLE: 1
TYPE OF DEMAT DEPOSIT (Refundable) CHARGES (non

ACCOUNT TERMINAL refundable)

CLASSIC Rs.5000 Rs.250

Rs.10000 Nil

TRADESUM Rs.5000 Rs.500

Rs.10000/25000 Nil

13
Account opening:-

 Opening a DP account with Motilal Oswal Financial Services -

• One can open a Depository Participant (DP) account, either through a Motilal

Oswal Financial Services branch or through a Motilal Oswal Financial Services

Franchisee centre.

• There is no fee for opening DP accounts with Motilal Oswal Financial Services.

However a nominal deposit (refundable) is charged towards services which will be

adjusted against all future billings.

• All investors have to submit their proof of identity and proof of address along with

the prescribed account opening form.

BROKERAGE STRUCTURE OF MOTILAL OSWAL FINANCIAL

SERVICES

BROKERAGE:-

TABLE: 2

INTRADAY DELIVERY

CASH- EQUITIES 0.03% 0.3%

F&O 0.03%

PREPAID SCHEME 0.025% 0.25%

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MINIMUM INVESTMENT IN MUTUAL FUND:-

TABLE: 3

INVESTMENT MINIMUM AMOUNT

Mutual Fund (Any Company) 5000

Systematic Investment (Any 500

Plan Company)

15
 PROCESS OF ACCOUNT OPENING

LEAD MANAGEMENT SYSTEM (LMS) /

REFERENCES

CONTACT

TELEPHONE AND PRESONAL VISIT

APPOINTMENT

DEMONSTRATION

AGREE DISAGREE (CLOSE)

DOCUMANTATION
FILLING THE FORM

SUBMISSION THE FORM

LOGIN OF THE FORM

SENDING THE ACCOUNT OPENING KIT TO THE CUSTOMER

FOR TRADING

16
MOTILAL OSWAL FINANCIAL SERVICES has tie up
with the following banks:-

• HDFC

• Axis Bank

• IDBI

• Citi Bank

• Indus land Bank

• Union Bank

• ICICI Bank

CUSTOMER OF MOTILAL OSWAL FINANCIAL

SERVICES

• Business class people (high class)

• High Net worth Individuals

• Service class people

• Government Employees

• Young Adults (19-30 yrs.)

• Adults (35-50 yrs.)

• HUF (Hindu Undivided Family)

17
 • Women (literate and working)

Market Share:-

Motilal Oswal Financial Services enjoyed about 20 per cent market

share in Web business (Internet trading) in stock markets. Three
years ago, Web trading showed lot of promise but with the market
witnessing a downturn, there was not much interest among retail
customers.
Profits :-

The share of Web trading constituted 22 per cent of the revenue. As

Motilal Oswal Financial

Services 's daily trading volume was over Rs 200 crore, the share of
Web trading at about

Rs 40 crore a day was substantial and a larger part of the volume was
coming from day traders

Its core services are:-

• Equities, and Derivatives trading on the National Stock

Exchange of India Ltd.
(NSE), and Bombay Stock Exchange Ltd. (BSE),

• Commodities trading on National Commodity and Derivatives

Exchange India
(NCDEX) and Multi Commodity Exchange of India Ltd.
(MCX),

• Depository services,

• Online trading services,

18
 • IPO Services,

• Dial-n-Trade

• Portfolio management services,

• Fundamental and Technical Research services,

• In addition to this they also provide advisory services and

distributions for mutual funds.

• Motilal Oswal Financial Services Value Line (a monthly

publication with reviews of recommendations, stocks to watch

out for etc.)

Documents Required :

 3 photographs ( signed across)

 Photo Identification Proof - any of the following - Voter

ID/Driving License/Passport.

Address Proof any of the following - Voter ID/Driving License/

Passport/ Bank statement or A crossed Cheque favouring “Motilal
Oswal Financial Services Ltd”. Of the required amount. The
amount for Demat as well apass book sealed and attestation by bank
official/ BSNL landline bill.

19
  trading will be Rs. 300/-(free Demat +300 Trading Account)

the minimum amount being Rs. 1000 a cheque can be given for

a larger amount.

 Copy of PAN Card is mandatory.

 Registration Kit

 Bank and address proof declaration.

 PAN name discrepancy form.

These documents may not be consumer friendly but it is to avoid

illegal transaction and to prevent black money this ensures that

money invested is accounted.

Features of Trading With Motilal Oswal Financial Services:-

• Freedom from paperwork

• Instant credit and money transfer

• Trade from any net enabled PC

• After hour orders

• Online orders on the phone

• Timely advice and-research reports

• Real-time Portfolio tracking

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 COMPETITORS OF MOTILAL OSWAL FINANCIAL SERVICES
LTD

Indian bulls Securities

Indian bulls is an Indian group with its headquarters in Mumbai. It has presence in

sectors ranging from Real Estate, Infrastructure, Housing Finance, and Securities India

bulls Group has several companies with presence in Housing Finance, Real Estate,

Securities. All the group companies are listed on the Bombay Stock Exchange, and the

National Stock Exchange. The combined market capitalization of these companies is

15,443 Crore. India bulls was conferred the status of a Business Super brand by The

Brand Council, Super brands India in 2008.

Share khan Limited

Share khan is an online website portal for online trading, investments and stock

marketing. The company was founded in February 2000 by entrepreneur Shripal

Morakhia. Share khan is ranked 2nd largest stock broker portal and has its branches in

575 cities in India.

Angel Broking Limited

Angel Broking is an Indian Stock Broking firm established in 1987. The company is a

member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE),

National Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity

Exchange of India
21
 Limited (MCX). It is a depository participant with Central Depository Services Limited

(CDSL). The company has 8500+ sub-brokers and franchisee outlets in more than 850

cities across India.

The company Angel Broking provides financial services to retail clients. Their services

include online stock broking, depository services, and commodity trading and investment

advisory services. Wealth management solutions such as personal loans and insurance are

also delivered by this company. In 2006, the company started its Portfolio Management

Services (PMS), IPOs business and Mutual Funds Distribution (MFD) arm. The company

publishes research reports on areas related to investment broking.

Kotak Securities Limited

Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and

distribution arm of the Kotak Mahindra Group. One of the oldest broking houses in India,

its operations include stock broking and distribution of various financial products. It is a

corporate member of both the Bombay Stock Exchange and the National Stock Exchange

of India. Kotak Securities was founded in 1994 and is headquartered in Mumbai, India. In

2014, Kotak Securities was ranked as number 1 in India's Institutional Investor rankings

by weighted average. Kotak Securities is well known with professional traders for its

comprehensive online trading portal offerings.

India Info line Services

FL was co-founded on Oer 17, 1995 by Nirmal Jain and R. Venkatraman. Jain was

previously employed with Hindustan Lever Limited. The company was founded as

Probity Research and Services Private Limited which provided research on the Indian

economy, businesses and corporates. The name was later changed to India Info line

Limited.
22
 A few years into the business, the organization found itself with clients which included

research organizations, banks and corporates. They then began launching their research

products to become more noticeable in the market. In the meanwhile, the dotcom

revolution was beginning to take place in India. Taking advantage of this revolution

would mean an increase in the number of readers to millions. The website was created in

1999.

5 PAISA.COM

Taking the business one step ahead this group of consultants opened a trading portal –

www.5paisa.com –in 2000 thus moved into the business of being a full service broking

agency.

During this time they widened their distribution network.

In 2001, the Indian dotcom industry saw a downfall. During this time, sustaining became
tough.

The organization then decided to tie-up with leading Life Insurance company ICICI

Prudential, thus putting to use its distribution network and becoming India’s first

corporate

agent for
insurance.
SWOT ANALYSIS

Strengths

• It is a pioneer in online trading with a turn over of Rs.250 crores and more than 110

peoples working in the organization

• Motilal Oswal Financial Services has more than eight decades of trust and

credibility in the Indian stock market.

• Motilal Oswal Financial Services provides multi-channel access to all its customers

through a strong online presence with www.sharekhan.com, 250 share shops in

130cities and a call-centre based Dial-n-Trade facility

23
 • Motilal Oswal Financial Services has dedicated research teams for fundamental and
technical research.

Which constantly track the pulse of the market and provide timely investment

advice free of cost to its clients which has a strike rate of 70-80%

• Easier access to the customer due to largest ground network of 280 branded share

shops in 120 cities

• Efficient research and analysis team, which is, interpreting the economy and

company’s performance accurately, is enhancing the profitability of the client

Weakness

• Localized presence due to insufficient investments for country wide Expansion

• Lack of awareness among customers because of non-aggressive promotional

strategies (print media, newspapers, etc)

• Lesser emphasis on customer retention

• Focuses more on HNIs than retail investors which results in meager market- Share

as compared to close competitors

• Promotional activities conducted by the company are not at par with the other Firms

Opportunities

• With the booming capital market it can successfully launch new services and raise

its client’s base

• It can easily tap the retail investors with small saving through promotional Channels

like print media, electronic media, etc.

• As interest on fixed deposits with post office and banks are all time low, more and

more small investors are entering into stock market.

24
 • Abolition of long term capital gain tax on shares and reduction in short term capital

gain is making stock market as hot destination for investment among small

investors.

• Increasing usage of internet through broadband connectivity may boost a whole

new breed of investors for trading in securities

Threats:-

• Aggressive promotional strategies by close competitors

may hamper

Motilal Oswal Financial Services acceptance by new clients.

• Lack of sufficient branch-offices for speedy delivery of services.

• Other players are providing margin funds to investors on easy terms where as

there is no such facility in Motilal Oswal Financial Services

• More and more players are venturing into this domain which can further

reduce the earnings of Motilal Oswal Financial Services

• Availability of Unit Linked Insurance Policies (ULIP’s) and mutual funds in

the market.

Behind the Picture: Why Motilal Oswal Financial Services?

The underlying picture forming answer for above question is given below.
25
 PRODUCTS AND SERVICES OF MOTILAL OSWAL FINANCIAL
SERVICES :

FIGURE:-

26
PART-2

27
INTRODUCTION

28
 INTRODUCTION

CONSUMER BEHAVIOUR:

Consumer behaviour is the study of individuals, groups, or organizations and the

processes they use to select, secure, use, and dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these processes have on the consumer and
society.

Customer behaviour study is based on consumer buying behaviour, with the customer
playing the three distinct roles of user, payer and buyer. Research has shown that
consumer behaviour is difficult to predict, even for experts in the field.

Overview of Online Trading

Stocks:-
The stock or capital stock of a business entity represents the original capital paid into or
invested in the business by its founders. It serves as a security for the creditors of a
business since it cannot be withdrawn to the detriment of the creditors. Stock is distinct
from the property and the assets of a business which may fluctuate in quantity and value.
Buying a stock for the long term means that you want to own part of a company and you
think that in the future the company will be profitable. If you buy stock in a company and
the company performs well, the stock's price should rise. If the company fails, then the
stock should fail you, too and go down. The stock exchanges actually compete with each
other for these listings, since companies that attract more trading make more money for
the stock exchange that listed it. Company stocks are assigned a "ticker" or trading
symbol by the listing exchange. You may notice some well-chosen tickers that are easy to
remember, like "DNA" for the company Genentech, a biotechnology firm. Or some
companies' ticker is the same as its name, Nike for example

29
Stock market

A stock market or equity market is a public market (a loose network of economic

transactions, not a physical facility or discrete entity) for the trading of company stock
and derivatives at an agreed price; these are securities listed on a stock exchange as well
as those only traded privately. The size of the world stock market was estimated at about
$36.6 trillion US at the beginning of October 2008. The total world derivatives market has
been estimated at about $791 trillion face or nominal value, 11 times the size of the entire
world economy. The value of the derivatives market, because it is stated in terms of
notional values, cannot be directly compared to a stock or a fixed income security, which
traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel'
each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable
derivative 'bet' on the event not occurring). Many such relatively illiquid securities are
valued as marked to model, rather than an actual market price. The stocks are listed and
traded on stock exchanges which are entities of a corporation or mutual organization
specialized in the business of bringing buyers and sellers of the organizations to a listing
of stocks and securities together. The largest stock market in the United States, by market
cap is the New York Stock Exchange, NYSE, while in Canada, it is the Toronto Stock
Exchange.

Trading

Historically, stock markets were physical locations where buyers and sellers met and
negotiated. With the improvement in communications technology in the late 20th century,
the need for a physical location became less important, as traders could transact from
remote locations. Participants in the stock market range from small individual stock
investors to large hedge fund traders, who can be based anywhere. Their orders usually
end up with a professional at a stock exchange, who executes the order. Some exchanges
are physical locations where transactions are carried out on a trading floor, by a method
known as open outcry. This type of auction is used in stock exchanges and commodity
exchanges where traders may enter "verbal" bids and offers simultaneously. The

other type of stock exchange is a virtual kind, composed of a network of computers

where trades are made electronically via traders. The shares of a company may in general
be transferred from shareholders to other parties by sale or other mechanisms, unless
prohibited. Most
30
 jurisdictions have established laws and regulations governing such transfers, particularly
if the issuer is a publicly-traded entity
The desire of stockholders to trade their shares has led to the establishment of stock
exchanges. A stock exchange is an organization that provides a marketplace for trading
shares and other derivatives and financial products. Today, investors are usually
represented by stock brokers who buy and sell shares of a wide range of companies on the
exchanges. A company may list its shares on an exchange by meeting and maintaining the
listing requirements of a particular stock exchange. Actual trades are based on an auction
market model where a potential buyer bids a specific price for a stock and a potential
seller asks a specific price for the stock. (Buying or selling at
market means you will accept any ask price or bid price for the stock, respectively.) When
the bid and ask prices match, a sale takes place, on a first-come-first-served basis if there
are multiple bidders or askers at a given price. The purpose of a stock exchange is to
facilitate the exchange of securities between buyers and sellers, thus providing a
marketplace (virtual or real). The exchanges provide real-time trading information on the
listed securities, facilitating price discovery

History

The two main stock markets of India are:-

• Bombay stock exchange(BSE)

• National Stock Exchange(NSE)

31
Bombay Stock Exchange(BSE):-

Established in 1875, BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's
first & fastest Stock Exchange with the speed of 200 micro seconds and one of India's
leading exchange groups. Over the past 140 years, BSE has facilitated the growth of the
Indian corporate sector by providing it an efficient capital-raising platform. Popularly
known as BSE, the bourse was established as "The Native Share & Stock Brokers'
Association" in 1875. BSE is a corporatized and demutualised entity, with a broad
shareholder-base which includes two leading global exchanges, Deutsche Bourse and
Singapore Exchange as strategic partners. BSE provides an efficient and transparent
market for trading in equity, debt instruments, derivatives, mutual funds. It also has a
platform for trading in equities of small-and-medium enterprises
(SME).
More than 5500 companies are listed on BSE making it world's No. 1 exchange in terms
of listed members. The companies listed on BSE command a total market capitalization
of USD 1.68 Trillion as of March 2015. It is also one of the world's leading exchanges
(5th largest in March 2015) for Index options trading (Source: World Federation of
Exchanges).

BSE also provides a host of other services to capital market participants including risk
management, clearing, settlement, market data services and education. It has a global
reach with customers around the world and a nation-wide presence. BSE systems and
processes are designed to safeguard market integrity, drive the growth of the Indian
capital market and stimulate innovation and competition across all market segments. BSE
is the first exchange in
India and second in the world to obtain an ISO 9001:2000 certification. It is also the first

Exchange in the country and second in the world to receive Information Security
Management System Standard BS 7799-2-2002 certification for its On-Line trading
System (BOLT). It operates one of the most respected capital market educational
institutes in the country (the
BSE Institute Ltd.). BSE also provides depository services through its Central Depository
Services Ltd.(CDSL)arm.
32
 BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked
stock market benchmark index. It is traded internationally on the EUREX as well as
leading exchanges of the BRCS nations (Brazil, Russia, China and South Africa).
BSE has won several awards and recognitions that acknowledge the work done and
progress made like India Innovation Award for the Big Data implementation , ICICI
Lombard & ET Now Risk Management BFSI Company 2013, SKOCH Order of Merit
Certificate was awarded to BSE for E -Boss for qualifying amongst India's Best 2013,

The Golden Peacock Global CSR Award for its initiatives in Corporate Social
Responsibility, NASSCOM - CNBC-TV18's IT User Awards, 2010 in Financial Services
category, Skoch Virtual Corporation 2010 Award in the BSE STAR MF category and
Responsibility Award (CSR) by the World Council of Corporate Governance. Its recent
milestones include the launching of BRICSMART indices derivatives, BSE-SME
Exchange platform, S&P BSE GREENEX to promote investme nts in Green

Introduction to BSE:-
Bombay Stock Exchange is the oldest stock exchange not only in India but in entire Asia.
Its history is synonymous with that of the Indian Share Market history. BSE started
functioning with the name, The Native Share and Stock Broker's Association in 1875. It
got Government of India's recognition as a stock exchange in 1956 under Securities
Contracts (Regulation) Act, 1956. At the time of its origin it was an Association of
Persons but now it has been transformed to a corporate and demutualized entity. BSE is
spread all over India and is present in 417 towns and cities. The total number of
companies listed in BSE is around 3500.The main index of BSE is called BSE SENSEX
or simply SENSEX. It is composed of 30 financially sound company stocks, which are
liable to be reviewed and modified from time-totime.

Launch of Other BSE Indices

• The launch of SENSEX in 1986 was later followed up in January 1989 by

introduction of BSE National Index (Base: 1983-84 = 100).

33
 • The BSE National Index was renamed as BSE-100 Index from October 14, 1996
and since then it is calculated taking into consideration only the prices of stocks listed at
BSE.
• The Exchange launched dollar-linked version of BSE-100 index i.e. Dollex-100 on
May 22, 2006.
• The Exchange constructed and launched on 27th May, 1994, two new index series
viz., the 'BSE-200' and the 'DOLLEX-200' indices.
• The launch of BSE-200 Index in 1994 was followed by the launch of BSE-500
Index and 5 sector alindices in 1999. In 2001, BSE launched the BSE-PSU Index,
DOLLEX-30 and the country's first free-float based index - the BSE TECK Index. The
Exchange shifted all its indices to a free-float methodology (except BSE PSU index) in a
phased manner.

National Stock Exchange(NSE):-

The National Stock Exchange (NSE) is India's leading stock exchange

covering various cities and towns across the country. NSE was set up by
leading institutions to provide a modern, fully automated screen-based
trading system with national reach. The Exchange has brought about
unparalleled transparency, speed & efficiency, safety and market integrity.
NSE has played a catalytic role in reforming the Indian securities market in
terms of microstructure, market practices and trading volumes.

The market today uses state-of-art information technology to provide an

efficient and transparent trading, clearing and settlement mechanism, and has
witnessed several innovations in products & services viz. demutualization of
stock exchange governance, screen based trading, compression of settlement
cycles, dematerialization and electronic transfer of securities, securities
lending and borrowing, professionalization of trading members, fine-tuned
risk management systems, emergence of clearing corporations to assume
counterparty risks, market of debt and derivative instruments and intensive
use of information technology

Introduction to NSE:-

National Stock Exchange (NSE) founded although late than BSE, is currently the leading
stock exchange in India in terms of total volume traded. It is also based in Mumbai but
has its presence in over 1500 towns and cities. In terms of market capitalization, NSE is
the

34
 second largest bourse in South Asia. National Stock Exchange got its recognition as a
stock exchange in July 1993 under Securities Contracts (Regulation) Act, 1956. The
products that can be traded in NSE are: -
• Equity or Share

• Futures (both index and stock)

• Options (Call and Put)

• Wholesale Debt Market

• Retail Debt Market

NSE's leading index is Nifty 50 or popularly Nifty and is composed of 50 diversified

benchmark Indian company stocks. Nifty is constructed on the basis of weighted average
market capitalization method.

NSE's mission is setting the agenda for change in the securities markets in India.

The NSE was set-up with the following objectives:

• 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.

• Meeting the current international standards of securities markets.

REGULATORS OF SECURITIES MARKET:-

The responsibility for regulating the securities market is shared by Department of Economic

Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India (RBI) and
Securities and Exchange Board of India (SEBI).

35
Securities and Exchange Board of India (SEBI):-

SEBI or Securities and Exchange Board of India is entitled to protect the

investors' interests, regulate and develop securities market in India. The
Securities and Exchange Board of India (SEBI) is the regulatory authority in
India established under Section 3 of SEBI Act, 1992. SEBI Act, 1992
provides for establishment of Securities and Exchange Board of India (SEBI)
with statutory powers for (a) protecting the interests of investors insecurities
(b) promoting the development of the securities market and (c) regulating the
securities market. Its regulatory jurisdiction extends over corporates in the
issuance of capital and transfer of securities, in addition to all intermediaries
and persons associated
with securities market. It passes laws for streamlining the Indian share
market for efficient outcomes.

Role of SEBI:-

SEBI has been obligated to perform the aforesaid functions by such measures
as it

Thinks fit. In particular, it has powers for:-

• Regulating the business in stock exchanges and any other securities markets

• Registering and regulating the working of stock brokers, sub–brokers etc.

• Promoting and regulating self-regulatory organizations

• Prohibiting fraudulent and unfair trade practices

• Calling for information from, undertaking inspection, conducting inquiries and audits

of the stock exchanges, intermediaries, self –regulatory organizations, mutual funds

and other persons associated with the securities market.

36
Security Measures and Operational Features of BSE and NSE :

The leading stock exchanges in India have developed itself to a large extent since its
emergence. These stock exchanges aim at offering the investors and traders better
transparency, genuine settlement cycle, honest transaction and to reduce and solve
investor grievances. The aim to describe these operational features is for better
understanding of the working of stock exchanges. This is done for the purpose of easy
understanding from the reader‘s point of view.

DERIVATIVES:

Derivatives are assets, which derive their values from an underlying asset. These

underlying assets are of various categories like:

• Commodities including grains, coffee beans, etc.

• Precious metals like gold and silver.

• Foreign exchange rate.

• Bonds of different types, including medium to long-term negotiable debt securities

issued by governments, companies, etc.

• Short-term debt securities such as T-bills.

• Over-The-Counter (OTC) money market products such as loans or deposits.

• Equities

For example, a dollar forward is a derivative contract, which gives the buyer
a right & an obligation to buy dollars at some future date. The prices of the
derivatives are driven by the spot prices of these underlying assets.
However, the most important use of derivatives is in transferring market risk,
called Hedging, which is a protection against losses resulting from
unforeseen
37
price or volatility changes. Thus, derivatives are a very important tool of risk
management.
There are various derivative products traded. They are;

• Forwards

• Futures

• Options

• Swaps

38
 MARKETING STRATEGY OF MOTILAL OSWAL
FINANCIAL SERVICES

Market Positioning:-

Market positioning statements of Motilal Oswal Financial Services are “ same level of
personal attention, respect and support each time”

So, Motilal Oswal Financial Services focus on the consumers who prefer almost all
investment activities at same place by providing number of various financial services. At
Motilal Oswal Financial Services a person can purchase or sell shares, debentures etc. and
at the same place also demat it. Motilal Oswal Financial Services also provides other
investment option to the same person at same place like Mutual Fund, , Fixed Deposit,
and Bonds etc. and help the person in designing his portfolio. By this way Motilal Oswal
Financial Services provides comfort to its customers.

Target Market:-

Motilal Oswal Financial Services uses demographic segmentation strategy and segment
people based on their occupation. Karvy uses selective specialization strategy for market
targeting.
Target person for the Sumpoorn are persons who can work as sub-broker for the
companies. Companies focus on Advisors of Insurance and post office, Tax consultants
and CAs for making sub-broker.

Marketing channel System:-

Motilal Oswal Financial Services uses one level marketing channel for investment product
distribution. Sub- brokers work as intermediary between consumer and company.
Company has both forward and backward flow of activity through channel. Company

40
 distributes stationery, brokerage, and information forward to its sub-broker. The
sub-brokers send filled forms, queries, amount of investment etc. back to the
company

PROJECT Channel Members: -

Motilal Oswal Financial Services provides PROJECT to the sub-brokers because they
will be viewed as the company by the investors. The executives of Motilal Oswal
Financial Services explain various new schemes of investment to the sub-brokers with its
objective, risk factors and expected return. Company also periodically arrange seminar to
guide sub- brokers.

Advertising and Promotion:-

The objective of advertising of Motilal Oswal Financial Services is to

create awareness about services of Motilal Oswal Financial Services
among investors and sub-brokers and increase sub-brokers of Motilal
Oswal Financial Services.

Company doesn’t give advertisement in media like TV, Newspapers, and

Magazines etc. Motilal Oswal Financial Services’s advertisement is made
indirectly by the companies associate with it.

Quality Objectives of Motilal Oswal Financial Services:

• Build in-house processes that will ensure transparent and harmonious relationships

with its clients and investors to provide high quality of services.

• Establish a partner relationship with its investor service agents and vendors that
will help in keeping up its commitments to the customers.

41
REVIEW OF

LITERATURE
 REVIEW OF LITERATURE
Charles (1999) has analysed that the astonishing growth in Americans'
stock portfolios in the 1990s has been a major force behind the growth of
consumer spending. This article reviews the relationship between stock
market movements and consumption. Using various econometric techniques
and specifications, the authors find that the propensity to consume out of
aggregate household wealth has exhibited instability over the postwar period.
They also show that the dynamic response of consumption growth to an
unexpected change in wealth is extremely short-lived, implying that
forecasts of consumption growth one or more quarters ahead are not
typically improved by accounting for changes in existing wealth.

Bhardwaj (2003) has stated the literature on globalization, He found the

pervasiveness of the west’s perception of the world affect on Indian investors
that affects the trends in investor’s choice. They are hugely affected by the
west’s views and so changes in Indian trends occur.

Ranganathan (2003), has stated the investor behavior from the marketing
world and financial economics has brought together to the surface an
exciting area for study and research: behavioral finance. The realization that
this is a serious subject is, however, barely dawning. Analysts seem to treat
financial markets as an aggregate of statistical observations, technical and
fundamental analysis. A rich view of research waits this sophisticated
understanding of how financial markets are also affected by the ‘financial
behavior’ of investors. With the reforms of industrial policy, public sector,
financial sector and the many developments in the Indian money market and
capital market,

43
mutual funds that has become an important portal for the small investors, is
also influenced by their financial behavior. Hence, this study has made an
attempt to examine the related aspects of the fund selection behavior of
individual investors towards Mutual funds, in the city of Mumbai. From the
researchers and academicians point of view, such a study will help in
developing and expanding knowledge in this field.

Shrotriya (2003) conducted a survey on investor preferences in which he

depicted the linkage of investment with the factor so considered while
making investment. He says “There are various factors and their linkage
also. These factors help us how to ensure safety, liquidity, capital
appreciation and tax benefits along with returns.”

Dijk (2007) has conducted 25 years of research on the size effect in

international equity returns. Since Banz's (1981) original study, numerous
papers have appeared on the empirical regularity that small firms have higher
risk-adjusted stock returns than large firms. A quarter of a century after its
discovery, the outlook for the size effect seems bleak. Yet, empirical asset
pricing models that incorporate a factor portfolio mimicking underlying
economic risks proxied by firm size are increasingly used by both academics
and practitioners. Applications range from event studies and mutual fund
performance measurement to computing the cost of equity capital. The aim
of this paper is to review the literature on the size effect and synthesize the
extensive debate on the validity and persistence of the size effect as an
empirical phenomenon as well as the theoretical explanations for the effect.
We discuss the implications for academic research and corporate finance and
suggest a number of avenues for further research.
Vasudev (2007) analysed the developments in the capital markets and
corporate governance in India since the early 1990s when the government of
44
India adopted the economic liberalization programme. The legislative
changes significantly altered the theme of Indian Companies Act 1956,
which is based on the Companies Act 1948 (UK). The amendments, such as
the permission for nonvoting shares and buybacks, carried the statute away
from the earlier “business model” and towards the 'financial model' of the
Delaware variety. Simultaneously, the government established the Securities
Exchange Board of India (SEBI), patterned on the Securities and Exchange
Commission of US. Through a number of other policy measures, the
government steered greater investments in the stock market and promoted
the stock market as a central institution in the society. The article points out
that the reform effort was inspired, at least in part, by the government’s
reliance on foreign portfolio inflows into the Indian stock market to fund the
country’s trade and current account deficits.

Johnson (2008) has stated that Product quality is probably under-valued by

firms because there is little consensus about appropriate measures and

methods to research quality. The authors suggest that published ratings of a
product's quality are a valid source of quality information with important
strategic and financial impact. The authors test this thesis by an event
analysis of abnormal returns to stock prices of firms whose new products are
evaluated in the Wall Street Journal. Quality has a strong immediate effect
on abnormal returns, which is substantially higher than that for other
marketing events assessed in prior studies. In dollar terms, these returns
translate into an average gain of $500 million for firms that got good
reviews and an average loss of
$200 million for firms that got bad reviews. Moreover, there are some
important asymmetries.
Rewards to small firms with good reviews of quality are greater than those to
large firms with good reviews. On the other hand, large firms are penalized

45
more by poor reviews of quality than they are rewarded for good reviews.
The authors discuss the research, managerial, investing, and policy
implications.

Patnaik and shah (2008) has analysed on the preferences of foreign and domestic
institutional investors in Indian stock markets. Foreign and domestic institutional
investors both prefer larger, widely dispersed firms and do not chase returns. However,
we and evidence of strong differences in the behavior of foreign and domestic
institutional investors.

Bhatnagar (2009) has analysed of Corporate Governance and external finance in

transition economies like India. The problem in the Indian corporate sector is that of
disciplining the dominant shareholder and protecting the minority shareholders. Clearly,
the problem of corporate governance abuses by the dominant shareholder can be solved
only by forces outside the company itself particularly that of multilateral financial
institutions in the economic development. India has relied heavily on external finance as
their domestic saving rates have been much lower than their investment rates. The less
promising prospects for the global supply of external finance the need for an increase in
the multilateral financial institutions. India being a transition economy is changing from a
centrally planned economy to a free market. It is undergoing economic liberalization,
macroeconomic stabilization where immediate high inflation is brought under control,
and restructuring and privatization in order to create a financial sector and move from
public to private ownership of resources. These changes often may lead to increased
inequality of incomes and wealth, dramatic inflation and a fall of GDP.

Mayank (2009) has analysed the role of two important forces - the regulator and the
capital market as determinant of external finance in transition economies analyses the
changing pattern and future prospectus of external finance to India and reviews the role of
external finance. Under this framework, the study evaluates current Indian corporate
governance practices in light of external finance.

Rajeshwari and Moorthy has conducted the study and analysed that Mutual
Fund is a retail product designed to target small investors, salaried people and others who
are intimidated by the mysteries of stock market but, nevertheless, like to reap the
benefits of

46
stock market investing. At the retail level, investors are unique and are a highly
heterogeneous group. Hence, their fund/scheme selection also widely differs. Investors
demand inter-temporal wealth shifting as he or she progresses through the life cycle. This
necessitates the Asset Management Companies (AMCs) to understand the fund/scheme
selection/switching behaviour of the investors to design suitable products to meet the
changing financial needs of the investors. With this background a survey was conducted
among 350 Mutual Fund Investors in 10 Urban and Semi Urban
centers to study the factors influencing the fund/scheme selection behaviour of Retail
Investors. This paper discusses the survey findings. It is hoped that it will have some
useful managerial implication for the AMCs in their product designing and marketing.

Atkinson (2000) There are several studies in the literature that attempt to discuss some of
the problems and challenges associated with online trading. The first problem discussed in
the literature is hidden costs and deceptive advertising associated with online trading.
supported this contention that buried in all the online trading hype resides the fine print.

This obscure data translates into a venture that is more costly than one was lead to believe.

McNamee (2000) and Patel (1999) Delayed and varied execution speeds and
self serving market makers were among the items responsible for this pitfall of online
trading as was collaborated in the studies. Internet security is also a major concern to
investors. Computer hackers and viruses plague every sector of the computer community
and with certainty will continue to do so.

(Goldberg, 1998) Internet applications are endless and e-commerce companies are
developing innovative business models and making advancements everyday. One of the
fastest growing internet ventures is online trading. The first internet securities trading
occurred in 1994. By 1997, it has been estimated that 17 percent of all trades occurred
online via the internet. Online brokerage firms emerged and the wealth of information
available to many investors.

47
OBJECTIVES OF

THE STUDY

55
 OBJECTIVES OF THE STUDY
The Objective is to review the study of ONLINE TRADING at Motilal Oswal Financial
Services

Portfolio Ltd as the exchange has changed it’s trading from the outcry mode
to online trading on 20th December 2010.

To know the awareness level of customers regarding online trading.

• To study the attitude of the investor.

• To know the factors influencing investment decision.

• To make a comparative study of competitors of Motilal Oswal

Financial Services Ltd.

• To know the online screen based trading system adopted by

Motilal Oswal Financial Services .

56
 RESEARCH
METHODOLOGY

57
 The research methodology defines what the activity of research is, how to
proceed, how to measure progress, and what constitutes success. It provides
us an advancement of wealth of human knowledge, tools of the trade to carry
out research, tools to look at things in life objectively; develops a critical and
scientific attitude, disciplined thinking to observe objectively (scientific
deduction and inductive thinking); skills of research particularly in the ‘age
of information’. Also it defines the way in which the data are collected in a
research project. In this paper it presents one components of the research
methodology from a real project; the theoretical design and framework
respectively.

Sources of Data:-
Data, facts ,figures, other relevant material of past and present and surveying
are the basis for study and analysis. Without an analysis of factual data no
specific inferences can be drawn on the questions under study. Inferences
based on imagination or guesses cannot provide correct answer to research
questions. The relevance adequacy and reliability of data determine the
quality of the findings of a study.
For the purpose of the present study, data from two sources has been
collected, namely primary data and secondary data.

 PRIMARY DATA:- Primary data is source from which the

researcher collects the data. It is a first hand data, which is used
directly for the analysis purposes. Primary data always gives a
researcher a fairer picture. In the present study primary data has been
collected using questionnaires. For the purpose of collecting the same,
50 respondents have been randomly selected. Even the

58
 response of the respondents was taken into consideration. In this
study, primary data plays a vital role for analysis, interpretation,
conclusion and suggestions.
 SECONDARY DATA:- Secondary data is data which is collected and
compiled for other purposes. Secondary data also plays a key factor in providing

more information which will influence the analysis. Few of the main sources of

secondary data include newspapers, magazines, business journals, internet .

 Research Design:- Exploratory research design is been taken.

 Exploratory research design: Exploratory research is research conducted for

a problem that has not been clearly defined. It often occurs before we know

enough to make conceptual distinctions or posit an exploratory relationship.

Exploratory research helps determine the best research design, data collection

method and selection of subjects.

 Sample Area : Noida city is being taken as a sample area for study.

 Sample Size : The research made use of primary data, which was collected by
the

50 respondents but out of which only 40 has responded to the questions that’s why

the research has been carried on 40 respondents.

 Data Collection Instrument: Structured Questionnaire

 Sampling Procedure : We have used a Non Probabilistic Sampling Technique

that is, Convenience Sampling.

59
FINDING

85
 FINDINGS

• The investment decision of investors is influenced by their own decision and

through friends & relatives.

• Majority of investors invest only upto 10% of their annual income in share market.
• Motilal Oswal Financial Services Ltd has a great competition with other broking
agencies like Kodak, Angel etc. because they are also using new technologies to
retain customers.
•
• The number of players is increasing at a steady rate and today there are over a
dozen of brokerage houses who have opted to offer net trading to their customer
and prominent among them are Motilal Oswal Financial Services, India bulls,
Kotak street, Karvy.
• Investors perception changes with the fluctuations in share market

86
CONCLUSION

87
 CONCLUSION

In today’s scenario when al services are going to be online or in electronic form Motilal

Oswal Financial Services Ltd. Is creating awareness of online trading so that the client

can trade from anywhere from the World. Motilal Oswal Financial Services Portfolio Ltd.

takes care of client portfolio and whenever the value of his/her portfolio will decrease by

30% then that client is always informed by his/her relationship Manager. Motilal Oswal

Financial Services is a company that has helped in handling a vast amount of transactions

and this can be an efficient trading, delivering, settlement system with adequate

protection to investors.

The introduction of on-line trading would influence the investors resulting in an increase

in the business of the exchange. Due to invention of online trading there has been great

benefit to the investors as they could sell / buy shares as and when required and that to

with online
88
SUGGESTIONS

89
 SUGGESTIONS & RECOMMENDATIONS

• Allocation of news in such a way that Motilal Oswal Financial Services Ltd maintain a

consistency level throughout the month.

• Can improve in that areas where service provide by other major competitors is very

strong in this area. • To increase the awareness level of the company among the public.

• 24*7 customer support can increase its value.

• The company must spread the awareness to its clients for the service like F&O

Equities to increase the satisfaction level of clients as we have find that there is

positive aspect between the satisfaction level of services provided by Motilal Oswal

Financial Services success in online trading.

90
LIMITATIONS OF

THE STUDY

91
REFERENCES
 REFERENCES

WEBSITES :

• www.Motilal Oswal Financial Servicesonline.com

• www.investopedia.com

• www.bseindia.com

• www.nseindia.com

• www.moneycontrol.com

NEWSPAPER :

• The Times of India

• The Economic Times

RESEARCH PAPERS:
• Bae, K., Bailey, W., Mao, C.X. (2006), Stock Market Liberalization and the

Information Environment, Journal of International Money and Finance, 25, 404-

428.

• Baker, H.K. (1996), Trading Location and Liquidity: An analysis of U.S. Dealer
and

Agency Markets for Common Stocks. Financial Markets, Institutions & Instruments,

5(4), 1-51.
 • Money and Capital in Economic Development, Washington: Brookings
Institution. International Journal of Economics and Financial Issues, Vol. 3, No. 3.

• Dijk (2007). Economic Policy, The Size Effect in Equity Returns. Empirical
Research Findings. Journal of Financial Management and Analysis,
21(1).Available at http://papers.ssrn.com/sol3/results.cfm last accessed on July5,

2009.

• Charles (1999). Economic Policy, Astonishing growth in Americans' stock

portfolios. The Icfai Journal of Stock Market, 6 (3): 43-60. Available at
http://papers.ssrn.com/sol3/results.cfm last accessed on July5, 2009.

BOOKS:

• Beri G.C, Marketing Research

• Gupta C.B. , Marketing Management

ANNEXURE
 ANNEXURE

Dear respondent,

I am a student of MBA, is conducting a research on Study on Equity

Market”. I would be extremely thankful if you spare some time to answer the
following questions. All the facts disclosed by you will be used for academic
purpose only.

1. Do you know about online trading?

□ Yes □ No

2. Do you have a DMAT Account ?

□ Yes □ No

3. Do you feel safe while trading online?

□ Yes □ No

4. In which stock you most trade online?

 □ Equity □ Mutual Funds

□ Commodities □ F&O Equities

5. Do you receive updated online information regarding the stock

market from your dealer/broker?

□Yes □No

6.. Do you believe that your trader/broker is very successful in online

trading?

□ Strongly Agree □Agree □Moderate

□Disagree □Strongly Disagree

7. Are the stock broking services provided by Motilal Oswal Financial

Services is satisfactory ?

□ Strongly Agree □Agree □Moderate

□Disagree □Strongly Disagree

8. . What percentage of your annual income do you invest in share

market ?