Benefits of Online Broking

8/2/2019 Benefits of Online Broking

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BENEFITS OF ONLINE BROKING

1) Less Costly: The most significant advantage of the online broking is the cost

reduction in the brokerage. Due to the power of the Internet one has the privilege

of becoming the clients of really large brokerages with the benefits of enjoyingthe low charges hithelio before enjoyed only by the big players. As the DP account

has got linked to the trading account most players do not charge a minimum

transaction cost thus truly allowing one to buy a single share and achieve

meaningful rupee price averaging whatever be your buying power.

2) Peace of Mind: One can never have complete peace of mind but online

investing does away with the hassles of filling up instruction slips, visits to the

broker for handing over these slips and consequent costs.

3) Keeping Records: The site one trades on keeps a record of all transactions down

to unexecuted orders and cancelled orders thus keeping one abreast of all your

transactions 24 hours a day. No paperwork means more time at ones disposal for

research and analysis.

4) Access to Information and investment Tools: Most online investing sites

have a wealth of information for their registered members. This includes

research reports, results, analysis and even gossip and the buzz in the market.

5.) Unparalleled Liquidity: The bank account linked with the trading accountinvariably has an A TM free. Most partner banks offer Internet banking as well. This

results in ones money becoming available to him whenever he like from his trading

account. Conversely in case he spot an opportunity in the market he can

immediately allocate money from his Savings account to his trading account and

make profits.

6.) Unparalleled Safety: Most sites are secure using 128-bit algorithms highestavailable commercially anywhere in the world. Moreover even if somebody broke

in and tampered with ones account the money from the stocks he sold or the

stock bought from the money in his account is in his account only.

7.) Reduces the settlement risk: This method of trading reduces thesettlement risk for the investor, as in this case no Short sale is possible i.e. the seller

will not be able to sell the securities unless he has their actual possession. In the case

of a demat account (required for an online transaction), when a seller wants to sell

the securities, his demat account is checked by the Depository Participant before

executing the sale transaction. This reduces the settlement risk for the buyer, who

is assured of the delivery of the securities.


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8.) Offers greater transparency: Online trading gives greater transparency tothe investors by providing them an audit trail. This involves a complete integrated

electronic chain starting from order placement, to clearing and settlement and

finally ending with a credit to the depository account of the investor. All these

stages are subject to inspection, thus bringing in transparency into the system.

9.) Ease of trade: It is the ease of doing the trade through net, with a click ofmouse, one can buy or sell any share that is dematerialized. Other than the above-

mentioned advantages, Internet trading provides some additional advantages to

the investors, brokers and also helps the nation to channelize the resources.

Net trading would increase competition in the market hence increase in the bargaining

power of the investors. The entire communication between the investor, broker and

exchange would take place within milliseconds

PROBLEMS OF ONLINE BROKING

So, the main problems of online trading are as follows:

1.) "Server not found": This may appear on ones screens when he isdesperately trying to get out of an unprofitable position. Some of the online sites are

providing a telephone number for use in case their sites are overloaded or their serverdown.

2.) Connectivity of the Broker with NSE: Recently ICICI Direct had a

connectivity problem with the NSE for two and half-hours during trading hours. This

problem is rare but be alive to its possibility.

3.) Cyber attack: In the event of a malicious attack on the systems of one sbroker he is protected only if the company is taking proper precautions against such

attacks and if proper backup is regularly been taken. He may like to choose a

brokerage that has a stated security policy and contingency plan in place.

4.) Non-availability of a seamless interface: As a client one will access the

NSE through a server of the online brokerage and this may involve queuing delays. Ifa number of client access the server the server takes its own time sending the orders

to the NSE server. He must check out the seamlessness of this interface beforeselecting an online brokerage. The faster the orders are processed the more seamless is

the interface.


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5.) Non- availability of personalized advice: If one likes to ask his broker"Aaj kya achcha lag raha hai" he may not be able to do so. If he wants advice on a

particular stock in his portfolio he may not even be able to get that.

6.) Margin: If Internet trading alone is not fast and furious enough; many people

are trading on margin. That is where the brokerage firm lends you money byleveraging his account, allowing him to buy a large amount of securities by putting

up only a small amount of money. He may have forgotten what he read in thesmall print of his agreement, but the brokerage firm has the right to change the

maintenance margin requirements without any warning or notice to him. In fact, the

firm has the right to liquidate his securities holdings (and it can pick and choose

which ones) without any notice to one if he fails to meet the margin call. And there

he was leveraged to the hilt, hoping to hit a home run when he discovered that he

is required to make a large deposit that he cannot make. The next thing one knows,

the firm is selling off his securities at a point in time that is not the best for him.

These are the perils oftrading on margin.

7.) Little use of advisory services: The advisory services being promised bythe brokers would be of little use to investors looking for an insight into the

market. Many would not like to rely on research reports, which are there for all. So,

net investors will have to do their own research and take their own decision, whether

wild or wise.

8.) Increased charges: Some of the brokers are of the view that they would

have to provide advisory services to the customers. But with increased volumes,

they will have to follow the international practice of charging a little more than

the normal charges from a customer looking for personal advice.

PPRROOCCEESSSS OOFF OONNLLIINNEE TTRRAADDIINNGG

An investor interesting in trading through Internet shall have to; firstly register himself

with an Internet brokerage firm. Some formalities such as filling the account opening form of

the e-broker, copies of identity proof, copy of residence proof are made to register him with

the e-trader. Secondly, the investor would be required to open a bank account with a

scheduled bank and sufficient balance should be kept in the account. Thirdly he would berequired to open account with a depository participant because only dematerialized shares

can be traded on Internet.


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The client places an order via the net by logging on to his

brokers site.

The broker accepts and executes the order and places it

with the exchange.

The exchange accepts the order after checking the share limit for the

The broker makes the payment either directly via the clients bank account

or a s throu h its own account and recovers it later from the client.

The exchange receives money and completes the settlement

The client is intimated about the settlement

either throu h demat or via e-mail.


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So, generally following steps are followed while doing the trading through the Internet:

Step-1: Those investors interested in doing the trading over Internet system, that is, NEAT-ISX

(NSE), should approach the brokers and register with the Stock Broker.

Step-2: After registration, the broker will provide to them a login name, password and a

personal identification number (PIN).

Step-3: Actual placement of an order. Using the place order window as under can then place an

order:

(a) First by entering the symbol and series of stock and other parameters such as quantity and

price of the scrip on the place order window.

(b) Second, fill in the symbol, series and the default quantity.

Step-4: It is the process of review. Thus, the investor has to review the order placed by clicking

the review option. He may also re-set to clear the values.

Step-5: After the review has been satisfactory; the order has to be sent by clicking on the send

option.

Step-6: The investor will receive an ``Order Confirmation'' message along with the order number

and the value of the order.

Step-7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons

such as invalid price limit, an appropriate message will appear at the bottom of the screen. At

present, a time lag of about ten seconds is there in executing the trade.

Step-8:It is regarding charging payment, for which there are different modes. Some brokers will

take some advance payment from the investors and will fix their trading limits. When the trade is

executed, the broker will ask the investor for transfer of funds by the investor to his account.


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TTRRAADDEE && SSEETTTTLLEEMMEENNTT PPRROOCCEESSSS

INTERNET SITE

BROKERS

SITE

BANKDEPOSITORY

STOCK

EXCHANGE


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NET TRADING IN INDIA

In 2000, when the Securities and Exchange Board of India announced its regulations for

Internet trading, net trading has become a reality. Kerala-based Geojit Securities has taken the

lead, starting off the process in Bombay. The software was developed by NSE.IT, the infotech

firm floated by the NSE. The first net transaction was a trade for 100 shares of Reliance executed

by D R Mehta, chairman, SEBI, for A P Kurian, chairman, Geojit Securities. This is a step

forward in bringing the capital markets closer to the investor. Compared to the Western

countries, online trading is still in its infancy in India. Today, web trading has a share of over 40

per cent in United States, as high as 60 per cent in South Korea and 20 per cent in Britain. Now

in India share of the online trading (nse) has increased to near about 13 per cent as compared to

10 per cent (approx.) in December 2004. In February 2005, daily turnover of net trading is near

about 800 crore. According to a NSE official,There are the days when the daily turnover has

even crossed the Rs. 1,000 crore mark.

In India, some major E-trader like icicidirect, 5paisa, RELIGARE, hdfcsec, sharekhan,

kotakstreet, geojitonline and karvy have been giving tough competition to traditional stock

brokers by offering an easier, transparent and cost effective trading platform. Of late, some of the

e-traders have been diversified into commodity trading in a bid to offer one-stop shop facilities

to retail investors. Stock market analysts pointed out that the e-trading platform has a bright

future going ahead.

In India, e-traders have been charging a minimum one time nonrefundable deposit of Rs.

250 to Rs. 750, while the brokerage cost ranges from 0.20% to 0.85% for delivery based

transactions and 0.035% to 0.10% for intra-day transactions. The buy or sell order are instantly

routed to the Bombay Stock Exchange or the National Stock Exchange depending upon the

investors preference for the exchange. The money gets instantly transferred from customers

bank accounts for any buy order and shares are deposited into the demat account managed by the

NSDL (National Securities Depositories Limited) or the CDSL (Central Depositories Services

Limited) as all the three accounts- bank, demat and web trade- are interlinked electronically with

each other.


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NON-NET BROKING INTERNET BROKING

Check with the broker about the price of shares

that you wish to buy.

Place the purchase order with the broker.

The broker executes the purchase order through

a stock exchange.

Pay the broker through a cheque.

The broker transfers the shares to your demat

account (with a bank).

In case you do not have a demat account, the

shares are credited to the broker's account, in

favour of the purchaser.

Phase I

Log on to the broker's website to check share

prices and related information.

Place a purchase order through authorised

secure user id and password.

Order is routed through the broker to the stock-

exchange server and you get confirmation of

the deal in a few minutes.

The payment and delivery of shares is still done

in the traditional way.

Phase II

(once payment on the Internet is allowed)

Payment amount will get deducted from your

online bank account (with which the broker has

tied up).

The purchased shares are credited to the online

demat account in no time.

DDIIFFFFEERREENNCCEE BBEETTWWEEEENN OONN LLIINNEE AANNDD

OOFFFF LLIINNEE TTRRAADDIINNGG

Nevertheless, with all the convenience of online trading there are still investors who prefer the

old fashion way of offline trading. Offline trading has lost some popularity but it is still the main form of

investing. Offline trading offers many benefits as well.


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1. The one benefit that an investor appreciates the most is that they are not alone when

making investment decisions.

2. There are experienced and professional brokerage companies that handle their

investments for them.

3. Investors are not faced with the challenge of making these vital investment decisions;

especially, if they do not have the experience necessary to make the appropriate investments.

4. Also, there is someone there to answer any questions that may cause concerns. Not

to mention, with offline trading mistakes are less likely to take place. No one wants to throw their

money away or stand by and watch someone else throw their money away. It may be wise to hire a

professional to assist you in making the correct investment decisions if you feel youlack the knowledge necessary.

Points of difference between online trading and off line trading are as follows:

1. Online trading is very expensive as compare to manual trading or offline trading.

2. Online trading consumes less time as compare to manual trading.

3. Online trading has very helpful to finding the records easily but offline trading takes

more time to finding the records.

4. In the help of online trading, there is no chance of any errors while doing the trading. in

offline trading there are some errors exist like barriers of communication .


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5. With the help of online trading, we know the international market rate of share very

easily.


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The given flow chart clearly explains the process of online trading:

Login

Buy transcation Sell transcation

The system will check buyinglimits

The system will check yourdp account quantity

Orders accepted Rejected orders would becommunicated along with reasonsorders accepted

contract note wouldbe sent to by mailor hand delivery

flashed on yourscreen immediately

on execution

conformationcould be send to your

e-mail and mobile

you may edit your

pending order

you may delete ypending order

your order is transmitted to exchange for execution

pending sell orderswould be displayed

on your screen

pending buy orderswould be displayed

on your screen

on executionof your orders

you may edit your

pending orderyou may delete

your pending order


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SETTLEMENT PROCESS IN CM SEGMENT OF NSE

The settlement process begins as soon as members obligations are determined through

the clearing process. 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 clearing

corporation provides a major link between the clearing banks, clearing members and the

depositories. This link ensures actual movement of funds and securities on the prescribed pay-in

and payout day. The core processes involved in the settlement process are:

(i) 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 members accounts

to the extent of payment obligations. The banks process these instructions, debit accounts of

members and credit accounts of the NSCCL.

ii) 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


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securities to custodians/members. Settlement is deemed to be complete upon declaration and

release of pay-out of funds and securities. Exceptions may arise because of short delivery of

securities by CMs, bad deliveries or company objections on the pay-out day. (The detailed

explanation of securities and funds settlement follows in the later section). NSCCL identifies

short deliveries (discussed later) and conducts a buying-in auction on the day after the pay-out

day through the NSE trading system. The delivering CM is debited by an amount equivalent to

the securities not delivered and valued at a valuation price (the closing price as announced by

NSE on the day previous to the day of the valuation). If the buy-in auction price is more than

thevaluation price, the CM is required to make good the difference. All shortages not bought-in

are deemed closed out at the highest price between the first day of the trading period till the day

of squaring off or closing price on the auction day plus 20%, whichever is higher. This amount is

credited to the receiving member's account on the auction pay-out day.

The settlement process for transactions in securities in the CM segment of NSE is presented in

below Figure.


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1

8 9

6 7

2 3

5 4

10 11

Explanations:

1. Trade details from Exchange to NSCCL (real-time and end of day trade file).2. NSCCL notifies the consummated trade details to CMs/ custodians who affirm back based on

the affirmation, NSCCL applies multilateral netting and determines obligations.

DEPOSITRIES CLEARINGBANKS

CUSTODIANs/CMs

NSE

NSCCL


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3. Download of obligation and pay-in advice of funds/securities4. Instructions to clearing banks to make funds available by pay-in time.5. Instructions to depositories to make securities available by pay-in-time.6. Pay-in of securities (NSCCL advises depository to debit pool account of custodians. Ms and

credit its account and depository does it.

7. Pay-in of funds (NSCCL advises Clearing Banks to debit account of custodians/CMs andcredit its account and clearing bank does it).

8. Pay-out of securities (NSCCL advises depository to credit pool account of Custodians/CMsand debit its account and depository does it).

9. Pay-out of funds (NSCCL advises clearing Banks to credit account of custodians/CMs anddebit its account and clearing bank does it).

10.Depository informs custodians/CMs through DPs.11.Clearing Banks inform custodians/CMs.

THE EMERGENCE OF ONLINE TRADING IN INDIA

The Indian trader is being fancied by the democratized world of online trading or also known as e-broking.

The regular and attractive advertisements in the print media and electronic media have added to this fancy

world

But as we compare to the Western countries, in India online trading has not still grasped the market , but has

done a very important amount of progress in the past years and the future of online trading is bright. That is

why many new companies are coming into this form of business structure and the existing companies are

changing to this new format besides offline and other traditional forms of business. With only a mere share of

10% online trading a combined gross turnover of around Rs.


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12000-13,000 crores handled by the BSE and NSE together there is a much greater scope for online trading.

The various player whos offering and facilities is different according to the individual

investors. This will help us understand what processes and strategies competitors have adopted

to attract and retain investors and satisfy their investments needs.

At present some of the dominant players in the online trading market of share

market are


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ICICIDirect (or ICICIDirect.com) is stock trading company of ICICI Bank. Along with stock trading and

trading in derivatives in BSE and NSE, it also provides facility to invest in IPOs, Mutual Funds and Bonds.

Type of Account

ICICIDirect offers 3 different online trading platforms to its customers:

Share Trading Account

Share Trading Account by ICICIDirect is mainly for buying and selling of stocks in BSE and NSE.

This account allows Cash Trading, Margin Trading, Margin Plus Trading, Spot Trading, Buy Today

Sell Tomorrow and Call and Trade on phone. They also provide installable application terminal

based application for high volume trader.

Wise Investment Account

Along with MF and IPO investing in BSE and NSE, Wise Investment account also provide options

to invest in Mutual Funds, around 19 Mutual Fund companies and bonds. ICICI Direct offers

various options while investing in Mutual Funds like Purchase Mutual Fund, Redemption and

switch between different schemes, Systematic Investment plans, Systematic withdrawal planand transferring existing Mutual Funds in to electronic mode. This account also provides facility

to invest in Government of India Bonds and ICICI Bank Tax Saving Bonds. ICICIDirect.com

website is the primary tool to invest in Mutual Funds, IPOs, Bonds and stock trading.

Active Trader Account


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Active Trader account gives more personalized investment options to the investors. It allows

investor to use online and offline stock trading. It also provides with independent market

expertise and support through a dedicated Relationship Manager from ICICI. Active Trader also

provides commodity trading.

Brokerage and fees

Account opening fees : Rs 975/- (non-refundable)

Brokerage: ICICIDirect.com brokerage varies on volume of trade and inclusive of demats

transaction charges, service taxes and courier charges for contract notes. It ranges from 0.1% to 0.15%

for margin trades, 0.2% to 0.425% for squared off trades and 0.4% to 0.75% on delivery based trades.

Advantages of ICICIDirect

3-in-1 account integrates your banking, broking and demat accounts. All accounts are from ICICIand very well integrated. This feature makes ICICI the most interesting player in online trading

facility.

Unlike most of the online trading companies in India which require transferring money to thebrokers pool or towards deposits, at ICICI Direct you can manage your own demat and bank

accounts through ICICIdirect.com..

Investment online in IPOs, Mutual Funds, GOI Bonds, and Postal Savings Schemes all from onewebsite. General Insurance is also available from ICICI Lombard.

Trading is available in both BSE and NSE.

Disadvantages of ICICIDirect

Getting access to ICICIDirect.com website during market session can be frustrating.

ICICI Direct brokerage is high and not negotiable. Not all stocks are available under Margin Plus Facility for linking account of ICICI Bank Only


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Reliance Money, A group company of Reliance Capital Limited, is the financial services division of

the Rs 10'000 Crore Reliance Anil Dhirubhai Ambani Group. Reliance Money has over 22 lakhs

customers and more than 10'000 branches in around 5000 cities in India. Company is among the largest

broking and distribution house of financial products and having share of more than 3% of total stock

market volume at BSE & NSE.

RelianceMoney.com enables its customer to invest & manage most of the services provided by

Reliance Money including Equity (Stock) Trading, Commodity Trading, Derivatives, Mutual Fund

Investment, IPO Investment, Life Insurances, General insurances, Money Transfer, Forex exchange, Gold

Coins and Credit Cards Services. Company recently entered in to Wealth Management with tools like

investment in equity-linked portfolio management services, structured products, insurance and mutual

funds.

The Reliance Money stock trading websites uses special security features Security Token which

makes online trading more secure without complexity.Stock Trading through RelianceMoney.com is

available for BSE and NSE stock exchanges. Offline trading is also available through Reliance Money

partners in more than 5000 city across India and through phone by dialing 022-39886000.

The investment options available with Reliance Money online portal are as below:

Equity (Stock) Trading at BSE, NSE and NSE F&O IPO Investment Derivatives Trading Forex Trading Commodity Trading (Gold, Silver, Crude etc....) at MCX, NCDEX and NMCE. Mutual Fund Investment Life & General Insurance


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'Pure Swiss' Gold Coins (99.99% pure, 24 carat)

Trading platforms

Reliance Money provides 3 different trading platforms for equity trading:

1. Insta Trade2. Fast Trade3. Easy trade

Reliance Money Technical Analysis (A paid service)

Reliance Money offers a simplified, automated, sophisticated technical analysis to Indian retail

broking consumers with the help of Recognia's Technical Analysis tools. Recognia, a Canada based

company, has proprietary pattern recognition technology capable of recognizing patterns in the price

charts of any publicly traded financial instrument including stocks, bonds, funds, commodities,

currencies and indexes.

The technical services are available for introductory free 7-day trial period to Reliance Money

users. Post the trail period, this service is available to users at a nominal subscription of Rs. 99 for 3

months/ Rs. 179 for 6 months/ Rs. 299 for a year, i.e., less than Re 1 a day.

Reliance Money Brokerage and fees:

Reliance Money offers lowest brokerage rates in today's online stock trading industry in India. The

brokerages are as low as 0.075% for delivery based trading and 0.02 for now delivery. For more detail

about Reliance Moneys brokerage and fees visit the below section of this webpage.Advantages of Reliance Money


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Extra security features with 'Security Token', which is the most secure and tested technology incomputer world.

Simple, easy and fast online stock trading.

Almost all investment options are available under one account including Equity Trading,Derivatives, Forex, Commodity, IPO, Mutual Funds and Insurance.

Branches are available in all major cities and the number is growing.

Disadvantages of Reliance Money

Customer Service is not that good.

Sharekhan is online stock trading company ofSSKI Group, provider of India-based investment

banking and corporate finance service. Sharekhan is one of the largest stock broking houses in the

country. S.S. Kantilal Ishwarlal Securities Limited (SSKI) has been among Indias leading broking houses

for more than a century.

Sharekhan's equity related services include trade execution on BSE, NSE, Derivatives, commodities,

depository services, online trading and investment advice. Trading is available in BSE and NSE. Along

with Sharekhan.com website, Sharekhan has around 510 offices (share shops) in 170 cities around the

country.

Share khan has one of the best state of art web portal providing fundamental and statistical

information across equity, mutual funds and IPOs. You can surf across 5,500 companies for in-depth

information, details about more than 1,500 mutual fund schemes and IPO data. You can also access
http://www.sski.co.in/http://www.sski.co.in/


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other market related details such as board meetings, result announcements, FII transactions,

buying/selling by mutual funds and much more.

Type of Account

Sharekhan Classic account

Allow investor to buy and sell stocks online along with the following features like multiple

watch lists, Integrated Banking, demat and digital contracts, Real-time portfolio tracking with

price alerts and Instant credit & transfer.

Online trading account for investing in Equities and Derivatives Free trading through Phone (Dial-n-Trade)

Two dedicated numbers for placing your orders with your cellphone or landline. Automatic funds transfer with phone banking (for Citibank and HDFC bank

customers)

Simple and Secure Interactive Voice Response based system for authentication get the trusted, professional advice of our telebrokers After hours order placement facility between 8.00 am and 9.30 am

Integration of: Online trading + Bank + Demat account Instant cash transfer facility against purchase & sale of shares Investments and trade confirmations by e-mail Single screen interface for cash and derivatives

Sharekhan Speed Trade account

This accounts for active traders who trade frequently during the day's trading session. Following

are few popular features of SpeedTrade account.

Single screen interface for cash and derivatives Real-time streaming quotes with Instant order Execution & Confirmation Hot keys similar to a traditional broker terminal


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Alerts and reminders Back-up facility to place trades on Direct Phone lines

Brokerage:

Some stock trading companies charge direct percentage while others charge a fixed amount per Rs

100. Sharekhan charges 0.5% for inter day shares and 0.1% for intra day or you could say Sharekhan

charges 50 paise per Rs 100.

Advantages of Sharekhan:

Online trading is very user friendly and one doesn't need any software to access. They provides good quality of services like daily SMS alerts, mail alerts, stock recommendations

etc.

Sharekhan has ability to transfer funds from most banks. Unlike ICICI Direct, HDFC Sec, etc., soinvestor not really needs to open an account with a particular bank as it can establish link with

most modern banks.

Disadvantages of Sharekhan:

They charge minimum brokerage of 10 paisa per stock would not let you trade stocks below 20rs. (If you trade, you will loose majority of your money in brokerage).

Lots of hidden rules and charges. They do not provide facility to book limit order trades during after-hours. Classic account holders cannot trade commodities. Cannot purchase mutual funds online.


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Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, was set up in 1994. Kotak

Securities is a corporate member of both Bombay Stock Exchange (BSE) and National Stock Exchange

(NSE). Currently, Kotak Securities is one of the largest broking houses in India with wide geographical

reach.

Kotak securities online trading, is the online trading portal of the Kotak Securities Ltd, the

leading stock broking house of India. The online division of Kotak Securities Limited provides

services like internet broking services, online IPO and mutual fund investments.

ACCOUNT TYPES:

Kotak offers different account types according to users requirement:

Kotak Gateway

Kotak securities gateway account opens the gateway to a world of investing opportunities for

beginners. Kotak gateway user can trade anywhere, anytime using internet. Kotak also offers call and

trade facility.

They provide sms alert, research report, free news and market updates. Best feature of Kotak

gateway is call and trade facility. Anybody can activate Kotak securities gateway account with any

amount between Rs 20,000 to 5, 00,000. This can be in form of cash deposit or the value of the shares


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you buy. Brokerage will be charged based on the account type. For intraday trading brokerage is .06%

both sides for less then 25 lakhs and .023% for more then 25 crores.

Kotak Privilege Circle

This is the premium account for its users. Along with kotak gateway account benefits they provides

independent market expertise and support through a dedicated relationship manager and a dedicated

customer service desk which provides assistance inopening accounts, handling day-to-day problems, and more. They provides KEAT premium which is an

exclusive online tool that lets you monitor what is happening in the market and view your gains and

losses in real-time.

One can activate Kotak securities privilege circle account with any amount more than Rs. 10,

00,000/- as margin, by way of cash or stock. For intraday trading brokerage is .06% both sides for less

then 25 lakhs and .03% for more then 25 crores.

Kotak High Trader

This is the best offer for daily trader or intraday traders. This is an Auto Square Off product where

you can enjoy the benefits of intra-day trading. Trader can get the 6 times exposure on the margin. They

provide all the benefits which kotak gateway and privilege account provides. Trader can apply paper free

order for IPO.

One can activate Kotak securities high trader with any amount less than Rs 5, 00,000/- as margin, by

way of cash or stock. The minimum brokerage that is applicable in the Kotak high trader account is 4

paisa on delivery and 4 paisa in the cash segment.

Kotak Freeway

Frequent trader use this account type because freeway account enables its users to trade as many

times as they like - at a fixed brokerage.


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One can activate Kotak securities freeway with any amount less than Rs. 1, 25,000/- as margin, by

way of cash or stock. They charge fixed brokerage of Rs.999/- a month and on delivery transaction

brokerage is .59% on less then 1lakhs and .18% on more then 2 crores.

Kotak Flat

This product is best suited for the needs of the Indian retail investor who actively invests through the

internet. Kotak flat introduces the international trend of charging brokerages on per trade basis.

Brokerage rate works up to 0.18% on delivery trades and 0.018% for intraday trades.

Kotak Assist

This account most suits to long term investors. This account provides Complete assistance on all

your financial investment.

Brokerage and Account opening fees:

A trading account in Kotak requires you to have a minimum of Rs.1000 to start with, the bank

account to have a minimum of Rs.2500.

Brokerage:

For Intra-day trading, Kotak brokerage is around 0.05%. For delivery trading, Kotak brokerage is around 0.45%.

Advantages of Kotak Securities Limited


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Kotak provides a Call & Trade facility to its customers wherein they can place and track theirorders through phone when they are away from home.

They provides daily SMS alerts, market pointers, periodical research reports, stockrecommendations etc.

Kotak provides exclusive online tool to monitor what is happening in the market and alsoinvestor can view gains/losses in real-time.

Disadvantages of Kotak Securities Limited

In online trading sometimes delay comes. So it can be frustrating

Indiabulls is India's leading Financial Services and Real Estate Company having presence over 414

locations in more than 124 cities. Indiabulls Financial Services Ltd is listed on the National Stock

Exchange, Bombay Stock Exchange, Luxembourg Stock Exchange and London Stock Exchange.

TYPE OF ACCOUNT

Indiabulls Equity Trading Account

Indiabulls Equity Trading Account is standard Online trading account from India bulls and

along with online trading it also provides priority telephone access that gives you direct access

to your Relationship Manager and full access to 'Indiabulls Equity Analysis'.

Power Indiabulls

Power Indiabulls trading terminal is the most advanced new generation trading platform

with great speed. This trading terminal is built in JAVA.

Power Indiabulls is extremely reach in features including Live Streaming Quotes, Fast Order


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Entry and execution, Tic by Tic Live Charts, Technical Analysis, Live News and Alerts, Extensive

Reports for Real-time Accounting.

Brokerage and fees:

Account opening fees: Rs 1200/- (One time, non-refundable) as below:

250/- Equity Trading Account opening charge

200/- Demat Account opening charge

750/- Software changes

Advantages of Indiabulls

Brokerage is less compare to other online trading companies. Provide trading terminal 'powerbulls', a java based software. It's very fast in terms of speed and

execution.

Disadvantages of Indiabulls

Faces lots of complaints regarding portal breakdown.

Motilal Oswal Financial Services (MOSL), a leading brokerage firm, has exhibited robust and

consistent growth in both institutional and retail broking. An established brand name and extensive


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geographic network covering 1,339 locations in over 426 cities and towns would provide it ample

opportunities to cross-sell products and services. It has also forayed into related businesses like

investment banking, private equity and asset management. We believe the stock offers quality exposure

to the domestic equity broking and financial services market, which has impressive growth potential.

Strong competitive positioning

MOSL is one of the leading stock broking firms in India with a rapidly growing client base and wide

distribution network. A respected research presence and extensive reach has resulted in robust growth

in its retail business. The company also has a strong institutional equity business. It has consistently

improved its market share in terms of traded volumes on the stock exchanges

Diversifying into related businesses

MOSL has forayed into related business like investment banking, private equity and assetmanagement. Though all these business are linked to capital market, we believe the move would bring

in various diversification benefits for the company going forward

Customized investment management services

MOSL offers customized investment management services to its retail clients. These services

include planning, advisory, execution and monitoring a range of investment products. It also provides

wealth management services.


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The company has classified its clients into three segments Mass Retail, Mid-Tier Millionaire and (PCG)

Private Client Group. According to the needs of each segment, products and services are offered

through the companys business locations and online channels. MOSL has a discretionary portfolio

management business. The company is seeking to build this business rapidly. The target customer

segment for wealth management business would largely be the HNW (high net-worth) segment. The

growing client bases of its broking and distribution businesses would be a captive source for cross-selling

these products. MOSL has recently launched a separate branded product (Purple) for catering to the

needs of this segment.

Strategy adopted by Motilal Oswal

Religare Securities Ltd is a Ranbaxy promoter group company, is one of Indias largest and fastest

growing integrated financial services institutions. The company offers a large and diverse bouquet of
http://www.religare.in/index.asp


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services ranging from equities, commodities, insurance broking, to wealth advisory, portfolio

management services, personal finance services, Investment banking and institutional broking services.

Religares retail network spreads across the length and breadth of the country with its presence

through more than 900 locations across more than 300 cities and towns. Having spread itself fairly wellacross the country and with the promise of not resting on its laurels, it has also aggressively started

eyeing global geographies.

Unique features and benefits of trading through Religare:

Trade RewardTrade Rewards is a unique offering from Religare that gives you dual

benefits of hassle free investment experience online and an opportunity to earn while you

invest with us.

Zero Brokerage:Break the shackles. Get freedom from brokerage and avail zero brokerage on

your trades through us.

Exposure up to 20 times on your margin:Allowing you the freedom to trade without hassles throughout the day without

having to worry about your cash margin. You can get exposure (on cash

Segment) as high as 20 times for intraday trades. Of course conditions apply on above

two.

Interest on cash margin:


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Even while you are waiting to make your next trade or online investment, your

unutilized cash does not lie idle with us. You earn interest on your unutilized cash

margin.

The indiaInfoline group, comprising the holding company, India Infoline Limited and its wholly-

owned subsidiaries, straddle the entire financial space with offerings ranging from Equity research,

Equities and derivatives trading, Commodities trading, portfolio management services, Mutual Funds,

Life Insurance, Fixed Deposits, Gold Bonds and other small savings instruments to loan products and

investment banking. Website of India Infoline for trading iswww.5paisa.com.

The company has a network of 976 business locations (branches and Sub-brokers) spread across 365 cities

and towns. Today it has more than 800000 clients

Trading Platform

5Paisa offers 2 different online trading terminals to its customers:

Investor Terminal (IT)
http://www.5paisa.com/http://www.5paisa.com/http://www.5paisa.com/http://www.5paisa.com/


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Investor Terminal is 5Paisa's equity trading terminal for low volume trader. This is web based terminal and

could access from anywhere. This product provides limited features in comparison of Trader Terminal, which is

another product provided by 5Paisa.

Trader Terminal (TT)

Trader Terminal is for high volume equity traders. Trader Terminal provides high volume trading with

powerful interface and fast order execution.

Brokerage and Account opening fees:

Account opening fees

Rs 500/- onetime non refundable Brokerage

Brokerage:

5 paisa offers charge only 5 paisa for Rs100 of intraday trade done, which is 0.05% brokerage. In case of in

delivery trade, they charge an additional 0.20% for back office and securities handling.

So these are the key players of the Indian online trading market

Brokerage Comparison Sheet of key player of the Indian market

Online BrokerBrokerage for

Delivery* (%)

Brokerage for

Intraday

trading* (%)

Account opening

charges (Rs)

AMC

(Rs)

IL&FS

investsmart.50-.15% .05-.02 950/-

300


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ICICIdirect 0.75 - 0.25 0.375 - 0.125 975/- 500/-

Indiabulls 0.50 - 0.25 0.10 - 0.50 900/- NIL

Religare 0.30 - 0.20 0.03 - 0.02 500/- NIL

Sharekhan 0.50 - 0.03 0.10 - 0.03 750/- 300/-

Kotak

Securities0.59 0.18 0.06 0.03 750/-

350/-

Motilal Oswal 0.50 - 0.30 0.15 - 0.03 500/- 300/-

Reliance Money 0.50 - 0.10 0.03 - 0.01 750/- 200/-

IndiaInfoline 0.50 - 0.25 0.10 - 0.05 555/- NIL

Comparison of Allied Services

Online Broker Bank Alliance

Third Party

Product*

Buy/Sell

Online/Offline

IL&FS investsm HSBC,CITI.HDFC,

IDBI,AXIS

YES BOTH

ICICIdirect ICICI Yes ONLINE

Reliance

Money

ICICI, IDBI, HDFC, UTI, SBI Yes ONLINE

Sharekhan

Axis, ICICI, BOI, Indian

Overseas Bank, Yes Bank,

HDFC, IDBI, IndusInd, PNB

Yes ONLINE

Indiabulls ICICI, HDFC,Axis,IDBI Yes BOTH


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Religare - Yes BOTH

Motilal Oswal SBI Yes OFFLINE

KotakSecurities

Kotak Mahindra, HDFC,Citibank, UTI, ICICI

Yes ONLINE

IndiaInfoline Axis, Citi, HDFC, ICICI Yes BOTH

*Thirdparty products includes Mutual Funds, Fixed Deposits (corporate), Insurance, etc.

Earlier the organizations which provided the facility of online trading was not safe enough to invest but some

of the changes in the past years in the Indian share market have created the interest of trading in the shares by

the people. Broadly we can classify three important factors which have contributed to the development of

online trading in India-

Firstly the major step was taken by the National Stock Exchange (NSE) in the year 1994 which allowed the

electronic trading and seeing to this various other stock exchanges in India followed soon. This helped in making

the fast, accurate and transparent transactions saving a lot of time then the traditional method of trading. The

investors were also saved by the clutches of the fraud brokers at the times when the clients were not aware of

the true prices of the shares.

Secondly, in the year 1996 the dematerialization of the shares came (also known as DEMAT) which avoided

the online presence of shares in an electronic form avoiding them from theft, pilferage or from other losses like

counterfeiting and frauds regarding share transfer.

The third step was the rapid growth of computer education and learning of internet by the people. With the

evolving of internet the online trading became a hit and the investors became confident in investing just with a

click of a mouse.


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With the happening of such events the ratio of trading has improved a lot. As it takes less time people praise

this technology for trading purposes. Some people who traded rarely now even trades 2-3 times every day as it

provides edge of researching about companies on the internet. The number of small investors is increasing on

the daily basis that trades on the internet.If a person invests or trades in equities, derivatives, commodities etc

through the use Internet it is known as online trading enabling the investor to connect electronically to buy or

sell stocks, derivatives etc with the other investors. This can be done with the help of online service providers

like investsmart, indiaInfoline etc. A person can access a stockbroker's website through an PC connected to

Internet and can place his orders. The benefits are-

A person can see the latest market movement through streaming quotes. Reduces time lag due to self-execution and instant confirmation. Empowers traders to have a complete control over their trading decisions. A person can access his accounts and related information on the Website. Provides greater convenience of trade as a person can trade from home or other convenient

location.

It is cheap in terms of cost associated and offers reduction in overheads A trader can view the historical charts on his computer.

The Internet revolution has changed the way to communicate and the way to do business in todays society

bringing us closer and closer to vital sources of information. It provides us with means to directly interact with

service-oriented computer systems tailored to our specific needs; therefore, we can serve ourselves better by

making our own decisions.

This new access by the online trading customers to low-cost transactions and cutting-edge, real-timemarket information that formerly belonged only to brokers has opened up extraordinary new investment

opportunities as well as a crucial need for state-of-the-art information.


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Today the investors use the Internet Client-Server technology to buy and sell the securities at an instant at

any point of time. People investing online have reached the proportions. Online trading allows an investor to

buy and sell shares on the exchange through Internet and helps in the direct control of his investments.


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QUESTIONAIRE

(To understand the perception of customer toward online trading)

NAME _______________________________________________________________________

AGE ______________________________ GENDER ____________________________

MOBILE _______________________________________________________________________

OCCUPATION _______________________________________________________________________

Q.1 What is your education qualification?

higher Secondary senior secondary Graduate Post Graduate professional degree holder

Q.2 What is your annual income?

Below 100000 1,00,0002,00,000 2,00,0003,00,000 3,00,0004,00,000 Above 4,00,000

Q.3 What percentage of your monthly household income could be available for investment?

Less than 5% 5% to 10% 10% to 15% 15% to 20% More than 20%

Q.4 Where do you often invest your money?

Equity Mutual fund Insurance


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Term depositsOthers

Q.5 What is the primary objective of your investment?

Capital appreciation

Source of income Retirement planning Wealth preservation Education funding /others

Q.6 Do you owe a Computer?

Yes No

Q.7 To operate a computer is easy for me

Strongly agree Agree Cant say Disagree Strongly disagree

Q.8 online trading is a secure way of trading

Strongly agree Agree

Cant say Disagree Strongly disagree

Q.9 online trading is easy and fast way of trading?

Strongly agree Agree Cant say Disagree Strongly disagree

Q.10 At what time do you trade?

Office Hours Non Office Hours Free Time


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Q.11 Introduction of online trading helped to attract the new Investors thus increasing the trading

volumes at Stock Market?

Strongly agree Agree

Cant say Disagree Strongly disagree

Q.12 What factor would you consider before choosing an account in a brokerage house ?

Tick the appropriate option according to your choice on the scale of 1 to 5

(Where 1 is Most important to 5 for least important)

S.NO. PRODUCT ATTRIBUTES

1 Variety of products offered 1 2 3 4 5

2 Time to open an account 1 2 3 4 5

3 Brokerage charged 1 2 3 4 5

4 Customer services 1 2 3 4 5

5 Software 1 2 3 4 5

6 Research reports 1 2 3 4 5

7 Efficiency at peak hours 1 2 3 4 5

8 Customer relationship 1 2 3 4 5

9 Compliance system 1 2 3 4 5

10 Infrastructure 1 2 3 4 5

11 Brand 1 2 3 4 5


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12 Trading Calls/sms 1 2 3 4 5

13 Effective execution 1 2 3 4 5

14 Regular delivery of contract notes 1 2 3 4 5

15 Market exposure 1 2 3 4 5

16 Recording confirmation 1 2 3 4 5

17 Access to back office 1 2 3 4 5

18 Comprehensive stock trading portal 1 2 3 4 5

19 Employees skill 1 2 3 4 5

20 Helpline services 1 2 3 4 5

21 Guidance 1 2 3 4 5

Documents

Benefits of Online Broking