A Brief Study of Equity Products at A Brief Study of Equity Products at

Indiabulls Securities Ltd. Indiabulls Securities Ltd.

& &
Comparative Study of Equity Maret Comparative Study of Equity Maret
Submitted By
ASHOK VERMA
2008-2010
In the partial fulfllment of
MASTERS OF BUSINESS ADMINISTRATION
BIRLA INSTITUTE OF TECHNOLOGY
Jaipur campus
Certifcate Of Approval
This project titled A Brief Study of Equity Products at A Brief Study of Equity Products at
Indiabulls Securities Ltd. Indiabulls Securities Ltd.
& Comparative Study of Equity Maret & Comparative Study of Equity Maret. Is hereby approved
as a credible study of business management carried out by Ashok Verma
(4MBA/4013/08) student of MBA 6
th
trimester is satisfactory manner to
warrant its acceptance as a prerequisite to the degree of MBA for which it
has been submitted.
Internal External
Certifcate Of Guide
This is to certify that ASHOK VERMA (4MBA/4013/08) is a student of
MBA 6
th
trimester and had completed his project under my guidance.
This project is bonafde work of student and has not been submitted
elsewhere for the award of any degree.
Mrs. Pankaj
Sharma
Acknowledgement
I take this opportunity to express my gratitude to all the people who are
instrumental in the successful completion of this project.
I would like to express my sincere gratitude to my Project guide,
Mrs.Pankaj Sharma for her continuous support & guidance towards
making this project success.
I would also like to thank my HOD, Dr. Rupali Sharma for her kind
guidance towards analyzing the requirements of the project to be
developed.
I would also like to show my greatest appreciation to all those who have
directly & indirectly supported me with their encouragement & guidance.
Without their encouragement & guidance this project would not have
been a success.
Ashok Verma
4MBA/4013/08
6
Th
Trimester
Contents
Acknowledgement
Certificate of approval
Certificate of guidance
Acknowledgement
Certificate
Objective of study
ndian on-line s!are trading
"#uity market
$argin %rading
nvestors awareness
Company profile
&esearc! $et!odology
Analysis and 'indings
(uggestions
)imitations
Concluding * recommendations
+ibliograp!y
,lossary

Objectives ! t"e stu#$%
Objective of t!is study is to find out ndiabulls (ecurities services for-
.emat account- "#uity market- and .erivative market/ 0roject is sub-
divided into t!e following objectives1
%o find t!e competition of e#uity market especially in 2(" trading
and bring out t!e awareness level of t!e investors w!o are trading
wit! 2ational (tock "3c!ange/
%o find t!e advantages of t!e .emat account and c!arges by various
depository participants/
%o study t!e trading procedure of ndiabulls (ecurities and
comparison of t!e broking firms/
%o find t!e cost saving analysis on t!e brokerage c!arges by t!e
ndiabulls (ecurities on t!e s!are and derivative trading wit! t!e ot!er
broking firms/
0ositioning of ndiabulls in 4aipur/
(uggestions and perceptions about ndiabulls/
I&#ia& Stc' (ar'et Overvie)
%!e +ombay (tock "3c!ange 5+("6 and t!e 2ational (tock "3c!ange of
ndia )td 52("6 are t!e two primary e3c!anges in ndia/ n ndia- in
addition- t!ere are 22 &egional (tock "3c!ange/ 7owever- t!e +(" and 2("
!ave establis!ed t!emselves as t!e two leading e3c!anges and account for
about 80 percent of t!e e#uity volume traded in ndia/ %!e average daily
turnover at t!e e3c!anges !as increased from &s 881 crore in 199:-98 to &s
1-28; crore in 1998-99 and furt!er to &s 2-2:< crore in 1999-2000 5April-
August 19996/ 2(" !as around 1800 s!ares listed wit! a total market
capitali=ation of around &s9- 21-800 crore 5&s 9218-bln6/ %!e +(" !as over
>000 stocks listed and !as a market capitali=ation of around &s 9->8-000
crore 5&s 9>80-bln6/ +ot! e3c!anges !ave a different settlement cycle-
w!ic! allows investors to s!ift t!eir positions on t!e bourses/ %!e primary
inde3 of +(" is +(" (ense3 comprising <0 stocks/ 2(" !as t!e (*0
2("80 nde3 52ifty6- w!ic! consist of fifty stocks/ +ot! t!e e3c!anges !ave
switc!ed over from t!e open outcry trading system to a fully automated
computeri=ed mode of trading known as +O)% 5+(" on )ine %rading6 and
2"A% 52ational "3c!ange Automated %rading6 (ystem/ t facilitates more
efficient processing- automatic order matc!ing- faster e3ecution of trades
and transparency/ %!e scrips traded on t!e +(" !ave been classified into ?A@-
?+1@- ?+2@- ?C@- ?'@- and ?A@ groups/ %!e ?A@ group s!ares represent t!ose-
w!ic! are in t!e carry forward system 5+adla6/ %!e ?'@ group represents t!e
debt market5fi3ed income securities6 segments/ %!e ?A@ group scrips are t!e
blacklisted companies/ %!e ?C@ group covers t!e odd lot securities in ?A@-
?+1@ * ?+2@ groups and rig!t renunciations/ %!e key regulator governing
(tock "3c!anges- +rokers- .epositories- .epository participants- $utual
'unds- ' and ot!er participants in ndian secondary and primary market is
t!e (ecurities and "3c!ange +oard of ndia 5("+6 )td/
*r'i&+ ! t"e stc' (ar'et
A person desirous of buyingBselling s!ares in t!e market !as to first place !is
order wit! a broker/ C!en t!e buy order of t!e s!ares is communicated to
t!e broker !e routes t!e order t!roug! !is system to t!e e3c!ange/ %!e order
stays in t!e #ueue e3c!ange@s systems and gets e3ecuted w!en t!e order logs
on to t!e system wit!in buy limit t!at !as been specified/ %!e s!ares
purc!ased will be sent to t!e purc!ase by t!e broker eit!er in p!ysical or
demat format/
R,,i&+ Sett,eme&t C$c,e
n a rolling settlement- eac! trading day is considered as a trading period and
trades e3ecuted during t!e day are settled based on t!e net obligations for t!e
day/ At 2(" and +("- trades in rolling settlement are settled on a %D2 basis
i/e/ on t!e 2
nd
working day/ %ypically trades taking place on t!e $onday are
settled on t!e Cednesday- %uesday@s trades settled on %!ursday and so on/
-rimar$ (ar'ets
(ecurities available for t!e first time are offered t!roug! t!e primary
securities markets/ %!e issuer may be a brand-new company or one t!at !as
been in business for many- many years- like t!at of $A&E%/ %!e securities
offered may be a new type for t!e issuer or additional amounts of a security
used fre#uently in past/ %!e key is t!at t!ese securities absorb new funds for
t!e coffers of t!e issuer/
Sec&#ar$ (ar'ets
Once investors !ave purc!ased new issues- t!ey c!ange !ands in t!e
secondary markets/ %!ere are actually two broad segments of t!e secondary
markets t!e organi=ed e3c!anges and t!e over-t!e-customer 5O%C6 market/
%!e primary middlemen in t!e secondary market are brokers and dealers/
+roker act as an agent w!ile dealer as a principal in a transaction/
Organi=ed stages are p!ysical market place w!ere t!e agent of buyers and
sellers operate t!roug! t!e auction process/
.epsitr$
%!e organi=ation responsible to maintain investor@s securities in t!e
electronic from is called t!e depository/ n ot!er words- a depository can
t!erefore be conceived of as a F+ankG for securities/ n ndia t!ere are two
suc! organi=ations vi=/ 2(.) and C.()/%!e depository concept is similar
to t!e banking system wit! t!e e3pectation t!at bank !andle funds w!ereas a
depository !andles securities of t!e investors/ An investor wis!ing to utili=e
t!e services offered by a depository !as to open an account wit! t!e
depository t!roug! a depository participant/ .epository participant1 t!e
market intermediaries t!roug! w!om t!e depository services can be availed
by t!e investors are called a .epository 0articipant 5.06/
I&#ia& &,i&e s"are tra#i&+
&eali=ing t!ere is untapped market of investors w!o want to be able to
e3ecute t!eir own trades w!en it suits t!em- brokers !ave taken t!eir trading
rooms to t!e nternet known as online brokers- t!ey allow you to buy and
sell s!ares via nternet/ %!ere are 2 types of online trading service1
.iscu&t br'ers
.iscount online brokers allow you to trade via nternet at reduced rates/
(ome provide #uality researc!- ot!er don@t/
Fu,, service &,i&e
'ull service online brokerage is linked to e3isting brokerages/ %!ese brokers
allow t!eir clients to place online orders wit! t!e option of talkingB c!atting
to brokers if advice is needed/ +rokerage rates !ere are !ig!er/ 80aisa/com-
CC.irect/com- ndia+ulls/com- (!arek!an/com- ,eojit securities/com-
7.'Csec/com- %atatdw/com- Hotakstreet/com are some of t!e online
broking sites in ndia/
Factrs i&vestrs 'eep i& mi&# )"i,e se,ecti&+ &,i&e
br'ers i& I&#ia
Br'era+e cst
t is important to weig! up t!e subscription and trading costs c!arged by an
online broker against benefits offered by t!e site/ All online brokers display
t!eir c!arges on t!eir sites/ (ome make sure you find t!e c!arges easily-
w!ile wit! ot!ers you will !ave to searc! a bit/
Securit$
0lease make sure site !as 128-bit encryption to ensure safety of transaction
online/Iou normally get a secured )ogin id and password/ t is always
advisable to fre#uently c!ange trading password/ deally online trading site
s!ould be fully integrated/ %!e greater t!e backward integration- t!e better it
is for t!e customer/ deally broking account- .emat account and bank
account s!ould be linked electronically/
Rate re!res"
&ate refres! !as to be real-time wit! no time lag/ %!e speed and reliability
comes wit! !uge investment in tec!nology/ t is always advisable to c!eck
rates of online broking sites wit! +("B 2(" terminal rates/
Spee# ! e/ecuti&
(ystem !as to be fast and reliable t!at doe@s just one job- e3ecutes your
trades/ %!e last t!ing you need is a site t!at is !eavily congested wit! t!e
users w!o are downloading !eavy jpeg grap!s or pulling t!e latest story w!y
market is moving/ %!e site s!ould be one click wonder w!ere s#uaring off
all your positions or canceling all your pending orders takes one click and a
confirmation of action/
Tra#i&+ E/psure
'or trading- all sites provide ; times buy and sell limit against margin money
put in by customer/ 'or delivery of s!ares- buying limit is e#ual to margin
money put in by customer/ Couple of sites also provides margin funding for
buying of s!ares/
Free tria, peri#
(ite s!ould allow users free trial period to familiari=e yourself wit! system
before you decide to become trading member of t!e site/
I&tra#a$ c"art0 "istrica, c"art
%!e site s!ould provide intraday c!art tick-by-tick time and price data B
!istorical c!art for tec!nical analysis by investors of particular scrip/ )ot of
people trade based on c!arting packages/
+efore you can trade- you need to open an account and register as a trader as
wit! online broking site/ %!is involves filling up trading account form-
.emat account form and for faster transfer of money- nternet enabled bank
account/ 0lease read terms and condition of eac! site before commencing to
deal wit! t!em/ As per ("+ rule- 0!oto id proof and current address proof
is a must for opening trading account/
Online s!are dealing on t!e nternet is now a way of life for t!ousands of
investors/ 80J of (out! Horea and <0J-;0J E( trade are e3ecuted online/
f you want to deal in s!ares- t!ereto deal in s!ares- t!ere is no easier way/
Se&se/ a&# Ni!t$
(ense3 and 2ifty are t!e two important indices t!at track t!e ndian e#uity
market/ %!ere are !owever many differences in t!eir construction and
be!aviour/ nvestors must c!oose one between t!e two to benc!mark t!eir
portfolios/ t is sometimes seen t!at t!ese indices move wit! a low
correlation to eac! ot!er- t!at is to say t!at t!ey are not moving toget!er/
An inde3 is used to give information about t!e price movements of
products in t!e financial- Commodities or any ot!er market/ A stock inde3 is
created to provide investors wit! information regarding t!e average s!are
price in t!e stock market/
,enerally t!e stock price of any company is vulnerable to t!ree types
of news1
Company specific
ndustry specific
"conomy specific
Fu&cti&s ! a& i&#e/%

%!e main objective is to give all market participants an indicator of t!e
general movement of t!e stock/
%!e primary function of a stock inde3 is to serve as a barometer of t!e
e#uity market/ %!e ups and down in t!e inde3 represents t!e
movement of t!e e#uity market/
nvestors can !ave a clear picture on e#uity market/
(econdly- stock market indices are lead indicators of t!e performance
of t!e overall economy/ (imilarly- sectoral inde3 serves as a lead
indicator of t!e performance of t!at particular sector/
0er!aps- t!e most important use of an e#uity market inde3 is as a
benc!mark for a portfolio of stocks/ %!e systematic risk of one@s
portfolio can also be measured by comparing it to t!e inde3/
'inally- indices are useful in modern financial applications of
derivatives/ ndices serve as t!e underlying for 'uture * Options
products/ n t!e ndian market- bot! (ense3 and 2ifty are underlying
for 'utures and Options contracts/
(ar+i& Tra#i&+
$argin %rading is not!ing but borrowing money to invest in stocks- 7ere t!e
investor borrows money from !isB!er broker to invest in stocks t!roug! t!e
same broker/ %!e FmarginG !ere is t!e money actually borrowed from t!e
broker/ %!e margin loan can be up to 80J of t!e total amount invested/ %!is
effectively means t!at you can invest in s!ares wort! &s 100 by borrowing
&s 80 from your broker/ %!is is called buying s!ares on a 80J margin/ f t!e
value of t!e s!ares goes down- t!e investor !as to pay a Fmaintenance
marginG to bring t!e margin up to ;0J of t!e market value of t!e s!ares/
%!is margin is paid w!en t!e broker makes a Fmargin callG to t!e investor-
and investor !as to pay t!e difference between current margin and
maintenance margin to take it to ;0J/ f t!e margin falls below <0J- t!e
broker !as t!e discretion of li#uidating t!e client@s !oldings and t!us
recovering t!e loan advanced/
Ris's i& (ar+i& Tra#i&+%
Iou can lose more money t!at you !ave invested
Iou may !ave to deposit additional cas! or securities in your account
on s!ort notice to cover market lossesK
Iou may be forced to sell some or all your securities w!en falling
stock prices reduce t!e value of your securities
Iour brokerage firm may sell some or all of your securities wit!out
consulting you to pay off t!e loan it made to you/
Be&e!its ! (ar+i& Tra#i&+%
/ %!e main benefit of $argin %rading for t!e investors is t!at it
serves as an avenue for t!e investor w!o wants to buy more
s!ares t!an t!e cas! available/
/ %!e investor leverages t!e transaction and aim to make more
money on t!e investment t!an t!e interest payable on t!e margin
loan/
/ t can be very effective tool in t!e !ands of t!e e3perienced and
!eavy trades- w!o can invest up to double !is investible sum in
t!e !ope to earn !ig! profits/
L/ %rading on $argin improves li#uidity in t!e market/ Cit! lesser
amounts of cas! wit! investors- t!ey can assume !ig!er risk and
can invest in !ig!er value of stocks/
L/ %!e Official and structured market for $argin %rading will most
likely lead to an e3pansion of day trading activity in t!e market/
.ay %rading provides t!e market needed li#uidity to t!e e#uity
market/
O&,i&e Tra#i&+
nvestors can !ave complete control of t!eir stock investing actions- now
t!at t!ey !ave t!e convenience of buying and selling s!ares on t!e 2("
online and in real time/ "ac! individual !as access to t!e latest information
and tools to analyse any stock investment decision/ 0lus t!e power to
e3ecute t!e sale or purc!ase rig!t before t!em on t!eir personal computer
screen/
A#va&ta+es ! &,i&e tra#i&+%
%!e convenience of desktop investment-trade from anyw!ere at any time/
2ot just online but real time-from placing an order to !aving it e3ecuted-
in a few seconds/
Continuous feedback of all transactions orders and t!eir status/
t!ree level security via 'irewalls- data encryption using (ecure (ocket
)ayer 5((6 tec!nology- Eser .s and 0asswords i/e your personal
information remains for your eyes only/
Online access to a wealt! of live information t!at can facilitate better
investment decisions/
Crprate O!!er
S& -arameters Cmpetitrs !!er I&#iabu,,s O!!er
1 'acilities Only offline or online +ot!
2 ABc Opening c!arges &s 280D or :80 &s :005lifetime6
< Annual $aintenance
c!arges
&s 280D 2il
; +rokerage-ntraday 0/18J 0/105negotiable6
8 .elivery 0/:8J 0/805negotiable6
> $in C!arges &s 10 to &s 28 1 0aisa
: $argin-ntraday ,enerally > to 10
times
8 times
8 .elivery 2o carry forward ; times
9 "#uity analysis .o not !ave Epdated analysis
of 200 companies/
10 %ec!nical c!arts .o not provide 0rovided on trade
terminal
11 %ransparency 2ot so transparency "veryt!ing
provided online
Cmpetitive A&a,$sis%
-arameters Icici#irect I&vestsmart 1paisa Om'ta' S"are'"a&
Opening fee
%rade
.emat
&s :80
2il
&s >:0
2:0
&s ;28
2il
&s 800
2il
&s 800
2il
+rokerage 5J6
.elivery
(#uare Off
0/:8
0/18
0/:8
0/28
0/28
0/08
0/28
0/10
0/28
0/10
nterface
+anking
.emat
cici
cici
7dfc
)*'(
7dfc
%
corp
CitibankM
Hotak
securities
7dfcMM
((k
RESEARCH (ETHO.OLOGY
%!e literature study is our main met!od/ %!is is used in order to fulfill t!e
0urpose- i/e/ to give a s!ort- but full overview of t!e e3isting t!eoretical
definitions for %rading in secondary and primary market/ A detailed
description on trading and ot!er investment opportunities available in
market place is given in order to !elp or aid t!e readers in assessing a better
investment avenue/
%!e centre point of our study is a ndia bulls securities ltd- about w!ic! a
detailed description is given w!ic! includes !istory- development stages and
current scenario / "3amples of various ot!er securities firm are also given
wit! t!eir classification and respective features for comparison/
%!e information in t!e study is a secondary data taken from t!e various sites
of t!e concerned company and most of t!e information is furnis!ed from t!e
various web sites official as well as non official/
BRO2ERS AN. SUB BRO2ERS IN JAI-UR
(!are brokers and sub-brokers 5including on-line line * off-line brokers6
On-line broking firms1 Hotakstreet/com- 80aisa/com- CC .irect/com-
(!arek!an/
Off-line broking firms1 Anand &at!i- 7/C/4ain * Co/- 7em (ecurities-
"ureka (ecurities- Alankit Assignments and ot!er/
A&a,$sis ! #ata%
.ata analysis is done wit! t!e !elp of bar c!artsK pie c!arts- tables and
certain mat!ematical tools are also applied to derive t!e results/
Su++esti&s
nterest rate on 'unds 0rovided to investors on margin trading !ave
to be reduced
'rom t!e survey conducted- found t!at interest rate on funds
provided to investors is more t!an ot!er competitive firms/ so
company s!ould take care of t!is issue and try to !ave solution on
t!is aspect w!ic! felt more important/
+rokerage rate on trading !ave to be reduced/ "ven t!is one of t!e
major factor t!at !as to be taken care of- because competitors are
providing lesser brokerage bot! ntraday and .elivery trading w!ic!
satisfies customer w!o are investing and trading fre#uently/
%apping t!e !ig! income groups
Company s!ould focus on 7ig!-income groups and )evel to be
maintained/ %!ey can better profit to t!e company and can increase
t!e turnover of t!e company/
Limitati&s%
'indings cannot be generali=ed all over ndia
%!e researc! undertaken is strictly wit! in t!e time frame of 18
$ay till <0 4une 200;
(everal suggestions could not be included in t!e report because
more of researc! works are re#uired for t!em/
%!e findings of t!e researc! are directly in accordance wit! above
mentioned time period and are directly proportional to market
conditions
%!e result is just an instantaneous view of t!e e#uity market
scenario/
Alt!oug! every care !as been taken to make sure t!at t!e researc!
is accurate to t!e !ig!est degree of significance but still a slig!t
possibility of errors cannot be ruled out/

Bib,i+rap"$

16 www/nseindia/com
26 www/sebi/gov/in
<6 www/indiabulls/com
;6 www/kotakstreet/com
86 www/indiainfoline/com
>6 www/ya!oofinancials/com
:6 www/!indubonline/net
106 www/icicidirect/com
GLOSSARY3TER(INOLOGY
Arbitra+e4 0rofiting from differences in price of t!e same s!are traded on two or more
stock e3c!anges/
Autmate# Scree& Tra#i&+4 "lectronic trading in stocks t!roug! Lisual .isplay Enits
5L.E6/ %!e associated computer enters- matc!es- and e3ecutes t!e deal/ t makes
possible a floorless e3c!ange and brings transparency to deals/
Bears- %!ose w!o sell s!ares anticipating a fall in prices/
Bear Hammeri&+4 0ersistent selling pressure by bears- bringing t!e prices down/
Beta S"ares4 )isted- but infre#uently traded- s!ares of companies wit! a generally low
e#uity capital/
B,a&' Sa,es4 (ale of securities by BEARS w!o do not possess t!e securities at t!e
moment of selling- but !ope to buy t!em at a lower price w!en t!e market !as fallen/
B' C,sure4+efore a company declares a dividend or issues bonus or rig!ts s!ares- it
closes its register of members for a certain period- from one week to a mont!- during
w!ic! no transfer of s!ares is registered/
Br'ers4 are intermediaries w!o compete for t!e rig!t to !elp people buy or sell
somet!ing of value on !is client@s be!alf/
Bu,,s4%!ose w!o buy s!ares in anticipation of increase in price/
Ca,, Opti&4 &ig!t to buy at fi3ed price/
Capita, (ar'et4includes primary market- securities market term lending institutions-
banks- investors engaged in providing long-term capital 5w!et!er e#uity capital or debt
capital6 to t!e ndustrial (ector/
Cmm#ities (ar'et4$arket for trading bulk * basic goods like grain- edible oils-
rubber- cotton- metals- etc/ Certain special items like tea * coffee are traded in auctions
wit! inspection facilities for t!e goods/
.a$ Tra#i&+4+uying and selling t!e same s!are during a single day- !oping to make a
profit from price fluctuations/
.ept" mar'et- refers to t!e number of participants in t!e market ready to transact at a
given price to ensure sufficient li#uidity/
.erivatives4 is a product w!ose value is derived from t!e value of underlying asset-
inde3 etc/ %!e underlying assets can be e#uity- fore3 commodity- or any ot!er asset/
Gver&me&t Securities4 means a security created * issued by t!e Central ,overnment
or (tate ,overnment for t!e purpose of raising a public loan/
Gre$ (ar'et4 Enofficial premium market in w!ic! new- not-yet-listed s!ares reboug!t
and sold/
E5uit$ (ar'et- Owners!ip of tangible assets are boug!t * sold in "#uity $arket/
E/4.ivi#e&# .ate4A publicly announced date on or after w!ic! a buyer will not be
entitled to t!e dividend declared on a s!are/ %!e s!are price is usually s!ade lower on t!e
e3-dividend date/
E/ercise4%o put into effect- t!e rig!t to buy or sell/
Fi&a&cia, (ar'et- provide t!e c!annel for allocation of savings to investment * provide
a variety of assets to savers as well as various forms in w!ic! t!e investors can raise
funds/
FI4 'inancial nstitution
FII4'inancial nstitutional nvestor
F,r Br'er4A person w!o actually does t!e buying * selling of s!ares on be!alf of a
member of t!e stock e3c!ange for a small s!are of t!e commission c!arged by a broker/
Fr)ar# .ea,i&+0Tra#i&+-Contracts to buy or sell specific #uantities of goods-
currency- or freig!t at a stated price and a stated time in t!e future/ 'orward contracts are
boug!t * sold in t!e FUTURES MARKET.
Futures4(!ares or commodities boug!t or sold for delivery at a future date/ %!ese can be
sold at a profit before delivery if prices in t!e market !ave c!anged/
H,#i&+ t"e (ar'et4$arket intervention by public corporations like t!e E% or )C
wit! large buy orders of s!ares to stabili=e a falling market/ t is a part of t!eir
government mandate/
Ht S"ares4 1/ (!ares in great demand/
2/ (tolen s!ares/
I&4a&#4Out Tra#er4One w!o buys and sells t!e same s!are in t!e course of t!e trading
day- !oping to profit from s!arp price movements * keeps no over-nig!t position/
I-O4 nitial 0ublic Offering/ 2ew s!ares offered to public in t!e 0rimary $arket/
Jbbers4 +roker@s broker/ One w!o speciali=es in specific securities catering to t!e needs
of ot!er brokers/
Li5ui# (ar'et- One w!ere t!e si=e of an order creates minimal affects on t!e
transactions price/
Lt4A fi3ed number in w!ic! s!ares are boug!t * sold/
L)4%!e lowest price paid for a s!are in t!e last twelve mont!s/
(ar' .)&4 C!en a broker is buying s!ares on !is own account from a customer !e
takes t!e best Bid Price and deducts a commission- w!ic! is t!e mark down/
(ar' Up4 C!en a broker is selling from !is own account to a customer- !e c!arges t!e
best Ask Price and adds a commission- w!ic! is t!e mark up/
(ar'et at Rest4 %!e day@s closing prices t!at are taken into account w!ile preparing
s!are price movements c!arts/
(ar'et Capita,i6ati&4 %!e total market value- at t!e current stock e3c!ange list price-
of t!e total number of e#uity s!ares issued by a company/
(ar'et Or#er4 Order to t!e stockbroker to buy or sell a s!are at t!e best available price/
(ar'et -rice4 %!e last reported price of a s!are at w!ic! it was sold on t!e stock
e3c!ange/
(ar'et Lt4 "ac! Company specifies t!e minimum number of securities- w!ic! makes
an even or market lot/
(ar+i&4 %!e difference in prices at w!ic! a Jobber will buy and sell/ Also called a
Haircut/
(ar+i& Accu&t4An account wit! a brokerage firm- w!ic! will allow t!e client to buy
s!ares wit! money borrowed from t!e broker/ $argin re#uirements can be met wit! a
deposit in cas! or s!ares/
(aturit$4.ay on w!ic! option is e3ercised/
(e,t#)&4 %!e p!enomenon of fast- uncontrolled fall in s!are prices/
(ember C#e4 A uni#ue code given to eac! member of t!e stock e3c!ange to enable t!e
clearing!ouse to c!eck !is payment or delivery position/
(ember Firm4 A brokerage firm w!ic! !as at least one members!ip on a major stock
e3c!ange/
(IT4 $arket f %ouc!ed/ A limit order w!ic! automatically becomes a market order
w!en t!e price is reac!ed/
Na7ve Bu$4a&#4H,# Strate+$4 (electing s!ares randomly- buying t!em- and !olding
t!em regardless of any information available in t!e market/
Na'e# Ca,, *riti&+4 (elling a call option on s!ares t!e writer does not own/
Na'e# Opti&4 A Call option for w!ic! t!e seller does not own t!e supporting s!ares/
O&e *a$ (ar'et4 A market dominated by only buyers or sellers/
Out ! t"e m&e$4Option e3ercised price is above 5in case of call6 or below 5in case of
put6 prevailing price of underlying asset/
Over t"e Cu&ter (ar'et r OTC (ar'et4 A market w!ere s!ares w!ic! are not listed
on t!e stock e3c!ange are traded/
-a&ic Se,,i&+4 A condition of t!e stock market in w!ic! not only ine3perienced investors-
but also sturdy bulls- take frig!t and start selling/
-rt!,i4 Combined !olding of many kinds of financial securities- s!ares- debentures-
government bonds- Enit %rust certificates- and ot!er financial assets/ &educing risk by
diversification and ma3imi=ation of gains are t!e primary objects/
-rt!,i (a&a+er4 A professional w!o manages ot!er peoples@ or institution@s
investment portfolios wit! t!e objectives of profitability- growt! and risk minimi=ation/
-remium4 1/ A price above t!e face value of a s!are or any ot!er financial security/
2/ 0rice paid for buying an ption.
-rice Gap4 A s!are@s !ig! and low during a day does not overlap t!e prices on t!e
previous/
-r!it B'i&+4 (elling s!ares w!en t!eir prices !ave risen above t!eir purc!ase price/
-r!it Ta'i&+4 (elling a s!are- boug!t w!en its price was relatively low- w!en t!e market
price !as risen/
-u&ter4 (mall speculator w!o !opes to make a #uick buck by buying s!ares- !olding
t!em for s!ort period- and selling t!em to make a #uick profit/
-urc"ase Or#er4 Critten instruction to a s!are broker to buy or sell particular s!ares in a
particular way/
-ut Opti&4&ig!t to sell at fi3ed price/
8utati&4 7ig!est bid and lowest offers for a s!are/
8ute# -rice4 %!e price at w!ic! a s!are was last boug!t and sold on t!e stock
e3c!ange/
8ute# S"ares4 %!e s!ares of a company w!ic! are officially registered on a stock
e3c!ange- and w!ose prices are #uoted on t!e !!icial "ist.
Ra,,$4 2oticeable rise in t!e price of a s!are- or a noticeable rise in t!e s!are market
inde3- after a period of stagnancy or a declining trend/
Rampi&+4 )arge-scale buying of a stock from t!e market wit! t!e object of boosting t!e
image of t!e stock and t!e company be!ind it to increase its demand and conse#uently its
price/
Rate ! Tur&ver4 %otal annual sales divided by t!e average inventory s!ows t!e speed
wit! w!ic! stock !as been turned over/
Recr# .ate4 'or t!e purpose of dividend distribution and entitlements to Bonus or
Ri#$ts %ssues& a company fi3es a date on w!ic! a s!are!older must officially own s!ares
to #ualify/
Resista&ce Leve,4 A level at w!ic! t!e rise in price of a s!are !as repeated !alted- as
t!ere are more sellers at t!at price t!an buyers/
Retai, I&vestr4 7e is t!e individual buying s!ares for !imself- as opposed to t!e
institutional investor w!o buys for ot!ers/
Ri++i&+4 $anipulation of s!are prices so as to attract naNve investors to buy or sell
s!ares/
Ri+"ts Issue4 ssue of s!ares at par or at a premium by an e3isting company to its
s!are!olders in a certain proportion to t!eir !oldings- as a matter of t!eir rig!t to receive
preferential treatment/
R,, Over4 %ransfer of funds from one investment to anot!er/
Ru&# Lt4 %!e minimum number of s!ares in a trading lotK 10 or 80 in t!e case of
&s/10 s!ares- and 10 or 8 for &s/100 s!ares/
Ru&&i&+ A"ea#4 A broker buying or selling a s!are on !is own account before !is
client@s order for t!e same s!are/
Sau#a B'4 A book used by members of a stock e3c!ange or t!eir aut!ori=ed assistants
to record sales and purc!ase transactions/
Scree&i&+ Stc's4 A process of looking for s!ares- w!ic! meet predetermined- financial
and investment criteria/ Cit! computeri=ed s!are scan t!e process !as now become muc!
simpler/
Scrip4 (!are Certificate/
SEBI 9Securities : E/c"a&+e Bar# ! I&#ia;4 is t!e 2ational &egulatory body for t!e
securities market set up under t!e ("+ AC%- 1992 to ?protect t!e interests of investors in
securities * to promote t!e development of- * to regulate- t!e securities market * for
matters connected t!erewit! or incidental to/@
Sec&#ar$ (ar'et4 0lace w!ere already issued and outstanding s!ares are boug!t and
sold/ .istinguis!ed from t!e primary market in w!ic! t!e issuer sells s!ares directly to
t!e investor/
Securities (ar'et4refers to t!e markets for t!ose financial instrumentsB claimsB
obligations t!at are commonly * readily transferable by sale/
Se,,er<s (ar'et4 C!aracteri=ed by a s!ortage of s!ares in t!e market in relation to t!eir
demand and conse#uent !ig! prices- indicating a BU"" MARKET.
Se,, Out4 C!en a client fails to pay and take delivery of t!e s!ares boug!t on be!alf of
!im by t!e broker- t!e broker sells off t!e s!ares at t!e best market price and t!e client is
responsible for any financial loss to t!e broker/
Se,,i&+ S"rt4 (ale of s!ares- w!ic! !e doesn@t possess- by a speculator/
Se&sitive (ar'et4 $arket easily influenced by good or bad news/
Sett,eme&t .ate4 n a spot delivery contract t!e delivery of s!are certificates and
payment for t!em !ave to be concluded on t!e same day or t!e ne3t day/ n !and delivery
contracts t!e delivery and payments !ave to be made on an agreed date- not e3ceeding a
fortnig!t from t!e date of contract/
Sett,eme&t0Ba#,a Tra#i&+ =+uy s!are even if we do not !ave t!e re#uisite amount of
money or sell s!ares even if we do not !ave t!e (!are Certificates/
S"are4 A s!are is one unit of owners!ip of a company/
S"are Certi!icate4 .ocumentary evidence of t!e owners!ip of a block of s!ares/
S"are",#er4 A person or a legal entity w!o owns e#uity or preference s!ares of a
company/
S"are -remium4 An amount in e3cess of t!e face value of a s!are c!arged by a company
on its s!are issue/
SHCIL4(tock 7olding Corporation of ndia )td/ (et up in 1988 to provide post-trade
services like !olding stocks on be!alf of investors/
Speci!ie# S"ares4 %!e most widely traded s!ares- also known as 'RUP A
SECUR%T%ES& C"EARE( SECUR%T%ES& transactions in w!ic! are made t!roug! t!e
clearing!ouse of t!e stock e3c!ange/
Spt .e,iver$4 .elivery of s!ares and payment for t!e same on t!e date of purc!ase or
wit!in ;8 !ours/
Spt (ar'et4 Commodities market in w!ic! goods are sold against cas! and delivered
immediately/
S5uari&+ Up4 (ettling of accounts on ACCU)TS (A*- by actual delivery of s!ares or
carrying forward one@s transactions to t!e ne3t account day- by paying
BACK+AR(AT%).
Stc' E/c"a&+e4 A marketplace w!ere s!ares c!ange !ands for consideration/ An
association of individual members called member brokersB membersB brokers formed for
t!e purpose of regulating * facilitating t!e buying * selling securities by t!e public *
institutions at large/
(tock "3c!ange operates wit! due recognition from t!e ,overnment under t!e (ecurities
* Contracts 5&egulations6 Act- 198>/ +(" controls 80J of total volume of transactions/
Stc' Opti&4 n s!are trading- it is t!e rig!t to buy or sell a !are at a particular price
wit!in a particular period- in order to !edge t!e investment/
Stri'i&+ r E/ercise -rice% 'i3ed price at w!ic! t!e option may be e3ercised and t!e
underlying asset boug!t or sold/
Ta'e a -siti&4 %o buy a s!are for t!e long-term/
Ta'e .e,iver$4 0!ysical acceptance of s!ares- w!ic! !ave been boug!t on !is account-
by a client/
Tra#i&+ F,r4 %!e area in a stock e3c!ange in w!ic! dealers trade t!roug! personal
contact- as against impersonal screen trading/
Tra#i&+ Ha,t4 (uspension of trading in a s!are for a time w!ile important news from t!e
issuing company is being evaluated/
U&,a#i&+4 (elling s!ares off w!en prices are falling to avoid furt!er loss/
*as" Sa,e4 +uying * selling of a s!are simultaneously or wit!in a s!ort period of time
by an individual or a group to generate artificial market activity and a rise in t!e s!are@s
price w!ic! t!e manipulator@s can t!en cas! in on/