PROJECT REPORT ON

A STUDY OF STOCK EXCHANGE AND DERIVATIVES AT VENTURA LTD

TO
SKN SINHGAD MANAGEMENT SCHOOL OF BUSINESS

Submitted By:
Amit Hatwalne(36) Bhagyashree Shinde(59) Girish Daswani(22)

Under the Guidance Of Manjula Dhulipala

SKN SINHGAD SCHOOL OF BUSINESS MANAGEMENT

DECLARATION
We the undersigned, hereby declare that the Project Report entitled A study on Stock Exchange & Derivative written and submitted by our team, under the guidance of Manjula dhulipala is my original work and the conclusions drawn therein are based on the material collected.

Place: Date : Signature of Student

ACKNOWLEDGEMENT
Our sincere thanks to Prof. Manjula Dhulipala SKNSSBM for her support and encouragement in execution of our training and preparation of our report. This project would have been difficult to complete, but by the invaluable contribution from some important person. Let us take this opportunity to thank them. But firstly, I like to thank Ventura Securities Ltd. for giving me such a challenging project to work upon. I hope this challenge has brought the best out of us. We are greatful to the entire Ventura Securities Ltd. branch of Pune, Specially Mr. Girish Manani Branch Manager. We are indebted to our guide Mr. Abhishek Kumar, Sr. Relation Manager for the direction and purpose he gave to this project through his invaluable insight, which constantly inspired me to think beyond the obvious. His encouragement and patience helped me instill a great degree of self-confidence to deliver a good research work and for taking constructive interest in my project and (We are also grateful to Mr. Abhishek Kumar, Sr. Relation Manager, for having taken care of all our problems from
3

the most threatening to the most trivial, but which nobody else could handle and saving me from all those worries.)

EXECUTIVE SUMMARY

We have done our project in the field of Share Market in VENTURA SECURITIES Ltd. This is one of the most reputed financial services company with its wide range of financial services and products from securities, derivatives trading, depositary services, research & advisory services, insurance, loan against shares and mortgage.

The title of my project is A study of stock exchange and derivative at ventura . The project required me to study Stock Exchange in details and to find out various derivatives used in Market and used Fundamental Analysis.

The Project was of significance to me as it helped me to get an insight into the online share trading relating to future market, market research, fundamental analysis. It will also help the VENTURA SECURITIES LTD to get details of the trading strategies used by investors to minimize their risk and to earn profit.

INDEX
Sr. No. CHAPTERS PAGE NO.

I.

Introduction and Research Methodology

II.

Profile of The Organisation

III.

Research Design & Methodology

IV.

Data Presentation, Analysis & Interpretation

V.

Finding , Suggestion and Conclusion

INTRODUCTION
A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded private. The term 'the stock market' is a concept for the mechanism that enables the trading of company stocks (collective shares), other securities, and derivatives. Bonds are still traditionally traded in an informal, over-the-counter market known as the bond market. Commodities are traded in commodities markets, and derivatives are traded in a variety of markets. The stocks are listed and traded on stock exchanges which are entities (a corporation or mutual organization) specialized in the business of bringing buyers and sellers of stocks and securities together. The stock market in the India includes the trading of all securities listed on the BSE and NSE, as well as on the many regional exchanges. Market Phases 1. OPENING 8:45 a.m. to 9:54 am (includes Opening Session & Login Session) 1. OPEN PHASE- 9:55 a.m. to 3:30 pm (Trading Takes Place also called as continues secession) 1. MARKET CLOSE 3:30 p.m. to 4:00 (includes Closing & Post Closing Session)
7

1. SURCON-Surveillance & Control 4:00. to 6:00 p.m. (also called as Member Query Session)

The stock market is one of the most important sources for companies to raise money.

This allows businesses to go public, or raise additional capital for expansion.

The

liquidity

that

an

exchange

provides

affords

investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate, gold, etc.

Exchanges also act as the clearing house for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer
8

or seller that the counterparty could default on the transaction.

The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity.

COMPANY PROFILE
Ventura Securities Ltd. (Ventura) commenced operations in 1994 as a stock broking house. On its journey from then to now, Ventura has seen the capital markets mature and investors' requirements become more diverse. It has kept up with the times and today, it offers a whole range of investment products and services. Ventura has a 25,000 sq ft head office a Vikhroli, Mumbai which houses its corporate office and all operations. Our registered office is strategically situated in the Central Business District of Mumbai We have set up branches in select metros and have business partners across the length and breadth of the country We have been appointed as a national level distributor for all mutual funds We have been enlisted as a corporate agency for life insurance We are a corporate member of both the BSE and the NSE. This enables us to trade in equities, derivatives, currency products and offer depository services Ventura Commodities Pvt. Ltd., an associate company, is a trading member of MCX and NCDEX We have in-house, customized and ready to use software to enable seamless processes and flawless execution We adhere to a well-defined risk management system and settlement mechanism thereby enabling fully compliant operations.
10

Ventura Mission
To build relationships and strive towards customer delight, through constant innovation on a strong foundation of dedicated and trained resources.

. Directors Sajid Malik, Director is a member of the Institute of Chartered Accountants of India. He has more than fifteen years of varied experience in corporate advisory structured finance and private equity transaction. He has an international exposure to developed markets in Europe, US and the Far East and has been personally involved in international equity offerings and cross border acquisitions. He is the CEO of Genesys International Limited, a company focused on outsourcing of GIS and engineering design services. He is a non-executive director of Ventura Securities Limited. Hemant Majethia, Director is a member of the Institute of Chartered Accountants of India. He has more than fifteen years of experience in capital markets intermediation, equity research. Mr. Majethia is the CEO of Ventura Securities Limited and is responsible for the day to day operations and is responsible for creating an all India network of sub-brokers and creating the distribution strength of Ventura Securities Limited. He has been instrumental in establishing broking centers and branches for Ventura Securities Limited across the country. It was his vision to create an all India network of brokers relationship and build the distribution strength of Ventura.
11

Juzer Gabajiwala, Director is a member of the Institute of Chartered Accountants of India and The Institute of Company Secretaries of India. He has more than fifteen years experience in the field of finance and investment, having exposure to the industrial segment prior to entering the capital markets. Mr. Gabajiwala is responsible for setting up the entire Mutual Fund distribution business at Ventura and a network for PAN India operation. Mr. Gabajiwala is also responsible for setting up the wealth management business and the NRI desk.

DERIVATIVES
At Ventura, we strive to value add to our clients on the basis of their objective of leveraged trade opportunity and risk appetite by dealing in DERIVATIVES. Keeping this in mind, at Ventura we are fully geared to meet the all Requirements of derivative clients through a fully equipped Derivatives Trading Desk. We have dedicated & experienced team of derivatives experts and offer an integrated seamless service to our clients from the stage of making derivative strategy stage to confirmation of derivative trade. Understanding the need for flow of information at the best possible speed, all the calls & confirmation are routed through SMS alerts.
12

At the idea / call generation stage, we have people with proven capabilities both in Technical Aspects of stocks movement and having good pulse of the market mood. Our advisors take good care in profiling and ascertaining the clients trading objectives & risk appetite and accordingly suggest the strategies of Futures & Options, having optimum risk-reward ratio. Our strategies range from pure opportunistic calls for clients with higher risk appetite to Covered Calls for clients with moderate risk profile to pure hedging calls

13

RESEARCH DESIGN AND METHODOLOGY

RESEARCH METHODOLOGY Research in common parlance refers to a search for common knowledge. Once can also define research as a scientific and systematic search for pertinent information on a specific topic. Research is an academic activity and as such the term should be used in term should be used in a technical sense.
14

Objective of the Research: The entire project is based on the Analytical and Quantitative method. The project is concern with the Stock Market. The topic selected for research is To understand and study Market Research. Data Collection: The task of data collection begins after a research problem has been defined and plan chalked out. There are two types of data viz. Primary data, Secondary data. The Primary data those which are collected afresh and for the first time, and thus happen to be original in character. The Secondary data , on the other hand, are those which have already been collected by some one else and which have been passed through the statistical process. In research data is divided into two major parts i.e. Primary Data & Secondary Data. There different sources and methods of data collection follows: Primary data collection: The primary data is collected through Personal interview and information provided by the company.

15

SECONDARY DATA COLLECTION

The secondary data collected in project through Manuals, Internet, books, and newspapers etc.

Marketing Strategies:-

16

 Focus on the consumers who prefer almost all investment activities at same place by providing number of various financial services. At India Ventura securities a person can purchase or sell shares, debentures etc. and at the same place also demat it. India Ventura also provides other investment option to the same person at same place like Role of marketing research The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment. Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers' response to
17

marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers. Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the "DECIDE" model:

Ventura Securiti es Ltd Charges Demat A/C Trading A/C AMC NIL Rs. 450/Next Year 400 + Tax 0.02 paisa 0.15 paisa 0.02 paisa YES

India bulls Rs 1000/Rs. 1750/(4+5) NIL

Sharekh an Rs. 1000/Rs.1000/Rs. 300/-

India Info NIL Rs. 500/Rs. 250/0.25 paisa 0.07 paisa 0.06 paisa 25OO/5 000 YES

Brokerage Delivery Trade Intra day Trade F & O Trade

Rs.50 paisa Rs.05 paisa Rs.05 paisa

50 paisa 06 paisa 08 paisa

Initial Amount Software

NA YES

300/5000 YES

18

Investment Idea The trend of globalization has attracted many local and foreign investors to dive into the stock market arena. Presently, options investing drawing lots of investors towards it and all of them are grabbing good results. The field of investing is profitable field and highly competitive. The stock market never cares whether you are an experienced person or a newbie. Presently, the World Wide Web is offering different types of methods on options investing. This is a unique platform for everyone those who are willing to earn money and to run successful stock trading. Well, there are always risk in stock trading and you have to be ready to accept loss. At the lifetime of bond, you may get the interest payments, as well as when bond matures, and you repay the principle. Generally, bonds have the fixed rate of interest, and they are traded like stocks. However, this gives place for the money, which is accessible than the bonds and CDs when accruing interest. Also, you will have more control at this in case you select to have the savings account online. The stock market is volatile and no one knows when bad time will come. If you are a newcomer to this field, then you have to be highly cautious and must plan everything correctly. Well, for options investing there are lots of tips and rules that you can follow.

19

Literature Review Derivatives Forward Futures Option Derivative is a product whose value is derived from the value of one or more basic variables, called bases (underlying assets, index) in a contractual manner. The underlying assets can be Equity, Forex, commodity, Bullion or any other assets. The emergence of the market for derivative products, most notably Forwards, Futures and Option, can be traced back to the willingness of risk adverse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. By their very nature, the financial markets are marked by a very high degree of volatility. Through the use of derivatives products, it is possible to partially or fully transfer price risks by locking in asset price. For example, wheat farmers may wish to sell their harvest at a future date to eliminate the risk of a change in prices by that date. Such a transaction is an example

20

of derivative. The price of this derivative is driven by the spot price of wheat, which is the underlying. The financial derivatives came into spotlight in post- 1970 period due to growing instability in the financial markets. However, since their emergence, these products have become very popular and by 1990s, they accounted for about two third of total transactions in the derivatives products. In recent years, the market for financial derivatives has grown tremendously both in terms of variety of instruments available, their complexity and also turnover. The factors generally attributed as the major driving force behind growth of financial derivatives are: a) b) Increased volatility in asset prices in financial markets. Increased integration of national financial markets with the

international markets. c) Marked improvement in communication facilities and

sharp decline in their costs. d) Development of more sophisticated risk management

tools, providing economic agents a wider choice of risk management strategies. e) Innovations in the derivatives markets, which optimally
21

combine the risks and returns over a large number of financial assets, lead-

ing to higher returns, reduced risks as well as financial costs as compared to individual financial assets.

Participants:-The following three broad categories of participants hedgers, speculators and

1.

arbitrageurs trade in the derivatives market.

Hedgers- face risk associated with the price of an asset. They use futures and

options market to reduce or eliminate this risk.

2.

Speculators wish to bet on future movements in the price of an asset. Future

and Option contracts can give them an extra leverage, that 19s they can increase both the potential gains and potential losses in a speculative venture.

3.

Arbitrageurs are in business to take advantage of a discrepancy between

prices in two different markets. If, for instance they see the future price of an asset getting out of line with the cash price, they will take offsetting positions in the two markets to lock in a profit.

22

Types of Derivatives: - The most commonly used derivatives contracts are forwards, futures and options. Here I took a brief look at various derivatives contracts that have come to be used:Forwards: - A forward contract is a customized contract between two entities, where settlement takes place on a specified date in the future at todays pre-agreed price. Futures: - A future contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Future contracts are special types forward contracts in the sense that the former are standardized exchange traded contracts. Options: - Options are of two types- Calls and Puts. Call gives the buyer the right but not the obligation to buy a given quantity of the underlying assets, at a given price on or before a given future date. Put gives the buyer (holder) the right but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date.
23

Leaps: - The acronyms LEAPS means Long term Equity Anticipation Securities. These are options having a maturity of up to three years.

Warrants: - Option generally has lives of up to one year, the majority of options traded on options exchanges having maximum maturity of nine months. Longerdated options are called warrants and are generally traded over the counter. Baskets: - Baskets options are option on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Swaps: - Swaps are private agreement between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are;a) b) Interest Rate Swaps Currency Swaps

24

DATA COLLECTION AND DATA ANALYSIS

25

DERIVATIVES STRATEGIES What are Strategies? Strategies are specific game plans created by you based on your idea of how the market will move. Strategies are generally combinations of various products futures, calls and puts and enable you to realize unlimited profits, limited profits, unlimited losses or limited losses depending on your profit appetite and risk appetite. How are Strategies formulated? The simplest starting point of a Strategy could be having a clear view about the market or a script. There could be strategies of an advanced nature that are independent of views, but it would be correct to say that most investors create strategies based on views. What views could be handled through Strategies? There could be four simple views: bullish view, bearish view, volatile view and neutral view. Bullish and bearish views are simple enough to comprehend. Volatile view is where you believe that the market or scrip could move rapidly, but you are not clear
26

of the direction (whether up or down). You are however sure that the movement will be significant in one direction or the other. Neutral view is the reverse of the Volatile view where you believe that the market or scrip in question will not move much in any direction. 1. Bullish Strategies Various bullish strategies possible Buy a Future Buy a Call Option Sell a Put Option Create a Bull Spread using Calls Create a Bull Spread using Puts Let us discuss each of these using some examples. Buy a Futures Contract If you buy a Futures Contract, you will need to invest a small margin (generally 15 to 30% of the Contract value). If the underlying index or scrip moves up, the associated Futures will also move up. You can then gain the entire upward movement at the investment of a small margin. For example, if you buy Nifty Futures at a price of Rs 1,100 that moves up to 1,150 in say 10 days time you gain 50 points. Now if you have invested only 20%, i.e. 220, your gain is over 22% in 10 days time, which works out an annualized return of over 700%. The danger of the Futures value falling is very important. You should have a clear stop loss strategy and if your Nifty Futures in
27

the above example were to fall from 1,100 to say 1,080, you should sell out and book your losses before they mount. The graph of a Buy Futures Strategy appears below:

Buy a Call Option If you buy a Call Option, your Option Premium is your cost which you will pay on the day of entering into the transaction. This is also the maximum loss that you can ever incur. If you buy a Cipla May 260 Call Option for Rs 21, the maximum loss is Rs 21. If Cipla closes above Rs 260 on the expiry day, you will be paid the difference between the closing price and the strike price of Rs 260. For example, if Cipla closes at Rs 300, you will get Rs 40. After setting off the cost of Rs 21, your net profit is Rs 19. The Call buyer has a limited loss, unlimited profit profile. No margins are applicable on the buyer. The premium will be paid in cash upfront. If the scrip moves nowhere, the buyer is adversely impacted. As time passes, the value of the Option will fall. Thus if Cipla is currently at around Rs 260 and remains around that price till the end of May, the value of the Option which is currently Rs 21 would have fallen to nearly zero by that time. Thus time affects the Call buyer adversely. The graph of a Buy Call position appears below: Sell a Put Option
28

Another bullish strategy is to sell a Put Option. As a Put Seller, you will receive Premium. For example, if you sell a Reliance May 300 Put Option for Rs 18, you will earn an Income of Rs 18 on the day of the transaction. You will however face a risk that you might have to pay the difference between 300 and the closing price of Reliance scrip on the last Thursday of May. For example, if Reliance were to close on that day at Rs 275, you will be asked to pay Rs 25. After setting of the Premium received of Rs 18, the net loss will be Rs 7. If on the other hand, Reliance closes above Rs 300 (as per your bullish view), the entire income of Rs 18 would belong to you. As a Put Seller, you are required to put up Margins. These margins are calculated by the exchange using a software program called Span. The margins are likely to be between 20 to 35% of the Contract Value. As a Put Seller, you have a limited profit, unlimited loss profile which is a high risk strategy. If time passes and Reliance remains wherever it is (say Rs 300), you will be very happy. Passage of time helps the Sellers as value of the Option declines over time. The profile of the Put Seller would appear as under: Bull Spreads First of all, Spreads are strategies, which combine two or more Calls (or alternatively two or more Puts). Another series of Strategies goes by the name Combinations where Calls and Puts are combined.
29

Bull Spreads are those class of strategies that enable you benefit from a bullish phase on the index or scrip in question. Bull spreads allow you to create a limited profit limited loss model of payoff, which you might be very comfortable with. Bull Spread using Calls/ Puts Bull spreads can be created using Calls or using Puts. You need to buy one Call with a lower strike price and sell another Call with a higher strike price and a spread position is created. Interestingly, you can also buy a Put with a lower strike price and sell another with a higher strike price to achieve a similar payoff profile. 2. Bearish Strategies Various bearish strategies possible Sell Scrip Futures Sell Index Futures Buy Put Option Sell Call Option Bear Spreads

Combinations of Options and Futures .

How to decide the volume of the underlying to trade?

30

This is based on delta of the option at that point in time. For example, if a Cipla 240 call option with 20 days to expire and Cipla itself quoting at Rs 240 is priced at Rs 12, the implied volatility is 51% (you can derive this from a Black Scholes calculator). The historical volatility is say 41%. Thus, the option is expensive and hence you sell the option. You will look up the Delta of the option, which happens to be 0.54. One contract of Cipla is 1,200 Units. You have a positive Delta which means that with Cipla going up the price of the Call will move up (Rs 0.54 for every upward movement of Re 1.00 in Cipla) and will move down correspondingly. You do not want to bet on this directional movement. You will therefore buy Cipla futures to the tune of 1,200 x 0.54 i.e. 648 Futures. This will neutralize the impact in such a manner that whether Cipla moves up or down, the changes in Futures price will offset the changes in the Option price. For example, if Cipla moves up to Rs 245 tomorrow, you will find that the Option price has moved up to Rs 14.54. In case you wonder why, the background is with a Delta of 0.54, the Option price should go up by Rs 2.70 (0.54 x Rs 5 upward movement in Cipla ). As one day has passed, the time factor will impact Option prices downward say by Rs 0.16. Thus, the net Option price will tend to go up by Rs 14.54 (derived from the Black Scholes calculator).

31

You will have lost Rs 3,048 on the Call. You will find that you have gained 3,240 on the Futures, thus generating a net gain of Rs 152.

Dematerialization 32

Indian economy has been globalize and the capital market has been linked to the international Financial market. Foreign individuals and institutional investors have encouraged

participating into it. So, there is a need for raising the Indian Capital market in to the international standards in terms of efficiency and transparency. One such measure is the passing out of the Depository Act during the year 1996. Dematerialization of securities and under this system is one of the major steps aimed at improving and modernizing the capital market and enhancing the levels of investors protection

measures which aims at eliminating the bad deliveries and forgery of shares and expediting the transfer of shares. The draw back of the old system and the pool proof measures sought to improve efficiency in transfer and transparency standards prompted to evaluate the functioning of the

dematerialization process and to focus on the 8 developments of the depository system in the Indian capital market.

33

The study showed that there is a growth in the shares included in the Dematerialization process both in terms of volume of shares and value of shares.

ANALYSIS
Dematerialization Learning about dematerialization How to convert your security to demat form Process of conversion of securities into the demat form Securities specified as being eligible for dematerialization by the depository in its bye laws and as under the SEBI (Depositories and Participants) Regulations, 1996 (the Regulations) can be converted or issued in a dematerialized form. The process of conversion of securities into a dematerialized form or the issuance of the same in a dematerialized form can be explained thus: 1.Firstly, the issuer company, whose securities are eligible for dematerialization, has to enter into an agreement with a depository for dematerialization of securities already issued, or proposed to be issued to the public or existing shareholders. 2. The investor is given an option to hold the securities in a dematerialized form and it is his prerogative to exercise the option to hold the securities in that manner.
34

3. The depository enters into an agreement with the participants who are the agents of the depository and co-functionaries in the process of dematerialization of securities. 4. Any person can then enter into an agreement, through the participant, with the depository for availing the services provided by the depository. 5. Upon the entering into such agreement with the depository, the person has to surrender the certificate pertaining to the securities sought to be dematerialized to the issuer. This surrender is affected in the following manner. (I) The person (beneficial owner) who has entered into an agreement with the participant for dematerialization of the securities has to inform the participant about the details of the certificate of such securities. (ii) The beneficial owner has to then surrender the said certificate to the participant. (iii) The participant informs the depository about the particulars of the securities to be dematerialized and the agreement entered into between him and the beneficial owner. (iv) The participant then transfers the certificate pertaining to the said securities to the issuer along with the details and particulars of the securities. (v) These certificates are mutilated upon receipt by the issuer and substituted in the records against the name of the depository, who is the registered owner of the said securities. A
35

certificate to this effect is sent to the depository and all stock exchanges where the security is listed. (vi) Subsequent to this, the depository enters the name of the person who has surrendered the certificate of security as the beneficial owner of the dematerialized securities. (vii) The depository also enters the name of the participant through whom the process has been carried out and sends an intimation of the same to the said participant. Once the aforesaid process of dematerialization is carried out, the depository has the responsibility to maintain all the records pertaining to the securities that have been dematerialized.

36

Benefits of Depository System In the depository system, the ownership and transfer of securities takes place by means of electronic book entries. At the outset, this system rids the capital market of the dangers related to handling of paper. NSDL provides numerous direct and indirect benefits, like: Elimination of bad deliveries In the depository environment, once holdings of an investor are dematerialized, the question of bad delivery does not arise i.e. they cannot be held "under objection". In the physical environment, buyer was required to take the risk of transfer and face uncertainty of the quality of assets purchased. In a depository environment good money certainly begets good quality of assets. Elimination of all risks associated with physical certificates

37

Dealing in physical securities have associated security risks of theft of stocks, mutilation of certificates, loss of certificates during movements through and from the registrars, thus exposing the investor to the cost of obtaining duplicate certificates and advertisements, etc. This problem does not arise in the depository environment. No stamp duty For transfer of any kind of securities in the depository. This waiver extends to equity shares, debt instruments and units of mutual funds.

Immediate transfer and registration of securities In the depository environment, once the securities are credited to the investors account on pay out, he becomes the legal owner of the securities. There is no further need to send it to the company's registrar for registration. Having purchased securities in the physical environment, the investor has to send it to the company's registrar so that the change of ownership can be registered. This process usually takes around three to four months and is rarely completed within the statutory framework of two months thus exposing the investor to opportunity cost of
38

delay in transfer and to risk of loss in transit. To overcome this, the normally accepted practice is to hold the securities in street names i.e. not to register the change of ownership. However, if the investors miss a book closure the securities are not good for delivery and the investor would also stand to loose his corporate entitlements. Faster settlement cycle The exclusive demat segments follow rolling settlement cycle of T+2 i.e. the settlement of trades will be on the 2nd working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor. Faster disbursement of non-cash corporate benefits like rights, bonus, etc. NSDL provides for direct credit of non-cash corporate

entitlements to

an investors account, thereby ensuring faster

disbursement and avoiding risk of loss of certificates in transit.

Reduction in brokerage by many brokers for trading in dematerialized securities Brokers provide this benefit to investors as dealing in dematerialized securities reduces their back office cost of
39

handling paper and also eliminates the risk of being the introducing broker. Elimination of problems related to change of address of investor, transmission, etc In case of change of address or transmission of demat shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of securities. Elimination of problems related to selling securities on behalf of a minor A natural guardian is not required to take court approval for selling demat securities on behalf of a minor. Ease in portfolio monitoring Since statement of account gives a consolidated position of investments in all instruments.

40

Disadvantages of Dematerialization The disadvantages of dematerialization of securities can be summarized as follows: A. Trading in securities may become uncontrolled in case of dematerialized securities.
41

B. It is incumbent upon the capital market regulator to keep a close watch on the trading in dematerialized securities and see to it that trading does not act as a detriment to investors. The role of key market players in case of dematerialized securities, such as stock-brokers, needs to be supervised as they have the capability of manipulating the market. C. Multiple regulatory frameworks have to be confirmed to, including the Depositories Act, Regulations and the various Bye Laws of various depositories. Additionally, agreements are entered at various levels in the process of dematerialization. These may cause anxiety to the investor desirous of simplicity in terms of transactions in dematerialized securities. However, the advantages of dematerialization outweigh its disadvantages and the changes ushered in by SEBI and the Central Government in terms of compulsory dematerialization of securities are important for developing the securities market to a degree of advancement. Freely traded securities are an essential component of such an advanced market and dematerialization addresses such issues and is a step towards the advancement of the market.

Depository System (working model)

42

NSDL carries out its activities through various functionaries called business partners who include Depository Participants (DPs), Issuing companies and their Registrars and Share Transfer Agents, Clearing corporations/ Clearing Houses of Stock Exchanges. NSDL is electronically linked to each of these business partners via a satellite link through Very Small Aperture Terminals (VSATs) or through Leased land lines. The entire integrated system (including the electronic links and the software at NSDL and each business partner's end) is called the "NEST" [National Electronic Settlement & Transfer] syst Ifs and Buts of Indian online share trading You have some money to dabble with. Trading shares on BSE/NSE has always been your dream. When will you ever find the time? And besides, the hassle of finding a broker is not easy. Realizing there is untapped market of investors who want to be able to execute their own trades when it suits them, brokers have taken their trading rooms to the Internet. Known as online brokers, they allow you to buy and sell shares via Internet. There are 2 types of online trading service: discount brokers and full service online broker. Discount online brokers allow you to trade via Internet at reduced rates. Some provide quality research, other dont. Full service online brokerage is linked to existing brokerages. These brokers allow their clients to place
43

online orders with the option of talking/ chatting to brokers if advice is needed. Brokerage rates here are higher. 5Paisa.com, ICICIDirect.com, IndiaBulls.com, Sharekhan.com, Geojit securities.com, HDFCsec.com, Tatatdw.com, Kotakstreet.com are some of the online broking sites in India. There are currently close to 50 online brokerages in India with ICICI Direct, Home Trade, Kotak Street, Sharekhan, Motilal Oswal, IndiaBulls and 5Paisa being some major players. However, due to limited volumes, no online brokerage is currently making money and a shakeout is imminent in the near future. The going is expected to get tougher with the advent of capital account convertibility. Players such as TD Waterhouse have already entered the Indian market, while others such as Schwab are expected shortly. On an average, Rs 40 crore per day (Rs 1,000 crore per month) is likely to be the threshold breakeven for online brokerages. However Hiren Gada, senior VP, Home Trade is not unduly perturbed. We at Home Trade believe there is scope for multiple players as the entire segment is in a growth stage. Hence, notwithstanding the current sentiment in the market, potential for online trading is still immense in India. Says Manish Shukla, VP, Internet broking, Motilal Oswal, By mid-2002 we should be able to see substantial volumes in the domestic market for Internet-based stock trading. In the next 18 months a lot of players will get in, the market will change form and shape, and

44

many people will get out. You will have the survivors and stable volumes.

.1. Which brand gives the more customer value?

Customer value analysis.

Customer Value = Customer Benefits Customer Costs

Customer costs = Price + Other Costs (Acquisition costs, Usage costs, Maintenance costs, Ownership costs, Disposal costs)

Q. 2. How customer rating the brands. 1) SHARE

Accounting charges

INDIAINFOLIN E Rs750 0.50% 10.20%

VENTURA

KHAN Rs750 0.50% 10.20%

Rs 700 0.50% 10.20%

Brokerage Service tax

45

STT

0.01%

0.01%

0.01%

2) CASH MANAGEMNET Delivery trade

Non-delivery trade

SHARE KHAN N.A N.A N.A 10 Paisa N.A 3.15 pm

INDIAINFOLIN E N.A N.A Rs500 N.A 0.05 N.A

VENTURA

0.08% 0.15% Rs500 N.A N.A 3.15pm

Min.order Min.brokerage Brokerage Jobbing

46

3) Spot mana geme nt Min. Trade Max. SHARE KHAN INDIAINFOLINE VENTURA

N.A N.A

Rs500 N.A N.A

Rs500 No limit N.A

Trade Broker 0.05% age

47

4) Marg SHARE KHAN INDIAINFOLINE in Seg ment Max. N.A Rs500 Trade Max. N.A Trade Brera 0.05% ge Rs15 0.05% VENTURA

Rs500 N.A N.A

5) Derivative Segment Service tax STT Min.Balance SHARE KHAN 10.20% 0.01% N.A INDIAINFOLINE 10.20% 0.01% Rs500 VENTURA 10.20% 0.01% N.A

6) Bank Fee SHARE KHAN INDIAINFOLINE VENTURA

48

Min.Balance Penalty Account Charges Custody Charges Transaction tobuy Transaction to sell Stamp charges

N.A NIL NIL N.A Free Free 0.01%

Rs 5000 NIL NIL N.A NIL 0.01% N.A

N.A N.A N.A N.A N.A N.A N.A

7) Demat Account Rejection or Fails Remat charges Pledge Demat charges SHARE KHAN N.A N.A 0.02% N.A INDIAINFOLIN E NIL N.A Rs 10per% Rs 3 per% VENTURA Rs 20 Rs 15 0.02% N.A

49

8) Depositary Participant Advance amount Thresh hold amount Funding IPO Research report Exposure SHARE KHAN N.A N.A Yes Yes 86% 4 times INDIAINFOLINE Rs2500 Rs1000 Yes Yes N.A 4-7 times VENTURA N.A N.A 21% Yes 80% 6 times

50

51

FINDINGS

52

. FINDINGS
During the Market Research business class people show positive attitude in Share Trading Those who have Interest in share trading most of them were aware of Ventura Securities.

Mostly Investors show their first preference for share Trading in Ventura Securities Ltd.

As per the survey results all Ventura Securities brokers and frenchancy in Pune area show positive attitude in share Trading

In some areas especially Ventura Securities in Pune, Mumbai, Chennai, Hyderabad etc. a big part of Investors were found to be Interested in Commodity Market

In survey few clients expressed full satisfaction for the products of Ventura Securities Mostly For PVS. (power Ventura Securities)

53

LIMITATION

54

During the project the following limitations are found: The major limitation of the project was time span i.e. only 1 month. So it was difficult to go in depth study in the respective subject. It is very difficult to collect the financial data relating to the Market Research & Fundamental or company, because it comes under business secrecy.

The project was undertaken in the Pune City, which is relatively a big city, and so that the clients very huge in number. Many of the clients were not able to define the strategies used by them.

55

SUGGESTIONS

56

SUGGESTIONS

Following suggestion have been drawn after doing this project The concept of Market Research is not very simple. An investor should therefore have sound knowledge of technical terms in Equity, Derivatives before dealing in Future market. Even though, the concept of derivatives is though. But it is becomes easy to understand once the person starts trading in it. The investor should also note that the price of future contracts depends on many factors which are uncontrollable. Therefore he should take care of such factors.

Ventura Securities is a service firm so company should apply

57

Ventura securities may go through Investment Mela Ventura Securities should come up with NCDEX Ventura Securities should conduct some kind of mock classes for new Investors who even dont know about share market

There should be employee ID-Card for them so that when they go on it shows good impression and Identity of employee

58

CONCLUSION

59

Conclusion Although Ventura Securities is the largest shareholder in the market, the next To follow is Leadership which is gearing up for expansion in all over India and Various nearer cities like Pune, Nasik, Mumbai, etc. with the spreading of Business in these cities and further developing on the key areas in Pune and All big Cities. Ventura Securities is all set up to become The Company of the Future

60

BIBLIOGRAPHY

61

Bibliography SReference Book :- National Certificate Financial Market NCDM Module Derivatives Market (Dealer ) Module NCCM Module Commodities Market Module

Websites:
www.ventura1.com

www.venturasecurities.com www.bseindia.com www.nseindia.com www.derivativesindia.com

62

Manuals: Ventura Securities Ltd. Company Manager Manu

Annexure

63

QUESTIONNAIRE

1. Name: 2. Address: 3. Do you invest in share market? Yes No

4. If Yes then which type of investment tool do you use (invest in)? Equities Commodities Mutual Funds Gold 5. Do you use Derivatives?(for Equity/Currency) Yes No
64

Insurance Currencies

6. Are you aware of call and put options of future? Yes No

7. Which strategies do you use for Hedging? Long Call / Put

Strategy Married Put Option Strategy Protective Strategy Bear Call Put Spread Strategy Covered Strategy Caller Strategy. Call

65