for MBA summer training

1. A
PROJECT REPORT
ON
SUMMER TRAINING UNDERTAKEN AT
KOTAK SECURITIES LTD.
TITLED
“ONLINE EQUITY TRADING”
Submitted in partial fulfilment for the
Award of degree of
Master of Business Administration
SUBMITTED BY: - SUBMITTED TO:-
Virendra kumar Mrs. Anushruti Pareek
MBA IIyear (III Sem)
2011-2013
SUBODH INSTITUTE OF MANAGEMENT & CAREER
STUDIES, JAIPUR
1

2. ACKNOWLDGEMENT
Talent and capabilities are of course necessary but opportunities and right guidance
is two very important back-ups without which any person cannot climb the ladder to
success.
I wish to express my most sincere thanks to “Mr. Taj Mohammed” (Cluster
Manager) kotak securities, Vaishali Nagar, Jaipur, providing me the opportunity to
work with renowned organization and enabling me to gain practical knowledge in the
field of Finance and Operations. I also owed my profound gratitude to my field guide
Mrs. Vartika (back office staff) and Mr. Naveen gupta (relationship manger) for their
guidance during the duration of project.
Moreover I am also indebt to Dr Joytsana Dewan Mehta “Director” and my college
mentor Mrs. Anushruti Pareek, SIMCS, Rambagh Campus, Jaipur for their kind
help and co-operation for completing this project work.
I indeed thanks to kotak securities ltd. Vaishali nagar, Jaipur and Simcs Jaipur for
giving me opportunity to have experience in a professionally run organization.
Indebted to my parents, friends and relatives for their physical, psychological and
moral support extended by them at all time.
Virendra Kumar
2

3. PREFACE
Any kind of learning is incomplete till it is practically applied in the concerned field.
Only then does a person understand and get hold of even the minutest details of
what he/she has learnt in his stay at the institute doing his /her MBA. So, to
practically apply what I had gained in the past one year in the MBA programme, I
underwent two months summer training at Kotak Securities, Vaishali Nagar, Jaipur.
It has been a wonderful learning experience, which has given me an insight into
Management of modern business which requires an appreciation of multidisciplinary
concept and in-depth knowledge of specific analytical tools, geared to the solution of
real life problems. No doubt every real situation is unique but a set of theoretical
tools of knowledge, itself based on empirical foundation, can help in developing the
mechanism for handling such situation.
So the MBA curriculum has been desired to provide to the future manager’s ample
practical exposure to the business world.
The summer training is essential for the fulfillment of MBA curriculum; it provides an
opportunity to the student to understand the industry with special emphasis on the
development of skills in analyzing interpreting practical problems through
applications of management.
3

4. The whole study has been divided into various parts:
The First Chapter includes the introduction about derivatives and history of
kotak securities ltd. Its award and recognitions and its business in online
trading.
The Second chapter includes the objectives, significance, and research
methodology and data collection.
The Third chapter has reported facts and information gathered by student
in the course of study of topic.
The Fourth chapter is about online trading and the software KEAT used
by the organization.
The Fifth chapter is about SWOT analysis, which can help the organization
to solidify its position in the market.
The Sixth chapter includes the Suggestions and Recommendations for the
further development and pointing out the weak points so that changes can be
made.
Lastly, there is Bibliography of the books, which was used by the researcher.
4

5. TABLE OF CONTENT
S.No TOPIC PAGE No.
1. OVERVIEW 6
A) BASIC INTRODUCTION OF DERIVATIVE
B) INTRODUCTION OF KOTAK MAHINDRA GROUP
C) HISTORY OF KOTAK MAHINDRA GROUP
D) INTRODUCTION OF KOTAK SECURITIES LTD.
E) PRODUCTS ANS SERVICES OF KOTAK
2. RESEARCH PROFILE 17
A) OBJECTIVE OF STUDY
B) SIGNIFICANCE OF STUDY
C) RESEARCH METHODOLOGY AND DATA COLLECTION
3. FACTS AND FINDINGS 21
A) INTRODUCTION OF SEBI,BSE AND NSE
B) INTRODUCTION ABOUT DERIVATIVES
C) WHAT ARE FUTURE AND THEIR TRADING STRATEGIES
D) WHAT ARE OPTIONS AND THEIR TRADING STRATEGIES
4. ONLINE TRADING 30
A) BASIC INTRODUCTION ABOUT ONLINE TRADING
B) PRODUCTS AVAILABLE FOR TRADING
C) TRADING TOOLS PROVIDED BY KEAT
5. SWOT ANALYSIS 47
6. SUGGESTIONS AND RECOMMENDATIONS 48
7. BIBLIOGRAPHY 50
5

6. BASIC INTRODUCTION OF DERIVATIVES
A derivative is a financial instrument whose value depends on the values of other
underlying variables. As the name suggests it derives its value from an underlying
asset. A feature common to all underlying assets is that they carry the risk of change
in value. For ex-a derivative may be created for a share, or any material object. The
most common underlying assets include stocks, bonds, commodities etc.
INTRODUCTION OF KOTAK MAHINDRA GROUP
The Kotak Mahindra Group
Kotak Mahindra is one of India's leading banking and financial services
organizations, offering a wide range of financial services that encompass every
sphere of life. From commercial banking, to stock broking, to mutual funds, to life
insurance, to investment banking, the group caters to the diverse financial needs of
individuals and corporate sector.
The group has a net worth of over Rs. 100.6 billion and has a distribution network of
branches, franchisees, representative offices and satellite offices across cities and
towns in India, and offices in New York, London, San Francisco, Dubai, Mauritius
and Singapore servicing around 8 million customer accounts.
The group specializes in offering top class financial services, catering to every
segment of the industry. The various companies include :
Kotak Mahindra Bank Ltd
6

7. Kotak Mahindra Old Mutual Life Insurance Ltd
Kotak Securities Ltd
Kotak Mahindra Capital Company (KMCC)
Kotak Mahindra Prime Ltd (KMPL)
Kotak International Business
Kotak Mahindra Asset Management Company Ltd (KMAMC)
Kotak Private Equity Group (KPEG)
Kotak Realty Fund
Kotak Mahindra Bank Ltd
Kotak Mahindra Bank Ltd is a one stop shop for all
banking needs. The bank offers personal finance solutions of every kind from
savings accounts to credit cards, distribution of mutual funds to life insurance
products. Kotak Mahindra Bank offers transaction banking, operates lending
verticals, manages IPOs and provides working capital loans. Kotak has one of the
largest and most respected Wealth Management teams in India, providing the
widest range of solutions to high net worth individuals, entrepreneurs, business
families and employed professionals.
Kotak Mahindra Old Mutual Life Insurance Ltd
7

8. Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26
joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual plc. A
Company that combines its international strengths and local advantages to offer its
customers a wide range of innovative life insurance products, helping them take
important financial decisions at every stage in life and stay financially independent.
The company covers over 3 million lives and is one of the fastest growing
insurance companies in India. www.kotaklifeinsurance.com
Kotak Securities Ltd
Kotak Securities is one of the largest broking houses in
India with a wide geographical reach. Kotak Securities operations include stock
broking and distribution of various financial products including private and
secondary placement of debt, equity and mutual funds.
Kotak Securities operate in five main areas of business:
Stock Broking (retail and institutional)
Depository Services
Portfolio Management Services
Distribution of Mutual Funds
Distribution of Kotak Mahindra Old Mutual Life Insurance Ltd products
For more information, please visit the Kotak Securities
website www.kotaksecurities.com
8

9. Kotak Mahindra Capital Company (KMCC)
Kotak Investment Banking (KMCC) is a full-service
investment bank in India offering a wide suite of capital market and advisory
solutions to leading domestic and multinational corporations, banks, financial
institutions and government companies.
Our services encompass Equity & Debt Capital Markets, M&A Advisory, Private
Equity Advisory, Restructuring and Recapitalization services, Structured Finance
services and Infrastructure Advisory & Fund Mobilization.
For more information, please visit the Kotak Investment Banking
website www.kmcc.co.in
Kotak Mahindra Prime Ltd (KMPL)
Kotak Mahindra Prime Ltd is among India's largest
dedicated passenger vehicle finance companies. KMPL offers loans for the entire
range of passenger cars, multi-utility vehicles and pre-owned cars. Also on offer
are inventory funding and infrastructure funding to car dealers with strategic
arrangements via various car manufacturers in India as their preferred financier.
For more information, please visit the KMPL website http://carloan.kotak.com
Kotak International Business
Kotak International Business specializes in
9

10. providing a range of services to overseas customers seeking to invest in India. For
institutions and high net worth individuals outside India, Kotak International
Business offers asset management through a range of offshore funds with specific
advisory and discretionary investment management services.
For more information, please visit the Kotak Mahindra International Business
websitewww.investindia.kotak.com
Kotak Mahindra Asset Management Company Ltd (KMAMC)
Kotak Mahindra Asset Management Company
offers a complete bouquet of asset management products and services that are
designed to suit the diverse risk return profiles of each and every type of investor.
KMAMC and Kotak Mahindra Bank are the sponsors of Kotak Mahindra Pension
Fund Ltd, which has been appointed as one of six fund managers to manage
pension funds under the New Pension Scheme (NPS).
For more information, please visit the KMAMC
website www.kotakmutual.com/kmw/main.htm
Kotak Private Equity Group (KPEG)
Kotak Private Equity Group helps nurture emerging
businesses and mid-size enterprises to evolve into tomorrow's industry leaders.
With a proven track record of helping build companies, KPEG also offers expertise
with a combination of equity capital, strategic support and value added services.
What differentiates KPEG is not merely funding companies, but also having a
close involvement in their growth as board members, advisors, strategists and
fund-raisers.
10

11. For more information, please visit the KPEG
website www.privateequityfund.kotak.com
Kotak Realty Fund
Kotak Realty Fund deals with equity investments covering
sectors such as hotels, IT parks, residential townships, shopping centre’s,
industrial real estate, health care, retail, education and property management. The
investment focus here is on development projects and enterprise level
investments, both in real estate intensive businesses.
For more information, please visit the Kotak Realty Fund
website www.realtyfund.kotak.com
History of Kotak Mahindra Group
The Kotak Mahindra group was born in 1985 as kotak Capital Management Finance
Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak
and company. Industrialists Harish Mahindra and Mahindra took a stake in 1986, and
that’s when the company changed its name to Kotak Mahindra Finance Limited.
It has been a steady and confident journey leading to growth and success. The
milestones of the group growth story are listed below year wise:
1986 Kotak Mahindra Finance Ltd started the activity of Bill Discounting
11

12. 1987 Kotak Mahindra Finance Ltd entered the Lease and Hire Purchase market
1990 The Auto Finance division was started
1991 The Investment Banking Division was started. Took over FICOM, one of
India's largest financial retail marketing networks
1992 Entered the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into a separate
company - Securities. Investment banking division incorporated into a
separate company - Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company - Kotak
Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited).
Kotak Mahindra takes a significant stake in Ford Credit Kotak
Mahindra Limited, for financing Ford vehicles. The launch of Matrix
Information Services Limited marks the Group's entry into information
distribution.
1998 Entered the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
2000 Kotak Mahindra tied up with Old Mutual plc. For the Life Insurance business.
Kotak Securities launched its on-line broking site. Commencement of private
equity activity through setting up of Kotak Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation. Launched Insurance Services. Kotak
Securities Ltd. was incorporated
12

13. 2003 Kotak Mahindra Finance Ltd. converted into a commercial bank - the first
Indian company to do so.
2004 Launched India Growth Fund, a private equity fund.
2005 Kotak Group realigned joint venture in Ford Credit; their stake in Kotak
Mahindra Prime was bought out (formerly known as Kotak Mahindra Primus
Ltd) and Kotak group’s stake in Ford credit Kotak Mahindra was sold.
Launched a real estate fund.
2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital
Company and Kotak Securities.
Launched a Pension Fund under the New Pension System.
2008
Kotak Mahindra Bank Ltd. opened a representative office in Dubai
2009
Entered Ahmadabad Commodity Exchange as anchor investor.
Ahmadabad Derivatives and Commodities Exchange, a Kotak anchored
2010 enterprise, became operational as a national commodity exchange.
INTRODUCTION OF KOTAK SECURITIES LTD.
Originally established in 1994, Kotak Securities is a subsidiary of Kotak
13

14. Mahindra Bank, which services more than 7.4 lakh customers. The firm has a
wide network of more than 1400 branches, franchisees representative offices,
and satellite offices across 448 cities in India and offices in New York, London,
Dubai, Mauritius and Singapore.
We process more than 400000 trades a day which is much higher than some
of the renowned international brokers.
The company is a corporate member of both The Bombay Stock Exchange
(BSE) and The National Stock Exchange of India (NSE). Our operations
include stock broking services for trading in stock markets through branches &
internet and distribution of various financial products including investments in
IPOs, Mutual Funds and Currency Derivatives. Currently, Kotak Securities is
one of the largest broking houses in India with substantial geographical reach
to Asia Pacific, Europe, Middle East and America.
Kotak Securities Limited has Rs. 1,202 crore of Assets Under Management
(AUM) as of 31st Dec, 2011.
Innovators:
We have been the pioneers in providing many products and services which
have now become industry standards for stock broking in India. Some of them
include:
Mobile stock trading application to keep track of your investments even
on the go
Facility of Margin Finance to the customers for online stock trading
14

15. Investing in IPOs and Mutual Funds on the phone
SMS alerts before execution of depository transactions
Auto Invest - A systematic investing plan in Equities and Mutual funds
Provision of margin against securities automatically against shares in
your Demat account
Research Expertise:
We specialize in Fundamental and Technical analysis backed by a team of
highly trained and qualified individuals.
Our full-fledged research division is involved in Macro Economic studies,
Sectorial research and Company Specific Equity Research which publishes in-
depth stock market analysis. This is combined with a strong and well
networked sales force which helps deliver current and up to date market
information and news.
We are also a depository participant with National Securities Depository
Limited (NSDL) and Central Depository Services Limited (CDSL). By being a
stock broker and depositary participant, we provide dual benefit in our services
wherein the investors can avail our stock broking services for executing the
transactions and the depository services for settling them.
Our Portfolio Management Service comes as an answer to those who would
like to grow exponentially on the crest of the stock market, with the backing of
an expert.
Board of Directors of Kotak Securities Ltd :
15

16. Chairman: Mr. Uday Kotak.
Managing Director: Mr. Narayan S.A.
Directors: Mr. C. Jayaram
Mrs. Falguni Nayar.
Mr. Vikram Sud.
Executive Director & Chief operating Officer: Mr. D. Kannan
KOTAK GROUP PRODUCTS AND SERVICES :
Bank
Life Insurance
Mutual Fund
Car Finance
Securities
Institutional Equities
Investment Banking
Kotak Mahindra International
Kotak Private Equity
Kotak Realty Fund
AWARDS AND RECOGNITION OF KOTAK SECURITIES LTD.
Awards
Best Broker in India by Finance Asia for 2010 & 2009
16

17. UTI MF - CNBC TV18 Financial Advisor Awards - Best Performing Equity
Broker (National) for the year 2009
Best Brokerage Firm in India by Asia money in 2009, 2008, 2007 & 2006
Best Performing Equity Broker in India - CNBC Financial Advisor Awards 2008
Avaya Customer Responsiveness Awards (2007 & 2006) in Financial Services
Sector
The Leading Equity House in India in Thomson Extel Surveys Awards for the
year 2007
Euro money Award (2007 & 2006) - Best Provider of Portfolio Management:
Equities
Euro money Award (2005)-Best Equities House In India
Finance Asia Award (2005)-Best Broker In India
Finance Asia Award (2004)- India's best Equity House
We specialize in Fundamental and Technical analysis backed by a team of
highly trained and qualified individuals.
Our full-fledged research division is involved in Macro Economic studies,
Sectorial research and Company Specific Equity Research which publishes
in-depth stock market analysis. This is combined with a strong and well
networked sales force which helps deliver current and up to date market
information and news.
We are also a depository participant with National Securities Depository
Limited (NSDL) and Central Depository Services Limited (CDSL). By being a
stock broker and depositary participant, we provide dual benefit in our
services wherein the investors can avail our stock broking services for
17

18. executing the transactions and the depository services for settling them.
Our Portfolio Management Service comes as an answer to those who would
like to grow exponentially on the crest of the stock market, with the backing of
an expert.
TITLE OF THE STUDY
The title of the study undertaken by the researcher is “operation and services
offered by Kotak Securities Ltd. and the procedure involved in online equity
trading with more emphasis on customer preference.”
The title given to the researcher found to be very interesting and learning in
nature. Although researcher faced various problem seeking information from
various source due to the competition of various bank, but due to co-operation
from various friends, colleagues and specially the staff of Kotak Securities Ltd.
she had completed the report.
OBJECTIVE OF THE STUDY
To help the researcher in knowing out the various kinds of services provided
by Kotak group.
To study the different products of Kotak Securities Ltd.
To maintain the database regarding various.
To give an in depth knowledge about security, Derivatives; future and
option, capital market; primary and secondary, NSE and BSE.
To study how to determine various Pricing Strategies involved in online
18

19. trading.
To study the software KEAT used by the company for trading.
SIGNIFICANCE OF THE STUDY
Everyone put his or her time, money and efforts because to have some
significance. My studies have some significance to:
The organization
As organization has got valuable data regarding customer preference and
market share of Kotak Securities Ltd. in finance industry. Now the
Organization can some significant actions in the direction of customer
satisfaction so that the customer can avail more benefits and the organization
can get good customer and more business.
The Student
It also has signification to me that I got the precious knowledge about various
operations of different department, policies and data regarding various
schemes provided by the Kotak Securities Ltd. It will help me in my future for
the practical application in real life.
RESEARCH METHODOLOGY
Research Methodology is way to systematically solve the research problem. It
may be understood as a science of studying how researcher is done
19

20. scientifically. In it we study the various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind them.
Entire data has been collected and calculated up to the accurate extent is
from primary as well as secondary sources i.e. no previous data was available
on the basis of which calculation for graphical presentation is done. As it was
assured to the respondents that their response would be kept confidential so
they were very free and frank while giving their response.
It was descriptive research. The researcher –collected data from personal
interviewed with official of different banks, by filling questionnaires, surfing on
Internet, articles published in magazines, literature available with Kotak
Securities Ltd.
METHODOLOGY OF DATA COLLECTION
To make the report more authentic and valid, the collection of data should be
through reliable sources and the approach is very important. For the purpose
of his report, the data and information were collected in the following manner:
Direct contact with the organization:-
The organization was visited daily to collect the information about their
services and products offered. Their pamphlets were obtained and studied.
Websites and search Engines :-
The internet, being the largest source of information and knowledge proved to
be biggest help in data collection. The website of the Kotak Securities Ltd.
gave the information regarding the industry in general.
Books Available :-
The data was also collected from the book with us and the brochures also
20

21. proved very useful.
The data so collected was then sorted and classified to make it suitable for
analysis. Several questions proved to be reluctant and were dropped in final
analysis. Conclusions were drawn on the basis of the majority opinion. Some
points were the conclusions were ambiguous were also removed from
analysis.
DIAGRAM OF RESEARCH METHODOLOGY :
DEFINE RESEARCH PROBLEM
REVIEW THE LITERATURE
FORMULATE HYPOTHESIS
DESIGN RESEARCH
COLLECT DATA
ANALYSIS DATA
21

22. INTERPRET AND REPORT
SEBI – Introduction
In 1988 the Securities and Exchange Board of India (SEBI) was established
by the Government of India through an executive resolution, and was
subsequently upgraded as a fully autonomous body (a statutory Board) in the
year 1992 with the passing of the Securities and Exchange Board of India Act
(SEBI Act) on 30th January 1992.
In place of Government Control, statutory and autonomous regulatory board
with defined responsibilities, to cover both development & regulation of the
market, and independent powers have been set up. Paradoxically this is a
positive outcome of the Securities Scam of 1990-91.
The basic objectives of the Board were identified as:
• to protect the interests of investors in securities;
• to promote the development of Securities Market;
• to regulate the securities market and
• for matters connected therewith or incidental thereto.
Since its inception SEBI has been working targeting the securities and is
22

23. attending to the fulfilment of its objectives with commendable zeal and
dexterity. The improvements in the securities markets like capitalization
requirements, margining, establishment of clearing corporations etc. reduced
the risk of credit and also reduced the market. SEBI has introduced the
comprehensive regulatory measures, prescribed registration norms, the
eligibility criteria, the code of obligations and the code of conduct for different
intermediaries like, bankers to issue, merchant bankers, brokers and sub-
brokers, registrars, portfolio managers, credit rating agencies, underwriters
and others. It has framed bye-laws, risk identification and risk management
systems for Clearing houses of stock exchanges, surveillance system etc.
which has made dealing in securities both safe and transparent to the end
investor. Another significant event is the approval of trading in stock indices
(like S&P CNX Nifty & Sensex) in2000. A market Index is a convenient and
effective product because of the following reasons:
• It acts as a barometer for market behaviour;
• It is used to benchmark portfolio performance;
• It is used in derivative instruments like index futures and index options;
• It can be used for passive fund management as in case of Index Funds.
Two broad approaches of SEBI is to integrate the securities market at the
national level, and also to diversify the trading products, so that there is an
increase in number of traders including banks, financial institutions, insurance
companies, mutual funds, primary dealers etc. to transact through the
Exchanges. In this context the introduction of derivatives trading through
Indian Stock Exchanges permitted by SEBI in 2000 AD is a real
landmark.SEBI appointed the
L. C. Gupta Committee
23

24. in 1998 to recommend the regulatory framework for derivatives trading and
suggest bye-laws for Regulation and Control of Trading and Settlement of
Derivatives Contracts. The Board of SEBI in its meeting held on May 11, 1998
accepted the recommendations of the committee and approved the phased
introduction of derivatives trading in India beginning with Stock Index Futures.
The Board also approved the "Suggestive Bye-laws" as recommended by the
Dr LC Gupta Committee for Regulation and Control of Trading and Settlement
of Derivatives Contracts.
SEBI then appointed the
J. R. Verma Committee
to recommend Risk Containment Measures (RCM) in the Indian Stock Index
Futures Market. The report was submitted in November 1998.However the
Securities Contracts (Regulation) Act, 1956 (SCRA) required amendment to
include” derivatives" in the definition of securities to enable SEBI to introduce
trading in derivatives. The necessary amendment was then carried out by the
Government in 1999. The Securities Laws(Amendment) Bill, 1999 was
introduced. In December 1999 the new framework was approved. Derivatives
have been accorded the status of `Securities'. The ban imposed on trading in
derivatives in1969 under a notification issued by the Central Government was
revoked. Thereafter SEBI formulated the necessary regulations/bye-laws and
intimated the Stock Exchanges in the year 2000. The derivative trading started
in India at NSE in 2000 and BSE started trading in the year 2001.
Introduction of BSE
BSE Limited is the oldest stock exchange in Asia What is now popularly
known as the BSE was established as "The Native Share & Stock Brokers'
Association" in 1875.
24

25. Over the past 135 years, BSE has facilitated the growth of the Indian
corporate sector by providing it with an efficient capital raising platform.
Today, BSE is the world's number 1 exchange in the world in terms of the
number of listed companies (over 4900). It is the world's 5th most active in
terms of number of transactions handled through its electronic trading system.
And it is in the top ten of global exchanges in terms of the market
capitalization of its listed companies (as of December 31, 2009). The
companies listed on BSE command a total market capitalization of USD
Trillion 1.28 as of Feb, 2010.
BSE is the first exchange in India and the second in the world to obtain an ISO
9001:2000 certification. It is also the first Exchange in the country and second
in the world to receive Information Security Management System Standard BS
7799-2-2002 certification for its BSE On-Line trading System (BOLT).
Presently, we are ISO 27001:2005 certified, which is a ISO version of BS 7799
for Information Security.
The BSE Index, SENSEX, is India's first and most popular Stock Market
benchmark index. Exchange traded funds (ETF) on SENSEX, are listed on
BSE and in Hong Kong. Futures and options on the index are also traded at
BSE.
BSE continues to innovate:
Became the first national exchange to launch its website in Gujarati and
Hindi and now Marathi
Purchased of Marketplace Technologies in 2009 to enhance the in-
house technology development capabilities of the BSE and allow faster
25

26. time-to-market for new products
Launched a reporting platform for corporate bonds christened the ICDM
or Indian Corporate Debt Market
Acquired a 15% stake in United Stock Exchange (USE) to drive the
development and growth of the currency and interest rate derivatives
markets
Launched 'BSE Star MF' Mutual fund trading platform, which enables
exchange members to use its existing infrastructure for transaction in
MF schemes.
BSE now offers AMFI Certification for Mutual Fund Advisors through
BSE Training Institute (BTI)
Co-location facilities for Algorithmic trading
BSE also successfully launched the BSE IPO index and PSU website
BSE revamped its website with wide range of new features like 'Live
streaming quotes for SENSEX companies', 'Advanced Stock Reach',
'SENSEX View', 'Market Galaxy', and 'Members'
Launched 'BSE SENSEX MOBILE STREAMER'
With its tradition of serving the community, BSE has been undertaking
Corporate Social Responsibility (CSR) initiatives with a focus on Education,
Health and Environment. BSE has been awarded by the World Council of
Corporate Governance the Golden Peacock Global CSR Award for its
initiatives in Corporate Social Responsibility (CSR).
Other Awards:
The Annual Reports and Accounts of BSE for the year ended March 31,
2006 and March 31, 2007 have been awarded the ICAI awards for
excellence in financial reporting.
The Human Resource Management at BSE has won the Asia - Pacific
HRM awards for its efforts in employer branding through talent
management at work, health management at work and excellence in
HR through technology
Drawing from its rich past and its equally robust performance in the recent
26

27. times, BSE will continue to remain an icon in the Indian capital market.
Introduction of NSE
The National Stock Exchange (NSE) is India's leading stock exchange
covering various cities and towns across the country. NSE was set up by
leading institutions to provide a modern, fully automated screen-based trading
system with national reach. The Exchange has brought about unparalleled
transparency, speed & efficiency, safety and market integrity. It has set up
facilities that serve as a model for the securities industry in terms of systems,
practices and procedures.
NSE has played a catalytic role in reforming the Indian securities market in
terms of microstructure, market practices and trading volumes. The market
today uses state-of-art information technology to provide an efficient and
transparent trading, clearing and settlement mechanism, and has witnessed
several innovations in products & services viz. demutualisation of stock
exchange governance, screen based trading, compression of settlement
cycles, dematerialisation and electronic transfer of securities, securities
lending and borrowing, professionalisation of trading members, fine-tuned risk
management systems, emergence of clearing corporations to assume
counterparty risks, market of debt and derivative instruments and intensive
use of information technology.
Getting Familiar with Market Related Concepts
Once you enter the Stock market, you will frequently come across terms like
Market Capitalization, Small-Cap Stocks, Mid-Cap Stocks and Large-Cap
Stocks. In this section you will get an understanding of what these terms mean
in the context of stock markets.
27

28. Let us first understand MARKET CAPITALIZATION
MARKET CAPITALIZATION
A: "Cap" is short for capitalization, the market value of a stock, indicating the
size of the stock available.
Calculating a stock's capitalization
Market Capitalization = Market Price of the stock x The number of the stock's
outstanding* shares
*Outstanding means the shares held by the public
For example, if Stock A has a Current Market Price of Rs 20 per share, and
there are 1,00,000 shares in the hands of public investors, then Stock A has a
capitalization of 20,00,000.
The company's capitalization is an effective parameter to group corporate
stocks.
In the US, mid-cap shares are those stocks that have a market capitalization
ranging from Rs 9,000 crore to Rs 45,000 crore. In India, these shares would
be classified as large-cap shares. Thus, classification of shares into large-cap,
mid-cap, small-cap is made on the basis of the relative size of the market in
that particular country. The total market capitalization of US markets is $15
trillion. In India, the market capitalization of listed companies is around
$600bn.
28

29. SMALL-CAP STOCKS
A: The stocks of small companies that have the potential to grow rapidly are
classified as small-cap stocks. These stocks are the best option for an investor
who wishes to generate significant gains in the long run; as long he does not
require current dividends and can withstand price volatility. Generally
companies that have a market Capitalization in the range of up to 250 Corores
are small cap stocks As many of these companies are relatively new, it is
difficult to predict how they will perform in the market. Being small enterprises,
growth spurts dramatically affect their values and revenues, sending prices
soaring.
On the other hand, the stocks of these companies tend to be volatile and may
decline dramatically.
Most Initial Public Offerings are for small-cap companies, although these days
large companies do tend to source the capital markets for expansion plans.
Aggressive mutual funds are also enthusiastic about adding small-cap stocks
in their portfolios. Because they have the advantage of being highly growth
oriented, small-cap stocks can forego paying dividends to investors, which
enables the profits earned to be reinvested for future growth.
MID-CAP STOCKS
A: Mid-cap stocks are typically stocks of medium-sized companies. These are
stocks of well-known companies, recognized as seasoned players in the
market. They offer you the twin advantages of acquiring stocks with good
growth potential as well as the stability of a larger company. Generally
companies that have a market Capitalization in the range of 250-4000 crores
are mid cap stocks
29

30. Mid-cap stocks also include baby blue chips; companies that show steady
growth backed by a good track record. They are like blue-chip stocks (which
are large-cap stocks) but lack their size. These stocks tend to grow well over
the long term.
LARGE-CAP STOCKS
A: Stocks of the largest companies (many being blue chip firms) in the market
such as Tata, Reliance, ICICI are classified as large-cap stocks. Being
established enterprises, they have at their disposal large reserves of cash to
exploit new business opportunities.
The sheer volume of large-cap stocks does not let them grow as rapidly as
smaller capitalized companies and the smaller stocks tend to outperform them
over time. Investors, however gain the advantages of reaping relatively higher
dividends compared to small- and mid-cap stocks while also ensuring the
long-term preservation of their capital.
Futures Trading
What are Derivatives?
A: A derivative is a financial instrument whose value depends on the values of
other underlying variables. As the name suggests it derives its value from an
underlying asset. For Ex-a derivative, may be created for a share, or any
30

31. material object. The most common underlying assets include stocks, bonds,
commodities etc.
Let us try and understand a Derivatives contract with an example:
A: Anil buys a futures contract in the scrip "Satyam Computers". He will
make a profit of Rs.500 if the price of Satyam Computers rises by Rs 500. If
the price remains unchanged Anil will receive nothing. If the stock price of
Satyam Computers falls by Rs 800 he will lose Rs 800.
As we can see, the above contract depends upon the price of the Satyam
Computers scrip, which is the underlying security. Similarly, futures trading
can be done on the indices also. Nifty futures is a very commonly traded
derivatives contract in the stock markets. The underlying security in the case
of a Nifty Futures contract would be the Index-Nifty.
What are the different types of Derivatives?
A: Derivatives are basically classified into the following:
Futures/Forwards
Options
Swaps
What are Futures?
31

32. A: A futures contract is a type of derivative instrument, or financial contract
where two parties agree to transact a set of financial instruments or physical
commodities for future delivery at a particular price.
The example stated below will simplify the concept of futures trading:
Case1:
Ravi wants to buy a Laptop, which costs Rs 50,000 but owing to cash
shortage at the moment, he decides to buy it at a later period say 2 months
from today.However,he feels that after 2 months the prices of Lap tops may
increase due to increase in input/Manufacturing costs .To be on the safer side,
Ravi enters into a contract with the Laptop Manufacturer stating that 2 months
from now he will buy the Laptop for Rs 50,000. In other words he is being
cautious and agrees to buy the Laptop at today's price 2 months from now.
The forward contract thus entered into will be settled at maturity. The
manufacturer will deliver the asset to Ravi at the end of two months and Ravi
in turn will pay cash delivery.
Thus a forward contract is the simplest mode of a derivative transaction. It is
an agreement to buy or sell a specific quantity of an asset at a certain future
time for a specified price. No cash is exchanged when the contract is entered
into.
What are Index Futures?
A: As Stated above, Futures are derivatives where two parties agree to
32

33. transact a set of financial instruments or physical commodities for future
delivery at a particular price. Index futures are futures contracts where the
underlying is a stock index (Nifty or Sensex) and helps a trader to take a view
on the market as a whole.
What is meant by Lot size?
A: Lot size refers to the quantity in which an investor in the markets can trade
in a derivative of a particular scrip. For Ex-Nifty Futures have a lot size of 100
or multiples of 100.Hence if a person were to buy 1 lot of Nifty Futures , the
value would be 100*Nifty Index Value at that point of time.
Similarly lots of other scrips such as Infosys, reliance etc can be bought and
each may have a different lot size. NSE has fixed the minimum value as two
lakhs for an Futures and Options contract. Lot sizes are fixed accordingly
which will be the minimum shares on which a trader can hold positions.
What is meant by expiry period in Futures Trading?
A: Each contract entered into has an expiry period. This refers to the period
within which the futures contract must be fulfilled. Futures contracts may have
durations of 1 month,2 months or at the most 3 months. Each contract expires
on the last Thursday of the expiry month and simultaneously a new contract is
introduced for trading after expiry of a contract.
What are the uses of Derivatives? What are the various derivative
strategies that I can use?
33

34. A: Derivatives have a multitude of uses namely:
a)Hedging
b)Speculation&
c)Arbitrage
Chapter 1:OPTIONS
What are options?
A: Before you begin options trading it is critical to have a clear idea of what
you hope to accomplish. Only then will you be able to narrow down on an
options trading strategy. Let us first understand the concept of options.
An option is part of a class of securities called derivatives.
The concept of options can be explained with this example. For instance,
when you are planning to buy some property you might have placed a
nonrefundable deposit to hold it for a short time while you evaluate other
options. That is an example of a type of option.
Similarly, you have probably heard about Bollywood buying an option on a
novel. In 'optioning the novel,' the director has bought the right to make the
novel into a movie before a specified date. In both cases, with the house and
34

35. the script, somebody put down some money for the right to buy a product at a
specific price before a specific date.
Buying a stock option is quite similar. Options are contracts that give the
holder the right to buy or sell a fixed amount of a certain stock at a specified
price within a specified time. A put option gives the holder the right to sell the
security, a call option gives the right to buy the security. However, this type of
contract gives the holder the right, but not the obligation to trade stock at a
specific price before a specific date. Several individual investors find options
useful tools because they can be used either as:
A) A type of leverage or
B) A type of insurance.
Trading in options lets you benefit from a change in the price of the share
without having to pay the full price of the share. They provide you with limited
control over the shares of a stock with substantially less capital than would be
required to buy the shares outright.
When used as insurance, options can partially protect you from the specific
security's price fluctuations by granting you the right to buy or sell shares at a
fixed price for a limited amount of time.
Options are inherently risky investment vehicles and are suitable only for
experienced and knowledgeable investors who are prepared to closely
monitor market conditions and are financially prepared to assume potentially
substantial losses.
35

36. What are the different types of Options? How can Options be used as a
strategic measure to make profits/reduce losses?
A: Options may be classified into the following types:
a)Call Option
b)Put Option
As mentioned before, there are two types of options, calls and puts. A call
option gives the holder the right to buy the underlying stock at the strike price
anytime before the expiration date. Generally Call options increase in value as
the value of the underlying instrument increases.
By contrast, the put option gives the holder the right to sell shares of the
underlying stock at the strike price on or before the expiry date. The put option
gains in value as the value of the underlying instrument decreases. A put
option is one where one can insure a stock against subsequent price fall. If the
value of your stocks goes down, you can exercise your put option and sell it at
the price level decided upon earlier. If in case the stock price moves higher, all
you lose is just the premium amount that was paid.
Note that in newspaper and online quotes you will see calls abbreviated as C
and puts abbreviated as P.
The examples stated below will explain the use of Put options clearly:
Case 1:
36

37. Rajesh purchases 1 lot of Infosys Technologies MAY 3000 Put and pays a
premium of 250 This contract allows Rajesh to sell 100 shares of Infosys at Rs
3000 per share at any time between the current date and the end of
May.Inorder to avail this privilege, all Rajesh has to do is pay a premium of Rs
25,000 (Rs 250 a share for 100 shares).
The buyer of a put has purchased a right to sell. The owner of a put option has
the right to sell.
Case 2:
If you are of the opinion that a particular stock say "Ray Technologies" is
currently overpriced in the month of February and hence expect that there will
be price corrections in the future. However you don't want to take a chance ,
just in case the prices rise. So here your best option would be to take a Put
option on the stock.
Lets assume the quotes for the stock are as under:
Spot Rs 1040
May Put at 1050 Rs 10
May Put at 1070 Rs 30
So you purchase 1000 "Ray Technologies" Put at strike price 1070 and Put
price of Rs 30/-. You pay Rs 30,000/- as Put premium.
Your position in two different scenarios have been discussed below:
1. May Spot price of Ray Technologies = 1020
2. May Spot price of Ray Technologies = 1080
37

38. In the first situation you have the right to sell 1000 "Ray Technologies" shares
at Rs 1,070/- the price of which is Rs 1020/-. By exercising the option you earn
Rs (1070-1020) = Rs 50 per Put, which amounts to Rs 50,000/-. Your net
income in this case is Rs (50000-30000) = Rs 20,000.
In the second price situation, the price is more in the spot market, so you will
not sell at a lower price by exercising the Put. You will have to allow the Put
option to expire unexercised. In the process you only lose the premium paid
which is Rs 30,000.
What is open interest?
A: The total number of option contracts and/or futures contracts that are not
closed or delivered on a particular day and hence remain to be exercised,
expired or fulfilled through delivery is called open interest.
What are Index Futures?
A: As Stated above, Futures are derivatives where two parties agree to
transact a set of financial instruments or physical commodities for future
delivery at a particular price. Index futures are futures contracts where the
underlying is a stock Index (Nifty or Sensex) and helps a trader to take a view
on the market as a whole.
What is meant by the terms Option Premium, strike price and spot price?
A: The price that a person pays for a call option/Put Option is called the
Option Premium. It secures the right to buy/sell that particular stock at a
38

39. specified price called the strike price. In other words the strike price is the
specified price at which the holder of a stock option may purchase the stock. If
you decide not to use the option to buy the stock, and you are not obligated to,
your only cost is the option premium. Premium of an option = Option's intrinsic
value + Options time value The stated price per share for which underlying
stock may be purchased (for a call) or sold (for a put) by the option holder
upon exercise of the option contract is called the Strike price. Spot Price is the
current price at which a particular commodity can be bought or sold at a
specified time and place.
What is meant by settlement price?
A: The last price paid for a contract on any trading day. Settlement prices are
used to determine open trade equity, margin calls and invoice prices for
deliveries.
How does one determine the price of an option?
A: A variety of factors determine the price of an option.
The behavior of the underlying stock considerably affects the value of an
option. Investors have different opinions about how a particular stock will
behave in the future and hence may disagree about the value of any given
option.
In addition, the value of an option decreases as its expiration date
approaches. Thus, its value is also highly dependent on the amount of time
left before the option expires.
Intrinsic & Time Value
An options price is composed of its intrinsic value and time value.
What a particular option contract is worth to a buyer or seller is measured by
how likely it is to meet their expectations. In the language of options, that's
39

40. determined by whether or not the option is, or is likely to be, in the money or
out-of-the-money at expiration. Intrinsic value is how far an option is 'in-the-
money.' Thus, the phrase is an adjective used to describe an option with an
intrinsic value. A call option is in- the-money if the spot price is above the
strike price. A put option is in the money if the spot price is below the strike
price.
It is calculated by subtracting the options strike price from the spot price. An
out-of-the-money option has an intrinsic value of zero.
For example if XYZ is trading at Rs 58 and the June 55 call is trading at Rs 4,
to calculate the intrinsic value subtracts Rs 55 from 58, leaving you with Rs 3
of intrinsic value. The remaining Rs 1 is known as extrinsic or time value.
Time value is the amount over intrinsic value that a buyer pays for the option.
While buying time value, an options purchaser assumes that the option will
increase in value before it expires. As the option nears expiration, its time
value starts decreasing toward zero.
Theoretical Value
Theoretical value is the objective value of an option. It shows how much time-
value is left in an option. The most commonly used formula to calculate the
theoretical value of an option is known as the Black-Scholes model.
40

41. This model considers the price of the stock, the options strike price, the time
remaining before expiration, the volatility of the underlying stock, the stock's
dividends and the current interest rate while arriving at the theoretical value of
the option.
Although an option may trade for more or less than its theoretical value, the
market views the theoretical value as the objective standard of an option's
value. This makes the price of all options tilt toward their theoretical value over
time.
The Components of Theoretical Value
Volatility
The volatility of the underlying stock is one of the key factors in determining
the value of an option. Often, the options price increases as the volatility of the
stock increases. The difficulty in predicting the behavior of a volatile stock
permits the option seller to command a higher price for the additional risk.
There are two types of volatility, historical and implied. As the term suggests,
historical volatility is a measurement of the stocks movement based on its past
behavior.
By contrast, implied volatility is calculated using option prices. It is a
measurement of the stocks movement as implied by how the market is
currently valuing options.
41

42. Dividends
As an owner of a call option you can always exercise your right to the stock
and receive any dividend it might pay.
Interest Rate
If you buy an option rather than a stock, you invest less money upfront.
Days Until Expiration
An option, being a wasted asset; wastes a little as each day lapses. Thus its
value is calculated in accordance to the amount of days left in its life.
What are swaptions?
A: A swaption is an option on an interest rate swap. Swaptions are options
contracts, which give you the right to enter into a swap agreement at the
option expiration, in return for a one-off premium payment.
What is meant by Covered Call, Covered Put, In the Money, Out Of the
Money, At the Money?
A: Ø In-the-money
A call option is in the money if the strike price is less than the market price of
the underlying security. A put option is in-the-money if the strike price is
greater than the market price of the underlying security.
Ø Out of the money
A call option is out-of-the-money if the price of the underlying instrument is
lower than the exercise/strike price. A put option is out-of-the-money if the
price of the underlying instrument is above the exercise/strike price.
42

43. Ø At-the-money
At the money is a condition in which the strike price of an option is equal to (or
nearly equal to) the market price of the underlying security.
Ø Covered Call
You can take a covered call if you take a long position in an asset combined
with a short position in a call option on the same underlying asset.
Ø Covered Put
The selling of a put option while being short for an equivalent amount in the
underlying security.
Online Trading
Basic introduction about online trading
Trading tools provided by KEAT
Easy usage of the software
WHAT IS ONLINE TRADING?
Online trading is a service offered on the internet for purchase and sale of
equity, derivatives and commodities. In Online trading, you ill access
stockbroker’s website through your internet –enabled PC and place orders
through broker’s internet-based trading engine. These orders are routed to the
concerned Stock or commodity Exchange without manual intervention and
execution thereon in a matter of a few seconds.
43

44. Trinity Account:
Trinity Account is a unique integrated account that helps you enjoy
the benefits of a Online Trading Account, Bank Account,
Demat Account on a single platform for your securities transaction.
This account gives you a convenience of fund transfer and
online trading with our multiple logins.
Benefits of Trinity Account:
Single application to open three different account i.e. Bank Account,
Demat A/c & Online Trading Account.
44

45. Get all the three different account with single entity.
2 in 1 Account 3 in 1 ( Trinity )
Account
Banks to Link Kotak , Axis , HDFC , Kotak Mahindra Bank
Citi, IndusInd, ICICI ,
SBI
Fund transfer Manual transfer done No manual transfer
facility via payment gateway required
Payment Fund transfer through Direct fund transfer
Gateway payment gateway possible
Limits on fund Limited transfer Unlimited transfer
transfer
How to open a Kotak Securities Ltd. Demat account:
Approach your nearest Kotak Securities Ltd. Branch.
Fill up the Demat Account Opening Form.
If your shares are held in joint names, be sure to open your account in the
same order of names. If A, Band C jointly hold 100 shares in the company and
have three share certificatesall named as ABC, one DP account will suffice.
For different combinations of names, open separate accounts for each
combination if the three certificates are held as ABC, BAC and CBA, three
accounts are required.
There is no limit to the number of accounts you can open.
You can even open a multiple-sign Depository Participant - Client Agreement,
which each investor must sign at the time of account opening.
45

46. You will receive an account number and a DP ID number with each account.
Quote both these in all future correspondence with Kotak Securities Ltd.
After opening the account, you can hold shares of any number of companies in
your account, provided all such companies have entered the depository
system.Submit a completely filled up Demat Request Form (DRF) in triplicate
for each ISIN along with defaced physical securities. Kotak Securities Ltd.
provides you with one blank
Dematerialization Request Form (DRF). Additional forms are available at any
of the Kotak
Securities Ltd. branches offering Demat Services.
Documents Required:
 Two passport size photographs.
 One Xerox of ID proof (PAN card, Passport etc).
 One Xerox of address proof (Driving License, Recent 2 months Bank
statement etc.).
 One cancelled cheque.
 One cheque of margin amount + application fee.
BROKERAGE STRUCTURE:
BROKERAGE STRUCTURE
BROKERAGE STRUCTURE FOR INTERNET BASED TRADING
Delivery - Brokerage applicable both side
46

47. < 1lakh 0.59% Gateway A/C
1 - 5 lakh 0.55%
5 - 10 lakh 0.45%
10 - 20 lakh 0.36%
20 - 60 lakh 0.27%
60 lakh - 2
0.23%
crore
> 2 crore 0.18% Privilege A/C
Intraday brokerages
< 25 lakhs 0.06% both sides Gateway A/C
25 lakhs - 2
0.05% both sides
crores
2 crores - 5
0.04% both sides
crores
47

48. > 5 crores 0.03% both sides Privilege A/C
Futures
Intraday brokerages Settlement
Gateway
< 2 crores 0.07% both sides 0.09% both sides
A/C
2 - 5.5 crores 0.045% both sides 0.073% both sides
5.5 - 10 crores 0.036% both sides 0.046% both sides
Privilege
10 - 25 crores 0.027% both sides 0.046% both sides
A/C
> 25 crores 0.023% both sides 0.032% both sides
Options - Brokerage applicable both side
48

49. Minimum Minimum
Monthly
Intraday Settlement Brokerage Brokerage Per
Premium
Brokerage% Brokerage% Per Lot Lot
Volume
(Intraday) (Settlement)
Upto
2.5 2.5 100 100 Gateway
4Lacs
4Lacs-
2.25 2.5 100 100
11Lacs
11Lacs-
1.8 2.3 100 100
20Lacs
20Lacs-
1.35 2.3 80 100 Privilege
50Lacs
< 50Lacs 1.15 1.6 70 100
Here Premium Volume is considered as (Premium x Lot Size x No. of Lots).
As per this new structure you will be charged either a fixed minimum
brokerage per lot or the new brokerage rate based on the monthly premium
value slabs you achieve, whichever is higher. Kindly note that this new
brokerage structure for option contracts will be applicable with effect from 23rd
February 2007.
49

50. Note:1 Even if a client starts with a Gateway/ value trading account, it is
possible that he may avail brokerages as low as 0.18%in the cash delivery
segment (and 0.03% in the intraday cash square up segment)depending on
his trading volumes.Kotak securities.com will regularly monitor client accounts
on a frequent basis and upgrade accounts to the next higher level so that
clients may be entitled to higher benefits . The minimum brokerage that is
applicable in Kotak Gateway Account is 4 paise on delivery and 4 paise in the
cash segment.
Note:2 Brokerage will be charged based on your account type at the start of
the month. Based on the monthly volume your effective slab will be calculated
and the brokerage difference will be debited or credited.
Note:3 Service Tax of 12.36 % of brokerage will be charged in addition. The
brokerages charged are as per the volumes that are achieved. Based on these
volumes a client can be either debited or credited an amount which is as per
the volumes he/she may achieve at the end of the month.
Securities Transaction Tax (STT) @ 0.125% of turnover will be charged in
addition to the brokerage on all delivery trades
STT @ 0.025% of turnover will be charged in addition to the brokerage on sell
leg of all non delivery trades in the cash market
STT @ 0.017% of turnover will be charged in addition to the brokerage on sell
leg of all non delivery trades in the derivative market
KEAT Software provides the best Terminal for the investors. With the help of
50

51. KEAT investor get profile of any company and see sensex, share prices, nifty
and up and downmarket position. KEAT is a dynamic, trading terminal that
facilities instant order placement and more.
Things you can do with KEAT –
 Live ticker rates.
 Speedy transactions.
 Script alerts.
 Customize watch list.
 View status of orders.
 Intraday alerts and exchange messages.
 Trade report, net position report, exercises report.
 Company research.
KEAT Pro X
A free, easy-to-use web based tool for all our online trading customers, KEAT
Pro X is a high speed trading tool that allows you to monitor what is happening
in the market at real time speed. KEAT Pro X allows you to check live market
rates of scrips on NSE, BSE & NSE Currency. You can create multiple
watchlists and simultaneously place orders, view order reports etc.
This platform is powered with many features that make your trading
experience faster and easier.
Features
Real time streaming data :
51

52. Watch the market at real time with free streaming stock quotes from NSE,
BSE & NSE Currency. Available information also has details of Market Lot,
Top Gainers/Losers, Indices Update, Top Active Scrips, and Option
Calculator.
Charting Tools :
With available charting facility you can study and understand the pattern of
the stock of your choice. This gives you the option of viewing different kinds of
charts like Area, Candlestick etc.
Live Account Information :
Track your account information live, view placed orders; get trade
confirmation; view limits, positions, changing profit and loss etc. You can
customize the reports as per your convenience.
Customizable :
KEAT Pro X allows you to create your own personalised view of the Indian
share market so you can watch the data you want. You can create multiple
watch lists that can have up to 50 scrips in each of them; these watch lists
can be set in tabs.
Speed :
KEAT Pro X is a high speed trading platform which provides you real trading
and reporting that helps you to take advantage of changing stock prices.
Stock Recommendations :
52

53. This share trading software i.e. KEAT Pro X also provides you
recommendation on stocks which are researched by our research analysts on
real-time basis as and when a call is made by the research analyst.
Watchlists :
It gives more control on your investment decisions by allwing you to create
your personalised watchlists for tracking your favourite stocks on real-time
basis. This share trading software also allows you to do in-depth research on
any stock of your choice
.
KEAT Pro X allows you to view NSE, BSE and currency prices all on a single
watch list.
Highly Integrated :
KEAT Pro X is a highly integrated platform, this means you can access to
different exchanges and instruments like, Equities, Derivatives and Currency
Derivatives from this single platform. It also allows each of your created watch
lists to be available on Website and Mobile Stock Trader as well and vice-
versa.
Benefits
It comes free of charge with you online trading account
53

54. Set multiple watch lists
Create tab-wise access to watch list
View placed order and trade confirmation
Select indices/sectors or business groups
Trade long contracts
Facility to sell from existing stocks
Limits, Positions tabs available in the Risk Report
View changing profit and loss
Fast and convenient User Interface
Customizable User Interface
View live Market Depth
Predefined watch list to create personalised watch list
How to Download
To download KEAT Pro X, login to your trading account on
www.kotaksecurities.com by using your User Id, Password & Security
Key/Access Code. Click on the tab Trading Tools and Select KEAT Pro X.
Click "Download" button to install it on your machine.
Note: The Operating system supported is Windows.
Version and Update
If KEAT Pro X is installed on your computer, go to Help option and then go to
54

55. the link About Us to view the version of KEAT Pro X. You can also check the
version on the top header of the main terminal screen.
Auto update: Since Kotak Securities constantly introduces new features in this
online trading platform KEAT Pro X, we have provided our customers with an
auto update facility in which every new feature will get updated automatically
when it is started on the computer.
SWOT ANALYSIS
Strength
Weakness
Opportunities
Threats
STRENGTHS
Kotak securities ltd is one of the largest players in distribution of IPO’sIt’s
brokerage charges are almost half of other Web trade.
Highly co-operative and skilled staff.
Sales oriented organization.
Aggressiveness of sales force in selling products.
The company has expertise in managing big business.
Effective and wider distribution network.
It has a wide network of more than 1400 branches, franchisees representative
offices, and satellite offices across 448 cities in India and offices in New York,
London, Dubai, Mauritius and Singapore.
Process more than 400000 trades a day which is much higher than some of
55

56. the renowned international brokers.
Product designed for every area of personal.
The office hours of the company for the customers are 9am to 6pm.
The company enjoys a very high brand loyalty and recall value among its
customers .
The company has a presence in all metros as well as in the most of the major
cities in the country.
WEAKNESS
No presence in the rural and semi-urban segment.
Lack in making follow-ups.
Lack of corporate agents.
Lack of customer services and promotional activities.
OPPORTUNITIES
There is continuous growth in this sector.
People have started turning towards the organization as they know that
facilities are far better than the others.
Market is fully vacant to capture because the branch has recently setup its
business.
THREATS
Competition in the sector is increasing in the entry of lots of private giants with
the collaboration of foreign giants.
56

57. Selling attitude for the company always has to be maintained in order to
compete with other companies.
Continuous follow up of the clients and customers.
As other organizations like Icici web trade, India Info line, etc are there in the
city so is a little bit difficult for them to capture the market.
SUGGESTIONS AND RECOMMENDATIONS
Some of the Suggestions and recommendations for improving the present
image as well as the Services of kotak securities Ltd. are as follows:
More Branches:
Some more branches should be opened so it becomes more easy and
approachable for the people to do their transaction. The branches should have
well trained employees.
Customer awareness:
The people should be updated with the new issues and the schemes started
by the organizations to the existing customers. The customers should be
informed about the newly issued scrip’s as well as be given daily basis
tips/news for profitable transactions. Regular contact with the customers
through telephone can be maintained for smooth running of the business.
Feedback:
A proper feedback system should be designed to take care of the dissatisfied
customers and solving their problem as their bad works of mouth publicity can
make Kotak Securities Ltd loose its potential as well as existing customers.
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58. Well Trained Customer Care Staff:
For satisfactory handling queries to establish more good standards in trading
can be done through outstanding performance , courteous services and a high
ethical benchmark
Higher Penetration in the Untapped Market:
Approaching all the potential clients, making them aware that various
instruments and convincing them.
Newspaper and Agents:
Newspaper and agents are most effective tools for awareness, so Kotak
Securities Ltd should use these tools more for advertisement.
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59. QUESTIONNAIRE
I AM STUDENT OF M.B.A FROM SUBODH INSTITUTE OF
MANAGEMENT AND CAREER STUDIES, JAIPUR. OU ARE
REQUIRED TO FILL THIS QUESTIONNAIRE TO ENABLE ME
TO UNDERTAKE THE STUD ON THE SAID PROJECT.
NAME :
CONTACT NUMBER:
OCCUPATION:
ADDRESS:
1. Are you aware of stock market?
(a) Yes (b) No
2. Do you deal in share?
(a) Yes (b) No
3. Are you aware of Demat account?
(a) Yes (b) No
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60. 4. How long have you been transacting in the stock
exchange?
(a)Less than 1 year (c) 1 year
(b)2 year (d) More than 3 year
5. Do you transfer frequently or occasionally?
(a) Frequently (b) Occasionally
6. In which securities do you trade frequently?
(a)Equity (b) Bonds (c) Debentures
(d)Future and Options (e) All
7. Do you like to convert your shares electronically?
(a) Yes (b) No
8. On what basis you have taken your decisions of opening
of demat account?
(a) Services (b) Charges (c) Convenience
9. Are you satisfied with your demat service provider?
(a) Yes (b) No
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61. 10. What type of problems do you centrally face when you
trade in securities?
(a) Non transfer of shares (b) Other type of options
(c) Bad transfer of shares (d) No Problem
BIBLIOGRAPHY
Research Methodology : C.R.Kothari
Financial Management: Khan and Jain
Investment management : Preeti Singh
Annual report, Kotak securities Ltd.
Pamphlets and Brochures of Kotak securities Ltd.
Organizational Profile of Kotak Securities Ltd.
WEBSITES USED:
www.kotak.com
www.kotaksecurities.com
www.goggle.com
www.businesstoday.com
www.nseindia.com
www.bseindia.com
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