INTRODUCTION:The stock market has fascinated people all through the years.

Many have made fortunes, and others have lost them investing and trading on this stock market. Almost every country has its own stock exchanges. The stock market is a place where people, either on behalf of their clients or their organization or themselves bid to buy a number of shares at a specific price on the other side another set of people asking to sell the same stock for a different price. These are technically called the bid and ask price when a price from bidding side agrees with a price from the asking price, a trade is preformed. In heavy volume transactions stocks, the difference between the bid and the ask price is marginal. The answer to this is the variation between supply and demand of the stock in question in simple terms when a particular stock is demanded heavily and the supply is short, the share price for the stock goes up since people are ready to buy that stock with a higher price than the current price, and people who want to sell or ready to wait and sell at a higher prices.

Definition of stock exchange:Stock exchange means any body or individuals weather incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, and selling or dealing in securities.It is an association of member brokers for the purpose of self regulation or protecting the interest of its members it can operate only if it is recognize by the government under the securities contracts act, 1956.The recognisation is granted under section 3 of the act by the central government, ministory of finance.

HISTORY OF STOCK EXCHANGE:The only stock exchange operating in the 19 century were those of Bombay set up in 1975 and Ahmedabad set up in1894.these were organized as voluntary non-profit-making association of brokers to regulate and protect their interests. Before the control on securities contract act 1925 use to regulate trading and securities. Under this act, the Bombay stock exchange was recognized in 1927 and Ahmedabad in1937.

During the war boom, a number of stock exchanges were organized even in Bombay, Ahmedabad and other centers, but they were not organized. Soon after it became a central subject, central legislation was proposed in committees and public discursion, the security contract (regulation) act become law in 1956. BOMBAY STOCK EXCHANGE:
This stock exchange in Mumbai, popularly known as BSE was established in 1857 as The Native share and stock brokers association as a voluntary non-profitmaking association. It has an evolved over the years into its present status as the premier stock exchange in the country. It may be not that the stock exchanges the oldest one in Asia, even than the Tokyo Stock Exchange, which was founded in 1878. The exchange, while providing an efficient and transparent market for trading in securities, upholds the interests of the investors and ensures redressed of their grievances, whether against the companies or its own member brokers. It also strives to educate and enlighten the investors by making available necessary informative inputs and conducting investor education programmes. A governing board comprising of 9 elected directors, 2 SEBI nominees, 7 public representative and executive director is the apex body, which decides the policies and regulates the affairs of the exchange. The executive director as the chief executive officer is responsible for the day to day administration of the exchange. The average daily turnover of the exchange during the year 2000-01 (April March) was Rs. 3,984.16 crores and average number of daily trade 5.69 lakhs. The Ban on all deferral products like BLESS AND ALBM in the Indian Capita Markets by SEBI with effect from 2001, abolition account period settlements and introduction of compulsory ruling settlements in all scripts traded on the exchanges with effect from December 31, 2001 etc, have adversely impacted the liquidity and consequently there is a considerable decline in the daily turnover at the exchange. The average daily turnover of the exchange present scenario is 110363 (lakhs) and number of average daily trade 1057 (lakhs).

NATIONAL STOCK EXCHANGE:The NSE was incorporated in November 1992 with

an equity capital of Rs. 25 crores. The International Securities Consultancy (ISC) of Hong Kong has helped in setting up NSE. ISE has prepared the detailed business plans and installation of hardware and software systems. The promotions for NSE were financial institutions, insurances companies, banks and SEBI Capital Market Ltd. It has been set up to strengthen the move towards professionalizing of the capital market was well as provide nation wide securities trading facilities to investors.

NSE is not an exchange in the traditional sense where brokers own and manage the exchange. A two tier administrative set up involving a company board and a governing board in envisaged. NSE is a national market for shares PSU bonds, debentures and government securities since infrastructure and trading facilities are provided.

NSE MIDCAP INDEX:

The NSE midcap index or the Junior Nifty comprises 50 that represents 21 abroad industry groups and will provide proper representation of the midcap segment of the Indian Capital Market. All stocks in the index should have market capitalization of greater than Rs. 200 crores and should have traded 85% of the trading days at an impact cost less 2.5%. The base period for the index is November 4th, 1996, which signifies two years for completion of operation of the capital market segment of the operations. The base value of the index has been set at 1000. At present there are 24 stock exchanges recognized under the securities contract (regulation) Act, 1956.

Characteristics of stock exchanges in India:Traditionally, a stock exchange has been as association of individual members called brokers, formed for the express purpose of regulating an facilities the buying and selling of securities by the public and institutions at large. A stock exchange in India operates with the recognisation from the government under the securities contract act, 1956.The member brokers are essentially the middle men who transact in securities on behalf of the public for commission. The largest stock exchange in India is Bombay stock exchange (BSE), which along accounts over 80%of the total volume of transactions in shares in the country.SEBI has been set up in Bombay by the government to over see the orderly development of stock exchange in the country. All companies wishing to raise capital from the public or required to list their securities on at least one of the stock exchange.Thus, all ordinary shares, preference shares and debentures of publicly held companies are listed in one or more stock exchanges. Stock exchanges also facilitate trading in the securities of public sector companies as well as government securities. NATURE AND FUNCTIONS OF STOCK EXCHANGE:As economic development proceeds increase the scope for acquisition and ownership of capital by private individuals also grow. Along with it, the

opportunity for stock exchanges to render the service of stimulating private savings and challenging such savings into productive investments exist on vastly grade scale. These are services, which the stock exchange alone can render efficiently. The stock exchange in India has an important role to play in the building of real share holders democracy. It aims to protect the interest of the public. The activities of the stock exchange are governed by the recognized code of conduct apart from statutory regulations. Investors both actual and potential are provided through the daily stock exchange quotations. The job of stock exchange and its members is to satisfy the needs of market for investment to bring the buyers and sellers together, and to make the exchange or stock between them as simple and fair a process as possible. OBJECTIVES OF THE STUDY The objectives of the study are as follows:
1) To understand the online trading proceedings used by ZEN securities. 2) To compare the performance of ZEN securities ltd with industry. 3) The primary objective is to analyze the changes in trading procedures after the exchange shifted from outcry system to on line trading system. 4) To know the market potentiality of the ZEN securities Limited.

NEED FOR THE STUDY

Capital Markets play a vital role in the development of the economy and stock exchanges are the integral part of the Capital Market. With the advance in Information Technology, age-old methods of stock trading are gradually fading out. They are replaced by the easier and hassle-free method of trading On-Line through the Internet.This study is carried out to explore the changes occurring in stock exchange with the advancements in the information technology. The major need for this study is to know the effectiveness of online system in comparison with the outcry system. More emphasis is given to bring out the process of online trading behind the screen and its advantages. The study also includes the emergence of the depository system in the country to rule out the drawbacks of the system of physical transfer of the shares.

SCOPE OF THE STUDY

The study covered process of online trading. How it works out technically and

the brokerage structure and other charges levied by different stock broking Companies.

 The scope of study is to know various advantages of online trading. To know the process of online trading and analyzing the current market situations in the economy. The scope study is to suggest the investors to use the online trading system to access the market information. The study is to analyze the process of online trading investment pattern.

LIMITATIONS The study covers data collection at Hyderabad branch only. Therefore it does not cover all related issues in brief. The data collected from the primary and secondary sources may subject to slight variation with that of in reality. Hence accuracy and correctness can be measured only to the extent of what the sample has furnished. ANALYSIS OF DATA;The data collected can be analyzed by the following tools like:
1) 2) 3) 4) Graphs, Line charts, Pie diagrams and Bar charts.

METHOLODY OF THE STUDY DATA COLLECTION METHODS: The data collection methods includes both the primary and secondary Primary collection methods:
The primary data is the data that is collected by approaching the individuals directly. The data is collected by visiting frequently to ZEN Securities and meet the employees. This helps to collect the data regarding online trading procedure of ZEN Securities & its impact on the business. To study the online trading process & its impact on the business I have approached various investors or the customers of ZEN Securities.

Secondary collection methods: The secondary collection methods includes the lectures of superintend of the department and also data collected from the magazines of NSE, internet, books on capital market and trading, newspapers and journals. WHAT IS SENSEX Sensex refers to "Sensitive Index" and is generally associated
with the stock market indices. There are currently two major stock exchanges in India, The Bombay Stock exchange and The National Stock Exchange. Sensex an

indicator of the financial performance of the companies listed in Bombay stock exchange situated in Bombay. Sensex constitutes of 30 companies and when Sensex goes down it signifies that majority of the companies stock prices have fallen down and vice -versa. The Sensex is an indicator of all the major companies of the BSE. The Nifty is an indicator of all the major companies of the NSE. BSE is the Bombay Stock Exchange and the NSE is the National Stock Exchange. The BSE is situated at Bombay and the NSE is situated at Delhi. These are the major stock exchanges in the country. Most of the stock trading in the country is done though the BSE & the NSE.

DEFINITION OF SENSEX:The SENSEX, An abbreviation of the Bombay Exchange Sensitive Index (SENSEX), is a "Market Capitalization-Weighted" index of 30 stocks representing a sample of large, wellestablished and financially sound companies. It is the oldest index in India and has acquired a unique place in the collective consciousness of investors. The index is widely used to measure the performance of the Indian stock markets. SENSEX is considered to be the pulse of the Indian stock markets as it represents the underlying universe of listed stocks at The Stock Exchange, Mumbai. Further, as the oldest index of the Indian Stock market, it provides time series data over a fairly long period of time (since 1978-79). The index has just one job: To capture the price movement. So a stock index will reflect the price movements of shares while a bond index captures the manner in which bond prices go up or down. If the SENSEX rises, it indicates the market is doing well. Since stocks are supposed to reflect what companies expect to earn in the future, a rising index indicates investors expect better earnings from companies. It is, therefore, also a measure of the state of the Indian economy. If Indian companies are expected to do well, obviously the economy should do well too....

OBJECTIVES OF SENSEX
The Sensex is the benchmark index of the Indian capital markets with wide acceptance among individual investors, institutional investors, foreign investors and fund managers. The objectives of Sensex indicator are: 1. To measure market movements:Given its long history and its wide acceptance, no other index matches the Sensex in reflecting market movements and sentiments. Sensex is widely used to describe the mood in the Indian stock markets. 2. Benchmark for funds performance:-

The inclusion of blue chip companies and the wide and the balanced representation in the Sensex makes it the ideal benchmark for fund managers to compare the performance of there funds. 3.For index based derivative products:Institutional investors, money managers and small investors all refer to the Sensex for their specific purposes the Sensex is in effect the proxy for the Indian stock markets. The countrys first derivative product i.e. index futures was lunched on Sensex.

HOW IS IT CALCULATED?The SENSEX is calculated taking into consideration stock

prices of 30 different BSE listed companies. It is calculated using the "free-float market capitalization" method. The market capitalization of a company is determined by multiplying the price of its stock by the number of shares issued by the company. This market capitalization is further multiplied by the free-float factor to determine the freefloat market capitalization.

CRITERIA FOR SELECTION AND REVIEW SCRIPTS FOR THE SENSEX A .Quantitative criteria:1.

Market capitalization:- The scrip should figure in the top 100 companies listed by market capitalization. Also market capitalization of each scrip should more than 0.5% of the total market capitalization of the index i.e. the minimum weight should be 0.5%. Since the Sensex is a market capitalization weighed index, this is one of the primary criteria for scrip selection. (Market capitalization would be averaged for last six months)

2. Liquidity:- (i) Trading frequency:-the scrip should have been traded on each and every trading day for the last one year. Exceptions can be made for extreme reasons like scrip suspension etc. (ii) number of trades: the scrip should be among the top 150 companies listed by average number of trades per day for the last one year. (iii) Value of shares traded: the scrip should be among the top 150 companies listed by average value of shares traded per day for the last one year. 3. Continuity:Whenever the composition of the index is changed, the continuity of historical series of index values is re-established by correlating the value of the revised index to the old index (index before revision). The back calculation over the last one year period is carried out and correlation of the revised index should not be less

than 0.98. This ensures that the historical continuity of the index is maintained. Industry representation: Scrip selection would take into account a balanced representation of the listed companies in the universe of BSE. The index companies should be leaders in their industry group. 4. Listed history:3.

The scrip should have a listing history of at least one year on BSE. B. Qualitative Criteria: Track Record:In the opinion of the Index Committee, the company should have an acceptable track record.

WITH WHAT FREQUENCY IS SENSEX CALCULATION DONE?

During market hours, prices of the index scrips, at which trades are executed, are automatically used by the trading computer to calculate the SENSEX every 15 seconds and continuously updated on all trading workstations connected to the BSE trading computer in real time

Introduction:
The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully automated Screen Based Trading System (SBTS) where a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party. SBTS electronically matches on a strict price/time priority and hence cuts down on time, cost and risk of error, as well as on fraud resulting in improved operational efficiency. It allows faster incorporation of price sensitive information into prevailing prices, thus increasing the informational efficiency of markets. It enables market participants, irrespective of their geographical locations, to trade with one another simultaneously, improving the depth and liquidity of the market. It provides full anonymity by accepting orders, big or small, from members without revealing their identity, thus providing equal access to everybody. It also provides a perfect audit trail, which helps to resolve disputes by logging in the trade execution process in entirety. This sucked liquidity from other exchanges and in the very first year of its operation, NSE became the leading stock exchange in the country, impacting the fortunes of other exchanges and forcing them to adopt SBTS also. Today India can boast that almost 100% trading take place through electronic order matching.

The trading network in NSE has main computer, which is connected through Very Small Aperture Terminal (VSAT) installed at its office. The main computer runs on a fault tolerant STRATUS mainframe computer at the exchange. Brokers have terminals installed at their premises, which are connected through VSETs/leased lines/modems. An investor informs a broker to place an order on his behalf. The broker enters the order through his PC, which runs under Windows NT and sends signal to the Satellite via VSAT/leased line/modem.

MANUAL TRADING:
Trading procedure before introduction of online trading Trading on stock exchanges is officially done in the trading ring. In the trading ring the space is provided for specified and non-specified sections, the members and their authorized assistants have to wear a badge or carry with them an identity card given by the exchange to enter the trading ring. They carry a said book or confirmation memos, duly authorized by the exchange and carry a pen with them. The stock exchanges operations are floor level are technical in nature .Non-members are not permitted to enter in to stock market. Hence various stages have to be completed in executing a transaction at a stock exchange .The steps involved in this method of trading have given below: Placing of the order by the client, order can be placed as limit order, best Market price or open order. Entry in order book by the broker. Execution of order. Preparation of contract note. Entry in settlement registrar, client registers. Actual delivery of shares by Brokers or clients. Preparation of bill or order delivery note. Entry in client ledger, scrip ledger. Payments

Choice of broker:
The prospective investor who wants to buy shares or the investors, who wants to sell shares and transact business, have to act through member brokers only. They can also appoint their bankers for this purpose as per the present regulations.

Placement of order:
The next step is the placing order for the purchase or sale of securities with a broker. The order is usually placed by telegram, telephone, letter, fax etc or in person.

To avoid delay, it is placed generally over the phone. The orders may take any one of the forms such as At Best Orders, Limit Order, Immediate or Cancel Order, Limited Discretionary Order, and Open Order, Stop Loss Order.

Execution of order or contract:

Orders are executed in the trading ring of the BSE. This works from 11:30 to 2.30 P.M on all working days Monday to Friday, and a special one-hour session on Saturday. The members or the authorized assistants have to wear a badge given by the exchange to enter into the trading ring. They carry a sauda Block Book or conformation memos, which are duly authorized by the exchange when the deal is struck; both broker and jobber make a note in their sauda block books. From the sauda book, the contract notes are drawn up and posted to the client. A contract note is written agreement between the broker and his clients for the transaction executed.

Drawing Up and Bills:

Both sale and purchase bills are prepared along with the contract note and it is posted on the same day or the next day. This in a purchase transaction, once the shares are delivered to the client effects payment for the purchases and pays the stamp fees for transfer, a bill is made out giving the total cost of purchase.

HOW TRADING TAKES PLACE:

PURCHASE OF SECURIT
Investor Broker

Decision

Agreem Details

DRAWBACKS OF THE MANUAL SYSTEM:

Stock Exchange

Bargain Contra

Lack of transparency The scope for manipulation and frauds Time consuming

TECHNOLOGY REVOLUTION
Technology is revolutionizing every field of human rapid growth in number, volume and value of securities exposed the limitation of handling and dealing in securities shortcomings of the market became manifest in terms transfer and irregular settlement etc. endeavor and activity. The in the Indian capital market in physical / paper mode; the of bad deliveries, delays in

The National Stock Exchange (NSE) followed by The Stock Exchange, Mumbai (BSE) in 1995 first introduced electronic medium of trading. There was a time when an individual investor had to go to an exchange-trading ring to have his order executed. Today the premier exchanges of the country want to come to his doorstep, or rather his desktop. Relationship marketing is really gaining momentum! The countrys two biggest exchanges the BSE and the NSE have embraced the Internet in an effort to leverage the power of this medium to reach out to the hitherto untapped masses. The actual definition of Online Trading is as explained below: Online trading is a service offered on the internet for purchase and sale of shares. In the real world you place orders on your stockbroker either verbally (personally or the stockbrokers website through your internet enabled PC and place orders through the brokers internet based trading engine. These orders are routed to the stock exchange without manual intervention and executed thereon in a matter of a few seconds. The net is used as a mode of trading in internet trading. Orders are communicated to the stock exchange through website.

REQUIREMENTS FOR ONLINE TRADING:

For investors:
1. Installation of a computer with required specification 2. Installation of a modem 3. Telephone connection

4. Registration for on-line trading with broker 5. A bank account 6. Depository account 7. Compliance with SEBI guidelines for net trading

The following should be produced to get a demat account and online trading account:
As identity proof: PAN card(mandatory)

For address proof any one of the following: Voter ID card Driving license Ration card Bank pass book Telephone bill

Other requirements, which are necessary

First page of the bank pass book and last 6 months statement. Bank managers signature along with banks seal, manager registration code on photograph.

For stock brokers:

1. Permission from stock exchange for net trading 2. Net worth of Rs. 50 lakhs 3. Adequate back-up system 4. Secured and reliable software system 5. Adequate, experienced and trained staff 6. Communication of order (trade confirmation to investor by e-mail) 7. Use of authentication technologies 8. Issue of contract notes within 24 hours of the trade execution 9. Setting up a website.

The net is used as a medium of trading in internet trading. Orders are communicated to the stock exchange through website. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on internet based securities trading services has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. Under the Order Routing System the client enters his requirements (security, quantity, price, and buy/sell) in broker's site. They are checked electronically against the clients account and routed electronically to the appropriate exchange for execution by the broker. The client receives a confirmation on execution of the order. The customer's portfolio and ledger accounts get updated to reflect the transaction. The user should have the user id and password to enter into the electronic ring. He should also have demat account and bank account. The system permits only a registered client to log in using user id and password.

ZEN NET TRADING PROCESS

To start net trading with ZEN, the individuals need to open a trading Account and a Depository (or Demat shares) Account with ZEN Securities Ltd. All receipts and payments for buying and selling of shares and all commissions and charges will be posted to customers trading account. Shares which they buy and sell through the trading Account will be received in or delivered from their demat Account. Trading account refers to the account of client maintained by ZEN in their books of accounts. Demat account refers to the account opened by client with Depository for holding securities in electronic form. For the purpose of Net-Trading through ZEN demat account refers to the account opened by client with National Securities Depository Limited (NSDL) through ZEN Securities Ltd as Depository Participants (DP). If they already have a demat account with ZEN Securities Ltd, then the same Account can be linked to Net trading Account. Just the customers have to give their account details at the time of becoming a Net trading customer. Before ZEN can make the customers account operative, they require that clients have to fill and sign all forms / agreements which form part of Account opening kit, and supply with all the relevant legal documents and financial information which law requires us to maintain. Clients have to warrant and represent that the information that they supply in account application (or other information that ZEN may require) is accurate and truthful. Clients also expressly authorize ZEN to obtain reports concerning the customers credit standing and business conduct. If application is approved, ZEN will open a Net trading Account (an "Account") for the client. ZEN reserve the absolute right to either accept or reject clients application on any grounds whatsoever and agree that client shall not dispute the result in any manner whatsoever.

TRADING AND SETTLEMENT:-

Introduction of automated trading systems has enabled market participants to login orders, execute deals and receive online market, information. The competition from NSE has forced the regional stock exchanges including BSE to switch over to screen based trading. The NSE trading system is order driven while the OTCEI system is quote driven. BSE Online Trading (BOLT) is a mixture of both quote driven and order driven system as the system permits both jobbing and direct matching of orders. Trading on equities segment takes place on all days of week (except Saturdays, Sundays & holidays declared by Exchange in advance). The normal market timings of the equities segment on BSE & NSE are: Normal Market open: 09:55 hours. Normal Market Close: 15:30 hours.

TRADING PROCESS:Investors who want to either buy or sell the share have to understand how it works. After deciding what to buy or sell the first step is to place the order for with a broker. When an order is placed to the broker, it is communicated to the stock exchange through the broker. The order stay is the queue exchanges systems and gets executed within buy/sell limit that has been specified. The share buy or sell will be sent to purchaser by the broker in their demat account The stock trading process can be divided as; a) Online Stock Trading Process b) Offline Stock Trading Process

c) ONLINE STOCK TRADING:Online trading is a services offered on the internet for purchase and sale of shares in the real world you place orders on your stock broker either verbally (personally or telephonically) or in a written form (fax)in online trading, you will access a stock brokers internet based trading engine. These orders are routed on the stock exchange without manual intervention and executed there on in a matter of a few seconds.

IN INDIA

Internet trading started in India on 1st April 2000 with 79 members permission for online treading .The SEBI committees on internet based securities treading services has allowed the net to be used as on order routing system (ORS) Through registered stock brokers on behalf of their client for execution of transaction under the client enter his requirements (security, quantity, price buy/sell) on brokers site.

OBJECTIVES:Internet trading is expected to Increase transparency in the markets,

Exchange market quality through improved liquidity, by increasing quote continuity and market depth. Reduce settlement risk due to open trades, by elimination of mismatches. Provide management information system. Introduce flexibility in system, so as to handle growing volumes easily and to support nationwide expansion of market activity. Besides, through internet treading three fundamental objectives of securities regulation can be easily achieved these are: Investor protection Creation of a fair efficient market Reduction of the systematic risks

The customers who participate in the stock trading process directly without any intermediaries through the internet services are referred as Online Stock Trading. Online trading symbolizes the perfect synergy between technology and the mindfreezing particulars of stock markets in bringing about a standard shift in the way Financial Markets operating recent times. It facilitates faster and efficient transactions of stocks and shares through the Internet, while keeping the basic principles of share trading intact. In addition to replicating the traditional stock trading business on the net, online trading has led to the growing surplus of secondary business units in the form of e-broking firms, web advisors, e-consultants etc The Internet and internet enabled technologies have radically altered the business processes and activities of investors, brokerage firms and regulators. They have enabled front end applications to be integrated with back office administration, taking paper out of the system and drastically brought down the cost of stock trading. They have facilitated straight through processing and lead to T+0 clearing and settlement. Online Trading is of two categories: 1) Discount on-line Brokers 2) Full Service On-line Broker Discount on-line brokers allow one to trade via the internet through the broker at reduced rates. Full service online brokerages are linked to existing brokerages directly through the internet.

OFFLINE STOCK TRADING PROCESS:The customers who involve in the stock trading process indirectly i.e., through telephones, through employees of organizations & through other means of communication etc

SETTLEMENT PROCESS
Clearing of transaction in the form of shares and cash is called settlement. Buyers will take the delivery of shares through the depository participants like Zen and others. Finally, the settlement is made by means of delivering the share certificates along with the transfer deeds. The transferor duly signed transfer deed. It bears a stamp of the selling broker. The buyer then fills up the certificates fills up the particulars in the transfer deed. Settlement can be done in the following way

SPOT SETTLEMENT:Under this method the delivery of securities and payment for them are affected on the day of the contract itself.

ROLLING SETTLEMENT:Under this rolling settlement the trading is on T+2, basis i.e. if Monday is trading day then Wednesday is the paying day in case on non-delivery the securities will go for action.

DETAILS OF PROCEDURES:DELIVEY IN:The members who are in pay out position in to clearing house within the settlement period along with the delivers Chelan filled in the details of share certificates which has folio numbers or distinctive numbers etc.

DELIVERY OUT:The buyer of shares who made payment will take delivery of shares from the clearing house.

PAY-IN:The member who is in paying position shall pay for value of share within the trading settlement period (T+2).

PAY-OUT:The cheques paid in the clearing house will be paid to members who are in paying position. All disputes arising between members regarding non-deliveries, nonpayments, good and bad deliveries pertaining to the settlement will be settled by the settlement committee of the exchange.

Procedure for online trading

Step 1: Those investors, who are interested in doing the trading over internet system i.e. NEAT-IXS, should approach the brokers and get them self registered with the Stock Broker. Step 2: And personal identification number (PIN). Step 3: Actual placement of an order. An order can then be placed by using the place order window as under: (a) First by entering the symbol and series of stock and other parameters like quantity and price of the scrip on the place order window. (b) Second, fill in the symbol, series and the default quantity. Step 4: It is the process of review. Thus, the investor has to review the order placed by clicking the review option. He may also re-set to clear the values. Step 5: After the review has been satisfactory, the order has to be sent by clicking on the send option. Step 6: The investor will receive an "Order Confirmation" message along with the order number and the value of the order. Step 7: In case the order is rejected by the Broker or the Stock Exchange for certain reasons such as invalid price limit, an appropriate message will appear at the bottom of the screen. At present, a time lag of about 10 seconds is there in executing the trade. Step 8: It is regarding charging payment, for which there are different mode. Some brokers will take some advance payment from the investor and will fix their trading limits. When the trade is executed, the broker will ask the investor for transfer of funds to his account.

IMPACT OF ONLINE TRADING ON THE MARKET:The number of transaction has increased considerably after introduction of the online trading system. The factor of influence could be:

The case of the operation from the point of view of both the members and investors. Facilities better monitoring of the market by the market operations department. The daily that the best price is achieved in buying and selling.

ADVANTAGES OF ONLINE TRADING

Online trading allows you to buy and sell shares on the exchange through internet. It is a truly powerful medium to be in direct control of your investments.

1. Freedom of information

The Internet can provide a new sense of control over your financial future. The amount of investment information available online is truly astounding. It's one of the best aspects of being a wired investor. For the first time in history, any individual with an Internet connection can: Know the price of any stock at any time Review the price history of any stock in chart format Follow market events in-depth Receive a wealth of free commentary and analysis about stock markets and the global economy Conduct extensive financial research on any company Talk with other investors around the world At Invest smart you can get real-time stock quotes, daily roundups of the stock market, expert commentary, and a deep community of fellow investors

2. Control of your money

One of the great appeals of using an Invest smart online account is the fact that the account belongs to you, and is under your direct control. When you want to buy or sell stock, you no longer need to call your broker on the phone; hope that he is in the office to place your order; possibly argue with the broker about the order; and hope that the transaction is executed instantly.

3. Access to the market

At the most basic level, an online trading account with Invest smart gives you more agility in buying and selling stocks. This is through sophisticated information streams, dedicated trading platforms and sophisticated tools for accessing the markets.

4. Ensures the best price for investors

We at Invest smart specialize in the technique that offers the best price for the buy and sell orders of the investors and traders. Also due to the high level of transparency with regard to display of information relating to the specific stocks and company profiles, you will be able to get the best quote for your orders.

5. Offers greater transparency

Online trading offers you greater transparency by providing you with an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and finally ending with a credit into your depository account. All these stages are subject to inspection, thus bringing in transparency into the system.

6. Enables hassle free trading

Online trading integrates your bank account, your trading account and your demat accounts, which leads to easy and paperless trading for you

7. Allow instant trade execution

You as an Invest smart online customer will be able to execute the entire trading transaction, right from logging on to our site, to the execution and settlement of your bank account, in a very short period of time.

8. Provides a level playing field

Trading on the net, gives even the smallest retail investor access to information that earlier was available only to the big traders. This provides a level playing field for all investors in the securities market.

9. Reduces the settlement risk

This method of trading reduces the settlement risk for the investor, as in this case all short sell orders are squared off at the specified cut-off time and not allowed to be carried forward. In the case of a demat account your demat account is checked by us before executing your sell transaction. This reduces the settlement risk for the buyer, who is assured of the delivery of the securities and for you as a seller of the securities.

10. Live financial news & Analysis

As a client of Invest smart online, you are given free access to streaming news to give you the latest financial information as it occurs.

11. Onlilne help desk

You can contact the Tele Trading Executives from the Tele Trading team during and after market hours. Any questions you might have will be addressed quickly and your trading ideas and strategies can be discussed with them.

12. Instant order trade confirmations

Every trade is confirmed immediately and you will receive an on-screen confirmation following every trade with full details for your records. This avoids costly errors that would have been discovered when it is too lat

Disadvantages of Online Trading

The ease and speed of online trading can give the investor a false sense of security and encourage him to trade more frequently without paying any heed to market basics like, researching a company or knowing the risk he is going to assume.
The concept of chat rooms, which has become very popular with the investors,

may provide them with misleading information. Chat room participants are often paid to highlight certain stock.
Online trading is not always instantaneous.

In a rapidly changing market, orders may not get executed at the price shown on the computer screen. This is because even a nanosecond delay can put one the race for that particular stock at that particular price.

 Delays in execution usually arise due to various technological choke-points

like the Internet slowing down due to heavy traffic or if the modems, Computer or Internet Service Provider are malfunctioning. If the investor does not factor in these technological lags while entering into a volatile market, he may suffer heavy losses.

SUMMARY OF FINDINGS
Fluctuations are more in stock market than any other market. Online trading is useful to each and every investor who wants long and short term investments. 1) Most of the investors participate in offline stock trading. As, the investors do not have awareness in the trading business, they prefer offline trading procedure. 2) 56% of the customers feel that trading in financial assets is risky process. Unlike any other business, stock trading business is a risky one.

3) 68% of the customers prefer the asset Equity which refers the investors does
trading mostly in Equity 4) 58% of the commodity preferred customers do trading through MCX and 42% of the customers do trading in NCDEX exchanges. 5) There is an increase in the turnover of ZEN Securities from the year 2004-2008 which indicates the growth of the business in the competitive business world. 6) There are more speculators than investors. 7) This project gives a clear cut idea to new investors about online trading

CONCLUSIONS
Online trading is more powerful & advantageous than manual trading. If online trading is done with proper infrastructure and software in place then it facilitates smooth trading. The software or the systems used in online trading should be advanced and the persons who operate should have minimum knowledge or if they are very well versed about the functioning of the system then it will be helpful in smooth functioning of online trading. Companies should guide the investor as mentioned earlier. The online trading system can increase efficiency, free up time and, most importantly, increase profits. Online trading facility can be avail easily by just opening an account with the broker and depository participant. Online trading concept is not very common to the general investors; they still rely upon fact sheets and news paper and published information investment avenues.

 Online trading facility is good to the investors. Investors can easily update

information about their securities (shares etc) day to day. From the above data analysis and interpretations, the online stock trading, its impact on the business, the investors preferring various assets like equity, commodity, futures and options, various exchanges preferred by the investors, various services offered by ZEN securities, problems relating to stock trading business can be observed. Finally I conclude that the ZEN securities in Hyderabad is generating huge turnover to increase their revenue and its development which shows a positive impact in the business world.