NEAT System

Online Trading System

Working of Online Trading System

Submitted To

Submitted by

Prof. Ruchi Chugh

Jitesh Kejriwal

FORE School of Management

91084, Sec: Y

Jitesh Kejriwal, 91084

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Online Trading System Traditionally stock trading was done through stock brokers, personally or through telephones. As number of people trading in stock market increased enormously in the last few years, some issues like location constrains, busy phone lines, miss communication etc started growing in stock broker offices. Information technology helped stock brokers in solving these problems with Online Stock Trading. Online Stock Trading: Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker. In this case these Online Stock Trading companies are stock broker for the investor. They are registered with one or more Stock Exchanges. Mostly Online Trading Websites in India trades in BSE and NSE. There are two different type of trading environments available for online equity trading 1. Installable software based Stock Trading Terminals This trading environment requires software to be installed on investor‟s computer. Software is provided by the stock broker. These softwares require high speed internet connection. These kind of trading terminals are used by high volume intraday equity traders. Advantages: 

Orders directly send to stock exchanges rather than stock broker. This makes order execution very fast.



It provides all information which is required to a trader on a single screen including stock market charts, live data, alerts, stock market news etc.

Disadvantages: 

Location constraint - You cannot trade if you are not on the computer where you have installed trading terminal software.

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It requires high speed internet connection.

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These trading terminals are not easily available for low volume share traders.

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Online Trading System 2. Web (Internet) based trading application: This kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection. The major Stock Trading Websites in India are: 

ICICI Direct

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ShareKhan

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IndiaBulls

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5Paisa

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Motilal Oswal Securities

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HDFC Securities

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Reliance Money

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Religare

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Geojit

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IDBI PaisaBuilder

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Networth Stock Broking

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Kotak Securities

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Standard Chartered: STC Capital Markets Ltd

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Angel Trade

Advantages of Online Stock Trading (Website based): 

Real time stock trading without calling or visiting broker's office.

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Display real time market watch, historical data, graphs etc.

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Investment in IPOs, Mutual Funds and Bonds.

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Check the trading history; demat account balance and bank account balance at any time. Provide online tools like market watch, graphs and recommendations to do analysis of stocks.

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Place offline orders for buying or selling stocks.

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Set alert to inform you certain activity on the stock through email or sms.

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Customer service through Email or Chat.

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Secure transactions.

Disadvantages of Online Stock Trading (Website based): 

Website performance - sometime the website is too slow or not enough user friendly.

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Little long learning curve for people who don‟t know much about computers.

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Brokerages are little high.

Jitesh Kejriwal, 91084

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Online Trading System Both NSE and BSE have switched over to computerized Online Trading system from open outcry trading system. BSE has BOLT (BSE Online Trading) and NSE has NEAT (National Exchange Automated Trading). With these highly efficient online trading systems efficiency and transparency of BSE and NSE have increased dramatically. Essential of Online Trading 

Online trading account - You have to open an online trading account with any of the bank or financial trading system like ICICIdirect.com. There will be nominal annual charges. These charges vary from bank to bank but should not be more than Rs.1000 annually.

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A computer with internet connection or can do trading in internet cafe.

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After successfully opening the online account you will receive the username and password with the help of which you can login in online trading system and trade yourself.

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The trading system executive (with whom you opened trading account) will help you initially about how to use the online trading system.

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Once you get familiar with the system then you can trade yourself at your home or in the internet cafe.

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Nowadays you can get internet enabled on your cell (which is called GPRS) whose speed will be sufficient to do trading and also the charges of GPRS are very nominal.

Buying or Selling a Share Once the account is active you can buy shares from BSE or NSE. For every buy or sell transaction you will have to pay a brokerage to the broker normally ranges between 0.4% to 0.8%. Suppose you buy 100 shares with price 100. So total amount is Rs. 10000. For a .5% brokerage firm you will have to pay 0.5% of 10,000 i.e. Rs. 50. Same amount you have to pay when you sell it. So totally Rs 100 will be reduced from your total profit. Apart from this brokerage you will have to pay many other charges like Service tax on the brokerage i.e. 12.25% for every transaction it is 12.25% of Rs. 50 i.e. 6.125% for buy and another 6.125% for sell. Then there are other charges like Securities Turnover Tax (.125%), Stamp duty, Education Cess, minimum buy/sell commission etc. These amounts vary from broker to broker. Jitesh Kejriwal, 91084

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Online Trading System NEAT SYSTEM: NSE is the first exchange in the world to use satellite communication technology for trading. Its trading system, called National Exchange for Automated Trading (NEAT), is a state of-the-art client server based application. The NEAT screen consists of various functions to make trading a pleasant experience. These functions help us in performing various tasks like placing a buy order, placing a sell order, modifying the orders already placed, keeping a watch on the market movement, finding market depth, checking the status of an order which had been placed earlier and other various supplementary functions. At the server end all trading information is stored in an in-memory database to achieve minimum response time and maximum system availability for users. It has uptime record of 99.7%. For all trades entered into NEAT system, there is uniform response time of less than one second. On logging into the system the following screen appears:

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Online Trading System User Id: Each trading member can have more than one user. Each user has a unique ID and will be a registered NSE trading member. Trading Member Id: The trading member is a registered member of the exchange owning NSE ticket who participates himself or on behalf of its clients. The Trading Member ID is unique and functions as a reference for all orders/trades of different Users. Password: User password expires every 15 days which can be reset by typing new password in the new field. Display Screen:

Title Bar: a. Logo b. Name of the software c. Name of the company: Name of the Trading Member who has taken membership with exchange, is displayed. d. Login ID number: The login ID of the user is displayed. To get this ID, user has to clear NCFM certification in the desired module. e. Current date in format date month year (for example 01.01.2007 should01 JAN 2007) f. Current time in format - hours: minutes: seconds Jitesh Kejriwal, 91084

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Online Trading System Sub- title bar: Indicates the index current value along with change in points from yesterday‟s closing. E.g. NIFTY 5480 (+25) Second Sub- title bar: Indicates last traded trades of each security in the sequence of symbol, series, market type, quantity, and price in red color for sell and white color for buy. Market Watch: Here we can select securities of our choice and also choose attributes related to our choice along with the current buy/sell bids and buy/sell quantity. For example we may choose RIL securities and parameters we could choose can be OHLC, Volume traded, Last trading price, and Average trading price. System message window: It gives the share messages regarding order/trade Confirmation / modification /cancellation etc. Function Keys S. No

Function Keys

Function

F1- Buy & (+) F2- Sell & (-)

Function of Buying & Selling scripts.

2.

F3- Outstanding Order (OO)

Pending Orders which are Confirmed but not Traded.

3.

F4- Market Watch (MW)

It Inserts new Scrip and refresh the rates by only pressing enter on scrip.

4.

F6-Market By Price (MBP)

It Displays best 5 Buyers & Sellers on selected scrip.

5.

F7- Activity Log (AL)

Displays the whole activity done in scrip (Buying, Selling, Modify and Trade).

6.

F8- Previous Trades (PT)

It Displays Buy Sell Trades with avg. & total value.

F9- Snap Quote (SQ)

It is used to view rates of any scrip without disturbing the market watch.

9.

F10- Message View

It is a Partial display of Full Message.

10.

F11- Market Enquiry (MI)

Info. Of particular selected scrip (OHLC).

1.

7.

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Online Trading System BUYING OF SECURITY (F1 OR ‘+’) This function is used for placing buy orders. Buy orders can also be placed by using „+‟ key or by clicking on the „buy icon‟ on the tool bar. For a stop loss buy orders, the trigger price has to be lesser than or equal to the limit price. 

Symbol – Shows the symbol of the scrip.

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Series – Shows the series of the security, i.e. EQ or BE etc.

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Total Quantity – Here the user has to specify the quantity to be bought/sell.

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Price – The price at which the shares are to be bought is to be specified.

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Pro/Cli – Here the user has to select whether the shares are to be bought in the Proprietor‟s account or in Client‟s account.

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Client – If the shares are to be bought in client‟s account, the client code is specified.

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Disclose quantity (DQ) – The user can disclose a minimum of 10% of the buy/sell quantity. If nothing is mentioned in disclose quantity box then the entire buy/sell quantity is disclosed in the market.

Jitesh Kejriwal, 91084

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Online Trading System SELLING OF SECURITY (F2 OR ‘-‘) Sell orders can also be placed by using (-) key or by clicking on the sell icon on the tool bar. Sell orders are placed with different parameters. All the parameters for sell order are same as of Buy orders. The only difference is of stop loss orders in which, for sell orders, the trigger price has to be greater than or equal to the limit price. Submission of Order – After entering relevant data in all fields press “Enter and Ctrl” key to submit the order. As the order placed the message comes with Time, Order No, Symbol, Series, Quantity, Rate, Member ID, User ID with last word CONFIRMED.

Outstanding Order (F3): This function is used to enable the User to view the outstanding orders (buy/sell) for a selected security. An outstanding order is an order that has been entered by the user, but which has not yet been completely traded or cancelled.

Jitesh Kejriwal, 91084

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Online Trading System If the outstanding orders of a particular client are required, the client A/c no. has to be specified. Press enter to view the outstanding orders of the above mentioned security by filtering the above book type. Left side of the window displays „Buy Orders‟ & the right side displays „Sell Orders‟.

MARKET WATCH (F4) This screen is used to set-up and view trading details of the securities that are selected by the users. For each security in the market watch, market information is dynamically updated. The one line market information displayed is for current best price orders available in the Regular Lot Book. For each security the following information is displayed: 

Symbol, Series and Market type.

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The corporate action indicator "Ex/Cum"

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The total buy order quantity available at best buy price

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Best buy price

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Best sell price

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Total

sell

order

quantity

available at best sell price 

The last traded price

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The last trade price change indicator

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Increase/Decrease indicator

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The

no

delivery

period

indicator "ND"

Jitesh Kejriwal, 91084

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Online Trading System MARKET BY ORDER (F5) The purpose of Market by Order (MBO) is to enable the User, to view outstanding orders in the order books, in the order of price/time priority for a selected security. It shows best five orders by price time priority for buyers as well as for sellers for the selected scrip. This function is not available for Equity market; it only works for Auction markets.

Best Orders (F6)

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Online Trading System Activity Log (F7) The Activity Log (AL) shows all the activities which have been performed on any order belonging to that User. These activities include order modification/cancellation, partial /full trade, trade modification/cancellation.

Previous Trades (F8) Provide security wise information to Users for their own trades. For example, if 10 shares of ITC @ Rs.166.80 and another 10 shares are purchased @ Rs.168.80 after 10 minutes. The information reflected in the Net Integrated Position window will show that 20 share of ITC are bought @ 167.80, hence to view individual details of trade the individual can press F8.

Jitesh Kejriwal, 91084

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Online Trading System Snap Quote (F9) The Snap Quote is a feature available in the system to get instantaneous market information on a desired security. This is normally used for a security that is not setup in the Market Watch window.

Partial Message Log (F10) This function shows the messages regarding Order/Trade Confirmation/Modification/ Cancellation etc. It provides few messages in this window.

Jitesh Kejriwal, 91084

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Online Trading System MARKET ENQUIRY (F11) The purpose of the Market Enquiry is to enable the User to view the market statistics of a particular security in the particular market. It also displays the open price and previous close price for a security. This function is used to view the total market information of the selected scrip. It shows: Normal market as of the current time

Today‟s open price

Name of the scrip

Today‟s high price

Series of the scrip

Today‟s low price

Total traded quantity for the day till that

Last traded price

time 52 weeks high price.

Average Price

52 weeks low price

Net change.

Previous day closing price

Last traded quantity

Last traded time

Last traded date

Today‟s current best buyer/seller with their quantity.

Most Active Securities The Most Active Securities window is used to view the most active securities or top 10 securities sorted in the order of traded value. It is dynamically updated. The securities which are displayed are those which have been traded most actively since

market

opening

till

current time.

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