Arbitrage Trade Analysis of Stock Trading in Bse and Nse- India Infoline

7/27/2019 Arbitrage Trade Analysis of Stock Trading in Bse and Nse- India Infoline

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ABSTRACT

The security market is the placed where suppliers and users of capital, meet to share each

other vision and aspiration. The issued shares are traded hence it is called as secondary

market. The individuals in market transfer the funds from non profitable investment to

profitable investment. This transfer of funds from low return share to high return shares

forces the firms to improve their performance to increases the intrinsic value of shares.

The arbitrage is the deviation or difference between the market prices of a share.

The arbitrage is gained when there is a difference in the price a share in two markets. The

arbitrage provides some profits to the individuals in the market.

The arbitrage is the return for the invested amount and it is also for the skills used to get

the deviation between the prices. The investors purchase the security from where the

price is low and sell it in the market where the prices are high.

In these days, due to online trading the deviations in the market prices are occurring in

rare. So it may be a difficult task to search for an opportunity of getting arbitrage.


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INTRODUCTION

The securities market is a place where is a place suppliers and user of capital meet to

share each others vision and aspirations and now here a balance is sought to be achieved

between the diverse interest of market participations. Securities decouple individual acts

of saving to occur without a concomitant investment .moreover, availability of yield

bearing securities makes present consumption, including people to save more. The

composition of saving changes, with less saving held in the form of idle money or

unproductive assets simply because more divisible and liquid assets are available.

The securities market avoids allocation of savings to low yielding enterprises and

hence forces them to improve performance. It continuo monitors their performance

through movement of their share price in the market and the threat of takeover. the

improves efficiency of resources use and thereby signficancetly increases the return on

investment .as a result, savers and investors are constrained not by individual abilities but

by the economys ability to invest and save, which in evitable enhances savings and

investment in the economy. Thus the securities market converts a given stock of

ingestible resources into a large flow of goods and services and promotes economic

growth


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RESARCH METHODOLOGY

Research design or research methodology is the procedure of collecting, Analyzing and

interpreting the data to diagnose the problem and react to the Opportunity is such a way

where the cost can be minimized and the desire Level of accuracy can be achieved to

arrive at a particular conclusion.

The methodology used in the study for the completion of the project and the

fulfillment of the project objectives, is follows

STATISATICAL TOOLS

Arithmetic average or mean:

The arithmetic average measures the central tendency. The purpose of

computing an average value for set of observations is to obtain a single value, whish is

representative of all items .The main in objective of averaging is to arrive at a single

value which is a representative of the characteristics of the entire mass of data and

arithmetic average or mean of a series (usually denoted by X) is the value obtained by

dividing the sum of the values of various items in a series (sigma x) divided by number of

items (N) constituting the series.

Thus, if X1,X2..Xn are the given N observations. Then

X1+X2..Xn

X= __________________N


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RETURN:

Current priceprevious price *100

_____________________________

Previous price

VERIANCE:

The square of standard deviation is known as variance.

Variance is the square root of the standard deviation:

Variance =(S.D)2

Where, (S.D) is standard deviation

DATA COLLECTION METHODS

For the purpose of the study was collected through secondary

Source of the data collection method .major source of the data are

Published NSE & BSE sensex.


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SOURCE OF THE DATA

PRIMARY DATA:

The primary data information is gathered in Alcom

SECONDARY DATA:

The secondary data is collected from various financial books, magazines and

from stock lists of various newspapers and Alcom as part of the class undertaken for

project.

TIME PERIOD

I collected daily stock price of 3 selected companies traded in BSE &NSE for the period

December 2011 to February 2011

SCOPE OF THE STUDY

1. The scope of ltd to operation Alcom. Company.

2. The information obtained primary and secondary source were ltd to Alcom Company.


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LIMITATIONS

1)The data collected was basically confined to secondary sources with very little amount

of primary data associated with the project.

2)The detailed study of the topic way not possible due to the limited size of the project.

3)The availability of information in the form reports and price fluctuations of the

company was a big constraint to the study.

4) The number of funds considered is 3 that is share prices traded in BSE and NSE

sensex.

5) The time period taken for doing the data analysis has been taken DEC 2011 To FEB

2011.


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COMPANY PROFILE

Origin:

India infoline Ltd., was founded in 1995 by a group of professional with

impeccable educational qualifications and professional credentials. Its institutional

investors include Intel Capital (world's) leading technology company, CDC (promoted by

UK government), ICICI, TDA and Reeshanar.

India Infoline group offers the entire gamut of investment products including

stock broking, Commodities broking, Mutual Funds, Fixed Deposits, GOI Relief bonds,

Post office savings and life Insurance. India Infoline is the leading corporate agent of

ICICI Prudential Life Insurance Co. Ltd., which is India' No. 1 Private sector life

insurance company.

www.indiainfoline.com has been the only India Website to have been listed by

none other than Forbes in it's 'Best of the Web' survey of global website, not just once but

three times in a row and counting... A must read for investors in south Asia is how they

choose to describe India Infoline. It has been rated as No.l the category of Business News

in Asia by Alexia rating.

Stock and Commodities broking is offered under the trade name 5paisa. India

Infoline Commodities pvt Ltd., a wholly owned subsidiary of India Infoline Ltd., holds

membership of MCX and NCDEX

Main Objects of the Company

Main objects as contained in its Memorandum or Association are:

1. To engage or undertake software and internet based services, data processing ITenabled services, software development services, selling advertisement space on

the site, web consulting and related services including web designing and web

maintenance, software product development and marketing, software supply

services, computer consultancy services, E-Commerce of all types including

electronic financial intermediation business and E-broking, market research,

business and management consultancy.


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2. To undertake, conduct, study, carry on, help, promote any kind of research, probe,investigation, survey, developmental work on economy, industries, corporate

business houses, agricultural and mineral, financial institutions, foreign financial

institutions, capital market on matters related to investment decisions primary

equity market, secondary equity market, debentures, bond, ventures, capital

funding proposals, competitive analysis, preparations of corporate / industry

profile etc. and trade / invest in researched securities

VISION STATEMENT OF THE COMPANY:

Our vision is to be the most respected company in the financial services space In India .

Products: the India Infoline pvt ltd offers the following productsA. E-broking.

B. Distribution

C. Insurance

D. PMS

E. Mortgages

A. E-Broking:

It refers to Electronic Broking of Equities, Derivatives and Commodities under the brand

name of 5paisa

1. Equities2. Derivatives3. Commodities

B.Distribution:

1. Mutual funds

2. Govt of India bonds.3. Fixed deposits

C.Insurance:

1. Life insurance policies2. General Insurance3. Health Insurance Policies.


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THE CORPORATE STRUCTURE

The India Infoline group comprises the holding company, India Infoline Ltd,

which has 5 wholly-owned subsidiaries, engaged in distinct yet complementary

businesses which together offer a whole bouquet of products and services to make your

money grow.

The corporate structure has evolved to comply with oddities of the regulatory

framework but still beautifully help attain synergy and allow flexibility to adapt to

dynamics of different businesses.

The parent company, India Infoline Ltd owns and managers the web properties

www.Indiainfoline.com and www.5paisa.com. It also undertakes research Customized

and off-the-shelf.

Indian Infoline Securities Pvt. Ltd. is a member of BSE, NSE and DP with NSDL.

Its business encompasses securities broking Portfolio Management services.

India Infoline.com Distribution Co. Ltd., Mobilizes Mutual Funds and other

personal investment products such as bonds, fixed deposits, etc.

India Infoline Insurance Services Ltd. Is the corporate agent of ICICI Prudential Life

Insurance, engaged in selling Life Insurance, General Insurance and Health Insurance

products.

India Infoline Commodities Pvt. Ltd. is a registered commodities broker MCX and

offers futures trading in commodities.

India Infoline Investment Services Pvt Ltd., is proving margin funding and NBFCservices to the customers of India Infoline Ltd.,


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Pictorial Representation of India Infoline Ltd

Management of India Infoline Ltd.,

India Infoline is a professionally managed Company. The promoters who run the

company/s day-to-day affairs as executive directors have impeccable academic

professional track records.

Nirmal Jain, chairman and Managing Director, is a Chartered Accountant, (All

India Rank 2); Cost Account, (All India Rank l) and has a post-graduate management

degree from IIM Ahmedabad. He had a successful career with Hindustan Lever, where he

inter alia handled Commodities trading and export business. Later he was CEO of an

equity research organization.

R. Venkataraman, Director, is armed with a post- graduate management degree

from IIM Bangalore, and an Electronics Engineering degree from IIT, Kharagpur. He


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spent eight fruitful years in equity research sales and private equity with the cream of

financial houses such as ICICI group, Barclays de Zoette and G.E. Capital

The non-executive directors on the board bring a wealth of experience and

expertise.

Satpal khattar -Reeshanar investments, SingaporeThe key management team comprises

seasoned and qualified professionals.

Arbitrage Trade Analysis of Stock Trading in Bse and Nse- India Infoline

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