behavioral analysis of stock broker clients

8/9/2019 Behavioral Analysis of Stock Broker Clients

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BEHAVIORAL ANALYSIS OF STOCK BROKING

CLIENTS


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ACKNOWLEDGEMENT


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INDEX OF CONTENTS


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RATIONALE OF THE STUDY

The term "broker" might make some investors a bituncomfortable in these stark economic times, the word actuallymeans "one who acts as an agent for another." In the case of astock broker, this can be done on various levels. An "executiononly" arrangement puts most of the burden on the client, whocalls the broker and simply provides instructions on what to buyor sell. Advisory dealing still leaves the decision with the client,

but the stock broker may offer offer background information andsuggestions. Finally, with a "discretionary" relationship, the stockbroker is given free rein to use his or her own judgment.

The stock market is, at its core, a gamble. What the stock brokerdoes is to bet your money that the price of a certain share ofstock will rise beyond what you pay for it -- if not immediately, atleast in the long term. A broker may also advise you to sell acertain stock that seems to have peaked, or is rumored to be onthe verge of a fall.

A full-service broker might deal with other financial entities, suchas annuities and bonds, as well as stocks. At the other end of thespectrum is the discount broker, whose relationship is generallyconducted through execution only. The pool of knowledgerequired to be an effective stock broker is immense. Not onlymust the broker be on intimate terms with the rules and quirks ofthe market, but he or she must also be able to processinformation about various companies with an eye toward whether

that stock is likely to go up or down.

In order to reach that position of authority, a prospective brokermust pass two comprehensive examinations. Almost all of themthem work for brokerage houses, and they are paid in variousways. Some work on commission from the customer, some workon a fixed salary, and some combine both.
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What kind of broker to choose depends on a number of factors. Ifyou are a person who enjoys playing the market and relishes thethrill of the gamble, a discount broker might be the way to go. Ifyou are hoping to grow your retirement nest egg a little without

taking a great many risks, you would probably want to turn overmore responsibility to your broker. Obviously, the more input andservices a broker offers, the higher the price or commission.

So this study aims at finding out the main factors that affect the

choice making decisions of a person while choosing a stock

broker.
http://www.wisegeek.com/what-is-a-nest-egg.htmhttp://www.wisegeek.com/what-is-a-nest-egg.htm


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Company Profile:

STS Securities and Derivatives was started under the leadership

of Mr. Ramakant Mishra (Retired IRS officer) and Ms. Neelam

Goenka (High court advocate) in the year, . It made its humble

start at the commercial complex situated at Vashi station and

started providing its stock broking services to a modest number

of clients. Very soon the number of clients, especially clients with

high trading volume increased and the profits of the company sawa steady increase. The office was later shifted to a more prime

location at Swastik Chambers, Chembur in order to cater the

affluent clients. They have also forayed into the fields of

distribution of financial products.


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A Brief of the Stock Market

Evolution

Indian Stock Markets are one of the oldest in Asia. Its history

dates back to nearly 200 years ago. The earliest records of

security dealings in India are meagre and obscure. The East India

Company was the dominant institution in those days and business

in its loan securities used to be transacted towards the close of

the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and

Cotton presses took place in Bombay. Though the trading list was

broader in 1839, there were only half a dozen brokers recognized

by banks and merchants during 1840 and 1850.

The 1850's witnessed a rapid development of commercial

enterprise and brokerage business attracted many men into the

field and by 1860 the number of brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply

from United States of Europe was stopped; thus, the 'Share Mania'

in India begun. The number of brokers increased to about 200 to

250. However, at the end of the American Civil War, in 1865, a

disastrous slump began (for example, Bank of Bombay Share

which had touched Rs 2850 could only be sold at Rs. 87).

At the end of the American Civil War, the brokers who thrived out

of Civil War in 1874, found a place in a street (now appropriatelycalled as Dalal Street) where they would conveniently assemble

and transact business. In 1887, they formally established in

Bombay, the "Native Share and Stock Brokers' Association"

(which is alternatively known as " The Stock Exchange "). In 1895,

the Stock Exchange acquired a premise in the same street and it


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was inaugurated in 1899. Thus, the Stock Exchange at Bombay

was consolidated.

Other leading cities in stock market operations

Ahmedabad gained importance next to Bombay with respect tocotton textile industry. After 1880, many mills originated from

Ahmedabad and rapidly forged ahead. As new mills were floated,

the need for a Stock Exchange at Ahmedabad was realised and in

1894 the brokers formed "The Ahmedabad Share and Stock

Brokers' Association".

What the cotton textile industry was to Bombay and Ahmedabad,

the jute industry was to Calcutta. Also tea and coal industries

were the other major industrial groups in Calcutta. After the Share

Mania in 1861-65, in the 1870's there was a sharp boom in jute

shares, which was followed by a boom in tea shares in the 1880's

and 1890's; and a coal boom between 1904 and 1908. On June

1908, some leading brokers formed "The Calcutta Stock Exchange

Association".

In the beginning of the twentieth century, the industrial revolution

was on the way in India with the Swadeshi Movement; and withthe inauguration of the Tata Iron and Steel Company Limited in

1907, an important stage in industrial advancement under Indian

enterprise was reached.

Indian cotton and jute textiles, steel, sugar, paper and flour mills

and all companies generally enjoyed phenomenal prosperity, due

to the First World War.

In 1920, the then demure city of Madras had the maiden thrill of astock exchange functioning in its midst, under the name and style

of "The Madras Stock Exchange" with 100 members. However,

when boom faded, the number of members stood reduced from

100 to 3, by 1923, and so it went out of existence.


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In 1935, the stock market activity improved, especially in South

India where there was a rapid increase in the number of textile

mills and many plantation companies were floated. In 1937, a

stock exchange was once again organized in Madras - Madras

Stock Exchange Association (Pvt) Limited. (In 1957 the name waschanged to Madras Stock Exchange Limited).

Lahore Stock Exchange was formed in 1934 and it had a brief life.

It was merged with the Punjab Stock Exchange Limited, which

was incorporated in 1936.

Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom

which was followed by a slump. But, in 1943, the situation

changed radically, when India was fully mobilized as a supply

base.

On account of the restrictive controls on cotton, bullion, seeds

and other commodities, those dealing in them found in the stock

market as the only outlet for their activities. They were anxious to

join the trade and their number was swelled by numerous others.

Many new associations were constituted for the purpose andStock Exchanges in all parts of the country were floated.

The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock

Exchange Limited (1940) and Hyderabad Stock Exchange Limited

(1944) were incorporated.

In Delhi two stock exchanges - Delhi Stock and Share Brokers'

Association Limited and the Delhi Stocks and Shares Exchange

Limited - were floated and later in June 1947, amalgamated intothe Delhi Stock Exchnage Association Limited.

Post-independence Scenario

Most of the exchanges suffered almost a total eclipse during

depression. Lahore Exchange was closed during partition of the


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country and later migrated to Delhi and merged with Delhi Stock

Exchange.

Bangalore Stock Exchange Limited was registered in 1957 and

recognized in 1963.Most of the other exchanges languished till 1957 when they

applied to the Central Government for recognition under the

Securities Contracts (Regulation) Act, 1956. Only Bombay,

Calcutta, Madras, Ahmedabad, Delhi, Hyderabad and Indore, the

well established exchanges, were recognized under the Act. Some

of the members of the other Associations were required to be

admitted by the recognized stock exchanges on a concessional

basis, but acting on the principle of unitary control, all thesepseudo stock exchanges were refused recognition by the

Government of India and they thereupon ceased to function.

Thus, during early sixties there were eight recognized stock

exchanges in India (mentioned above). The number virtually

remained unchanged, for nearly two decades. During eighties,

however, many stock exchanges were established: Cochin Stock

Exchange (1980), Uttar Pradesh Stock Exchange Association

Limited (at Kanpur, 1982), and Pune Stock Exchange Limited

(1982), Ludhiana Stock Exchange Association Limited (1983),

Gauhati Stock Exchange Limited (1984), Kanara Stock Exchange

Limited (at Mangalore, 1985), Magadh Stock Exchange

Association (at Patna, 1986), Jaipur Stock Exchange Limited

(1989), Bhubaneswar Stock Exchange Association Limited (1989),

Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989),

Vadodara Stock Exchange Limited (at Baroda, 1990) and recently

established exchanges - Coimbatore and Meerut. Thus, atpresent, there are totally twenty one recognized stock exchanges

in India excluding the Over The Counter Exchange of India Limited

(OTCEI) and the National Stock Exchange of India Limited (NSEIL).


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The Table given below portrays the overall growth pattern of

Indian stock markets since independence. It is quite evident from

the Table that Indian stock markets have not only grown just in

number of exchanges, but also in number of listed companies and

in capital of listed companies. The remarkable growth after 1985can be clearly seen from the Table, and this was due to the

favouring government policies towards security market industry.

Growth Pattern of the Indian Stock Market

Sl.No.As on 31st

December

194

6

196

1

197

1

197

5

198

0

19851991 1995

1

No. of

Stock

Exchanges

7 7 8 8 9 14 20 22

2No. of

Listed Cos.

112

5

120

3

159

9

155

2

226

5

43446229 8593

3

No. of Stock

Issues of

Listed Cos.

150

6

211

1

283

8

323

0

369

7

61748967 11784

4

Capital of

Listed

Cos. (Cr. Rs.)

270 753 181

2

261

4

397

3

97233204

1

59583

5

Market value of

Capital of

Listed

Cos. (Cr. Rs.)

971 129

2

267

5

327

3

675

0

2530

2

1102

79

478121

6

Capital per

Listed Cos.

(4/2)

(Lakh Rs.)

24 63 113 168 175 224 514 693

7 Market Value of86 107 167 211 298 582 1770 5564


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Capital per

Listed

Cos. (Lakh Rs.)

(5/2)

8

Appreciated

value

of Capital per

Listed Cos. (Lak

Rs.)

358 170 148 126 170 260 344 803

Source : Various issues of the Stock Exchange Official Directory,

Vol.2 (9) (iii), Bombay Stock Exchange, Bombay.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges are limited to listed securities

of public limited companies. They are broadly divided into two

categories, namely, specified securities (forward list) and non-

specified securities (cash list). Equity shares of dividend paying,

growth-oriented companies with a paid-up capital of atleast Rs.50

million and a market capitalization of atleast Rs.100 million and

having more than 20,000 shareholders are, normally, put in thespecified group and the balance in non-specified group.

Two types of transactions can be carried out on the Indian stock

exchanges: (a) spot delivery transactions "for delivery and

payment within the time or on the date stipulated when entering

into the contract which shall not be more than 14 days following

the date of the contract" : and (b) forward transactions "delivery

and payment can be extended by further period of 14 days each

so that the overall period does not exceed 90 days from the dateof the contract". The latter is permitted only in the case of

specified shares. The brokers who carry over the outstandings

pay carry over charges (cantango or backwardation) which are

usually determined by the rates of interest prevailing.


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A member broker in an Indian stock exchange can act as an

agent, buy and sell securities for his clients on a commission basis

and also can act as a trader or dealer as a principal, buy and sell

securities on his own account and risk, in contrast with the

practice prevailing on New York and London Stock Exchanges,where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age

old conventional style of face-to-face trading with bids and offers

being made by open outcry. However, there is a great amount of

effort to modernize the Indian stock exchanges in the very recent

times.

National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found

inevitable to lift the Indian stock market trading system on par

with the international standards. On the basis of the

recommendations of high powered Pherwani Committee, the

National Stock Exchange was incorporated in 1992 by Industrial

Development Bank of India, Industrial Credit and Investment

Corporation of India, Industrial Finance Corporation of India, all

Insurance Corporations, selected commercial banks and others.

Trading at NSE can be classified under two broad categories:

(a) Wholesale debt market and

(b) Capital market.

Wholesale debt market operations are similar to money market

operations - institutions and corporate bodies enter into high

value transactions in financial instruments such as government

securities, treasury bills, public sector unit bonds, commercial

paper, certificate of deposit, etc.

There are two kinds of players in NSE:


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afford to damage the capital market path. In this regard NSE

gains vital importance in the Indian capital market system.

Stock traders and stock investors

Charting is the use of graphical and analytical patterns and data

to attempt to predict future prices

Individuals or firms trading equity (stock) on the stock markets as

their principal capacity are called stock traders. Stock traders

usually try to profit from short-term price volatility with trades

lasting anywhere from several seconds to several weeks. The

stock trader is usually a professional. Persons can call themselves

full or part-time stock traders/investors while maintaining otherprofessions. When a stock trader/investor has clients, and acts as

a money manager or adviser with the intention of adding value to

their clients finances, he is also called a financial advisor or

manager. In this case, the financial manager could be an

independent professional or a large bank corporation employee.

This may include managers dealing with investment funds, hedge

funds, mutual funds, and pension funds, or other professionals in

equity investment, fund management, and wealth management.Several different types of stock trading exist including day

trading, trend following, market making, scalping (trading),

momentum trading, trading the news, and arbitrage.
http://en.wikipedia.org/wiki/Chartinghttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Trader_(finance)http://en.wikipedia.org/wiki/Professionalhttp://en.wikipedia.org/wiki/Financial_advisorhttp://en.wikipedia.org/wiki/Investment_fundhttp://en.wikipedia.org/wiki/Hedge_fundhttp://en.wikipedia.org/wiki/Hedge_fundhttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Pension_fundhttp://en.wikipedia.org/wiki/Equity_investmenthttp://en.wikipedia.org/wiki/Fund_managementhttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Day_tradinghttp://en.wikipedia.org/wiki/Day_tradinghttp://en.wikipedia.org/wiki/Trend_followinghttp://en.wikipedia.org/wiki/Market_makerhttp://en.wikipedia.org/wiki/Scalping_(trading)http://en.wikipedia.org/wiki/Momentum_tradinghttp://en.wikipedia.org/wiki/Trading_the_newshttp://en.wikipedia.org/wiki/Arbitragehttp://en.wikipedia.org/wiki/File:MACD_example,_fast%3D12_slow%3D26_smooth%3D9.pnghttp://en.wikipedia.org/wiki/Chartinghttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Trader_(finance)http://en.wikipedia.org/wiki/Professionalhttp://en.wikipedia.org/wiki/Financial_advisorhttp://en.wikipedia.org/wiki/Investment_fundhttp://en.wikipedia.org/wiki/Hedge_fundhttp://en.wikipedia.org/wiki/Hedge_fundhttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Pension_fundhttp://en.wikipedia.org/wiki/Equity_investmenthttp://en.wikipedia.org/wiki/Fund_managementhttp://en.wikipedia.org/wiki/Wealth_managementhttp://en.wikipedia.org/wiki/Day_tradinghttp://en.wikipedia.org/wiki/Day_tradinghttp://en.wikipedia.org/wiki/Trend_followinghttp://en.wikipedia.org/wiki/Market_makerhttp://en.wikipedia.org/wiki/Scalping_(trading)http://en.wikipedia.org/wiki/Momentum_tradinghttp://en.wikipedia.org/wiki/Trading_the_newshttp://en.wikipedia.org/wiki/Arbitrage


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On the other hand, stock investors are firms or individuals who

purchase stocks with the intention of holding them for an

extended period of time, usually several months to years. They

rely primarily on fundamental analysis for their investment

decisions and fully recognize stock shares as part-ownership inthe company. Many investors believe in the buy and hold

strategy, which as the name suggests, implies that investors will

buy stock ownership in a corporation and hold onto those stocks

for the very long term, generally measured in years. This strategy

was made popular in the equity bull market of the 1980s and 90s

where buy-and-hold investors rode out short-term market

declines and continued to hold as the market returned to its

previous highs and beyond. However, during the 2001-2003equity bear market, the buy-and-hold strategy lost some followers

as broader market indexes like the NASDAQ saw their values

decline by over 60%.

Methodology

Historical photo of stock traders in the trading floor of the New

York Stock Exchange

Stock traders/investors usually need a stock broker such as abank or a brokerage firm to access the stock market. Since the

advent of Internet banking, an Internet connection is commonly

used to manage positions. Using the Internet, specialized

software, and a personal computer, stock traders/investors make

use oftechnical and fundamental analysis to help them in making
http://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Buy_and_holdhttp://en.wikipedia.org/wiki/NASDAQhttp://en.wikipedia.org/wiki/Trading_floorhttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Internet_bankinghttp://en.wikipedia.org/wiki/Internet_connectionhttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Personal_computerhttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/File:NY_stock_exchange_traders_floor_LC-U9-10548-6.jpghttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Buy_and_holdhttp://en.wikipedia.org/wiki/NASDAQhttp://en.wikipedia.org/wiki/Trading_floorhttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/New_York_Stock_Exchangehttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Internet_bankinghttp://en.wikipedia.org/wiki/Internet_connectionhttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Personal_computerhttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Fundamental_analysis


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decisions. They may use several information resources, some of

which are strictly technical. Using the pivot points calculated from

a previous day's trading, they are able to predict the buy and sell

points of the current day's trading session. These points give a

cue to traders as to where prices will head for the day, promptingeach trader where to enter his trade, and where to exit. There is

criticism on the validity of using these technical indicators in

analysis, and many professional stock traders do not use them.

Many full-time stock traders and stock investors have a formal

education and training in fields such as economics, finance,

mathematics and computer science, which are particularly

relevant to this occupation.

Expenses, costs and risk

Trading floor at Frankfurt Stock Exchange

Trading activities are not free. They have a considerably high

level of risk, uncertainty and complexity, especially for unwise

and inexperienced stock traders/investors seeking an easy way to

make money quickly. In addition, stock traders/investors face

several costs such as commissions, taxes and fees to be paid for

the brokerage and other services, like the buying/selling ordersplaced at the stock exchange. Depending on the nature of each

national or state legislation involved, a large array of fiscal

obligations must be respected, and taxes are charged by

jurisdictions over those transactions, dividends and capital gains

that fall within their scope. However, these fiscal obligations will
http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Mathematicshttp://en.wikipedia.org/wiki/Computer_sciencehttp://en.wikipedia.org/wiki/Frankfurt_Stock_Exchangehttp://en.wikipedia.org/wiki/Risk#In_financehttp://en.wikipedia.org/wiki/Uncertaintyhttp://en.wikipedia.org/wiki/Complexityhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Capital_gainhttp://en.wikipedia.org/wiki/File:Deutsche-boerse-parkett-ffm001.jpghttp://en.wikipedia.org/wiki/File:Deutsche-boerse-parkett-ffm001.jpghttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Mathematicshttp://en.wikipedia.org/wiki/Computer_sciencehttp://en.wikipedia.org/wiki/Frankfurt_Stock_Exchangehttp://en.wikipedia.org/wiki/Risk#In_financehttp://en.wikipedia.org/wiki/Uncertaintyhttp://en.wikipedia.org/wiki/Complexityhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Stock_exchangehttp://en.wikipedia.org/wiki/Dividendhttp://en.wikipedia.org/wiki/Capital_gain


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vary from jurisdiction to jurisdiction. Among other reasons, there

could be some instances where taxation is already incorporated

into the stock price through the differing legislation that

companies have to comply with in their respective jurisdictions; or

that tax free stock market operations are useful to boosteconomic growth. Beyond these costs are the opportunity costs of

money and time, currency risk, financial risk, and internet, data

and news agency services and electricity consumption expenses -

all of which must be accounted for.

Stock picking

Although many companies offer courses in stock picking, and

numerous experts report success throughTechnical Analysis andFundamental Analysis, many economists and academics

state[citation needed] that because of the efficient-market hypothesis it

is unlikely that any amount of analysis can help an investor make

any gains above the stock market itself. In the distribution of

investors, many academics believe that the richest are simply

outliers in such a distribution (i.e. in a game of chance, they have

flipped heads twenty times in a row). An added tool for the stock

picker is the use ofstock screens. Stock screens allow the user toinput specific parameters, based on technical and/or fundamental

conditions, that he or she deems desirable. Primary benefits

associated with stock screens is it's ability to return a small group

of stocks for further analysis, among tens of thousands, that fit

the requirements requested.
http://en.wikipedia.org/wiki/Taxationhttp://en.wikipedia.org/wiki/Stock_pricehttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Opportunity_costhttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Financial_riskhttp://en.wikipedia.org/wiki/Electricityhttp://en.wikipedia.org/wiki/Technical_Analysishttp://en.wikipedia.org/wiki/Fundamental_Analysishttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Distribution_(economics)http://en.wikipedia.org/wiki/Outliershttp://en.wikipedia.org/w/index.php?title=Stock_screens&action=edit&redlink=1http://en.wikipedia.org/wiki/Taxationhttp://en.wikipedia.org/wiki/Stock_pricehttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Opportunity_costhttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Financial_riskhttp://en.wikipedia.org/wiki/Electricityhttp://en.wikipedia.org/wiki/Technical_Analysishttp://en.wikipedia.org/wiki/Fundamental_Analysishttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Distribution_(economics)http://en.wikipedia.org/wiki/Outliershttp://en.wikipedia.org/w/index.php?title=Stock_screens&action=edit&redlink=1


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RESEARCH METHODOLOGY

We have undertaken statistical survey to find out the preferences

of individuals towards choosing a stock broker for trading or

investing in the stock market. We have designed a questionnaire

for the same.

DATA COLLECTION METHOD

We have taken a random sample of 50 individuals (male and

female) over a age group of 24 50 years for the collection of the

primary data via the questionnaire designed by us.

We have gathered secondary data through the internet via

websites of the National and the Bombay stock exchanges,

Wikipedia and others for the understanding of the stock market

and trader/investor behavior.

SAMPLING PLAN:

Sample size: 50 people

Sampling method: Questionnaire


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COPY OF THE QUESTIONNAIRE

NAME:

AGE:

SEX:

APPROXIMATE ANNUAL INCOME:

1. Are you new to the capital markets? If no, then no. of years

of experience.

2. Your existing stock broker

3. No. of years with the above stock broker

4. Segment of market in which you trade: F&O, Cash or both

5. Your reason for choice of your stock broker: (Pls tick the

applicable choice)

A. Near to residence or office

B. Reference of a friend or relative

C. Good Brand name or market reputation

D. Provides good market information such as tips or research

reports.

E. Latest facilities such as online trading, sms alerts, etc.


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F. Credit provision

G. Very competitive brokerage rates

6. Will you change broker if given a better option?


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DATA ANALYSIS

Table of data collected:

AG

E

SE

X

EXPERIEN

CED

or NEW

(N/E)

A B C D E F G Chan

ge

1 22 M Y Y Y

2 24 F Y Y

3 32 M Y Y Y

4 55 M Y Y

5 35 M Y Y Y

6 28 M Y Y

7 24 F Y Y

8 39 F Y Y Y Y

9 37 M Y Y

1

0

51 F Y Y

1

1

47 M Y Y

1

2

49 M Y Y Y

1

3

25 M Y Y


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1

4

33 F Y Y Y

1

5

39 M Y Y Y

1

6

44 M Y

1

7

55 M Y Y

1

8

49 F Y Y Y

19

51 F Y Y

2

0

26 F Y Y

2

1

29 M Y Y Y Y

2

2

40 M Y

2

3

35 M Y

2

4

31 M Y

2

5

26 M Y Y

2

6

25 M Y Y Y

2

7

36 F Y Y Y


24/27

2

8

51 M Y Y

2

9

52 M Y Y Y

3

0

22 M Y Y Y

3

1

24 M Y

3

2

26 F Y Y

33

29 M Y Y

3

4

51 F Y Y Y

3

5

33 M Y Y Y Y

3

6

35 F Y

3

7

51 M Y

3

8

37 F Y Y

3

9

47 F Y Y Y

4

0

52 F Y Y

4

1

27 M Y


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4

2

29 F Y Y

4

3

43 M Y Y Y

4

4

47 F Y Y

4

5

51 M Y Y

4

6

25 M Y Y Y

47

32 M Y Y Y

4

8

31 F Y Y

4

9

52 F Y

5

0

39 M Y Y Y


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The data collected will be analyzed using pictorial and graphical

methods.

Ratio of Males to Females:

Chart of factors A to G


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behavioral analysis of stock broker clients

Documents