Professional Documents
Culture Documents
20012-2013(SEMESTER IV) 1. NAME 2. ROLL NO. 3. TITLE OF PROJECT Derivative Markets 4. SUBJECT AREA 5. NAME OF GUIDE 6. SIGNATURE OF STUDENT WITH DATE 7. SIGNATURE OF GUIDE WITH DATE : : Sachit Shyamsunder Gupta : 10 :Study of Option Strategies Used In
: Finance : Prof. :
PROJECT PROPOSAL PROJECT TITLE: 1. Study of Option Strategies Used In Derivative Markets
B. Objective:
The broad objectives of the proposed study are as under,
1. To understand about derivatives market 2. To study how option strategies are used to hedge the risk 3. To know why derivatives is considered safer than cash market
4. To guide the investor who have underlying share as to how to hedge their risk by
C. Research Methodology
To carry out the research effectively the understated research methodology shall be adopted for the purpose. I. Preliminary Investigations
All literatures, tapes on the proposed study available from libraries/ Websites shall be examined to get acquainted with the topic of study.
The conceptual literature concerning the concepts and theories of derivatives and option strategies shall be used.
II.
The hypothesis of the study shall be as under. Ho: Null Hypothesis Options strategies do not hedge the position of investors
III.
Period of Study The proposed study shall cover the period 1st September 2012 to 31st March 2013.
IV.
Sampling Universe
V.
Sampling Technique
The sampling technique to be used for the proposed study shall be Descriptive Sampling, Judgment Sampling and Survey.
VI.
Sample Size
The size of sample shall be 30 investors who are holding underlying shares and designing option strategies for them to hedge their risk.
VII.
Type of Data
Primary Data shall be collected by interviewing investor who has underlying shares
Secondary data shall be used from the following sources VIII. Data Sources
Business newspaper & Magazines such as Economic Times, Business Today, Business Standard, etc.
Financial Websites such as, www.nseindia.com ww.sebi.gv.in www.bseindia.com www.moneycontrol.com www.theeconomictimes.com www.rediffmoney.com
IX.
Data Collection
Secondary data about American style of option quotes shall be collected from the newspaper and websites mentioned above.
X.
Tools and Techniques of Analysis The following option strategies shall be used: 1. Covered Call Writing 2. Protective Put 3. Straddle 4. Strangle 5. Strips 6. Straps 7. Spreads
1. For the individual investors the proposed study may help in designing their option strategies for hedging risk and protect them from the volatility of market.
2. The proposed study shall assist academicians and other research students in their research which, are similar to the proposed study.
1. As derivatives are a very vast subject, the scope of research is limited to the financial derivatives viz. option. 2. Future and Forward has been kept out of the scope of this research. 3. Since options are widely used for hedging, only the option cases have been taken into the consideration in my research.
The limitations of proposed study As research requires detail information of portfolios of clients, which is very confidential for the client, a huge difficulty may be faced while getting data.
Direction for future research In future both European option and American option will be considered while designing option strategies.