ABSTRACT

A derivative is a financial instrument whose value depends on other, more basic,

underlying variables. The valuable underlying could be prices of traded securities and stocks,
prices of gold or copper. Derivatives have increasingly important field of finance, options and
futures are traded actively on many exchanges, Forward contacts, Swap and different types of
options are regularly traded outside exchanges by financial institutions, Banks and their
corporate clients in what are termed as over the counter markets. In other words, there no single
market place organized exchanges
A derivative security is a security whose value depends on the value of together more
basic underlying variable. These are also known as contingent claims. Derivatives securities have
been very successful in innovation in capital markets.
The emergence of the market for derivative products most notably forwards, futures and
options can be traced back to the willingness of risk adverse economic agents to guard
themselves against uncertainties arising out of fluctuations in asset prices. By their very nature,
financial markets are market by a very high degree of volatility. Though the use of derivative
products, it is possible to partially or fully transfer price risks by locking in asset prices. As
instrument of risk management these generally dont influence the fluctuations in the underlying
asset prices. However, by locking-in asset prices, derivative products minimize the impact of
fluctuations in asset prices on the profitability and cash-flow situation of risk-averse investor.
Derivatives are risk management instruments which derives their value from an
underlying asset. Underlying asset can be Bullion, Index, Share, Currency, Bonds, Interest, etc.

CONTENT
Chapter No.

Name of the concept

Introduction

Page No.
01

Methodology of the study

I

Objectives of the study

Need Of The Study
Limitations of the study

II

Review of Literature

III

Company Profile

29

IV

Data analysis and interpretation

38

Findings, Suggestion & Conclusions

75

Bibliography

79