A

PROJECT REPORT ON

“DERIVATIVES MARKET ANALYSIS”

AT
“KARVY”
HYDERABAD

A Project Submitted in Partial fulfillment for the award of Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by
ARCHITHA BASANI
[ Roll No : 16UC1E0007 ]

Under The Guidance Of

M. MAMATHA
Assistant Professor

TALLA PADMAVATHI COLLEGE OF ENGINEERING,

(Approved by AICTE, Affiliated To JNTU, Hyderabad)
SOMIDI (TEKULAGUDEM), KAZIPET, WARANGAL-506003
(2016-2018)
 CERTIFICATE

This is to certify that the project work titled “DERIVATIVES MARKET

ANALYSIS” AT KARVY, HYDERABAD being submitted by ARCHITHA

BASANI (Roll No : 16UC1E0007) carried out in partial fulfillment of the

requirements for the award of degree of Master of Business Administration for

the academic year 2016-2018 of JNTU Hyderabad. This Project work is original

and not submitted earlier for the award of any degree/Diploma or associate ship to

any other University / Institution.

Internal Guide Head of the Department

EXTERNAL EXAMINER
 ACKNOWLEDGEMENT

I take this opportunity to remember and acknowledge the co-operation

extended by several individuals out of whom this project has evolved. I shall
always cherish my association with them.

I owe my sincere thanks to my project guide M. MAMATHA Assistant

Professor who has been guiding me in fine manner and has been a source of
motivation, support & advice.

I owe thanks to S. VIJAYA LAKSHMI Head of the Department of

Business Administration who has been a source of inspiration and advice and the
encouragement given throughout for the accomplishment of the project.

I owe special thanks to Dr. P. YELLAIAH principal of TALLA

PADMAVATHI COLLEGE OF ENGINEERING, for his encouragement in
doing this project. I owe special thanks to chairman of TALLA PADMAVATHI
COLLEGE OF ENGINEERING, for his encouragement in doing this project.

I owe my sincere thanks to faculty and staff, members of TALLA

PADMAVATHI COLLEGE OF ENGINEERING, for their vital guidance
throughout the project.

My verbal abilities limit the expression of heartfelt feelings towards my

parents and family members, friends whose untiring efforts have helped me to
great extent. God has been always with me giving hope and courage to accomplish
task in time.

ARCHITHA BASANI

H NO: 16UC1E0007
 DECLARATION

I “ARCHITHA BASANI” bearing H No: 16UC1E0007, hereby declare that the

project report entitled “DERIVATIVES MARKET ANALYSIS”, under the

esteemed guidance of M. MAMATHA Assistant Professor Department of MBA

submitted in partial fulfillment of the requirements for the award of the degree of

Master of Business Administration.

I declare that this submitted work is done solemnly be me and to the best

of my knowledge, no such work has been submitted by any other person for the

award of Degree or Diploma.

I also declare that all the information collected from various secondary sources

has been duly acknowledged in this project report.

Date: ARCHITHA BASANI,

Place: H NO: 16UC1E0007.

 ABSTRACT
Firstly I am briefing the current Indian market and comparing it with it past. I am also giving
brief data about foreign market. Then at the last I am giving my suggestions and
recommendations.
Derivatives trading in the stock market have been a subject of enthusiasm of research in the
field of finance the most desired instruments that allow market participants to manage risk in the
modern securities trading are known as derivatives. The derivatives are defined as the future
contracts whose value depends upon the underlying assets. If derivatives are introduced in the
stock market, the underlying asset may be anything as component of stock market like, stock
prices or market indices, interest rates, etc. The main logic behind derivatives trading is that
derivatives reduce the risk by providing an additional channel to invest with lower trading cost
and it facilitates the investors to extend their settlement through the future contracts. It provides
extra liquidity in the stock market.
Derivatives are assets, which derive their values from an underlying asset. These underlying
assets are of various categories like
 Commodities including grains, coffee beans, etc.
 Precious metals like gold and silver.
 Bonds of different types, including medium to long-term negotiable debt securities issued
by governments, companies, etc.
 Short-term debt securities such as T-bills.
 Over-The-Counter (OTC) money market products such as loans or deposits.
 Equities
On the other hand RBI has to play an important role in derivative market. Also SEBI must
encourage investment in derivative market so that the investors get the benefit out of it. Sorry to
say that today even educated persons are not willing to invest in derivative market because they
have the fear of high risk.
So, SEBI should take necessary steps for improvement in Derivative Market so that more
investors can invest in Derivative market.
 INDEX

S NO. PARTICULARS PAGE NO.

1 INTRODUCTION 1-3

1.1 Objectives of the Study 2

1.2 Need of the Study 2

1.3 Scope of the Study 2

1.4 Research Methodology 3

1.5 Limitations of the Study 3

2 REVIEW OF LITERATURE 4-6

3 INDUSTRY & COMPANY PROFILE 7-18

4 THEORITICAL FRAMEWORK 19-32

5 DATA ANALYSIS & INTERPRETATION 33-55

6 SUMMARY & CONCLUSION 56-57

6.1 Findings 56

6.2 Suggestions 56

6.3 Conclusion 57

7 BIBLIOGRAPHY 58
 CHAPTER-1

INTRODUCTION
 1. INTRODUCTION
In the Indian setting the Securities Contracts (Regulation) Act, 1956 (SC(R) A) characterizes
"Subordinate" to incorporate
1) A security got from an obligation instrument, share and advance whether secured or
unsecured, hazard instrument or contract for contrasts or some other type of security.
2) A contract which gets its incentive from the costs, or list of costs, of hidden securities.

Derivatives markets have been in presence in India in some frame or other for quite a while. In
the territory of products, the Bombay Cotton Trade Association began fates exchanging 1875
and, by the mid-1900s India had one of the world's biggest prospects ventures. In 1952 the
administration restricted money settlement and choices exchanging and derivatives exchanging
moved to casual advances markets. As of late, government approach has changed, taking into
consideration an expanded part for showcase based estimating and less doubt of derivatives
exchanging. The restriction on fates exchanging of numerous products was lifted beginning in
the mid-2000s, and national electronic ware trades were made.
In the value showcases, an arrangement of exchanging called "badla" including
a few components of advances exchanging had been in presence for quite a long time. In any
case, the framework prompted various unfortunate practices and it was precluded now and again
till the Securities and a clearinghouse ensures execution of an agreement by getting to be
purchaser to each vender and dealer to each purchaser.
Clients post edge (security) stores with intermediaries to guarantee that
they can cover a predefined misfortune on the position. A prospects position is set apart to-
showcase by understanding any exchanging misfortunes in real money on the day they happen.
Securities Exchange Board of India (SEBI) restricted it for good in 2001. A progression of
changes of the share trading system in the vicinity of 1993 and 1996 made ready for the
advancement of trade exchanged value derivatives showcases in India. In 1993, the legislature
made the NSE in a joint effort with state-possessed money related establishments. NSE enhanced
the productivity and straightforwardness of the securities exchanges by offering a completely
mechanized screen-based exchanging framework and ongoing value scattering. In 1995, a
disallowance on exchanging choices was lifted. In 1996, the NSE sent a proposition to SEBI for
posting trade exchanged derivatives.

1
1.1 OBJECTIVES OF THE STUDY :
 Study of Indian Derivative market.
 To study the trading mechanism of Derivative market with the special reference to
Futures & Options.
 To study the awareness of Derivatives among the investors in Hyderabad city.
 To analyze performance of derivative products
 To know about pay off for selected derivative products

1.2 NEED FOR THE STUDY:

 To know about derivatives market operations in Indian scenario.
 Financial Derivatives trading is new concept for Indian traders , but the Derivative’s
market has shown an immense potential which is visible by the growth it has achieved
in the recent past,
 To know the present changing financial environment and an increased exposure
towards financial risks, it is of immense importance to have a good working knowledge
of Derivatives.
 To understand derivative market regulatory frame work.

1.3 SCOPE OF THE STUDY :

 The statement of the problem of the study is, The Derivative market in INDIA is still
in a growth stage,
 In Modern countries also People are not interested to invest in derivative products in
this project we emphasis the investment in derivative system

PURPOSE OF STUDY
The motivation behind investigation Adding a portion of the wide assortment of subordinate
instruments accessible to a conventional arrangement of ventures can give worldwide
enhancement in money related instruments and monetary forms, help fence against expansion
and collapse, and create restores that are not associated with more customary speculations. The
two most generally perceived advantages credited to subsidiary instruments are value
revelation and hazard administration.

2
IMPORTANCE OF THE STUDY
While proficient dealers, day by day subsidiary brokers and cash chiefs can utilize subsidiaries
adequately, the chances that an easygoing financial specialist will have the capacity to create
benefits by exchanging subordinates are alleviated by the central attributes of the instrument
this undertaking give thought regarding how make benefits from subordinate market

1.4 RESEARCH METHODOLOGY :

Classification of Data:
To fulfill the objective of the study, Primary & Secondary Data have been considered.

 Primary Data :
To collect following data I have made use of following source.
Interaction with the business associates of Capital market and derivative market
services India.
 Secondary Data :
 In the first step data collection approach is to look for secondary data. stock broker
are given Secondary data are collected through their trading details from the. The
secondary data is collected from online sources.
 Sampling & Sampling Techniques :
 Sampling size: TCS, TECH MAHINDRA, HCL, INFOSYS, ANDHRA BANK,
ICICI AND HDFC BANK.
 Software Applications Used: MS-Word, MS-Excel.

1.5 LIMITATIONS OF THE STUDY :

 The period to carry out the study is too-short (restricted to 60 days). I could study the
market movements only for 60 days and observations are related only to this period.
 The Study have limited regarding derivatives to futures and options only, and have not
taken into consideration regarding commodities and forward trading.
 Futures and Options are less traded compared to equities in HYDERABAD. Options
are still less traded compared to futures, so I did not get much exposure to it.
 Survey is limited to HYDERABAD city.

3
 CHAPTER-2

REVIEW OF LITRATURE
 2. REVIEW OF LITRATURE

2.1 INTRODUCTION :
The trading of financial derivatives has received extensive attention, while at the same
time it has led to a debate over its impact on the underlying stock market from various facets by
the academicians. The researchers all over the world have done research on derivative trading
and were able to find out various facts about derivative and its trading. In this literature review
efforts have been made to bring into the picture the research done about various issues
throughout the world by the researchers.
The literature survey and review is presented in four sections: first, the review of studies
fundamental to capital market of India; second, the review of studies relating to the testing of
capital market efficiency; third, the review of studies concerning the volatility study; last, the
review of studies analyzing the causal relation between spot and index futures market.

2.2 CAPITAL MARKET OF INDIA :

There has been a wide range of studies concerning financial sector reforms in general,
and capital market reforms in particular, since mid-1980s in India. This section highlights certain
important studies that are context relevant. Several studies such as Sahni (1985), Kothari (1986),
Mookerjee (1988), Lal (1990), Chandra (1990), Franscis (1991), Ramesh Gupta (1991,1992),
Raghunathan (1991), Varma (1991), Gupta (1992), and Sinha (1993) comment upon the Indian
capital market in general and trading systems in the stock exchanges in particular and suggest
that the systems therein are rather antiquated and inefficient, and suffer from major weakness
and malpractices. According to most of these studies, significant reforms are required if the stock
exchanges are to be geared up to the envisaged growth in the Indian capital market.
Barua et al (1994) undertakes a comprehensive assessment of the private corporate debt
market, the public sector bond market, the govt. securities market, the housing finance and other
debt markets in India. Cho (1998) points out the reasons for which reforms were made in Indian
capital market stating the after reform developments. Shah (1999) describes the financial sector
reforms in India as an attempt at developing financial markets as an alternative vehicle
determining the allocation of capital in the economy.
Shah and Thomas (2003) review the changes which took place on India’s equity and debt
markets in the decade of the 1990s. This has focused on the importance of crises as a mechanism
for obtaining reforms.
 Mohan (2004) provides the rationale of financial sector reforms in India, policy reforms
in the financial sector, and the outcomes of the financial sector reform process in some detail.
Shirai (2004) examines the impact of financial and capital market reforms on corporate finance
in India. India’s financial and capital market reforms since the early 1990s have had a positive
impact on both the banking sector and capital markets. Nevertheless, the capital markets remain
shallow, particularly when it comes to differentiating high-quality firms from low-quality ones
(and thus lowering capital costs for the former compared with the latter). While some high-
quality firms (e.g., large firms) have substituted bond finance for bank loans, this has not
occurred to any significant degree for many other types of firms (e.g., old, export-oriented and
commercial paper-issuing ones).
Chakrabarti and Mohanty (2005) discuss how capital market in India is evolved in the
reform period. Thomas (2005) explains the financial sector reforms in India with stories of
success as well as failure.
Bajpai (2006) concludes that the capital market in India has gone through various stages
of liberalization, bringing about fundamental and structural changes in the market design and
operation, resulting in broader investment choices, drastic reduction in transaction costs, and
efficiency, transparency and safety as also increased integration with the global markets.
Gurumurthy (2006) arrives at the conclusion that the achievements in the financial sector
indicate that the financial sector could become competitive without involving unhealthy
competition, within the constraints imposed by the macro-economic policy stance.
Mohan (2007) reviews India’s approach to financial sector reforms that set in process
since early 1990s. Allen, Chakrabarti, and De (2007) concludes that with recent growth rates
among large countries second only to China’s, India has experienced nothing short of an
economic transformation since the liberalization process began in the early 1990s.
Chhaochharia (2008) arrives at the conclusion that India has a more modern financial and
banking system than China that allocates capital in a more efficient manner. However, the study
is skeptical about who would emerge with the stronger capital market, as both the country is
facing challenges regarding their capital markets.
Prasad and Rajan (2008) argues that the time has come to make a more concerted push
toward the next generation of financial reforms. The study advocates that a growing and
increasingly complex market-oriented economy and its greater integration with global trade and
finance will require deeper, more efficient, and well-regulated financial markets.
The survey and review of literature about the financial sector reforms in India reveals that
the reforms have been pursued vigorously and the results of the reforms have brought about
improved efficiency and transparency in the financial sector. The reforms also brought into inter-
linkage of financial markets across the globe leading to new product development and
sophisticated risk management tools.
Bose, Suchismita conducted research on (2006) found that Derivatives products provide
certain important economic benefits such as risk management or redistribution of risk away from
risk-averse investors towards those more willing and able to bear risk. Derivatives also help price
discovery, i.e. the process of determining the price level for any asset based on supply and
demand. These functions of derivatives help in efficient capital allocation in the economy.
Routledge, Bryan and Zin, Stanley E of Carnegie Mellon University conducted research
on “Model Uncertainty and Liquidity” in year 2001. Extreme market outcomes are often
followed by a lack of liquidity and a lack of trade. This market collapse seems particularly acute
for markets where traders rely heavily on a specific empirical model such as in derivative
markets.
Sen Shankar Som and Ghosh Santanu Kumar (2006) studied the relationship between
stock market liquidity and volatility and risk. The paper also deals with time series data by
applying “Cochrane Orchutt two step procedures”. An effort has been made to establish a
relation between liquidity and volatility in their paper. It has been found that there is a
statistically significant negative relationship between risk and stock market liquidity.
Shenbagraman (2004) reviewed the role of some non-price variables such as open
interests, trading volume and other factors, in the stock option market for determining the price
of underlying shares in cash market. The study covered stock option contracts for four months
from Nov. 2002 to Feb. 2003 consisting 77 trading days.
All the existing studies found that the Equity return has a significant and positive impact
on the FII (Agarwal, 1997; Chakrabarti, 2001; and Trivedi & Nair, 2003). But given the huge
volume of investments, foreign investors could play a role of market makers and book their
profits i.e., they can buy financial assets when the prices are declining thereby jacking-up the
asset prices and sell when the asset prices are increasing (Gordon & Gupta, 2003).
Masih AM, Masih R, (2007), had studied “Global Stock Futures: A Diagstinoc Analysis
of a Selected Emerging and Developed Markets with Special Reference to India”, by using tools
correlation coefficients , granger’s causality test, augmented Dicky Fuller test (ADF), Elliott,
Rothenberg and Stock point optimal test.
 CHAPTER-3

COMPANY AND INDUSTRY

PROFILE
 3. INDUSTRY AND COMPANY PROFILE

3.1 INTRODUCTION OF DERIVATIVE MARKET IN INDIA :

The report of the L. C. Gupta Committee, set up by SEBI, prescribed a staged presentation of
subsidiary items, and bi-level control (i.e., self-direction by trades with SEBI giving a
supervisory and warning part). Another report, by the J. R. Varma Committee in 1998, worked
out different operational points of interest, for example, the margining frameworks. In 1999, the
Securities Contracts (Regulation) Act of 1956, or SC(R) A, was changed with the goal that
derivatives could be pronounced "securities." This permitted the administrative Mr. Xework for
exchanging securities to be stretched out to derivatives. The Act views derivatives as legitimate
and substantial, yet just in the event that they are exchanged on trade’s trades.

At long last, a 30-year prohibition on forward exchanging was additionally lifted in 1999. The
monetary progression of the mid-nineties encouraged the presentation of derivatives in view of
financing costs and remote trade. An arrangement of market-decided trade rates was embraced
by India in March 1993. In August 1994, the rupee was made completely convertible on current
record. These changes permitted expanded joining amongst local and universal markets, and
made a need to oversee money hazard.
Given the quick change and development in the situation of the monetary and money
related part have expedited a significantly more extensive effect derivatives instrument. As the
name means, the estimation of this item is inferred on the costs of monetary forms, financing
costs (i.e. bonds), offer and offer lists, wares, and so forth not going into exceptionally back;
money related derivatives just appeared in the year 1980's. Here the standard instruments
clubbed under the general term derivatives, incorporates Prospects and advances Choices Swaps
Warrants Intriguing and are the cutting edge instruments of monetary hazard administration. All
valuing of derivatives is finished by arbitrage and by arbitrage alone. Here, there is a connection
between the cost of the spot and the cost in the fates. In the event that this relationship is abused
then an arbitrage opportunity is accessible and when individuals misuse this opportunity, the
cost returns to its financial incentive there for arbitrage is the essential necessity for estimating.

3.2 HISTORY OF STOCK EXCHANGE :

"Stock trade implies anyone or people whether consolidated or not, constituted to assist,
managing or controlling the matter of purchasing, offering or managing in securities".
It is a relationship of part merchants with the end goal of self-direction and
ensuring the interests of its individuals. It can work just in the event that it is perceived by the
Government under the securities contracts (control) Act, 1956. The acknowledgment is allowed
under segment 3 of the Act by the focal government, Ministry of Finance.
The main stock trades working in the nineteenth century were those of
Bombay set up in 1875 and Ahmadabad set up in 1894. These were sorted out as deliberate non
benefit influencing relationship of representatives to manage and ensure their interests. Prior to
the control on securities exchanging ended up focal subject under the constitution in 1950, it was
a state subject and the Bombay securities contracts (control) Act of 1925 used to manage
exchanging securities. Under this demonstration, the Bombay stock trade was perceived in 1927
and Ahmadabad in 1937.
Amid the war blast, various stock trades were composed in Bombay, Ahmadabad
and different focuses, yet they were not perceived. Not long after it turned into a focal subject,
focal enactment was proposed and a board of trustees headed by A.D. Gorwala went into the bill
for securities control. Based on the board's proposals and open dialog, the securities contracts
(direction) Act moved toward becoming law in 1956. Standing rules Other than the above
demonstration, the securities contracts (direction) rules were additionally made in 1975 to
regulative certain issues of exchanging on the stock trades.
Opening/shutting of the stock trades, timing of exchanging, direction of clear
exchanges, direction of Badla or remainder business, control of the settlement and different
exercises of the stock trade, focusing of edge, obsession of market costs or making up costs,
direction of taravani business (jobbing), and so forth., control of dealers exchanging, financier
chargers, exchanging rules on the trade, arbitrage and settlement of question, settlement and
clearing of the exchanging and so forth.
(a) REGULATION OF STOCK EXCHANGES :
The securities contracts (control) act is the reason for activities of the stock trades in India. No
trade can work lawfully without the administration consent or acknowledgment. Stock trades are
given restraining infrastructure in specific regions under area 19 of the above Act to guarantee
that the control and direction are encouraged. Acknowledgment can be conceded to a stock trade
gave certain conditions are fulfilled and the essential data is provided to the administration.
Acknowledgment can likewise be pulled back, if essential.

(b) SECURITIES AND EXCHANGE BOARD OF INDIA :

SEBI was set up as a self-ruling administrative expert by the legislature of India in 1988 "to
ensure the premiums of financial specialists in securities and to advance the improvement of and
to manage the securities showcase and for issue associated therewith or accidental thereto". It is
enabled by two acts specifically the SEBI Act, 1992 and the securities contract (direction) Act,
1956 to play out the capacity of ensuring financial specialist's rights and controlling the capital
markets.

3.3 BOMBAY STOCK EXCHANGE :

This stock exchange, Mumbai, popularly known as “BSE” was established in 1875
as "The Native offer and stock dealers relationship", as a deliberate non-benefit making
affiliation. It has a developed throughout the years into its present status as the debut stock trade
in the nation. It might be noticed that the stock trades the most established one in Asia, even
more established than the Tokyo stock trade, which was established in 1878.
The trade, while giving a productive and straightforward market for
exchanging securities, maintains the premiums of the financial specialists and guarantees
reviewed of their grievances, regardless of whether against the organizations or its own part
dealers. An administering board containing 9 chose chiefs, 2 SEBI candidates, 7 open delegates
and an official executive is the zenith body, which chooses is the summit body, which chooses
the strategies and directs the undertakings of the trade. The Exchange executive as the CEO
workplaces is in charge of the day by day today organization of the trade.
BSE INDICES :
With a specific end goal to empower the market members, examiners and so forth. To track the
different high points and low points in the Indian securities exchange, the Exchange has
presented in 1986 a value stock record called BSE-SENSEX that accordingly turned into the
gauge of the snapshots of the offer costs in the Indian securities exchange. It is a "Market
capitalization weighted" file of 30 segment stocks speaking to an example of vast, entrenched
and driving organizations.
Sensex is figured utilizing a market capitalization weighted strategy. According to
this approach the level of the record mirrors the aggregate market estimation of every one of the
30-segment stocks from various businesses identified with specific base period. The aggregate
market estimation of an organization is dictated by increasing the cost of its stock by the nu7mber
of shared exceptional. Analysts call list of an arrangement of joined factors, (for example, cost
and number of offers) a composite Index. A filed number is utilized to speak to the consequences
of this calcution so as to make the esteem less demanding to run work with and track over a
period. It is significantly less demanding to diagram an outline in light of Indexed esteems than
on in view of real esteemed world over larger part of the notable Indices are built utilizing
"Market capitalization weighted technique". By and by, the everyday count of SENSEX is
finished by separating the total market estimation of the 30 organizations in the record by a
number called the Index Divisor. The divisor is the main connect to the first base time frame
estimation of the SENSEX.

3.4 NATIONAL STOCK EXCHANGE :

The NSE was consolidated in Nov, 1992 with a value capital of Rs.25 crs. The universal
securities consultancy (ISC) of Hong Kong has helped in setting up NSE. ISC has arranged the
point by point strategies for success and introduction of equipment and programming
frameworks. The advancements for NSE were money related organizations, protections,
organizations, banks and SEBI capital market ltd, Infrastructure renting and budgetary
administrations ltd and stock holding partnerships ltd.
It has been set up to reinforce the move towards professionalization of the
capital market and additionally give across the country securities exchanging offices to financial
specialists. NSE isn't a trade in the conventional sense where expedites possess and deal with the
trade. A two level regulatory set up including an organization board and an overseeing on board
of the trade is visualized. NSE is a national market for shares PSU securities, debentures and
government securities since foundation and exchanging offices are given.
NSE-NIFTY :
The NSE on Apr22, 1996 propelled another value Index. The NSE-50. The new Index which
replaces the current NSE-100 Index is relied upon to fill in as a suitable Index for the new section
of future and alternative. "Clever" means National Index for fifty stocks. The NSE-50 includes
fifty organizations that speak to 20 board industry bunches with a total market capitalization of
around Rs 1,70,000 crs. All organizations incorporated into the Index have a market
capitalization in abundance of Rs. 500 crs each and ought to have exchange for 85% of
exchanging days at an effect cost of under 1.5%.
The base time frame for the list is the end of cost on Nov 3 1995, which influences one
year of finish of activity of NSE's capital market to section. The base estimation of the list has
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OVERVIEW :
KARVY, is a premier integrated financial services provider, and ranked among the top five in
the country in all its business segments, services over 16 million individual investors in various
capacities, and provides investor services to over 300 corporate, comprising the who is who of

11
Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking,
Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit,
equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services,
Merchant Banking & Corporate Finance, placement of equity, IPO’s, among others. Karvy has
a professional management team and ranks among the best in technology, operations and
research of various industrial segments.

EARLY DAYS :
The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a
small group of practicing Chartered Accountants who founded the flagship company. Karvy
Consultants Limited. Company started with consulting and financial accounting automation, and
carved inroads into the field of registry and share accounting by 1985. Since then, they have
utilized their experience and superlative expertise to go from strength to strength to better their
services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of
India’s premier integrated financial service enterprise.
Thus over the last 20 years Karvy has traveled the success route, towards building a
reputation as an integrated financial services provider, offering a wide spectrum of services. And
we have made this journey by taking the route of quality service, path breaking innovations in
service, versatility in service and finally totality in service.

KARVY GROUP COMPANIES

(1) ) KARVY CONSULTANTS LIMITED :
As the flagship company of the Karvy Group, Karvy Consultants Limited has always remained
at the helm of organizational affairs, pioneering business policies, work ethic and channels of
progress.
Having emerged as a leader in the registry business, the first of the businesses that Karvy
ventured into, company have now transferred this business into a joint venture with Computer
share Limited of Australia, the world’s largest registrar. With the advent of depositories in the
Indian capital market and the relationships that Company have created in the registry business,
Karvy believe that they were best positioned to venture into this activity as a Depository
Participant. Karvy were one of the early entrants registered as Depository Participant with NSDL

12
(National Securities Depository Limited), the first Depository in the country and then with CDSL
(Central Depository Services Limited). Today, Karvy service over 6 lakhs customer accounts in
this business spread across over 250 cities/towns in India and are ranked amongst the largest
Depository Participants in the country.
The corporate website of the company, “www.karvy.com”, gives access to in-
depth information on financial matters including Mutual Funds, IPOs, Fixed Income Schemes,
Insurance, Stock Market and much more. A link called ‘Resource Center’, devoted solely to
research conducted by team of experts on various financial aspects like ‘Sector Research’, deals
exclusively with in-depth analysis of the key sectors of the Indian economy.

(2) ) KARVY STOCK BROKING LIMITED :

Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards
attaining diverse goals of the customer through varied services. Creating a plethora of
opportunities for the customer by opening up investment vistas backed by research-based
advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping
the customer create waves in his portfolio and empowering the investor completely is the
ultimate goal. Karvy is a Member of National Stock Exchange (NSE), The Bombay Stock
Exchange (BSE), and The Hyderabad Stock Exchange (HSE).

(3) KARVY INVESTORS SERVICES LIMITED :

Merchant Banking- Recognized as a leading merchant banker in the country, Karvy are
registered with SEBI as a Category I merchant banker. This reputation was built by capitalizing
on opportunities in corporate consolidations, mergers and acquisitions and corporate
restructuring, which have earned us the reputation of a merchant banker. Raising resources for
corporate or Government Undertaking successfully over the past two decades have given us the
confidence to renew company focus in this sector. Karvy quality professional team and their
work-oriented dedication have propelled company to offer value-added corporate financial
services and act as a professional navigator for long term growth of companies clients, which
includes leading corporate, State Governments, foreign institutional investors, public and private
sector companies and banks, in Indian and global markets.

(4) KARVY COMPUTERSHARE PVT. LIMITED :

Karvy have traversed wide spaces to tie up with the world’s largest transfer agent, the leading
Australian company, Computershare Limited. The company that services more than 75 million

13
shareholders across 7000 corporate clients and makes its presence felt in over 12 countries across
5 continents has entered into a 50-50 joint venture with KARVY.

Mutual Fund Services

Karvy have attained a position of immense strength as a provider of across-the-board transfer
agency services to AMCs, Distributors and Investors. Nearly 40% of the top-notch AMCs
including prestigious clients like Deutsche AMC and UTI swear by the quality and range of
services that company offer. Besides providing the entire back office processing, Karvy provide
the link between various Mutual Funds and the investor, including services to the distributor, the
prime channel in this operation. Karvy service enhancements such as ‘Karvy Converz', a full-
fledged call center, a top-line website (www.karvymfs.com), the ‘m-investor' and many more,
creating a galaxy of customer advantages. www.karvymfs.com

Issue Registry
In company voyage towards becoming the largest transaction-processing house in the Indian
Corporate segment, KARVY have mobilized funds for numerous corporate, and emerged as the
largest transaction-processing house for the Indian Corporate sector. With an experience of
handling over 700 issues, Karvy today, has the ability to execute voluminous transactions and
hard-core expertise in technology applications have gained company the No.1 slot in the
business. Karvy is the first Registry Company to receive ISO 9002 certification in India that
stands testimony to its stature

Corporate Shareholder Services

Karvy has been a customer centric company since its inception. Karvy offers a single platform
servicing multiple financial instruments in its bid to offer complete financial solutions to the
varying needs of both corporate and retail investors where an extensive range of services are
provided with great volume-management capability. Today, Karvy is recognized as a company
that can exceed customer expectations which is the reason for the loyalty of customers towards
Karvy for all his financial needs. An opinion poll commissioned by “The Merchant Banker
Update” and conducted by the reputed market research agency, MARG revealed that Karvy was
considered the “Most Admired” in the registrar category among financial services companies.

(5) ) KARVY GLOBAL SERVICES LIMITED :

The specialist Business Process Outsourcing unit of the Karvy Group. The legacy of expertise
and experience in financial services of the Karvy Group serves us well as company enter the
global arena with the confidence of being able to deliver and deliver well.

14
 Here company offer several delivery models on the understanding that
business needs are unique and therefore only a customized service could possibly fit the bill.
KARVY service matrix has permutations and combinations that create several options to choose
from. KARVY is in re-engineering and managing processes or delivering new efficiencies,
company’s service meets up to the most stringent of international standards. Their outsourcing
models are designed for the global customer and are backed by sound corporate and operations
philosophies, and domain expertise. Providing productivity improvements, operational cost
control, cost savings, improved accountability and a whole gamut of other advantages.

(6) KARVY COMMODITIES BROKING LIMITED :

At Karvy Commodities, they are focused on taking commodities trading to new dimensions
of reliability and profitability. They have made commodities trading, an essentially age-old
practice, into a sophisticated and scientific investment option. Company enables trade in all
goods and products of agricultural and mineral origin that include lucrative commodities like
gold and silver and popular items like oil, pulses and cotton through a well-systematized trading
platform.
The technological and infrastructural strengths and especially the street-
smart skills make them an ideal broker. Their service matrix is holistic with a gamut of
advantages, the first and foremost being their legacy of human resources, technology and
infrastructure that comes from being part of the Karvy Group. Regular trading workshops and
seminars are conducted to hone trading strategies to perfection. Every move made is a calculated
one, based on reliable research that is converted into valuable information through daily, weekly
and monthly newsletters, calls and intraday alerts.

(7) ) KARVY INSURANCE BROKING PRIVATE LIMITED :

At Karvy Insurance Broking Pvt. Ltd., they provide both life and non-life insurance products to
retail individuals, high net-worth clients and corporate. With the opening up of the insurance
sector and with a large number of private players in the business, they are in a position to provide
tailor made policies for different segments of customers. In their journey to emerge as a personal
finance advisor, they will be better positioned to leverage their relationships with the product
providers and place the requirements of their customers appropriately with the product providers.
With Indian markets seeing a sea change, both in terms of investment pattern and attitude of
investors, insurance is no more seen as only a tax saving product but also as an investment

15
product. By setting up a separate entity, we would be positioned to provide the best of the
products available in this business to their customers.

KARVY Alliances
Karvy Computershare Private Limited is a 50:50 joint venture of Karvy Consultants Limited and
Computershare Limited, Australia. Computershare Limited is world's largest -- and only global
share registry, and a leading financial market services provider to the global securities industry.
The joint venture with Computershare, reckoned as the largest registrar in the world, servicing
over 60 million shareholder accounts for over 7,000 corporations across eleven countries spread
across five continents. Computershare manages more than 70 million shareholder accounts for
over 13,000 corporations around the world.

Quality Policy
To achieve and retain leadership, Karvy shall aim for complete customer satisfaction, by
combining its human and technological resources, to provide superior quality financial services.
In the process, Karvy will strive to exceed Customer's expectations.

Quality Objectives
As per the Quality Policy, Karvy will build in-house processes that will ensure transparent and
harmonious relationships with its clients and investors to provide high quality of services.
Establish a partner relationship with its investor service agents and vendors that will help in
keeping up its commitments to the customers. Provide high quality of work life for all its
employees and equip them with adequate knowledge & skills so as to respond to customer's
needs.

ACHIEVEMENTS
 Among the top 3 stock brokers in India (4% of NSE volumes)
 India's No. 1 Registrar & Securities Transfer Agents
 Top most Depository Participants
 Largest Network of Branches & Business Associates
 ISO 9002 certified operations by DNV
 Among top 10 Investment bankers
 Largest Distributor of Financial Products
 Adjudged as one of the top 50 IT uses in India by MIS Asia
 Full Fledged IT driven operations

16
KARVY SERVICES
EQUITY BROKING SERVICES
Stock markets are considered unpredictable, but they reflect the mood of the economy. Over the
years, investment in equities is considered to be the best long-term wealth maximization option.
The gap between unpredictability and a safety anchor in the market is bridged by the in-depth
knowledge of market functioning and changing trends, planning with foresight and choosing
one’s options with care. From that perspective, our equity broking and advisory services are
beyond just a medium for buying and selling stocks and shares. Instead, we provide services
which are multi-dimensional and multi-focused in its scope.

DEPOSITORY PARTICIPANT SERVICES

The onset of the technology revolution in the financial-services industry saw the emergence of
KSBL as an electronic custodian registered with the National Securities Depository Ltd (NSDL)
and Central Securities Depository Ltd (CSDL) in 1998. We set standards enabling further
comfort to the investor by promoting paperless trading across the country, emerging as the top-
3 depository participant in India, in terms of customer serviced.

DISTRIBUTION OF FINANCIAL PRODUCTS

The paradigm shift from pure selling to knowledge-based selling drives the business today. With
our wide portfolio offerings, we occupy all segments in the retail financial services industry. A
highly qualified and dedicated team of professionals, drawn from the best of academic and
professional backgrounds, are committed to maintaining high levels of client service delivery.

CURRENCY DERIVATIVES
Karvy Currency Derivatives Segment, a specialized group vertical within Karvy stock broking
limited, has been established in 2008 to cater to the growing needs of corporate houses to manage
currency exchange rate risk. With the changing dynamics and increasing volatility of exchange
rates across the globe, companies exposed to currency risk face the challenge of maintaining
continued profit margins. Currency Derivatives would be one of the best options to manage any
related exchange rate risk and be free from the worries of market uncertainties.

WEALTH MANAGEMENT SERVICES

Karvy, with over 25 years’ expertise in the financial markets, is offering comprehensive wealth
management solutions for its customers through Karvy Private Wealth (KPW). Our wealth
managers provide direction to a client’s financial decisions, enabling him achieve his financial

17
and life goals. As a wealth manager, we collate the relevant financial information and life goals
of the client, assess his risk tolerance level, examine his current financial status, and identify a
strategy to fulfill his goals.

PORTFOLIO MANAGEMENT SERVICES

Portfolio management services are meant for high net worth individuals or institutions who want
a personalized management of their finances. A team of expert professionals conduct extensive
research on markets to provide a customized solution to achieve unique investment objectives.
This ensures best selection of investment opportunity within an asset class and active monitoring
for optimized results. Investors are provided with an all-time access to track their portfolios.

KARVY FORTUNE
Karvy Fortune, helps individuals and small organizations forge a partnership with Karvy which
is one of the largest financial services group serving over 60 million investors and provides
investor services to over 400 corporate houses in the country. Karvy Fortune already has a huge
network of franchisees, with presence in 330 cities, and a total of 787 business associates all
over India. Karvy Fortune is constantly on the lookout for hard working, ambitious individuals
who would like to build a robust business without the usual hassles associated with starting an
enterprise. As a business partner of Karvy Fortune you get to be a part of an established broking
house, which is hugely successful in providing financial services to millions of customers.

INVESTMENT BANKING
Recognized as a leading merchant banker in the country, we are registered with SEBI as a
Category I merchant banker. We have built up a reputation as an able merchant banker over the
years by capitalizing on opportunities in corporate consolidation, mergers & acquisitions,
corporate restructuring and capital raising (including raising resources for corporates or the
government). Our success over the past two decades has given us the confidence to focus in this
sector with renewed vigor

NON - BANKING FINANCIAL SERVICE

Karvy Finance, an NBFC established in 2009, is primarily focused on Micro & Small Enterprise
Secured Business Loans with Loan against Property, Loan against Gold & Loan for Small
Commercial Vehicles. Karvy Finance believes in serving the underserved business customers in
India’s market for all their loan needs with a network of 75 neighborhood lending branches in
35 locations.

18
 CHAPTER-4

THEORITICAL FRAMEWORK
 4. THEORITICAL FRAMEWORK

4.1 INTRODUCTION TO DERIVATIVES :

Subsidiary is an item whose esteem is gotten from the estimation of at least one
fundamental factors, called bases (basic resource, list, or reference rate), in an authoritative way.
The basic resource can be value, forex, item or some other resource. In the class of value
derivatives the world over, prospects and alternatives on stock lists have increased more ubiquity
than on singular stocks, particularly among institutional financial specialists, who are significant
clients of record connected derivatives. Indeed, even little financial specialists locate these
valuable because of high relationship of the well-known files without breaking a sweat of
utilization.
For instance, wheat agriculturists may wish to pitch their gather at a future date to take
out the danger of an adjustment in costs by that date. Such an exchange is a case of a subsidiary.
The cost of this subordinate is driven by the spot cost of wheat which is the "fundamental"
Subsidiary items at first developed as supporting gadgets against variances in
ware costs, and ware connected derivatives remained the sole type of such items for right around
three hundred years. Budgetary derivatives came into spotlight in the post-1970 period because
of developing insecurity in the money related markets. Be that as it may, since their rise, these
items have turned out to be extremely prevalent and by 1990s, they represented around 66% of
aggregate exchanges in subordinate items.

4.1.1 FACTORS DRIVING THE GROWTH OF DERIVATIVES :

In the course of the most recent three decades, the derivatives advertise has seen a sensational
development. A huge assortment of subordinate contracts have been propelled at trades over
the world. A portion of the elements driving the development of money related derivatives are:
1. Increased unpredictability in resource costs in budgetary markets.
2. Increased reconciliation of national money related markets with the global markets.
3. Marked change in correspondence offices and sharp decrease in their expenses.
4. Development of more advanced hazard administration instruments, giving monetary
operators a more extensive decision of hazard administration techniques, and
5. Innovations in the derivatives markets, which ideally consolidate the dangers and returns
over an expansive number of monetary resources prompting higher returns, diminished
hazard and also exchanges costs when contrasted with individual money related resources.
 As on Mar 07, 2017 15:30:18 IST
Product No. of contracts Traded Value
(Rs crores)

Index Futures 6,65,164 20,954.06

Stock Futures 9,11,956 30,961.77
Index Options 56,31,554 1,80,994.61
Stock Options 5,44,506 17,978.12

F&O Total 77,53,180 2,50,888.57

4.1.2 DERIVATIVE PRODUCTS :

Derivative contracts have a few variations. The most well-known variations are advances, fates,
alternatives and swaps. We investigate different derivatives gets that have come to be utilized.
1) Forwards: A forward contract is a redone contract between two elements, where settlement
happens on a particular date later on at the present pre-concurred cost.
2) Futures: A fates contract is an assention between two gatherings to purchase or offer a
benefit at a specific time later on at a specific cost.
3) Options: Options are of two sorts
 Calls: give the purchaser the privilege yet not the commitment to purchase a given
amount of the hidden resource, at a given cost at the latest a given future date.
 Puts: give the purchaser the right, however not the commitment to offer a given amount
of the basic resource at a given cost at the very latest a given date.
4) Swaps: Swaps are private understandings between two gatherings to trade streams out the
future as per a prearranged recipe. They can be viewed as arrangement of forward contracts.
The two normally utilized swaps are :
 Interest rate swaps: These involve swapping just the premium related money streams
between the gatherings in a similar cash.
 Currency swaps: These involve swapping both vital and enthusiasm between the
gatherings, with the trade streams out one course being in an unexpected cash in
comparison to those the other way.

4.1.3 TRADING MECHANISM :

The futures and options trading system of NSE, called NEAT-F&O trading system,
provides a fully automated screen–based trading for Nifty futures & options and stock futures
 & options on a nationwide basis and an online monitoring and surveillance mechanism. It
supports an anonymous order driven market which provides complete transparency of trading
operations and operates on strict price–time priority. It is similar to that of trading of equities
in the Cash Market (CM) segment. The NEAT-F&O trading system is accessed by two types
of users. The Trading Members(TM) have access to functions such as order entry, order
matching, and order and trade management. It provides tremendous flexibility to users in terms
of kinds of orders that can be placed on the system.

4.1.4 TURNOVER :
The trading volume on NSE’s derivatives market has seen a steady increase since the
launch of the first derivatives contract, i.e. index futures in June 2000. Table gives the value of
contracts traded on the NSE. The average daily turnover at NSE now exceeds Rs.10000 core.
A total of 77,018,185 contracts with a total turnover of Rs.2,547,053 core were traded during
2008-2009.

4.2 INTRODUCTION TO FUTURE :

Definition of Futures:
A futures contract is an agreement between two parties to buy or sell an asset at a certain
time in the future at a certain price. But unlike forward contracts, the futures contracts are
standardized and exchange traded. To facilitate liquidity in the futures contracts, the exchange
specifies certain standard features of the contract. It is a standardized contract with standard
underlying instrument, a standard quantity and quality of the underlying instrument that can be
delivered,(or which can be used for reference purposes in settlement) and a standard timing of
such settlement. A futures contract may be offset prior to maturity by entering into an equal and
opposite transaction. More than 99% of futures transactions are offset this way. The standardized
items in a futures contract are:
 Quantity of the underlying  Quality of the underlying
 Location of settlement  The date and the month of delivery
 The units of price quotation and minimum price change

4.2.1 Distinction between Futures & Forward Contracts :

Forward contracts are often confused with futures contracts. The confusion is
primarily because both serve essentially the same economic functions of allocating risk in the
presence of future price uncertainty. However futures are a significant improvement over the
forward contracts as they eliminate counterparty risk and offer more liquidity. Table lists the
distinction between the two
Distinction between Futures & Forwards
Futures Forwards
1. Trade on an organized exchange 1. OTC in nature
2. Standardized contract terms 2. Customized contract terms
3. Range of Delivery dates 3. Usually one specified delivery date
4. Hence more liquid 4. Hence less liquid
5. Requires margin payments 5. No margin payment
6. Virtually no credit risk 6. Some credit risk

4.2.2 Futures Terminology :

 Spot value: The cost at which an advantage exchanges the spot showcase.
 Contract cycle: The period over which an agreement exchanges. The record prospects
contracts on the NSE have one-month, two-months and three-month expiry cycles which
terminate on the last Thursday of the month. Subsequently a January lapse contract
terminates on the last Thursday of January and a February termination contract stops
exchanging on the last Thursday of February. On the Friday following the last Thursday,
another agreement having a three-month expiry is presented for exchanging.
 Expiry date: It is the date determined in the prospects contract. This is the latest day on
which the agreement will be exchanged, toward the finish of which it will stop to exist.
 Cost of convey: The connection between prospects costs and spot costs can be condensed
regarding what is known as the cost of convey. This measures the capacity cost in addition
to the premium that is paid to fund the advantage less the salary earned on the benefit.
 Initial edge: The sum that must be kept in the edge account at the time a fates contract is
first gone into is known as beginning edge.
 Marking-to-showcase: In the fates advertise, toward the finish of each exchanging day, the
edge account is acclimated to mirror the financial specialist's pick up or misfortune relying
on the fates shutting cost. This is called marking– to– advertise.
 Maintenance edge: This is to some degree lower than the underlying edge. This is set to
guarantee that the adjust in the edge account never winds up negative. In the event that the
adjust in the edge account falls beneath the support edge, the financial specialist gets an
edge call and is relied upon to top up the edge record to the underlying edge level before
exchanging starts on the following day.
 1) Initial edges
2) Mark-to-advertise benefit/misfortune
The calculation of starting edge on the fates showcase is finished utilizing the idea of Value-
at-Risk (VaR). The underlying edge sum is sufficiently huge to cover a one-day misfortune
that can be experienced on 99% of the days. VaR procedure looks to quantify the measure of
significant worth that a portfolio may remain to lose inside a specific skyline day and age (one
day for the clearing company) because of potential changes in the basic resource advertise cost.
Introductory edge sum registered utilizing VaR is gathered in advance.
Give us a chance to take a speculative exchanging action of a customer of a NSE fates
division to exhibit the edges installments that would happen.
• A customer buys 200 units of FUTIDX NIFTY 29JUN2001 at Rs 1500.
• The introductory edge payable as ascertained by VAR is 15%.
Add up to long position = Rs 3,00,000 (200*1,500)
Beginning edge (15%) = Rs 45,000
Accepting that the agreement will close on Day + 3 the check to-advertise position will look
as takes after:

Position on Day 1 :
Close Price Loss Margin Released Net Cash Outflow
1,400*200=2,80,000 (3,00,000-2,80,000)20,000 (45,000- (20,000-3,000)17,000
42,000)3,000
Payment to be made -17,000
Payment to be made
New position on Day 2 :
Value of new position = 1,400*200= 2,80,000
Margin = 42,000
Close Price Gain Additional Margin Net Cash Outflow
1,510*200=3,02,000 (3,02,000-2,80,000)22,0 0 (45,300-42,000)3,200 (22,000-
3,300)18,700
Payment to be Recd 18,000
Payment to be received

Position on Day 3 :
Value of new position = 1510*200 = Rs 3,02,000
Margin = Rs 3,300
 Close Price Gain Net Cash Inflow
1,600*200=3,20,000 (3,20,000-3,02,000)18,000 18,000+45,300=63,300
Payment to be Recd 63,300
Payment to be received
Margin account :
Initial Margin Rs.45,000
Margin Recd Day 1 (-)3,000
Position on Day 2 Rs. 42,000
Additional Margin (+)3,200
Total Margin in Account Rs. 45,200
Total margin account
Net gain/loss :
Day1 (loss) Rs.(18,000)
Day2(Gain) Rs.18,700
Day1(Gain) Rs.18,000
Total Gain Rs.19,700
Total gain
The customer has made a benefit of Rs 19,700 toward the finish of Day 3 and the aggregate
money inflow at the end of exchange is Rs 63,300.

4.2.3 Settlement of Future Contracts :

Prospects contracts have two sorts of settlements, the MTM settlement which occurs on a
persistent premise toward the finish of every day, and the last settlement which occurs on the
last exchanging day of the fates contract.

1. MTM Settlement :
All prospects contracts for every part are set apart to-showcase (MTM) to the day by day
settlement cost of the significant fates contract toward the finish of every day. The
benefits/misfortunes are processed as the distinction between:
 The exchange cost and the day's settlement cost for contracts executed amid the day yet
not squared up.
 The earlier day's settlement cost and the present day's settlement cost for presented
contracts.
 The purchase cost and the offer cost for contracts executed amid the day and squared up.
 The CMs who have a misfortune are required to pay the check to-advertise (MTM) misfortune
sum in trade which is out turn passed on to the CMs who have made a MTM benefit. This is
known as day by day check to-advertise settlement.

2. Last Settlement for Futures :

On the expiry day of the prospects contracts, after the end of exchanging hours, NSCCL
denotes all places of a CM to the last settlement cost and the subsequent benefit/misfortune
is settled in real money. Last settlement misfortune/benefit sum is charged/credited to the
applicable CM's clearing financial balance on the day following expiry day of the agreement.
All exchanges the fates advertise are money settled on a T+1 premise and all positions
(purchase/offer) which are not finished off will be set apart to-showcase. The end cost of the
list prospects will be the day by day settlement cost and the position will be conveyed to the
following day at the settlement cost.

4.3 INTRODUCTION TO OPTIONS :

In this segment, we take a gander at the following subordinate item to be
exchanged on the NSE, specifically alternatives. Choices are on a very basic level unique in
relation to forward and prospects contracts. A choice gives the holder of the alternative the
privilege to accomplish something. The holder does not need to practice this right. Conversely,
in a forward or prospects get, the two gatherings have submitted themselves to accomplishing
something. While it costs nothing (aside from edge prerequisites) to go into a prospects get, the
buy of an alternative requires an up– front installment.
The appropriate response is they require not remain away in light of the fact
that they can maintain a strategic distance from this hazard by utilizing alternative. The idea of
alternatives has existed for a long time and was polished by merchants and agriculturists in some
shape or other. Before investment opportunities could be exchanged the present market financial
specialist could just purchase and offer offers in given supply of an open organization. So if a
stock was exchanging at say $100 speculators would require $10000 to purchase 100 offers.
Presently, $10000 is still a ton of cash to a great many people.

4.3.1 Options Terminology :

 Index choices: These alternatives have the record as the basic. A few alternatives are
European while others are American. Like file fates contracts, record alternatives contracts
are likewise money settled.
 Stock alternatives: Stock choices are choices on singular stocks. Choices as of now
exchange on more than 500 stocks in the United States. An agreement gives the holder the
privilege to purchase or offer offers at the predetermined cost.
 Buyer of a choice: The purchaser of an alternative is the person who by paying the choice
premium purchases the privilege yet not the commitment to practice his choice on the
dealer/essayist.
 Call choice: A call choice gives the holder the privilege yet not the commitment to
purchase an advantage by a specific date at a specific cost.
 Put alternative: A put choice gives the holder the privilege however not the commitment
to offer a benefit by a specific date at a specific cost.
 Expiration date: The date determined in the alternatives contract is known as the
termination date, the activity date, the strike date or the development.
 In-the-cash choice: An in-the-cash (ITM) choice is a choice that would prompt a positive
income to the holder in the event that it were practiced instantly. At-the-cash choice: An
at-the-cash (ATM) choice is an alternative that would prompt zero income on the off
chance that it were practiced quickly. A choice on the list is at-the-cash when the present
file approaches the strike cost (i.e. spot cost = strike cost).
 Time estimation of an alternative: The time estimation of a choice is the contrast between
its premium and its inherent esteem. The two calls and puts have time esteem. A choice
that is OTM or ATM has just time esteem. As a rule, the greatest time esteem exists when
the choice is ATM. The more drawn out the opportunity to termination, the more
noteworthy is an alternative's chance esteem, all else measure up to.

4.3.2 How to Read an Options Table?

How to Read an Options Table?

  Column 1: Strike Price – This is expressed cost per share for which a fundamental stock
might be acquired (for a Call) or sold (for a put) upon the activity of the alternative contract.
 Column 2: Expiry Date - This demonstrates the end date of an alternative contract.
 Column 3: Call or Put - This section alludes to whether the choice is a call (C) or put (P).
 Column 4: Volume - This shows the aggregate number of alternatives contracts exchanged
for the day. The aggregate volume of all agreements is recorded at the base of each table.
 Column 5: Bid this demonstrates the value somebody will pay for the alternatives contract.
 Column 6: Ask this demonstrates the cost at which somebody will offer a choices contract.
 Column 7: Open Interest - Open intrigue is the quantity of alternatives gets that are open;
these are gets that have neither terminated nor been worked out.

4.3.3 Distinction between Futures & Options :

Distinction between Futures & Options
Futures Options
1] Exchange traded, with novation 1] Same as Futures
2] Exchange defines the product 2] Same as Futures
3] Price is zero, strike price moves 3] Strike price is fixed, price moves.
4] Price is zero 4] Price is always positive.
5] Linear payoff 5] Nonlinear payoff.
6] Both long and short at risk 6] Only short at risk.

4.4 CALL OPTIONS :

Are that gives its holder the power or right yet not the commitment to purchase the basic resource
at a settled cost by a settled lapse date.

How do call alternative function?

Call choices are money related contracts amongst purchaser and the vender. The vender or
“author" of the call alternatives is giving the purchaser of those call choices the privilege to
purchase his stocks at a cost settled and settled upon in the call choices contract. The purchaser
or "holder" of these call choices would now be able to hang on them, trusting that the stocks will
ascend in cost after some time, before the call alternatives contract terminates, and afterward
either the offer the call choices on to another purchaser at a higher cost or exercise the privilege
vested in the call choice to purchase the stock from the dealer at the lower concurred value,
pivoting for a benefit by offering those stocks in the open market. Unmistakably the dealer or
"author" of call choices is anticipating that his stocks should remain dormant or to go down.

Call Options Example :

A financial specialist purchases 1 call alternative on Infosys at strike cost of Rs.3, 500 at the
premium of Rs. 100, if the market cost of Infosys upon the arrival of expiry is more than Rs.3,
500, the alternative will be worked out. The speculator will acquire benefits once the offer value
crosses Rs.3600 (strike cost + premium Rs.3500 + 100). Assume stock cost is Rs.3800, making
a benefit of Rs.200 {(spot cost – strike cost) - premium}.

Secured Calls :
A call choice position that is secured by a contrary position in the hidden instrument (for instance
shares, wares and so forth), is known as a secured call. Composing a secured calls includes
composing call choices when the offers that may must be conveyed (if the choice holder practices
his entitlement to purchase), are now claimed.

4.5 PUT OPTION :

A put choice gives the holder (purchaser/one who is for some time put), the privilege to offer
determined amount of the hidden resource at strike cost at the very latest an expiry date. The
dealer of the put choice (one who is short put) be that as it may, has the commitment to purchase
the basic resource at strike cost if the purchaser chooses to practice his alternative to offer.

Put Option Example :

A financial specialist purchases 1 put choice on Reliance at the strike cost of Rs.300/ - at a
premium of Rs.25/ - . In the event that the market cost of Reliance, upon the arrival of expiry is
under Rs.300, the choice can be practiced as it is in the cash. The financial specialist's breakeven
point is Rs.275/ - (strike value premium paid) i.e. financial specialist will procure benefits if the
market falls beneath 275. Assume stock cost is Rs.260/ - , the purchaser of the put choice will
quickly purchases Reliance share in the market @Rs.260/ - and practices his choice offering the
Reliance share at Rs.300 to the choice essayist consequently making a net benefit of Rs.15
{(strike value spot value)- premium paid}.
'In the Money', 'At the Money'& 'Out of the Money' Call Options :
An Option is said to be 'At the cash', when the Options strike cost is equivalent to the basic
resource cost. This is valid for the both the calls and puts. A call is said to be In-the-Money when
the strike cost of the Option is not as much as the hidden resource cost.
For Example :
A Sensex Call Option with strike cost of 3900 is the 'In the cash', when the spot Sensex is at
4100 as the call choice has esteem. The call holder has the privilege to purchase a Sensex at
3900, regardless of how much the spot advertise has risen. Furthermore, with the present cost at
4100, a benefit can be made by offering Sensex at this higher cost. Utilizing the prior ex: if the
Sensex tumbles to 3,700, the call choice never again has positive exercise esteem.
CALL OPTIONS PUT OPTIONS
IN THE MONEY Strike price < spot price of the Strike price > spot price of the
underlying asset underlying asset
AT THE MONEY Strike price = spot price of the Strike price = spot price of the
underlying asset underlying asset
OUT OF THE MONEY Strike price > spot price of the Strike price < spot price of the
underlying asset underlying asset
‘In the Money’, ‘At the Money’& ‘Out of the Money’ Call Options

‘In the Money’, ‘At the Money’& ‘Out of the Money’ Put Options :
A put option is In-the-money when the strike price of the option is greater than the spot price of
the underlying asset.

For Example :
A Sensex put at strike of 4400, is In-the-money then the sensex is at 4100. When this is the case,
the put option has value because the put holder can sell the sensex at 4400, an amount greater
than the current Sensex of 4100. Likewise, a put option is Out-of-the-money when the strike
price is less than the spot price of the underlying asset. For ex: the buyer of sensex put option
won’t exercise the option when the spot is at 4800.

4.6 SUMMARY :
CALL OPTION BUYER CALL OPTION WRITER (Seller)

Pay premium Receives premium

Right to exercise and buy the shares Obligation to sell shares if exercised
Profits from rising prices Profits from falling or remaining neutral
Limited losses, Potentially unlimited gain Potentially unlimited losses, limited gain

PUT OPTION BUYER PUT OPTION WRITER (Seller)

Pays premium Receives premium

Right to exercise and sell shares Obligation to buy shares if exercised
Profits from falling prices Profits from rising prices or remaining neutral
Limited losses, Potentially unlimited gain Potentially unlimited losses, limited gain
‘In the Money’, ‘At the Money’& ‘Out of the Money’ Put Options

(a) Who decides on the premium paid on options & how is it calculated?
Options premium is not fixed by the exchange. The fair value/ theoretical price of an
option can be known with the help of pricing models & then depending on the market
conditions the price is determined by competitive bids & offers in the trading environment. An
options premium/ price is the sum of intrinsic value & time value .if the price of the underlying
stock is held constant, the intrinsic value portion of an option premium will remain constant as
well.

(b) Why should one invest in options?

Besides offering flexibility to the buyer in form of right or sell, the major advantages of options
is their versatility. They can be conservative or as speculative as one’s investment strategy
dictates. Some of the benefits.

4.6.1 Option Benefits :

1) High leverage: option contracts allow the investor to control the full value of the
underlying shares for a fraction of the actual cost. For instance, though Infosys trades at
Rs 5600 an investor can get full exposure to it by investing only the premium of Rs.150.
We can see below how one can leverage ones position by just paying the premium.

Option Premium Stock

Bought on Oct 15 Rs 380 Rs 4,000
Sold on Dec 15 Rs 670 Rs 4,500
Profit Rs 290 Rs 500
ROI(Not annualized) 76.30% 12.50%

ROI (Not Annualized)

2) Risk administration: the purchaser can just lose what was paid for the choice contract (i.e.
premium), which is a small amount of what the real cost of the advantage would be. World
over the derivatives showcase are greater than the value markets and alternatives are the
most supported instruments in light of the remarkable blend of boundless return –
constrained hazard offered by them.
3) Large benefit potential and constrained hazard for the choice purchaser.
 4) Time to choose: By accepting a call choice the price tag for the offers is secured. This
gives the call choice holder until the point when the Expiry Day to choose whether or not
to practice the alternative and purchase the offers.
5) Insurance: one can shield his value portfolio from a decrease in the market by the method
for purchasing a defensive put wherein one can purchase sets against a current stock
positions. This alternative positions can supply the protection expected to conquer the
vulnerability of the commercial center.
6) Income age: Shareholders can gain additional salary far beyond profits by composing call
alternatives against their offers. By composing an alternative they get the choice premium
forthright. While they get the opportunity to keep the choice premium, there is a
probability that they could be practiced against and need to convey their offers to the taker
at the activity cost.

Clearing and Settlement :

National Securities Clearing Corporation Limited (NSCCL) attempts clearing and settlement
of all exchanges executed on the fates and choices (F&O) portion of the NSE. It additionally
goes about as legitimate counterparty to all exchanges on the F&O section and ensures their
money related settlement.

Clearing Entities :
Clearing and settlement exercises in the F&O section are embraced by NSCCL with the
assistance of the accompanying substances:

Clearing Members :
In the F&O section, a few individuals, called self-clearing individuals, clear and settle their
exchanges executed by them just either all alone record or by virtue of their customers. Some
others called exchanging member– cum– clearing part, clear and settle their own exchanges
and exchanges of other exchanging individuals (TMs).

Clearing Banks :
Assets settlement happens through clearing banks. With the end goal of settlement all clearing
individuals are required to open a different financial balance with NSCCL assigned clearing
bank for F&O section. The Clearing and Settlement process involves the accompanying three
fundamental exercises:
1) Clearing
2) Settlement
3) Risk Management
 4.6.2 RISK MANAGEMENT :
NSCCL has developed an entire peril control part for the F&O divide. The striking features
of danger direction framework on the F&O parcel are:
 The cash related soundness of the people is the best approach to risk organization. Thusly,
the necessities for enlistment with respect to capital adequacy (add up to resources, security
stores) are exceptionally stringent.
 NSCCL charges a straightforward early tense for all the empty spots of a CM. It decides
the fundamental edge essentials for each future/choices contract once per day. It also takes
after regard in risk (VaR) based margining through SPAN.
 The open spots of the people are separate to feature in light of understanding settlement
cost for every assention. The qualification is settled in genuine cash on a T+1 preface.
 NSCCL's on-line position watching structure screens a CM's empty positions reliably.
Limits are set for each CM in perspective of his capital stores. The on-line position checking
system produces cautions at whatever point a CM accomplishes a position bind set up by
NSCCL.
 A part is advised of his circumstance to engage him to adjust his introduction or get
additional capital. Position encroachment result in withdrawal of trading office for all TMs
of a CM if there ought to be an event of an encroachment by the CM.

4.7 NSE–SPAN :
The objective of NSE–SPAN is to identify overall risk in a portfolio of all futures and options
contracts for each member. The system treats futures and options contracts uniformly, while at
the same time recognizing the unique exposures associated with options portfolios, like
extremely deep out of the money short positions and inter–month risk. Its over–riding objective
is to determine the largest loss that a portfolio might reasonably be expected to suffer from one
day to the next day based on 99% VAR methodology. SPAN considers uniqueness of option
portfolios. The following factors affect the value of an option: Underlying market price, Strike
price, Strike price
As these factors change, the value of options maintained within a portfolio also
changes. Thus, SPAN constructs scenarios of probable changes in underlying prices and
volatilities in order to identify the largest loss a portfolio might suffer from one day to the next.
It then sets the margin requirement to cover this one–day loss. The results of these calculations
are called risk arrays. Risk arrays, and other necessary data inputs for margin calculation are
provided to members daily in a file called the SPAN risk parameter file.
 CHAPTER-5

DATA ANALYSIS AND

INTERPREATION
 5. DATA ANALYSIS AND INTERPREATION
SBIN :
Date Open Price High Price Low Price Close Price

2Apr18 1925.50 2551.95 2540.55 2549.05

3Apr18 2548 2549.5 2544.1 2548.65
4Apr18 2560 2562 2546.05 2549.35
5Apr18 2546.4 2549.9 2540.1 2547.75
9Apr18 2542 2542.95 2531.75 2532.8
10Apr18 2532.7 2537.8 2530.35 2533.65
11Apr18 2533.6 2536.95 2529 2532.65
12Apr18 2537.55 2539.7 2534.65 2538.2
13Apr18 2545 2546 2529 2530.2
16Apr18 2529.5 2533 2525.65 2531.45
18Apr18 2532 2536.5 2530.15 2534.85
18Apr18 2533.1 2536.55 2531.05 2534.8
19Apr18 2539.5 2541.4 2528.35 2530.2
20Apr18 2528.9 2529.25 2516.7 2518.6
23Apr18 2522.05 2522.4 2512.45 2513.8
24Apr18 2510.5 2516.65 2509.45 2511.9
25Apr18 2512 2519 2511.1 2516.9
26Apr18 2511 2513.7 2502.6 2507.95
27Apr18 2513 2516.2 2508.25 2514.55
30Apr18 2516.3 2519.5 2070.50 2070.10
1May18 2070.10 2524.4 2514.05 2523.15
6May18 2525.45 2525.45 2519.35 2521.25
7May18 2522.95 2523.45 2515 2518.4
8May18 2518.9 2519.7 2514.55 2515.1
9May18 2518 2521.9 2516.9 2520.6
10May18 2519.5 2521.65 2518.2 2518.3
13May18 2519.9 2519.9 2516 2516.9
18May18 2518.35 2522.3 2513.05 2515
16May18 2515.9 2516 2510.15 2512.5
18May18 2514.05 2514.95 2508.25 2510.1
20May18 2512.9 2518.6 2508.3 2511.15
21May18 2511 2516.6 2509.95 2510.85
22May18 2513.25 2515 2503.4 2512.95
23May18 2514.25 2515.9 2509.75 2511.85
24May18 2512.5 2512.5 2512.5 2512.5
24May18 2512.45 2512.55 2507.1 2508.25
27May18 2510.7 2512.45 2496.7 2502.3
28May18 2505.6 2528.6 2505.6 2526.85
29May18 2527.8 2534.8 2525.1 2530.15
30May18 2531 2533.6 2525.2 2598.75
4June18 2565.05 2536.9 2526.2 2529.3
5June18 2529.3 2530.9 2527.1 2528.45
6June18 2526.9 2538 2510.15 2512.15
7June18 2512.2 2513 2500.6 2504.6
8June18 2510 2518.9 2510 2518
11June18 2520.05 2525.8 2519.1 2523.5
12June18 2523.55 2524 2507 2508.2
13June18 2513.15 2519.15 2506.5 2518.65
14June18 2518.7 2518.95 2511.25 2514.95
18June18 2515.3 2516.45 2510.55 2512.35
18June18 2515 2516.9 2512.9 2516.25
19June18 2513.95 2518.9 2512 2515.35
20June18 2516.25 2521 2516.25 2518.75
21June18 2520.2 2520.8 2512.7 2513.55
22June18 2515 2518.15 2511.75 2513.6
25June18 2512 2514.1 2510.95 2512.15
26June18 2512 2513 2508.65 2652.55
FUTURE MARKET :
BUYER SELLER
2-Apr-18(Buying) 1925.00 1925.00
30-Apr-18(Cl., period) 2070.10 2070.10
Profit = 145.10 Loss = 79.18
Profit 125 x 145.10= 18137.5, Loss 125 x 145.10=-18137.5,
Here the buyer got the profit because increase of future price whereas seller got loss. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
01-May-18 (Buying) 2070.10 2070.10
30-May-18 (Cl., period) 2598.75 2598.75
Profit = 66081.25 Loss = 66081.25
Profit 125 x 528.65= 66081.25, Loss 125 x 528.65= 66081.25
Here the buyer got the profit because increase of future price whereas seller got loss. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4-jun-18(Buying) 2565.05 2565.05
26-jun-18(Cl., period) 2652.55 2652.55
Profit = 87.50 Loss = 87.50
Profit 125 x 87.50 = 10937.50, Loss =125 x 87.50= 10937.50
Buyer future price will increase so, he got Profit. Seller future price also increase so, loss also
increase, In case seller future will decrease, and he can get profit.

ICICI BANK :
Date Open Price High Price Low Price Close Price

2Apr18 1060.00 1051.95 1040.55 1049.05

3Apr18 1048 1049.5 1044.1 1048.65
4Apr18 1060 1062 1046.05 1049.35
5Apr18 1046.4 1049.9 1040.1 1047.75
9Apr18 1042 1042.95 1031.75 1032.8
10Apr18 1032.7 1037.8 1030.35 1033.65
11Apr18 1033.6 1036.95 1029 1032.65
12Apr18 1037.55 1039.7 1034.65 1038.2
13Apr18 1045 1046 1029 1030.2
16Apr18 1029.5 1033 1025.65 1031.45
18Apr18 1032 1036.5 1030.15 1034.85
18Apr18 1033.1 1036.55 1031.05 1034.8
19Apr18 1039.5 1041.4 1028.35 1030.2
20Apr18 1028.9 1029.25 1016.7 1018.6
23Apr18 1022.05 1022.4 1012.45 1013.8
24Apr18 1010.5 1016.65 1009.45 1011.9
25Apr18 1012 1019 1011.1 1016.9
26Apr18 1011 1013.7 1002.6 1007.95
27Apr18 1013 1016.2 1008.25 1014.55
30Apr18 1018.9 1270.00 1013.8 1270.00
1May18 1252.00 1024.4 1014.05 1023.15
6May18 1025.45 1025.45 1019.35 1021.25
7May18 1022.95 1023.45 1015 1018.4
8May18 1018.9 1019.7 1014.55 1015.1
9May18 1018 1021.9 1016.9 1020.6
10May18 1019.5 1021.65 1018.2 1018.3
13May18 1019.9 1019.9 1016 1016.9
18May18 1018.35 1022.3 1013.05 1015
16May18 1015.9 1016 1010.15 1012.5
18May18 1014.05 1014.95 1008.25 1010.1
20May18 1012.9 1018.6 1008.3 1011.15
21May18 1011 1016.6 1009.95 1010.85
22May18 1013.25 1015 1003.4 1012.95
23May18 1014.25 1015.9 1009.75 1011.85
24May18 1012.5 1012.5 1012.5 1012.5
24May18 1012.45 1012.55 1007.1 1008.25
27May18 1010.7 1012.45 996.7 1002.3
28May18 1005.6 1028.6 1005.6 1026.85
 29May18 1027.8 1034.8 1025.1 1030.15
30May18 1031 1270.55 1025.2 1270.55
4June18 1257.45 1036.9 1026.2 1029.3
5June18 1029.3 1030.9 1027.1 1028.45
6June18 1026.9 1038 1010.15 1012.15
7June18 1012.2 1013 1000.6 1004.6
8June18 1010 1018.9 1010 1018
11June18 1020.05 1025.8 1019.1 1023.5
12June18 1023.55 1024 1007 1008.2
13June18 1013.15 1019.15 1006.5 1018.65
14June18 1018.7 1018.95 1011.25 1014.95
18June18 1015.3 1016.45 1010.55 1012.35
18June18 1015 1016.9 1012.9 1016.25
19June18 1013.95 1018.9 1012 1015.35
20June18 1016.25 1021 1016.25 1018.75
21June18 1020.2 1020.8 1012.7 1013.55
22June18 1015 1018.15 1011.75 1013.6
25June18 1012 1014.1 1010.95 1012.15
26June18 1012 1463.75 1008.65 1463.75

FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 1060.00 1060.00
30- Apr -18 (Cl., period) 1270.00 1270.00
Profit = 210 Loss = 210
Profit 500 x 210 = 105000, Loss =500 x 210 = 105000
Here the buyer got the profit because increase of future price whereas seller got loss. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-May-18(Buying) 1252.00 1252.00
30- May -18(Cl., period) 1270.55 1270.55
Profit = 18.55 Loss = 18.55
Profit 500 x 18.55 = 9275, Loss =500 x 18.55 = 9275
Here the buyer got the profit because increase of future price whereas seller got loss. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4-June-18 (Buying) 1257.45 1257.45
26-June-18(Cl., period) 1463.75 1463.75
Profit = 206.30 Loss = 206.30
Loss =500 x 206.30 = 103150, Profit 500 x 206.30 = 103150.
Here the buyer got the profit because decrease of future price whereas seller got loss. If future
price increase at the time of settlement date buyer will get profit, seller will get loss.

ANDHRA BANK :

Date Open Price High Price Low Price Close Price

2Apr18 57.00 86.7 57.00 85.6

3Apr18 85.9 87.5 84.3 87.1
4Apr18 90 90.5 83.65 84.45
5Apr18 84.7 85 83.25 84.3
9Apr18 83.8 84.2 81.85 82.25
10Apr18 82.75 83.5 81 82.3
11Apr18 82.3 83.4 81.8 82.3
12Apr18 83 83.35 82.5 82.7
13Apr18 83.3 83.5 80.3 80.65
16Apr18 80.55 80.9 79.6 79.9
18Apr18 80.3 80.7 78.1 79.45
18Apr18 79.55 81.85 78.7 81.35
19Apr18 81.55 82.1 78.5 78.95
20Apr18 78.5 79.4 77.6 78.95
23Apr18 78.55 79.5 78.1 78.9
24Apr18 78.65 79.35 78.15 78.5
25Apr18 78.95 79 78.1 78.5
26Apr18 78.25 78.45 76.25 76.85
27Apr18 78 79.5 75.75 79
30Apr18 80.9 81 67.60 67.60
1May18 80.30 80.8 78.2 80.55
6May18 81.1 81.35 78.95 79.4
7May18 79.5 80.35 78.65 79
8May18 79.4 81.45 79.2 79.7
9May18 80.3 82.25 79.15 81.9
10May18 82.25 82.65 81.2 81.7
13May18 81.85 84.45 81.6 83.45
18May18 83.5 87.65 83.25 85.35
16May18 85.4 85.9 82.65 83.75
18May18 83.8 85.4 82.8 83.1
20May18 83.3 84.1 79.65 80.4
21May18 80.35 81.7 79.65 79.95
22May18 80.35 80.9 76.2 78.5
23May18 79.15 79.4 76.6 76.8
24May18 77 77 74.55 74.9
24May18 75.05 79.5 73.6 76
27May18 76.75 77.7 75 76.65
28May18 77 77.25 75.7 76
29May18 76.05 76.9 75.55 76.4
30May18 77.25 79.85 70.15 77.25
4June18 79.80 79.8 77.9 78.4
5June18 78.2 78.8 73.55 74.05
6June18 73.7 74 71.85 72.65
7June18 73.95 75.75 73.6 75.25
8June18 75.85 78.35 75 77.8
11June18 77.8 77.8 73.2 73.85
12June18 74.15 76.8 74.15 76.15
13June18 76.15 79.95 75.3 79.65
14June18 80.5 80.5 78.3 78.7
 18June18 78.7 79.45 77.25 77.8
18June18 77.8 79.8 77.55 78.95
19June18 79 80.25 78.75 79.05
20June18 79.4 79.45 77.45 77.6
21June18 77.55 78.85 76.5 76.9
22June18 77 77.5 76.35 76.9
25June18 76.85 77.2 76.1 76.45
26June18 76 78.5 71.50 76.00

FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 57.00 57.00
30-Apr-18 (Cl., period) 67.60 67.60
Profit = 8.55 Loss = 8.55
Profit 4000 x 8.55 = 34200, Loss =4000 x 8.55 = 34200
Here the buyer got the profit because increase of future price whereas seller got loss. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-May-18(Buying) 80.30 80.30
30-May-18(Cl., period) 77.25 77.25
Loss = 3.30 Profit = 3.30
Loss =4000 x 3.30 = 13200 Profit=4000 x 3.30 = 13200,
Here the buyer got the Loss because increase of future price whereas seller got Profit. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4 -June-18 (Buying) 79.80 79.80
26-June-18 (Cl., period) 76.00 76.00
Loss = 3.20 Profit = 3.20
Loss =4000 x 3.20 = 12,000, Profit= 4000 x 3.20 = 12,000.
Here the buyer got the loss because decrease of future price whereas seller got profit. If future
price increase at the time of settlement date buyer will get profit, seller will get loss.
HDFC BANK :

Date Open Price High Price Low Price Close Price

2Apr18 694.05 770 694.05 739.95

3Apr18 741 773 741 768.05
4Apr18 790 802.3 755.5 767.7
5Apr18 767.7 802.15 766.4 794.8
9Apr18 797.5 797.5 751.8 768.35
10Apr18 765.1 765.15 707.15 712.4
11Apr18 720.8 738.5 710.35 722.75
12Apr18 732.9 743.45 716.35 732.85
13Apr18 751 768 722 728.05
16Apr18 727 727 693.6 705.7
18Apr18 711.9 747.65 707.1 739.45
18Apr18 740.9 743.65 715 722.05
19Apr18 736 754.6 718.4 727.7
20Apr18 724 743.85 708 738.45
23Apr18 732.2 748.9 727.5 745.7
24Apr18 737.55 786.75 737.25 758.85
25Apr18 762 780.95 742.2 754.55
26Apr18 739.3 739.3 673 683.7
27Apr18 690.65 699 657.45 662.7
30Apr18 674.9 760.40 671.15 760.40
1May18 765 765.60 705.5 737.05
6May18 754.15 754.15 703.3 730.6
7May18 732.65 741.75 712.55 728.7
8May18 730.25 735.3 697.1 699.7
9May18 709.9 716.55 686.5 703.05
10May18 704.7 708.65 682.95 690.35
13May18 699.9 712 691.2 705.25
18May18 713 713.5 679.6 690.45
16May18 694.8 710 681.1 706.8
18May18 706.7 715.95 697.2 706.7
20May18 695 705.75 656.2 668.65
21May18 666.65 676.8 643.3 658.15
22May18 661.1 685 658 677.2
23May18 683 697.65 667 676.05
24May18 657.7 657.7 657.7 657.7
24May18 671 675 634.1 645.15
27May18 651.9 655 596.65 611.75
28May18 614 636.4 588.6 628.25
29May18 625 637 591.1 601.15
30May18 599.3 724.20 560.1 724.10
4June18 736.05 736.05 573.45 602.2
5June18 597 601.8 578.1 580.35
6June18 579.95 579.95 551.2 563.6
7June18 561.65 572.85 547 554.25
8June18 567.45 600 560.6 585.35
11June18 595 630.55 591.6 626.1
12June18 623 623 584.45 591.35
13June18 595.5 628.7 587.85 619.4
14June18 624.4 624.4 592 609.7
18June18 615 636.45 605.75 634.3
18June18 634 671 627 664.3
19June18 658 664.2 632.25 640.55
20June18 645 673.4 642.3 670.05
21June18 666.2 673.4 645.25 655.95
22June18 656.4 692.95 652.1 688.05
25June18 680 688 650 652.65
26June18 652.1 818.35 633.45 818.35
FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 694.05 694.05
30-Apr-18 (Cl., period) 760.40 760.40
Profit = 66.35 Loss = 66.35
Profit= 500 x 66.35 = 33185, Loss =500x 66.35 = 33185
Here the buyer got the profit because increase of future price whereas seller got loss. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-may-18(Buying) 765 765
30-may-18(Cl., period) 724.10 724.10
Loss = 40.90 Profit = 40.90
Profit 500 x 40.90 = 20450, Loss =500x 40.90 = 20450
Here the buyer got the loss because decrease of future price whereas seller got profit. If
future price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4 -June-18 (Buying) 736.05 736.05
26-June-2018 (Cl., period) 818.35 818.35
Profit = 82.30 Loss = 82.30
Loss =500x 82.30 = 41850, Profit 500 x 82.30 = 41850.
Here the buyer got the profit because increase of future price whereas seller got loss. If
future price decrease at the time of settlement date seller will get profit, buyer will get loss.

TCS :

Date Open-Price High-Price Low Price Close Price

2Apr18 416.65 418.2 406.1 414.75

3Apr18 393.5 402 393 399.65
4Apr18 402 402 390 391.55
5Apr18 392 395.2 382 383.95
9Apr18 381.9 389.15 376.1 377.3
10Apr18 379 391.8 378.15 390.7
11Apr18 389 390.7 386 389.3
12Apr18 389.85 392.25 383 384.7
13Apr18 386.95 389.5 383.5 385.1
16Apr18 387 387 381.05 384.4
18Apr18 388 388.4 379.65 381.8
18Apr18 382.2 385.75 381.05 384.55
19Apr18 386.5 389.5 383 385.35
20Apr18 385.95 391 383.6 388.25
23Apr18 388 390.35 383.1 389
24Apr18 387.55 393 386.55 390.05
25Apr18 391.4 391.4 380.1 381.8
26Apr18 378.85 380 370 372.3
27Apr18 373.15 374.45 366.4 368
30Apr18 382 409.90 379.55 404.30
1May18 409.90 384.25 378 383
6May18 384.05 384.6 378.7 380.75
7May18 380.75 382.4 376.4 379.6
8May18 385.25 402.7 385.1 400.35
9May18 403.35 409.4 398.9 406.95
10May18 403.95 410.2 403.9 409
13May18 409.4 415.7 403.8 412.35
18May18 411.7 411.7 404 405.95
16May18 405.95 406.05 401.6 403.65
18May18 402.05 405.15 399.05 400.4
20May18 401.85 402.75 390.55 392.05
21May18 392.05 398.7 392.05 394.4
22May18 394.25 400.9 393.45 399.2
23May18 402 405.9 400.9 404.25
24May18 404 404.85 394.15 396.25
24May18 397.3 400 390.7 397.65
27May18 397 398 390.8 392.4
 28May18 391 395.05 389.65 390.95
29May18 388.2 390.4 379.2 382.75
30May18 386 418.30 383.1 418.30
4June18 419.85 419.85 381.5 384.4
5June18 382.15 384 372.15 373.1
6June18 373.8 382.1 372.5 380.8
7June18 382.3 385.95 378.4 383.7
8June18 385 394.9 385 391.95
11June18 393.95 396.6 387 389.2
12June18 390.2 392.65 385 388.95
13June18 388.95 391.5 383.6 390.2
14June18 390.95 391.3 384.6 386.9
18June18 387.85 388.85 384.2 386.1
18June18 386 386.4 382.8 383.65
19June18 384.1 385.2 379.4 381.35
20June18 383.5 394.9 383.5 393.7
21June18 396.45 396.55 389.2 394.75
22June18 394 396.6 386.6 389.9
25June18 389 396.4 387.85 395
26June18 393.9 428.50 392 428.50

FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 416.65 416.65
30-Apr-18 (Cl., period) 404.30 404.30
Loss = 12.35 Profit = 12.35
Loss =1000x 12.35 = 12350, Profit =1000x 12.35 = 12350
Here the buyer got the loss because de-crease of future price whereas seller got profit. If
future price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-may-18(Buying) 409.9 409.90
30-may-18(Cl., period) 418.3 418.30
Loss = 7.40 Profit = 7.40
Profit =1000 x 7.40 = 7400, Loss =1000x 7.40= 7400
Here the buyer got the loss because decrease of future price whereas seller got profit. If
future price increase at the time of settlement date buyer will get profit, seller will get loss.

BUYER SELLER
4 -June-18 (Buying) 419.85 419.85
26-June-2018 (Cl., period) 428.50 428.50
PROFIT = 8.65 LOSS = 8.65
Profit =1000x 8.65 = 8650, Loss= 1000 x 8.65 = 8650.
Here the buyer got the profit because increase of future price whereas seller got loss. If
future price decrease at the time of settlement date seller will get profit, buyer will get loss.

TECH MAHINDRA :

Date Open-Price High Price Low Price Close Price

2Apr18 573.35 582 570.2 573.4

3Apr18 572.45 576.1 562.6 570.4
4Apr18 575.7 575.7 553.2 557.35
5Apr18 558.7 566.5 537.05 563
9Apr18 564.5 575 561.1 569.9
10Apr18 575 578.85 558 564.75
11Apr18 566.15 569.65 560.6 566.3
12Apr18 570 572.8 560.4 563
13Apr18 561.8 568 556.2 561.2
16Apr18 562.6 570 558 562.75
18Apr18 562 564.85 555.25 561
18Apr18 559 564.35 545.2 548.05
19Apr18 549.4 555 539.75 545.3
20Apr18 550 551.5 543.25 545.8
23Apr18 545.8 560 534.1 541.6
24Apr18 544.9 550.3 541 548.1
25Apr18 548 549.2 535.5 539.45
26Apr18 542.5 547 539 540.1
27Apr18 540.1 545 539.6 542.65
30Apr18 536.7 554 536.5 536.50
1May18 550 556.55 545.15 549
6May18 549 550.25 537.1 539.15
7May18 541 557.5 532.45 556.05
8May18 558.3 563 548.5 556.75
9May18 568 568.5 540.1 542.9
10May18 545.5 546.95 532.95 534.95
13May18 537 537.35 526.15 533.45
18May18 524 534.85 519.05 532.4
16May18 532.4 532.95 523.55 524.95
18May18 529.9 529.9 524.2 525.55
20May18 520 525.55 518 520.05
21May18 518 518.55 508 515.95
22May18 516.05 527.75 516.05 523.5
23May18 523.5 530.4 515 516.7
24May18 521.5 535.8 520 534.4
24May18 534.95 540 531 534.9
27May18 536 544.75 535.1 539
28May18 535.1 543.75 532.45 537.55
29May18 538 544 527.05 529.6
30May18 529.9 536.85 528.5 528.50
4June18 534.90 541.2 530 533.45
5June18 533 543.1 533 542.15
6June18 543 545.6 537.15 540
7June18 539.6 544.5 536 542.6
8June18 539.95 544.6 534 536.35
11June18 536 546.5 535.15 544.65
12June18 544.95 546 528.6 530.7
 13June18 531 537.5 525.1 527.35
14June18 530.4 540.5 523.8 538.75
18June18 540 543.9 535.1 536.95
18June18 527 545 527 543.65
19June18 548 548 516.6 519.95
20June18 522.55 531 520.1 523.35
21June18 525.5 532.15 520.6 530
22June18 525.7 528 521.5 523.25
25June18 519.4 524.4 514.05 521.85
26June18 524 526.8 518.9 519.55

FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 573.35 573.35
30-Apr-18 (Cl., period) 536.50 536.50
Loss = 36.85 Profit = 36.85
Loss =1000x 36.85= 36,850, Profit =1000x 36.85 = 36,850
Here the buyer got the LOSS because decrease of future price whereas seller got profit.
If future price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-may-18(Buying) 550.00 550.00
30-may-18(Cl., period) 528.50 528.50
LOSS = 21.50 PROFIT = 21.50
Loss =1000x 21.50= 21,500 Profit =1000 x 21.50 = 21,500,
Here the buyer got the loss because decrease of future price whereas seller got loss. If
future price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4 -June-18 (Buying) 534.90 534.90
26-June-2018 (Cl., period) 519.55 519.55
PROFIT = 18.35 LOSS = 18.35
Loss =1000x 18.35= 18350, Profit= 1000 x 18.35 = 18350.
 Here the buyer got the loss because decrease of future price whereas seller got profit. If
future price increase at the time of settlement date buyer will get profit, seller will get loss.

HCL TECHNOLOGIES :

Date Open-Price High-Price Low-Price Close-Price

2Apr18 940 960.5 940 940

3Apr18 962 989.7 953.85 962
4Apr18 890 914.8 834.85 890
5Apr18 845.7 870.8 838.05 845.7
9Apr18 863 868 848.7 863
10Apr18 845 848.75 811.1 845
11Apr18 828.8 837.4 812.5 828.8
12Apr18 835.5 850.8 833.5 835.5
13Apr18 859 860.95 829.65 859
16Apr18 852 853 826.35 852
18Apr18 829 838.95 825 829
18Apr18 835 838.9 828 835
19Apr18 836.05 845.75 835 836.05
20Apr18 830 861 818.7 830
23Apr18 859 868.5 848.45 859
24Apr18 866.8 868.95 852.1 866.8
25Apr18 867 869.9 848 867
26Apr18 859.35 868.65 857.1 859.35
27Apr18 863 874 854.6 863
30Apr18 877.7 885.2 822.50 873.25
1May18 876 877 867.55 876
6May18 875 880.9 870.1 875
7May18 876.25 881.9 874.25 876.25
8May18 879 884.4 875 879
9May18 881.6 883.8 874.05 881.6
10May18 877.5 889.5 874.6 877.5
13May18 878.9 885 870.1 878.9
18May18 876.25 879.85 847.2 876.25
16May18 854.9 860 842 854.9
18May18 825 856.8 823.2 825
20May18 828.1 842.4 825 828.1
21May18 844.5 859.9 835.75 844.5
22May18 853.95 853.95 835.25 853.95
23May18 850 876.85 846.05 850
24May18 872 874.4 855.5 872
24May18 862 867.95 858.6 862
27May18 862.1 872.5 856.6 862.1
28May18 861.2 869 856.85 861.2
29May18 864 875 863.2 864
30May18 872.18 881.78 862.68 872.18
4June18 870.95 885.7 869.05 870.95
5June18 882 882 856 882
6June18 856 856 849.25 856
7June18 849.25 850 831.15 849.25
8June18 840.2 852.85 834 840.2
11June18 841.65 867.9 841.65 841.65
12June18 857 857 839.7 857
13June18 844 850 837 844
14June18 849.9 849.9 836.25 849.9
18June18 843 852.65 826 843
18June18 849.7 849.7 840.9 849.7
19June18 849.3 859.8 842.7 849.3
20June18 851.45 864.3 847.25 851.45
21June18 860 865 844.9 860
22June18 845 857.95 843.15 845
25June18 855 855.45 845.85 855
26June18 850 865.45 849.5 850.00
FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 940 940
30-Apr-18 (Cl., period) 873.25 873.25
Loss = 66.75 Profit = 66.75
Profit =600x 66.75 = 36,850, Loss =600x 66.75= 36,850
Here the buyer got the loss because decrease of future price whereas seller got profit. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-may-18(Buying) 876.00 876.00
30-may-18(Cl., period) 872.18 872.18
Loss = 3.85 Profit = 2.85
Loss =600 x 3.85 = 2310, Profit =600x 3.85= 2310
Here the buyer got the loss because decrease of future price whereas seller got profit. If future
price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4 -June-18 (Buying) 870.95 870.95
26-June-2018 (Cl., period) 850.00 850.00
Loss = 20.9 Profit = 20.95
Loss =600x 18.35= 9210, Profit= 600 x 20.95 = 9210.
Here the buyer got the loss because decrease of future price whereas seller got profit.
If future price increase at the time of settlement date buyer will get profit, seller will get loss.

INFOSYS :

Date Open Price High Price Low Price Close Price

2Apr18 1,139.95 1,142.85 1,101.00 1106.2

3Apr18 1,102.00 1,133.40 1,097.50 1118
4Apr18 1,134.40 1,168.95 1,125.95 1187
5Apr18 1,169.90 1,197.75 1,160.00 1183.05
9Apr18 1,183.00 1,189.35 1,162.00 1181.1
10Apr18 1,187.05 1,192.55 1,148.10 1187
11Apr18 1,186.00 1,168.75 1,128.45 1139
12Apr18 1,136.40 1,149.60 1,126.05 1132.7
13Apr18 1,136.00 1,182.90 1,136.00 1180.9
16Apr18 1,199.00 1,219.80 1,109.00 1122.9
18Apr18 1,107.45 1,111.00 1,085.20 1098.1
18Apr18 1,091.45 1,118.55 1,087.20 1096
19Apr18 1,099.90 1,104.35 1,089.10 1096.9
20Apr18 1,099.00 1,101.40 1,090.00 1093
23Apr18 1,102.00 1,116.00 1,100.50 1114.7
24Apr18 1,113.00 1,130.00 1,110.60 1126.3
25Apr18 1,125.00 1,146.85 1,125.00 1137.5
26Apr18 1,141.80 1,183.00 1,125.10 1149
27Apr18 1,184.00 1,188.50 1,143.18 1180
30Apr18 1,144.50 1,188.00 1,139.00 1185.10
1May18 1,183.10 1,185.90 1,136.05 1142.25
6May18 1,145.00 1,145.00 1,130.00 1132
7May18 1,130.00 1,135.80 1,114.10 1133.75
8May18 1,133.40 1,180.45 1,133.40 1140.18
9May18 1,180.10 1,187.60 1,132.30 1137.05
10May18 1,142.95 1,145.00 1,119.40 1120.4
13May18 1,123.00 1,143.90 1,122.90 1140.2
18May18 1,120.00 1,140.00 1,118.20 1138.18
16May18 1,127.50 1,127.50 1,100.10 1106
18May18 1,118.00 1,118.00 1,103.00 1109.3
20May18 1,099.95 1,106.00 1,090.00 1097
21May18 1,083.65 1,094.00 1,067.20 1088
22May18 1,080.00 1,082.90 1,052.00 1058.6
23May18 1,041.00 1,045.18 1,011.25 1020.45
24May18 1,030.25 1,052.00 1,023.80 1048
24May18 1,048.00 1,063.20 1,042.05 1051
27May18 1,050.00 1,062.40 1,038.00 1052
 28May18 1,050.00 1,050.80 1,037.00 1040.7
29May18 1,040.95 1,059.50 1,040.05 1045.00
30May18 1,058.00 1,070.00 1,045.00 1045.00
4June18 1,079.95 1,098.30 1,056.20 1079.95
5June18 1,088.00 1,095.00 1,072.95 1075.45
6June18 1,079.95 1,079.95 1,059.00 1061.1
7June18 1,061.00 1,064.80 1,049.05 1059
8June18 1,049.00 1,064.90 1,040.10 1048.85
11June18 1,055.30 1,059.00 1,040.00 1046
12June18 1,045.05 1,062.75 1,039.30 1042
13June18 1,043.00 1,046.95 1,022.55 1024
14June18 1,036.60 1,051.60 1,030.30 1049.9
18June18 1,054.00 1,061.90 1,045.90 1055.65
18June18 1,049.50 1,073.18 1,048.05 1067.5
19June18 1,073.25 1,079.10 1,058.80 1078.5
20June18 1,083.40 1,098.00 1,083.40 1094
21June18 1,100.00 1,109.80 1,088.00 1105.5
22June18 1,103.40 1,103.40 1,079.45 1085.95
25June18 1,077.00 1,107.40 1,065.95 1107
26June18 1,097.45 1,097.45 1,080.10 1085

FUTURE MARKET :
BUYER SELLER
2-Apr-18 (Buying) 1139.95 1139.95
30-Apr-18 (Cl., period) 1185.10 1185.10
Profit = 18.18 Loss = 18.18
Profit =500x 18.18 = 7575, Loss =500x 18.18= 7575
Here the buyer got the PROFIT because increase of future price whereas seller got profit.
If future price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
1-may-18(Buying) 1183.10 1183.10
30-may-18(Cl., period) 1045.00 1045.00
Loss = 108.10 Profit = 108.10
Loss =500 x 3.85 = 54050, Profit =500x 3.85= 54050
Here the buyer got the loss because decrease of future price whereas seller got profit. If
future price decrease at the time of settlement date seller will get profit, buyer will get loss.

BUYER SELLER
4 -June-18 (Buying) 1079.95 1079.95
26-June-2018 (Cl., period) 1085.00 1085.50
PROFIT = 5.05 LOSS = 5.05
Profit =500x 18.35= 12570, Loss = 500 x 20.95 = 12570.
Here the buyer got the PROFIT because Increase of future price whereas seller got profit.
If future price increase at the time of settlement date buyer will get profit, seller will get loss.

APRIL MAY JUNE

SBIN 18137.5 66081.25 10937.50

ICICI 105000 9275 206.30

ANDHRA 34200 13200 12000

HDFC 33185 20450 41850

Chart Title

120000

100000

80000

60000

40000

20000

0
SBIN ICICI ANDHRA HDFC

APRIL MAY JUNE

INTERPREATION:-From the above chart ICICI is very active comparing with other
companies 105000 in April 2018, lowest payoff is 206.30 ICICI futures in June 2018.

APRIL MAY JUNE

TCS 12350 7400 8650

TECH MAHINDRA 36850 21800 18350

HCL 36,850 2310 9210

INFOSYS 7575 54050 12570

Chart Title
60000

50000

40000

30000

20000

10000

0
TCS TECH MAHINDRA HCL INFOSYS

APRIL MAY JUNE

INTERPREATION:-From the above chart INFOSYS is very active comparing with other
companies 54050 in May 2018, lowest payoff is 2310 HCL futures in June 2018.
 CHAPTER-6

SUMMARY AND CONCLUSION

 6. SUMMARY AND CONCLUSION

6.1 FINDINGS :
The Future price of TCS, TECH MAHINDRA, HCL TECHNOLOGIES, INFOSYS ICICI
BANK, HDFC BANK, SBIN And ANDHRA BANK moving along with the market price.

 If the buy price of the future is less than the settlement price, than the buyer of a future gets
profit.
 If the selling price of the future contract is greater than the settlement price, than the seller
incur losses.
 Derivative market is a good return market compared to equity market.
 Derivatives are mostly used for Speculations purposes.
 Derivatives market in India is growing rapidly unlike equity markets .Trading in derivatives
requires more than average understanding of finance, being a new concept. Maximum
numbers of investors have not yet understood the full implications of the trading in
derivatives. SEBI should act to create awareness in investors about the derivative market.
 Derivative market is very risky compare to equity market. Form the above calculation most
of long position are very risky.
 Long position INFOSYS AND TCS got more profit.
 Here the buyer got the loss because decrease of future price whereas seller got profit. If
future price increase at the time of settlement date buyer will get profit, seller will get loss.

6.2 SUGGESTIONS :
 In bullish market the future seller incurs more losses so the investor is suggested to go for
Long position to hold, whereas the Short holder suffers in a bullish market, so he is
suggested to take short positions as per market conditions.
 In bearish market the short position holder will incur more losses so the investor is
suggested to go for alternative hedge with equity, whereas the long positions will get more
losses, so he is suggested to hold stop loss order.
 In the above analysis the market price of Andhra bank is having low volatility, so the futures
buyers enjoy more profits to holders.
 The derivative market is newly started in India and it is not known by every investor, so
SEBI has to take steps to create awareness among the investors about the derivative
segment.
 In order to increase the derivatives market in India, SEBI should revise some of their
regulations like contract size, participation of FII in the derivatives market.
 Contract size should be minimized because small investors cannot afford this much of huge
premiums.

6.3 CONCLUSION :
 Derivatives advertise is an advancement to money showcase. Roughly its every day
turnover ranges to the equivalent phase of money advertise. The normal every day turnover
of the NSE subsidiary sections 2 lakh Cr In money showcase the benefit/loss of the financial
specialist rely upon the market cost of the basic resource. The financial specialist may bring
about immense benefits or he may acquire gigantic misfortunes. In any case, in derivatives
fragment the speculator appreciates immense benefits with constrained drawback.
 In money advertise the financial specialist needs to pay the aggregate cash, however in
derivatives the speculator needs to pay premiums or edges, which are some level of
aggregate cash.
 Derivatives are for the most part utilized for Speculative reason for intraday and
conveyance.
 In subsidiary portion the benefit/loss of the Future position is absolutely rely upon the
variances of the fundamental resource.
 CHAPTER-7

BIBILOGRAPHY
 7. BIBILOGRAPHY

TEXT BOOKS :
 Derivatives Dealers Module Work book–NCFM-NSE Publications.
 Financial Markets and Services– by GORDAN and NATRAJAN, Himalaya Publications.
 Financial Management – by PRASANNA CHANDRA, Kalyani Publications.

NEWS PAPERS :
 Economic times
 The Financial Express
 Business Standard

MAGAZINES :
 Business Today
 Business World
 Business India

WEBSITES :
 www.indianinfoline.com
 www.nesindia.com
 www.bseindia.com
 www.sebi.gov.in
 Derivativesindia.com