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1. YEAR -1 | Vol 1 | Issue 35 | Ludhiana | Price Rs.2/- Wednesday 29 April, 2020
DERIVATIVES DECODED
by Nitin Shahi
Last week we discussed that
with the passage of time the
value of premium decreases
andthisistrueforcallandput.
In technical terms the concept
of time value is a Greek of
option called Theta of option.
Which says “points lost per
day when other things are constant”. In
the context other things are mentioned
below, if they do not change the options
with passage of one day will reduce value
at a certain pace and this value of losing
the price of option is calculated using
“theta”.
Theta measures the value of a derivative
in relation to the time left before the
expirationdate.Asanoptiongetscloserto
the expiration date, it will lose value
priced into the extrinsic value. Theta can
be thought of as the rate of decline in the
valueofanoptionastimepasses.
Black Scholes were the first to come up
with options formula and till date this
formula is used to calculate the
fair price of option. Theta is
c a l c u l a t e d u s i n g b e l o w
mentionedformulaasdefined
byblackScholes:
•∂–thefirstderivative
• V – t h e o p t i o n ’s p r i c e
(theoreticalvalue)
•τ–theoption’stimetomaturity
The theta, as shown in the Chart is
expressed in rupees rather paise per day.
The theta value - indicates the amount
with which the value of an option will
decrease overnight. An option will
getcheaper every day towards maturity.
At expiration date the option (when not in
the money) has lost all of its value, each
time decreasing in value at a daily time
decayrate
The theta of call and put are same if the
dividendisnotdeclaredinthestock.
Other things that are to remain constant
forthetatoremainequalperday.
StrikePrice
Priceofunderlying
volatility
riskfreeinterest
Can one say time is money for those who
valueit.
Many option traders sell options to earn
theta, which means that they take risk of
movement of volatility, strike prices,
interesttoremainsameetc.
Can we find a trading strategy out of this?
This simply means that passing time can
yield you a lot of money for the sellers of
the options. Though it looks apparently
veryeasybutitisnot.
M a r k e t s a r e v o l a t i l e a n d t h e
characteristics of the market is change.
But to make it simple and easy to
strategise I would like to introduce the
conceptofthetadecay.
In initial days of the launch of option the
premium sheds theta at a slow rate and
eventually as we near expiry, the Premium
sheds at a very high rate this process is
known as theta decay. Using this concept
one can strategise when to buy and when
to sell an option to earn theta. The
graphical presentation makes it easy for
traderstostrategise.
Brief Headlines:
Axis Bank Q4 | Net loss at Rs 1,388 crore Versus profit at Rs 1,505 crore in the same period
last year;NII rose 19.3%to Rs 6,807.74crore YoY. Board authorised the bank to borrow/raise
fundsuptoanamountofRs35,000crore.
PNBHousing|NeerajVyastobeinterimMDandCEOofcompany.
Biocon|CompanyandMylanlaunchedbiosimilarFulphilainCanada.
L&T | FPIs cut stake to 16.90% in Q4FY20 (from 18.78% QoQ), but Govt of Singapore rose
stake to 1.78% (from 1.24%). Insurance firms raised stake to 18.56% (from 17.82%).
Company allotted 25,000 7.70% rated listed unsecured redeemable NCDs aggregating to Rs
2,500crore.
NLCIndia|CompanycommencedcoalproductionatTalabiraIIandIIImines.
Zee Entertainment | FPIs rose stake to 68.27% in Q4FY20 (from 67.38% QoQ), SBI-ETF Nifty
50increasedto2.03%(from1.47%).
Sangam (India) | Company resumed manufacturing activities at Bhilwara and Chittorgarh
plantsinRajasthan.
PPAPAutomotive|CompanyresumedoperationsatRajasthanandGujaratfacilities.
Ujjivan Small Finance Bank | Board appointed Biswamohan Mahapatra as part-time
chairman(non-executive)for3years.
Crompton Greaves Consumer Electricals | Company partially resumed operations at Baddi
(UnitIII).
Gabriel India | Company to resume operations at Khandsa (Haryana), Parwanoo (Himachal
Pradesh)andNashik(Maharashtra)plants.
RelianceIndustries|S&PaffirmsratingatBBB+,outlookstable.
GMRInfra|Promoterpledged2.07croresharesofthecompanyonApril27
IDFC First Bank | Bank is considering a $200 million share sale to bolster its capital, sources
said.
HexawareTech|ITfirmwillreportitsMarchquarterresultsonApril29.
TechMahindra|Nomuraupgradedthestocktobuyfromneutralandreducedtargetpriceto
Rs640fromRs820.
IndusInd Bank Q4 | Profit fell 76.8% to Rs 301.84 cr, net interest income rose 5.1% to Rs
3,231.19crQoQ.
HDFC Life Q4 | Profit down 14.4% to Rs 311.65 cr, net premium income rose 2.2% to Rs
10,476crYoY.
Adani Power Q4 | Loss at Rs 1,312.86 cr against profit at Rs 634.64 cr, revenue down 8.2% at
Rs6,172crYoY.
AxisBank|LenderwillannounceMarchquarterearningsFY20onApril28.
UPL|CompanycompletedacquisitionofYoloo(Laoting)Bio-technology.
8KMilesSoftware|SwastiBhowmickresignedasChiefFinancialOfficer.
Minda Industries | Company resumed partial production at Pantnagar, Waluj and Clarton
Hornmanufacturingfacilities.
DCW|CompanypartiallyresumeditsoperationsinSahupuramplant.
Shipping Corporation of India | Company physically handed over the vessel MT Maharaja
Agrasentothebuyer'srepresentativeatGalleAnchorageinSriLanka.
ShreyansIndustries|Companypartiallyresumedoperationsatmanufacturingunits.
SHKelkar|CompanypartiallyresumedmanufacturingoperationsatVashivali,Mulund,Vapi
andMahadunits.
ISGECHeavyEngineering|Companypartiallyreopenedmanufacturingplants.
GulfOilLubricants|CompanyresumedpartialoperationsatSilvassaplant.
JustDial|BoardtoconsidersharebuybackonApril30
Reliance Industries | Company in an exchange filing on April 27, said it will consider a rights
issuetoexistingshareholdersatitsboardmeetinglaterthisweek.
S o u r c e :
Livemint
G S T
collections are
s e t t o f a l l
drastically in
April and May
w i t h t h e
n u m b e r o f
e l e c t r o n i c
permits (e-way bills) generated for transport of
goods falling by close to 30% in March and by
over 80% in April sequentially, reflecting the fall
ineconomicactivities,officialdatashowed.
Data available from the Goods and Service
Tax Network (GSTN), the firm that processes tax
returns, showed that upto 27 April, businesses
havegeneratedonly6.7millione-waywillsinthe
month,against40.6millione-waybillsgenerated
in March. The over 83% fall in e-way bills
generated in April is set to have a telling effect on
the GST revenue to be collected in May which is
expectedtobereportedon1June.
For payment of taxes for the transactions in
every month, businesses have time till 20th of
the next month. Accordingly, May revenue is set
to reflect the full impact of the drop in economic
activities due to the national lockdown. India
went on a lockdown from 25 March to arrest the
spreadofCoronavirusinfections.
The signs of the impact the lockdown had on
March sales is expected to be visible in the GST
collections being made in April too. This will get
reportedon1May.
The 40 million e-way bills generated in
March reflects a 28.9% drop from the over 57
million e-way bills generated in February. In
March, the central and state governments
collected ₹97,597 crore from February sales. It
was on 11 March the World Health Organisation
declaredCovid-19asapandemic.
Experts said the fall in e-way bill generation
willgetreflectedinGSTrevenues.“Thedeclinein
e-way bill generation would suggest that
supplies are not happening and this will have an
impact on revenue receipts. Limited revenue will
be coming from sale of essential goods," said R
Muralidharan,seniordirectoratDeloitteIndia.
In the April-March period of FY20, GST
revenue collection grew by 3.8% to ₹12.2 trillion
fromtheyearagoperiod.
E-way bills are required to transport goods
worth more than ₹50,000 within and across
states.Theseenabletheauthoritiestokeepatab
on transactions without physically interfering
with the movement of goods. It was introduced
aspartoftheindirecttaxreformofGSTrolloutin
2017.
Former chief economic advisor Arvind
Subramanian had on Tuesday warned that India
should plan for “substantially negative economic
growth" this financial year due to the
Coronavirus crisis and that the government
should tap various sources to finance a ₹10
trillionstimulus.
GST revenue for April, May
set to fall drastically
Sebi reduces broker turnover fees,
filing charges for draft papersContinuin
g its efforts to
help market
participants
t i d e o v e r
challenges due
to Covid-19
p a n d e m i c ,
m a r k e t
regulator sebi
o n M o n d a y
decided to reduce broker turnover fees and filing
charges on offer documents for public offering,
rightsissueandbuybackofshares.
The broker turnover fee will be reduced to 50
percentoftheexistingfeestructurefortheperiod
June 2020 to March 2021, the Securities and
ExchangeBoardofIndia(Sebi)saidinacircular.
The benefit of such reduction in fees will
automatically be passed on to the investors as
well,itadded.
Besides, filling fees on offer documents for
public issue, rights issue and buy back of shares
will be reduced to 50 per cent of the existing fee
structure.
This will be effective for documents filed from
June1,2020,toDecember31,2020.
In a separate circular, Sebi has extended the
implementation of revised margin framework for
cash and derivatives segments by one month till
June1.
The regulator, in February, reviewed the
frameworktokeeppacewiththechangingmarket
dynamics and to bring more efficiency in the risk
managementframework.
“In view of the challenges arising out of
COVID-19 pandemic and various other
surveillance measures in place, it has been
decided to extend the implementation date... to
June1,2020,"itadded.
The framework, which was prepared in
consultation with the capital market regulator's
Risk Management Review Committee, was to
comeintoeffectfromMay1thisyear
Former chief economic advisor Arvind
Subramanian had on Tuesday warned that India
should plan for “substantially negative economic
growth" this financial year due to the Coronavirus
crisis and that the government should tap various
sourcestofinancea₹10trillionstimulus.

2. Wednesday 29 April, 2020
Owner & Publisher FINDOC CAPITAL MART PRIVATE LIMITED, Printed by Rakesh Kumar Prop. of Bhagotra Printers , 111 Sukhdev Market, Back Side Kailash Cinema,
Nr. Petrol Pump, Civil Lines, Ludhiana and Published at 5th Floor, Kartar Bhawan, Nr. PAU Gate No.1, Ferozepur Road, Ludhiana. By Nitin Shahi, Editor of Findoc Prime.
Stock Report
Derivative Analysis
India's chemical exports rose by 7 per
cent to 2.68 lakh crore rupees during April-
January period of the last fiscal,and became
the top exporting sector in the country for
the first time. Union Minister of Chemicals
and Fertilizers DV Sadananda Gowda
congratulated the chemicals and
petrochemicals industry on becoming
the top exporting sector of the country
forthefirsttime.
Mr Gowda informed that during
April 2019-January 2020, the export of
chemicals grew by 7.43 per cent over
the corresponding period of the
previousfiscal.Totalexportofchemicals
during this period reached 2.68 lakh
crore rupees. This constitutes 14.35 per
centofthetotalexports.
The Minister assured full support to
the industry towards making India a
leading global hub for manufacturing of
chemicals and petrochemicals. He said
continuouseffortsmadebytheDepartment
of Chemicals and Petrochemicals have
enabled the industry to become the top
mostexportingsegmentforthefirsttime.
Chemicals, Petrochemicals industry
becomes top exporting sector for 1st time
Country's foreign exchange reserves
surge by over 3 billion dollars
ECountry's foreign exchange reserves
surged by USD 3.09 billion to USD 479.57
billion in the week to April 17 due to an
increaseinforeigncurrencyassets.
According to the latest data from the
Reserve Bank of India, in the reporting week
ended April 17, foreign currency assets (FCA),
a major component of the overall reserves,
rose USD 1.55 billion to USD 441.88 billion.
The RBI data showed that gold reserves
increased USD 1.54 billion to USD 32.68
billion in the reporting week. While, special
drawing rights with the International
Monetary Fund,IMF were up by USD 3 million
to USD 1.43 billion. The country's reserve
position with the IMF remained stable at USD
3.58billionduringthereporting.
Remittances to India likely to drop
by 23 pct this year: World Bank
worldbank.o
r g T h e W o r l d
Bank has said
that remittances
to India are likely
to drop by 23 per
cent from 83 billion US Dollars last year to 64
billion US Dollars this year due to the Corona
virus pandemic, which has resulted in a global
recession.
According to a World Bank report on the
impact of the COVID-19 on migration and
remittances, the remittances are projected to
decline sharply by about 20 per cent this year
due to the economic crisis induced by the
pandemic and shutdowns due to out break of
NovelCoronavirus.
The projected fall, which would be the
sharpest decline in recent history, is largely due
to a fall in the wages and employment of
migrant workers, who tend to be more
vulnerable to loss of employment and wages
duringaneconomiccrisisinahostcountry.
WorldBankGroupPresidentDavidMalpass
said, remittances are a vital source of income
for developing countries and they help families
affordfood,healthcareandbasicneeds.
The Novel Corona virus has so far infected
over 26,38,020 people and claimed more than
1,84,230livesacrosstheglobe.
AIR PicsThe leading credit rating agency,
Fitch Ratings today has slashed India's
economic growth projections to 0.8 per cent
in the current fiscal saying an unparalleled
global recession was underway due to
disruptions caused by the outbreak of Corona
viruspandemicandresultantlockdowns.
In its Global Economic Outlook, Fitch
Ratings said India's Gross Domestic Product
(GDP) growth will slip to 0.8 per cent for the
year April 2020 to March 2021 as compared
to an estimated 4.9 per cent growth in the
previous fiscal. Growth is, however, expected
toreboundto6.7percentin2021-22.
Fitch said, the slump in growth was
mainly due to a projected fall in consumer
spendingandcontractioninfixedinvestment.
The agency has further made large cuts to
global GDP forecasts in its latest Global
Economic Outlook (GEO) in response to
Corona virus-related lockdown extensions
andincomingdataflows.
Chief Economist Brian Coulton at Fitch
Ratings said that World GDP is now expected
to fall by 3.9 per cent in 2020, a recession of
unprecedented depth in the post-war period
and this would be twice as severe as the 2009
recession. Further, the rating agency said, no
country or region has been spared from the
devastating economic impact of the global
pandemic.
Fitch Ratings slashes India's economic
growth projections to 0.8 pct in current fiscal

3. Wednesday 29 April, 2020
The most important task of a
successful leader is to divide the task
and delegate it to the most
appropriate person. This also means
that selecting the most appropriate
person is also one of the most
important task of a successful person.
If you have right team and you have
delegated the job properly you have
m o r e t i m e t o t h i n k o f t h e
development of business, expansion
of business and taking much more
important decisions than just
executingasmallidea.Yougetbetter
chance and time to ideation more and
more which makes you a much more
successful person. Our epics give us
classic example of right delegation
and also there are few examples
wheredecisionsofdelegationwasnot
done and those decisions proven to
beworstdecision.
I discuss a right decision, right team
member and the way his job was
delegated is a classic example. All of
know the incidence but just do not
thinkitonmanagementterms.
In Ramayan, Ram asks Hanuman to go
and know the where about of Sita.
Now in this sequence Ram asks
Hanuman to go and know where
about of Sita and do not tell him to go
and bring Sita. The message was clear
that he should look out for Sita, give
heramessagethatRamisworried
and trying to approach her. Now
Responsibility of Hanuman is to
search Sita, give her a message that
Ram will reach her and also to reach
out the person who have imprisoned
her give him a clear message that it is
wisetoreturnSitaandavoidanywar.
In this whole episode, Hanuman finds
out Sita, reaches her, share the
souvenir of Ram for his own
identification, share message of Ram
and approaches Ravan, give him
messageandcomesbacktoRam.
In between Hanuman had enough
time and courage to destroy Lanka by
setting it at fire, spoil Vatika of Lanka,
injure thousands of military of Lanka,
so he could have easily bought back
SitatoRam,buthewasnotauthorised
to do that. Thus his job was very well
defined and as a great team member
he executed so well that it is always
readasgoldenperiodofHinduepics.
This shows the importance of
selecting right man for right job and
alsodelegatingtheauthorityas
wellasresponsibilitytotheteam.
by Nitin Shahi
The wisdom tooth
Q4 Preview
InMillions InMillions
InMillions InMillions
Disclaimer : The Opinions expressed are not any recommendations to buy/sell and are findings of a material. Moreover we
urge our subscribers & readers to consult their investment advisor before investing

4. Wednesday 29 April, 2020
There is major impact of pandemic of
COVID-19 – Coronavirus on Share Market.
Currently, all investors encounter with
some significant questions in light of
currenteconomicconditions.
This is a true testing time for all
investors.
The Sensex dropped by 30% approx in
past 30 odd days and as informed
investors; we know that large and small
businesses got affected. Economy has
slowed down and with this pandemic,
business across industries irrespective of
their size are seeing some impact and will
continuetodosoforsometimetocome.
Once things settle down, which will
happen sooner than later, we are
confident that the Government will come
out with some measures for the industry
and people with some kind of a stimulus;
the recovery will happen, IT IS ONLY A
MATTEROFTIME&THISTOO
SHALLPAAS.
3 most important questions that most
of the investors encounter with during
such
situations:
1. Can we predict what is going to
happenandwillitbepermanent
innature?
Answer: No one can predict how long
it is going to take for the crises to get
undercontrol
and life to get back to normal. But
historically we have always seen after a
calamity, war or incidents with such
global impact, people and economies
have bounced back. No country and no
community remained stagnant and it is in
human nature to overcome difficulties,
innovateandprogress.
2. Should there be change in
investmentpattern?
Answer: No, if the investments in the
markets whether done in direct stocks or
through mutual funds, are done with long
term approach. Rather, a reasonable
thinking says that with such credible
companies trading at such low valuations,
it is a good time to invest some more in
equities.
There should not be stop on SIPs as
theywillbebuyingunits atvery lowprices
which will boost returns when markets
turn northwards. So, if there is long term
approach of investing, one should not
worry about temporary fluctuations in
market. An appropriate quote - "The time
ofmaximumpessimismisthebesttimeto
buy"-SirJohnTempleton
3.Shouldweworryaboutthesafetyof
ourinvestments/corpusandshifttoFDs?
Answer: Asset allocation is the answer
to this dilemma. Appropriate asset
allocation in Debt funds, Liquid Funds,
Cash, Direct Stocks, Equity Funds, PF, PPF
etc. Moreover, holding of contingency
funds.
If funds are appropriately allocated,
then why one should be driven by fear
and not see this as an opportunity? An
investor should be driven by IQ rather
thanEQ.
The text book “basics of investing” is
to have a financial goal and an asset
allocation as per risk appetite. And this is
the time to stick to the basics and have
assetallocationinplace.
Most of investors are in a state of
confusion and tension. But, there is
nothing to panic about in long term. The
cycle will surely move to positive phase at
itspace.
Conclusion: In the times of panic in
market, investors should remind these
questionsand
answers. Long term approach and
appropriate asset allocation should be
major ingredients of investing in order to
avoiddilemma.
Disclaimer: The report only
represents personal opinions and views
oftheauthor.Nopartofthereportshould
be considered as recommendation for
buying/selling any stock. The report
mentioned is only for the information of
readers
FAQs on Share Market: Impact of COVID-19
Spread is the difference in a trading
position – the gap between a short
position (that is, selling) in one futures
contract and a long position (that is,
buying) in another. This is officially
knownasaspreadtrade.
Reason for Spread: Various factors
like Cost of Carry (Interest +Storage
Cost), Seasonality (Kharif and Rabi),
Imports ,Duties and Taxes and any
other reason impacting demand and
SupplyofCommodity.
TypesofSpread:
1. Contango: Contango is the
normal situation in which the spot or
cash price or near month price of a
commodityislower
than the future price of next
month.
Reason: The Difference is the Cost
of Carry (Storage Charge + Interest of
Capital)
2.Backwardation:Backwardationis
a situation in which the spot or cash
price or near month price of a
commodityishigher
than the future price of next
month.
Reason: Shortage of Commodity in
near Month and more supply of
Commodity in Coming month due to
New Crop or Weather Conditions or
ImportsinFutureMonths.
WhytotradeinSpreads:
1.Lower Margin: Only ¼ Margin is
required of the normal margin
required for trading 2 Contracts as
exchanges provide spread margin
benefitonSpreadTrading.
2.Lower Price Range: Spread
normallytradesinanarrowrange.
3.Easy to Track price movement:
The traders have to track only supply
and demand of a Commodity to track
itspricemovement.
4.Scalping: Best Product to do scalp
traders as upper and lower price range
ismoreorlessdefined.
5.Intra Commodity and Inter
Commodity Spread: We can also trade
within same commodity or Different
but Related Commodity like Guarseed
–Guargum,SoybeanandRMSeed.
We have a dedicated desk for
trading spread both on Fundamental
and Technical analysis with a volume
ofRs.100CroreDaily.
For Further
Queries you can contact:
Mr. Manish Malhotra-VP
Findoc Financial Group
Manish.malhotra@myfindoc.com
M.No.9815991291
Spread Trading
By CA Paras Behl
Head Equities at PA Wealth Advisors