A project on derivatives market in India report goes beyond that the local derivative in the emerging markets have witnessed widespread use of the derivative instrument for a variety of reasons. This continuous growth and development by the emerging market participants has resulted in capital inflows as well as helped the investors in risk protection through hedging. Visit: http://www.projectskart.com/p/contact-us.html for more information.
Grand Project Report on “A Study of Investor’s Perception on IPO And IPOs Per...Manoj Muliya
A Grand Project Report on “A study of Investor’s Perception on IPO And IPOs Performance in Stock Market”.
This project is related is Stock Market in MBA 4th Semester and comparison between IPO and Share related how they react Before and After.
Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, share, bonds, currency, interest etc. SEBI set up a 24-member committee under Chairmanship of Dr.L.C. Gupta to develop the appropriate regulatory framework for derivatives trading in India. The committee submitted its report in March 1998. On May 11, 1998 SEBI accepted the recommendations of the committee and approved the phased introduction of derivatives trading in India beginning with stock index futures. SEBI also approved the “suggestive bye-laws” recommended by the committee for regulation and control of trading and settlement of derivatives contracts. My study is to know about the investors’ familiarity and awareness of the derivative market and their profit/loss positions in trading in types of derivatives.
Final Report on Capital Market with all the components including derivatives, Classification of capital market, Trading Procedure, Legal frame work of capital market, Clearing and settlement procedures, Role of RBI &SEBI, Recommendations & Problem of capital market, Conclusion, etc.
Grand Project Report on “A Study of Investor’s Perception on IPO And IPOs Per...Manoj Muliya
A Grand Project Report on “A study of Investor’s Perception on IPO And IPOs Performance in Stock Market”.
This project is related is Stock Market in MBA 4th Semester and comparison between IPO and Share related how they react Before and After.
Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, share, bonds, currency, interest etc. SEBI set up a 24-member committee under Chairmanship of Dr.L.C. Gupta to develop the appropriate regulatory framework for derivatives trading in India. The committee submitted its report in March 1998. On May 11, 1998 SEBI accepted the recommendations of the committee and approved the phased introduction of derivatives trading in India beginning with stock index futures. SEBI also approved the “suggestive bye-laws” recommended by the committee for regulation and control of trading and settlement of derivatives contracts. My study is to know about the investors’ familiarity and awareness of the derivative market and their profit/loss positions in trading in types of derivatives.
Final Report on Capital Market with all the components including derivatives, Classification of capital market, Trading Procedure, Legal frame work of capital market, Clearing and settlement procedures, Role of RBI &SEBI, Recommendations & Problem of capital market, Conclusion, etc.
NSE stands for National stock exchange and BSE stands for Bombay stock exchange. Mainly two exchanges in India regulated under SEBI(Security Exchange Board of India)
When we think about refreshment, the first thing that comes to our mind is coffee or tea. Most people prefer coffee and most prefer tea and these two drinks have become a part of a human being’s life.
Here we (I) have concentrated on coffee which is considered as a traditional drinks especially in south India. People here start their everyday life with a cup of coffee. Not only in south India but in all parts of the world people are so dependent and addicted to coffee that it acts as a daily schedule to every body every where. But this coffee is not grown in all parts of the world but is grown in very few places with right kind or weather, atmosphere and most important of all, the soil of that region.
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The sugar industry occupies a major portion in the (organization) industries of India. The sugar industries have rank second next to cotton and textile industries. The sugar industry started since 1830. China is the first producer of sugar in the world. It provides highest direct employment opportunities.
The sugar industry is one of the important Ago-based industry of the country India is the fourth major sugar production in the world. The first three is Russia, Brazil and Cuba. Sugar industry provides direct employment to nearly 3lakh persons this industry supports about 25 million agriculturists. It pay’s both to the central government and the state government about Rs.350 crores by way of different taxes. The capital employed in the industry is of the order of Rs.780 crores. There are about 414 mills producing sugar, which are spread all over the country.
When we think about refreshment, the first thing that comes to our mind is coffee or tea. Most people prefer coffee and most prefer tea and these two drinks have become a part of a human being’s life.
Here we (I) have concentrated on coffee which is considered as a traditional drinks especially in south India. People here start their everyday life with a cup of coffee. Not only in south India but in all parts of the world people are so dependent and addicted to coffee that it acts as a daily schedule to every body every where. But this coffee is not grown in all parts of the world but is grown in very few places with right kind or weather, atmosphere and most important of all, the soil of that region. It is usually grown in hill stations with adequate amount of rainfall and such places which are high above sea level. Therefore in India, Karnataka is such a place, especially South Karnataka which produces the highest amount of coffee in whole India. Most parts of Karnataka such as Chikmagalur district and many parts in Hassan District, and also Coorg.
A Study on Sugar Industry at Chamundeshwari SugarProjects Kart
The discovery of sugarcane from which sugar was produced had been known since thousands of years. It is thought to have originated in New Guinea, and was spread along routes to Southeast Asia and India. The process known for creation of sugar, by pressing out the juice and then boiling it into crystals, was developed in India around 500 BC.
Its cultivation was not introduced into Europe until the middle-ages, when it was brought to Spain by Arabs to thrive in a most favorable climate.
Study on Inventory Management at Reid & Taylor (India) LtdProjects Kart
Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.
Study on Working Capital Management at PNBProjects Kart
The prime objective of any business is to maximize the value of the company and to maximize the wealth of its shareholders. Working capital management has its own role to play in attaining this goal. Working capital is the funds required for day to day working in a business concern. The working capital management involves deciding upon the amount and composition of current assets and how to finance those assets. There should be a proper trade off between risk and profitability in each decision relating to it. This project work has been undertaken to know the procedures involved in the working capital management in PUNJAB NATIONAL BANK. An attempt is made to study the factors contributing towards working capital and the sources on which the company is depending for funds. The research study was also conducted to derive working capital ratios, to know the performance and efficiency of working capital management and to know the kind of policy adopted in this part of the management. For analyzing the factors and conditions influencing working capital tables and graphs were drawn based on the study. pubjab national bank mba project, summer internship 2017, project reprot, punjab national bank pdf, risk, project report pdf, project report, customer satisfaction in punjab national bank
Study on Mutual Fund is the Better Investment PlanProjects Kart
Mutual funds have become a hot favorite of millions of people all over the world. The driving force of mutual fund is the ‘safety of the principal’ guaranteed, plus the added advantage of capital appreciation together with the income earned in the form of interest or dividend. People prefer Mutual Funds to bank deposits, life insurance and even bond because with a little money, they can get into the investment game. One can own string blue chips like ITC, TISCO, Reliance etc., through mutual funds. Thus, mutual funds act as a gateway to enter into big companies hitherto inaccessible to an ordinary investor with his small investment.
Study on Store Environment and Merchandising Mix at Big BazaarProjects Kart
Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family, or household use. Retailing comprises of four elements customer orientation, coordinated effort, value-driven, and goal orientation. The word "Retail" originates from a French-Italian word. Retailer-someone who cuts off or sheds a small piece from something. Retailing is the set of activities that markets products or services to final consumers for their own personal or household use. It does this by organizing their availability on a relatively large scale and supplying them to customers on a relatively small scale. Retailer is a Person or Agent or Agency or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer.
Initial Public Offers and Due DiligenceProjects Kart
This report, as the Title “Initial Public Offers and Due Diligence: The Role of a Investment Banker”, is an attempt to bring forth the importance of the process of Due Diligence and the significance of the vital role played by the Investment Banker in managing the issue of an Initial Public Offer (IPO).
When a Company issues an IPO, it means it is going public. The issue of an IPO introduces a great degree of transparency in a Company‟s operations. All the relevant and updated information pertaining to the company is laid down before the investors so that they may make an investment decision. Again, there are set procedures, rules, regulations and laws to be followed in laying down this information before the investors. A document called the Prospectus‟ must be prepared. The Prospectus captures all the necessary information that is to be made available to the investors. Apart from the Prospectus, there are various other company documents that need to be verified and summarized in order to present them before the investors.
Influence of ADR on Underlying Stock PricesProjects Kart
Globalization has opened the door for the investors to avail various investment avenues across the globe. American Depository Receipt (ADR) is one such opportunity to the investing community. The ADR is a proxy for the Indian shares to enable them to be traded in the American stock exchanges. Various studies conducted on Depository Receipts (DRs) have shown that the trading on the DR sin the foreign market has its influence in the home country’s stock in terms of price, volatility and volume. This interested me and this project is concerned about studying “Whether the price fluctuations of ADR affect the corresponding Indian share prices?”
After the liberalization of the economy in 1991, the corporatist started sourcing their capital from both domestic and foreign markets. The Indian shares cannot be directly listed in the American stock exchanges. ADRs have been very helpful in this purpose. So a custodian bank receives the shares as deposit and issues receipt to the market. These receipts are issued in appropriate ratio to the shares deposited with the depository. The market players in the stock exchanges trade these receipts.
Impact of ERP on Organizational Functions in Retail SectorProjects Kart
The business environment has changed more in the last five years than it did in the previous five decades. Winning in today’s business climate requires more than just providing high-quality, low-cost products to customers, when and how the customers want them. The ability to respond to new customer needs and seize market opportunities as they arise, without compromising on the profitability of the firm is critical for the success of any organization. Competitive pressures frequently force manufacturers to decrease prices in spite of the fact that their internal costs continue to rise. Enterprises are continuously striving to improve themselves in the areas of quality, time to market, customer satisfaction, performance and profitability. Making informed business decisions in this manner would enable organizations to accomplish their business growth and at the same time enable them to utilize the information to competitive advantage. To make it possible for the companies to execute this vision, there is a need for an infrastructure that will provide information across all functions and locations within the organization and this is the Enterprise Resource Planning (ERP) solution available in the market today.
The Impact of Creativity and Wow Factor in AdvertisingProjects Kart
The approach used in this report is a case study approach. It essentially deals with two aspects; creativity and WOW factor. These two terms have been defined and the impact they have in advertising has been studied. The objectives of doing such a study were to understand creativity, to define it and to find factors that elicit a WOW response from viewers.
Impact of Advertisements on Investors at HDFC Standard Life InsuranceProjects Kart
This project is managing study on “Impact of advertisement on Investors – A case study in HDFC Standard Life Insurance” The scope of study is regarding the advertisements and therefore the presence of HDFC SLIC with relation to in door advertisements and their advertisements & their effectiveness & out door advertisements, however the folks wish to watch them. to understand the notice within the public like better to watch the ads and medium.
Impact of Advertising on Customers in Tata MotorsProjects Kart
The consumer durable market in India has been very competitive in the recent years, with opening up of market for international players due to liberalization; the domestic players are facing a tough competition. So it‟s time for domestic companies to frame new strategies for their production and marketing activities. An evaluation of the effectiveness of the past activities of a company will enable the company in framing these new strategies. Such an effort has been made through this market research to know the http://www.projectskart.com/ on Customers in TATA MOTORS (A case study in AUTO MATRIX, HASSAN).
Recruitment and Selection at Aviva Life InsuranceProjects Kart
The MBA project titled “RECRUITMENT AND SELECTION” Undertaken in AVIVA life insurance.
AVIVA is a UK based insurance group. It has a long history dating back to 1834 and has a joint venture with DABUR groups. Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share.
It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world.
The project report is about recruitment and selection process that‟s an important part of any organization. Which is considered as a necessary asset of a company? In fact, recruitment and selection gives a home ground to the organization acumen that is needed for proper functioning of the organization.
Financial Freedom through Reverse MortgageProjects Kart
The world population structure shows that population worldwide is ageing owing to exaggerated longevity of older folks and small birth rates in developed and most developing countries. Visit www.projectskart.com for more information. In Asian nation alone, statistics show that variety of older as a proportion of population can show a 107% growth, from 113 million in 2016 and 179 million by 2026 severally.
Financial Analysis on Recession Period at M&M TractorsProjects Kart
Financial ANalysis (also stated as financial plan analysis or accounting analysis) refers to an assessment of the viability, stability and profitable of a business, sub-business or project. Visit www.projectskart.com for more information. It is performed by professionals World Health Organization prepare reports exploitation ratios that create use of data taken from monetary statements and different reports. These reports area unit typically given to prime management mutually of their bases in creating business selections.
Effective Supply Chain Management as a Strategic AdvantageProjects Kart
TSS was established in 1913 and since then it has been in Sirsi. The products have got their own brand image and also customers. Based on the service provided by TSS to its customers we can know how the organization considers its customers and its products to the customers. A study Effective supply chain management as a strategic advantage at TSS is undertaken for assessing the supply towards the customers and to understand the expectations of the customers towards arecanut and its products which will in turn help to take appropriate action by the management for removing the loop holes.
Brand Awareness of Spencer's and Comparative Analysis with Big BazaarProjects Kart
By 2004 the retail industry was growing rapidly in India, and Spencer's Retail decided to pursue an aggressive expansion strategy. The company had the customers, the products, and the employees to make it happen. It just needed an IT infrastructure that could support rapid growth. Visit http://www.projectskart.com/p/contact-us.html for more information. Current servers were at capacity, and the company needed to upgrade before adding new stores. Amit Mukerjee, Group CIO of the RPG Group, describes the challenge as part of the learning curve for retail development in India. ―Retailing is a new business in this country. As the business matures, the process matures, and IT systems must evolve accordingly. The company also needed an enterprise resource planning (ERP) solution to handle critical processes such as supply-chain management. It decided to implement mySAP ERP, now called SAP ERP, and realized the solution needed to run on high-performance servers. Spencer's Retail evaluated several possibilities, including servers from HP, IBM, and Sun Microsystems. It decided to build its IT infrastructure on Sun systems for several reasons. Sun SPARC Enterprise Servers had the performance and scalability needed to sustain its business, and they delivered higher performance at less cost. Sun's knowledge of the retail space in India, as well as its long history with RGP Enterprises, were also deciding factors.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
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LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
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What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
1. Projectskart.com
Visit www.projectskart.com for more information
1-INTRODUCTION:
Among all the innovations that have flooded the international financial markets,
financial derivatives occupy the driver's seat. These specialized instruments facilitate the
shuffling and redistribution of the risks that an investor faces. Thus aids in the process of
diversifying one’s portfolio. The volatility in the equity markets over the past years has
resulted in greater use of equity derivatives. The volume of the exchange traded equity
futures and options in most of the mature markets have seen a significant growth.
It goes beyond that the local derivative in the emerging markets have witnessed
widespread use of the derivative instrument for a variety of reasons. This continuous
growth and development by the emerging market participants has resulted in capital
inflows as well as helped the investors in risk protection through hedging.
Derivatives trading commenced in India in June 2000 after SEBI granted the approval to this
effect in May 2000. SEBI permitted the derivative trading on two stock exchanges, i.e. and
BSE, and NSE, their clearing house/corporation to commence trading and settlement in
approved derivative contracts. Begin with SEBI’s approved trading in index futures contracts
based on S&P CNX Nifty Index and BSE-30 (Sensex) Index. This was followed by approval
for trading in options based on these two indices and options on individual securities. The
trading in index options commenced in June 2001 and trading in options on individual
securities would commence in July 2000. While trading in futures of individual stocks started
from November 2001. In June 2003, SEBI and/RBI approved the trading on interest rate
derivative instruments only in NSE. Introduced trading of interest rate futures contracts on
June 24, 2003 on 91-day Notional T-Bills and 10-year Notional 6% coupon bearing as well as
zero coupon Bonds. Futures and Options were also introduced on CNX IT Index in August
2003. The total exchange traded derivatives witnessed a value of Rs.5, 423, 333 million
during 2002-03 as against Rs. 1,038,480 million during the preceding year. While NSE
accounted for about 99.5% of total turnover, BSE accounted for less than 1% in2002-03. The
market witnessed higher trading levels from June 2001 with introduction of index options,
and still higher volumes with the introduction of stock options in July 2001. In the year 2002
has been a remarkable year for the global derivatives
Projectskart.com
2. Projectskart.com
market. This year witnessed NSE making huge strides and also moved upward in the
global ranking. According to the Futures Industry Associations in the year 2002, NSE
ranked 30
th
in the global futures and options volume, whereas it ranks 2
nd
in the world, in
terms of stock futures.
Securities and exchange Board of India (SEBI) signed a memorandum of understanding
(MOU) with United States Commodity Futures Trading Commission (CFTC) in Washington
on April 28, 2004. The MOU was signed by Mr. G. N. Bajpal, Chairman, SEBI and Mr.
James E.Newsome, Chairman, CFTC. The MOU aims to strengthen communication channels
and establish a framework for assistance and mutual cooperation between the two
organizations.
The MOU marks the beginning of greater collaboration between SEBI and CFTC too
effectively
Regulate and develop futures markets, in view of greater cross-border trade and cross-
market linkages brought about by the globalization of financial markets. The two
authorities intend to consult periodically about matters of mutual interest in order to
promote cooperation and market
Integrity and to further the protection of futures and options market participants. In
furtherance of the objective of promoting the development of futures and options
regulatory mechanisms would also provide technical assistance for development of
futures markets in India.
In India, the statutory, basis for regulating commodity futures’ trading is found in the
Forward Contracts (Regulation) Act. 1952, which (apart from being an enabling
enactment, laying down certain fundamental ground rules) created the permanent
regulatory body known as the Forwards Markets Commission. This commission holds
overall charge of the regulation of all forward contracts and carries out its functions
through recognized association.
Too much regulation and too little regulation are both bad in respect of these markets.
Too much regulation will have a throttling effect and prevent the entry and growth of the
market. Too little regulation will lead to lack of enough protection to investors and fear of
failures in the market.
The role of regulator has many objectives the purpose of regulation is to protect the
interests of investors, infuse confidence in the market and prevents unfair trade practices.
Projectskart.com
3. Projectskart.com
1.2-STATEMENT OF PROBLEM
The study analyses Various Derivatives Used to Minimise Risk in
Indian Capital Market.
It foresees the difficulties facial to choose the underlying assets in the derivatives
and to analyze the current scenario of Derivative markets in India
1.3-OBJECTIVES OF THE STUDY
1. To understand the concept and to study the current scenario of derivatives market
in India.
2. To analyze whether the purpose for which derivatives are used has been actually
achieved or not
3. To study the purpose for which financial institutions adopt derivatives
4. To know pricing of derivatives.
5. To know about future of derivative trading in India
6. To find the growth of derivatives in India
7. To suggest suitable methods based on the observations of the study
1.4-Data collection:
The study is exclusively based on secondary data.
Secondary data is collected from various sources such as text books, reports,
annual reports of various organisations , research articles, papers presented at various
national and international seminars, conferences, workshops etc., Secondary data
was also used to to conceptualise the term risk and the degree of risk involved. This
apart of Websites of companies, Stock exchanges, NSE and BSE were used.
Newspaper such as Economic Times, Business Line, Magazines such as Business
World and Capital Market were also used.
Projectskart.com
4. Projectskart.com
1.5-PLAN OF ANALYSIS TECHNIQUE
The collected data has been carefully classified, tabulated and interpreted on the basis
of which, tables, charts and graphs are drawn. Percentages are drawn from the tabulated
frequencies and the data should be analyzed. The analysis of data helped in drawing
inferences and better understanding, charts are plotted.
1.6-SCOPE OF THE STUDY
Derivative deals with equity, derivatives, mutual funds, etc. in this we are find
out which is the once is best and analyze the customer awareness in derivatives
Market and it also covers the recent changes in derivatives Market.
It gives the information about Forward, Future Option, & swaps. It gives
more concentrate on how Securities traded in derivative markets
1.7- LIMITATIONS OF THE STUDY
The study was carried out only on secondary information and it is carried out only for a
short period of three months hence the findings of the study cannot be generalized.
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6. Projectskart.com
Theoretical Review of Literature
2-DERIVATIVES
With the opening of the economy to multinational and the adoption of the liberalized
economic policies the economy is driven more towards the free market economy. The
complex nature of the financial structuring is self involves the utilization of
multicurrency transaction. It exposes the clients, particularly corporate clients to
various risks such as exchange rate risk, interest risk, economic risk & political risk
In the present state of the economy there is an imperative need for the corporate clients to
protect their operating profits by shifting some of the uncontrollable financial risk to
those who are able bear and manage them. Thus, risk management becomes a must for
survival since there is a high volatility in the present’s financial markets
In the context, derivatives occupy an important place as a risk reducing machinery.
Derivatives are useful to reduce many of the risks. In fact, the financial service companies
can play a very dynamic role in dealing with such risk. They can ensure that the above
risks are hedged by using derivatives like forwards, futures, options, swaps
In a broad sense, many commonly used instruments can be called derivatives since
they derive their value from underlying assets. For instance, equity share its self is a
derivatives, since it derives its value from the underlying assets. Similarly one takes
an insurance against his house covering all risks
DEFINITION
Derivatives are the financial instruments, which derive their value from some other
financial instruments, called the underlying. The foundation of all derivatives market
is the underlying market, which could be spot market for gold, or it could be a pure
number such as the level of the wholesale price index of a market price.
A derivative is a financial instrument whose value depends on
the Value of other basic underlying variables.
“John c hull”
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According to the Securities Contract (Regulation) Act, 1956, derivatives include:
A security derived from a debt instrument, share, and loan whether secured or
unsecured, risk instrument or contract for differences or any other form of Security.
A contract, which derives its value from the prices or index of prices of underlying
securities.
Therefore, derivatives are specialized contracts to facilitate temporarily for hedging
which is protection against losses resulting from unforeseen price or volatility
changes. Thus, derivatives are a very important tool of risk management.
Derivatives perform a number of economic functions like price discovery, risk
transfer and market completion. The simplest kind of derivative market is the forward
market. Here a buyer and seller write a contract for delivery at a specific future date
and a specified future price. In India, a forward market exists in the form of the dollar-
rupee market. But forward market suffers from two serious problems;
Counter party risk resulting in comparatively high rate of contract
noncompliance And poor liquidity.
Futures markets were invented to cope with these two difficulties of forward markets.
Futures are standardized forward contracts traded on an organized stock exchange. In
essence, a future contract is a derivative instrument whose value is derived from the
expected price of the underlying security or asset or index at a pre-determined future
date.
Derivatives are financial contracts that are designed to create market price exposure to
changes in an underlying commodity, asset or event. In general they do not involve
the exchange or transfer of principal or title. Rather their purpose is to capture, in the
form of price changes, some underlying price change or event. The term derivative
refers to how the prices of these contracts are derived from the price of some
underlying security or commodity or from some index, interest rate, exchange rate or
event. Examples of derivatives include futures, forwards, options and swaps, and these
can be combined with each other or traditional securities and loans in order to create
hybrid instruments or structured securities
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2.1- Players of trading in Futures & Option
The minimum quantity trade in is one market lot. The market lot is different for on
NSE Derivatives stocks/index. Time to time list will keep changing
CNXIT ICICI Oriental Bank
NIFTY Infosys PNB
ACC IOC Polaris
Andhra Bank MTNL Ranbaxy
Bajaj Auto ONGC Wipro
Bank of Baroda Nalco REL
Bank of India Tisco Union Bank
BEL M&M TCS
Bank of India Maruti Tata TEA
HCL Tech Grasim Ind ITC
BHEL IPCL RIL
BPCL Hero Honda i-flex
Canada Bank HDFC Bank HPCL
Cipla HLL Tata Power
GAIL Hindalco Gujarat Abuja
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2.2-DERIVATIVES IN INDIA
A derivative is a security or contract designed in such a way that its price is derived from
the price of an underlying asset. For instance, the price of a gold futures contract for
October maturity is derived from the price of gold. Changes in the price of the underlying
asset affect the price of the derivative security in a predictable way.
The term derivatives can simply be understood as those items that do not have their own
independent values. Rather they have derived values. Derivatives have a significant place
in finance and risk management. A Derivative is financial instrument whose pay-off is
derived from some other asset which is called an underlying asset.
Evolution of derivatives
In the 17th century, in Japan, the rice was been grown abundantly; later the trade in rice
grew and evolved to the stage where receipts for future delivery were traded with a high
degree of standardization. This led to forward trading. In 1730, the market received
official recognition from the “Tokugawa Shogunate” (the ruling clan of shoguns or feudal
lords). The Dojima rice market can thus be regarded as the first futures market, in the
sense of an organized exchange with standardized trading terms.
The first futures markets in the Western hemisphere were developed in the United States in
Chicago. These markets had started as spot markets and gradually evolved into futures
trading. This evolution occurred in stages. The first stage was the starting of agreements to
buy grain in the future at a pre-determined price with the intension of actual delivery.
Gradually these contracts became transferable and over a period of time, particularly delivery
of the physical produce. Traders found that the agreements were easier to buy and sell if they
were standardized in terms of quality of grain, market lot and place of delivery. This is how
modern futures contracts first came into being. The Chicago Board of Trade (CBOT) which
opened in 1848 is, to this day the largest futures market in the world.
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2.3 Kinds of financial derivatives
1) Forwards
2) Futures
3) Options
4) Swaps
1) Forwards
A forward contract refers to an agreement between two parties, to exchange an agreed
quantity of an asset for cash at a certain date in future at a predetermined price specified
in that agreement. The promised asset may be currency, commodity, instrument etc, In a
forward contract, a user (holder) who promises to buy the specified asset at an agreed
price at a future date is said to be in the ‘long position’. On the other hand, the user who
promises to sell at an agreed price at a future date is said to be in ‘short position’.
2) Futures
A futures contract represents a contractual agreement to purchase or sell a specified asset
in the future for a specified price that is determined today. The underlying asset could be
foreign currency, a stock index, a treasury bill or any commodity. The specified price is
known as the future price. Each contract also specifies the delivery month, which may be
nearby or more deferred in time.
The undertaker in a future market can have two positions in the contract: -
a) Long position is when the buyer of a futures contract agrees to purchase the underlying
asset.
b) Short position is when the seller agrees to sell the asset. Futures contract represents an
institutionalized, standardized form of forward contracts. They are traded on an organized
exchange, which is a physical place of trading floor where listed contract are traded face
to face.
A futures trade will result in a futures contract between 2 sides- someone going long at a
negotiated price and someone going short at that same price. Thus, if there were no
transaction costs, futures trading would represent a ‘Zero sum game’ what one side wins,
which exactly match what the other side loses.
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Types of futures contracts
a) Agricultural futures contracts:
These contracts are traded in grains, oil, livestock, forest products, textiles and foodstuff.
Several different contracts and months for delivery are available for different grades or
types of commodities in question. The contract months depend on the seasonality and
trading activity.
b) Metallurgical futures contract:-
This category includes genuine metal and petroleum contracts. Among the metals,
contracts are traded in
gold,
silver,
platinum and
Copper. Of the petroleum products, only heating oil, crude oil and gasoline is
traded.
c) Interest rate futures contract
These contracts are traded on treasury bills, notes, bonds, and banks certification of
deposit, as well as Eurodollar.
d) Foreign exchange futures contract
These contracts are trade in the British Pound, the Canadian Dollar, the Japanese Yen, the
Swiss Franc and the Deutsche Mark. Contracts are also listed on French Francs, Dutch
Guilders and the Mexican Peso, but these have met with only limited success.
1) Options
An option contract is a contract where it confers the buyer, the right to either buy or to
sell an underlying asset (stock, bond, currency, and commodity) etc. at a predetermined
price, on or before a specified date in the future. The price so predetermined is called the
‘Strike price’ or ‘Exercise price’. Depending on the contract terms, an option may be
exercisable on any date during a specified period or it may be exercisable only on the
final or expiration date of the period covered by the option contract.
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Option Premium
In return for the guaranteeing the exercise of an option at its strike price, the option seller
or writer charges a premium, which the buyer usually pays upfront. Under favorable
circumstances the buyer may choose to exercise it.
Alternatively, the buyer may be allowed to sell it. If the option expires without being
exercised, the buyer receives no compensation for the premium paid.
Writer
In an option contract, the seller is usually referred to as “writer”, since he is said to write
the Contract. If an option can be excised on any date during its lifetime it is called an
American Option. However, if it can be exercised only on its expiration date, it is called
an European Option.
Option instruments
a) Call Option
A Call Option is one, which gives the option holder the right to “buy” an underlying asset
at a pre-determined price.
b) Put Option
A put option is one, which gives the option holder the right to “sell” an underlying
asset at a pre-determined price on or before the specified date in the future. c)
Double Option
A Double Option is one, which gives the Option holder both the right to “buy” and “sell”
Underlying asset at a pre-determined price on or before a specified date in the future.
2) SWAPS
A SWAP transaction is one where two or more parties exchange (swap) one pre-
determined
Payment for another.
There are three main types of swaps:-
a) Interest Rate swap
An Interest Rate swap is an agreement between 2 parties to exchange interest obligations
or
Receipts in the same currency on an agreed amount of notional principal for an agreed
period of time.
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b) Currency swap
A currency swap is an agreement between two parties to exchange payments or
receipts in One currency for payment or receipts of another. c) Commodity swap
A commodity swap is an arrangement by which one party (a commodity user/buyer)
agrees to Pay a fixed price for a designated quantity of a commodity to the counter party
(commodity producer/seller), who in turn pays the first party a price based on the
prevailing market price (or an accepted index thereof) for the same quantity.
Derivatives are financial instruments whose values depend on the values of other, more
basic underlying assets. Exchange traded financial derivatives were introduced in India in
June 2000 at the two major stock exchanges, NSE and BSE. Derivatives are used by :
1. Hedgers: For protecting against adverse movement. Hedging is a mechanism to reduce
price risk inherent in open positions. Derivatives are widely used for hedging. A Hedge
can help lock in existing profits. Its purpose is to reduce the volatility of a portfolio, by
reducing the risk.
2. Speculators: To make quick fortune by anticipating/forecasting future market
movements. Hedgers wish to eliminate or reduce the price risk to which they are already
exposed. Speculators, on the other hand are those class of investors who willingly take
price risks to profit from price changes in the underlying. While the need to provide
hedging avenues by means of derivative instruments is laudable, it calls for the existence
of speculative traders to play the role of counter-party to the hedgers. It is for this reason
that the role of speculators gains prominence in a derivatives market.
3. Arbitrageurs: To earn risk-free profits by exploiting market imperfections.
Arbitrageurs profit from price differential existing in two markets by simultaneously
operating in the two different markets.
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2.4 DERIVATIVE MARKET IN INDIA
An important step towards introduction of derivatives trading in India was the
Promulgation of the Securities Laws (Amendment) Ordinance, 1995, which lifted the
Prohibition on "options in securities" (NSEIL, 2001). However, since there was no
Regulatory framework to govern trading of securities, the market could not develop.
SEBI Set up a committee in November 1996 under the chairmanship of Dr. L.C. Gupta
to Develop appropriate regulatory framework for derivatives trading. The committee
suggested that if derivatives could be declared as "securities" under SCRA, the
appropriate regulatory framework of "securities" could also govern trading of derivatives.
SEBI also set up a group under the chairmanship of Prof. J.R. Varma in 1998 to
recommend risk containment measures for derivatives trading. The Government decided
that a legislative amendment in the securities laws was necessary to provide a legal
framework for derivatives trading in India.
Consequently, the Securities Contracts (Regulation) Amendment Bill 1998 was
introduced in the LokSabha on 4th July 1998 and was referred to the Parliamentary
Standing Committee on Finance for examination and report thereon. The Bill suggested
that derivatives may be included in the definition of "securities" in the SCRA whereby
trading in derivatives may be possible within the framework of that Act.
The said Committee submitted the report on 17th March 1999. The Committee was of the
opinion that the introduction of derivatives, if implemented, with proper safeguards and
risk containment measures, will certainly give a fillip to the sagging market, result in
enhanced investment activity and instill greater confidence among investors/participants.
The Committee was of the view that since cash settled contracts could be classified as
"wagering agreements" which can be null and void under Section 30 of the Indian
Contracts Act, 1872, and since index futures are always cash settled, such futures
contracts can be entangled in legal controversy. The Committee, therefore, suggested an
overriding provision as a matter of abandoned caution-
"Notwithstanding anything contained in any other Act, contracts in derivatives as per the
SCRA shall be legal and valid". Further, since Committee was convinced that stock
exchanges would be better equipped to undertake trading in derivatives in sophisticated
environment it would be prudent to allow trading in derivatives by such stock exchanges
only. The Committee, therefore, suggested a clause- "The derivative shall be traded and
settled on stock exchanges and clearing houses of the stock exchanges, respectively in
accordance with the rules and bye-laws of the stock exchange". The Proposed Bill, which
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incorporated the recommendations of the said Parliamentary Committee, was finally
enacted in December 1999.
Equity Derivatives in India
Equity index futures are the most widely traded futures contract
while single stock futures on the whole contribute to a larger
percentage of the traded volumes
Equity index options are the most widely traded options contract in the exchange
FII’s are very active in the equity derivative markets in India . Retail presence is
also high in the equity derivative market
Interest Rate and Currency Derivatives in India
The market for Overnight Index Swaps (OIS) is the most active interest rate
derivative
OIS is based on the overnight call money benchmark, NSE Mibor
Other interest rate derivatives include swaps on government bond benchmarks
Currency derivatives is dominated by forward market though options are picking up
2.5-DERIVATIVES PRODUCTS LEGALLY PERMITTED TO BE TRADED IN
INDIAN
1. Equity Derivatives (Index/stock futures/options) - Legally permitted to be
traded through stock exchanges approved by SEBI
2. Commodity Trading - Commodity futures are permitted. Commodity futures
permitted only for trading in commodities approved by the Government in Commodity
Exchanges recognized by Forward Markets Commission. Option contracts in
commodities trading are not permitted.
3. Foreign Exchange Derivatives - Forward Contracts as approved by RBI
permitted to be transacted by Banks and other approved foreign-exchange dealers.
4. OTC rupee derivatives in the form of Forward Rate Agreements (FRAs)/Interest Rate
Swaps (IRS) - These were introduced by RBI in India in July 1999 in terms powers
vested with it Foreign Exchange Management Act, 2000. These derivatives enable banks,
primary dealers (PDs) and all-India financial institutions (FIs) to hedge interest
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5. Rate risk for their own balance sheet management and for market-making purposes.
Banks/PDs/FIs can undertake different types of plain vanilla FRAs/IRS. Swaps having
explicit/implicit option features such as caps/floors/collars are not permitted now.
6. Exchange Traded Interest Rate Derivatives were introduced by RBI/SEBI during June,
2003. These can be traded through stock exchanges by primary dealers subject to
conditions stipulated by RBI. OTC Rupee derivatives are presently not permitted.
2.6-CATEGORIES OF DERIVATIVES TRADED IN INDIA
1. Commodities Futures for Coffee, Oil Seeds, Oil (Castor, Palmolein), Pepper, Cotton,
Jute and Jute Goods are traded in the Commodities Futures. Forward Markets
Commission regulates the trading of commodities futures.
2. Index futures based on Sensex and Nifty Index are also traded under the supervision of
SEBI.
3. RBI has permitted Banks, FIs and PDs to enter into forward rate agreement
(FRAs)/interest rate swaps in order to facilitate hedging of interest rate risks and ensuring
orderly development of the derivatives market
4. NSE became the first exchange to launch trading in options on individual securities.
Trading in options on individual securities commenced from July 2, 2001. Option
contracts are American style and cash settled and are available on 41 securities stipulated
by the Securities & Exchange Board of India (SEBI)
5. NSE commenced trading in futures on individual securities on November 9, 2001. The
futures contracts are available on 41 securities stipulated by the Securities & Exchange
Board of India (SEBI).BSE also has started trading in individual stock options & futures
(both Index & Stocks) around the same time as NSE.
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2.7-Trading Strategies of Derivatives
Buy downside put as insurance when long stocks
Sell upside call to collect premium when upside is limited
Buy call spread expecting limited upside
Buy put spread expecting limited downside
Buy strangle or straddle expecting volatility ahead
Synthetic short – buy put sell call
Most PMs buy options not sell
Trading Strategies Buy Straddle
Buy both ATM call and put
Max gain: unlimited
Max loss: time decay (theta)
Buy gamma and kappa, pay theta
Short dated straddle – buy more gamma
Long dated straddle – buy more kappa
Trading Strategies Buy strangle
Buy both OTM call and put
Max gain: unlimited
Max loss: time decay, theta
You buy gamma and kappa, earn theta
Short dated strangle – buy more gamma
Long dated strangle – buy more kappa
Diversify your risk comparing to straddle and cheaper
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Trading Strategies
John Murphy is a very popular author, columnist, and speaker on the subject of StockCharts.com
is very glad to include his trading in our educational material. If you find this information useful,
please visit the Murphy Morris web site for additional examples of John's insight.
Buy downside put as insurance when long stocks
Sell upside call to collect premium when upside is limited
Buy call spread expecting limited upside
Buy put spread expecting limited downside
Buy strangle or straddle expecting volatility ahead
Synthetic short – buy put sell call
Buy call option
Expecting more upside
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Sell put option
Expecting limited downside
2.8-Derivative Based Instruments
Derivative Instruments are instruments at which their values are derived from the
value of an underlying physical or financial assets
Derivative Instruments include:
Forward Contracts Futures Contracts
Salam Contracts Swap Contracts
Option Contracts (Call & Put) Combination & Embedded Contracts
Derivative Instruments are mainly used as risk management tools
Participation in risk and reward is an important feature of Islamic finance &
investments
Management of risk is an integral part of Islamic mode of financing
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Call Options
Call Options are contracts at which the owner of the Call (buyer or long position
holder) after paying a premium (option premium) to the seller of the Call, gains
the right but not the obligation to buy a given asset with a specific quality at a
specific price (strike price) at or until a specific date (strike date).
A Call Option is not an obligation
The seller of a Call Option (short position holder) has no obligations to sell the
asset until the Call is exercised by the Option buyer
When the Call is exercised the seller is obliged to sell the asset at the strike price
Call Option buyer thinks the asset price will rise and the seller thinks the opposite
A Call Option buyer usually uses this instrument to insure or hedge the cost of the
needed raw materials or the maximum price he/she wants to pay for the purchase
of an asset
Call Options are mainly traded in the organized exchanges and to some degree
in the OTC markets
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Short Call Option
Value
Break-Even Price
Underlying Asset Price Short Call
Put Options:
Put Options are contracts at which the owner of the Put (buyer or long position
holder) after paying a premium (option premium) to the seller of the Put, gains the
right but not the obligation to sell a given asset with a specific quality at a specific
price (strike price) at or until a specific date (strike date).
A Put Option is not an obligation
The seller of a Put Option (Short Position holder) has no obligations to buy the asset
until the Put is exercised by the Option buyer
When the Put is exercised the seller is obliged to buy the asset at the strike price
Put Option buyer thinks the asset price will fall and the seller thinks the opposite
A Put Option buyer usually uses this instrument to insure or hedge the income resulting
from the sale of an asset or the minimum price he/she receives from the sale of an asset
Put Options are mainly traded in the organized exchanges and to some degree in the
OTC markets
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Short Put Option
Break-Even Price
Value
Short Put
Underlying Asset Price
An option gives its owner the right to buy or sell an underlying asset on or
before a given date at a fixed price.
Option belong to a broader class of assets called contingent claims
The most popular model for pricing options is the block-scholes model which was
published in 1973 the year in which the Chicago board of options exchange the
first organized options exchange in the world was also setup – it was a rare
occurrence in the field of finance when a seminal theoretical breakthrough
coincided with a major institutional development.
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HOW OPTIONS WORK
The options to buy is a call option & the option to sell is a put options
The options holder is the buyer of the option & the option writer is the seller of
the option.
The fixed price at which the option holder can buy & sell the underlying asset is
called the striking price.
The date when the option expires is referred to as the expiration date.
The act of buying or selling the underlying asset as per the option contract is
called exercising the option.
Options traded on an exchange are called exchange-traded options.
Options are said to be
1. ATM-At The Money
2. ITM-In The Money
3. OTM-Out of The Money
Call option put option
ATM exercise price=market price exercise price=market price
ITM exercise price<market price exercise price>market price
OTM exercise price>market price exercise price<market price
The value of an option if it were to expire immediately is called its intrinsic value.
The excess of the market price of any option over its intrinsic value is called the
time value of the option.
Exchange traded options are standardized in terms of quantity cycle, expiration
date, strike prices, type of option, & mode of settlement.
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2.9-EQUITY OPTIONS IN INDIA
There are two popular types of equity options index options and options
on individual securities.
Types of Equity Option
Bombay Stock Exchange
National Stock Exchange
INDEX OPTION:
Index options are options on stock market indices. Currently the most popular
index options option in India is the option on the S&P CNX Nifty which is traded on the
NSE. The salient features of this contract are as follows
1. The contract size is 200 times the underlying index.
2. The options contracts have a maximum of three month trading cycle
Near month
Next month
Far month
A new contract will be introduced on the next trading day
3. It is a European style option contract
4. The expiry day is the last Thursday of the expiry month or previous trading day if
the last Thursday is a trading holiday
5. The contract is cash settled. The settlement is done a day after the expiry day
based on the expiration price as may be decided by the exchange.
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Futures & Forward contract
forward future
1.traded on phone 1.traded in a competitive arena
2.self-regulating 2.regulated by authority like the exchange
3.tailor made sizes 3.standardised sizes
4.delivary on any date and as per the 4.delivary on specific dates fixed before
requirements of the party hand
5.settlements on the due date 5.settlement on a daily basis
6.Margins are not required 6.mergins are required
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3- INDUSTRY PROFILE
The growth of financial sector in India at present is nearly 8.5% per year. The rise in the
growth of the economy. The financial policies and the monetary policies are able to stable
growth rate. The reforms, pertaining to the monetary policies and the macroeconomic
policies over the last five years has influenced the Indian economy to the core.
However global economic activity decelerated towards the end of the calendar year
resulting in investment concerns on account of the sub-prime crisis in the US and other
developed nations. Naturally the effects of this slowdown spilled over into developing
economies also and we are looking ahead with some degree of concern over the prospects
in the near future.
The economic environment and prospects of India got the attention of global investors and
the FII inflows continued even in the current financial year. The net FII investors peaked at
USD 7 billion in September 2007. The increased liquidity combined with excellent
performance of the corporate sector helped growth of equity market significantly. The Sensex
touched the peak level of 21,206 in the month of January 2008. As a resulted volume in the
market also went up to unprecedented level. The combined daily market turnover touched the
record level of Rs 1 lakh crore for the first time in the history of capital market. The average
daily turnover in the cash segment of NSE which was 7,812 crore in the year 2006-07 crossed
was Rs 20,000 crore in October, 2007. Similarly the average volume in the derivative
segment which was Rs 29,543 crore in 2006-07 reached a high of Rs 83,348 crore in October
2007. There has been a considerable increase in other areas of the industry such as mutual
funds. IPOs and insurance products also, 612 mutual fund schemes were launched during the
year against 413 last year.
In recent days economic collapsed in variation of the foreign investors fund main effect of
the Indian economy in 2008-2009 the Bombay Stock Exchange (BSE) the Sensex was
13,400 in the month of 13
th
july 2009 . In other side National Stock Exchange (NSE)
3,974 is in the same month of 2009 . However the market witnessed deep corrections in
the end of January 2009 as a fall out of sub-prime crisis and related economic concerns in
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the US. Consequently volumes went down below half of the peak and the index corrected
by more than 30% from its peak level. The dark clouds caused by global events and its
possible impact on Indian economy continue to cast a shadow on the outlook of the
markets in the near future.
However global economic activity decelerated towards the end of the calendar year
resulting in investment concerns on account of the sub-prime crisis in the US and other
developed nations. Naturally the effects of this slowdown spilled over into developing
economies also and we are looking ahead with some degree of concern over the prospects
in the near future.
The economic environment and prospects of india got the attention of global investors and the
FII inflows continued even in the current financial year. The net FII investors peaked at USD
7 billion in September 2007. The increased liquidity combined with excellent performance of
the corporate sector helped growth of equity market significantly. The Sensex touched the
peak level of 21,206 in the month of January 2008. As a resulted volume in the market also
went up to unprecedented level. The combined daily market turnover touched the record level
of Rs 1 lakh crore for the first time in the history of capital market. The average daily
turnover in the cash segment of NSE which was 7,812 crore in the year 2006-07 crossed was
Rs 20,000 crore in October, 2007. Similarly the average volume in the derivative segment
which was Rs 29,543 crore in 2006-07 reached a high of Rs 83,348 crore in October 2007.
There has been a considerable increase in other areas of the industry such as mutual funds.
IPOs and insurance products also , 612 mutual fund schemes were launched during the year
against 413 last year.
In recent days economic collapsed in variation of the forign investors fund main effect of
the Indian economy in 2008-2009 the Bombay Stock Exchange (BSE) the sensex was
13,400 in the month of 13
th
july 2009 . In other side National Stock Exchange (NSE)
3,974 is in the same month of 2009 .
However the market witnessed deep corrections in the end of January 2009 as a fall out
of sub-prime crisis and related economic concerns in the US. Consequently volumes went
down below half of the peak and the index corrected by more than 30% from its peak
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level. The dark clouds caused by global events and its possible impact on Indian economy
continue to cast a shadow on the outlook of the markets in the near future.
3.1- COMPANY PROFILE
3.1a- Background and Inception of the company
Mr.C.J.George and Mr.Ranajit Kanjilal founded Geojit as a partnership firm in the
year 1987 in 1993. Mr.Ranajit kanjilal retired from the firm and Geojit became a
proprietary concern of Mr. C.J.George. In 1994, it became a public limited company by
the name Geojit securities Ltd. The Kerala state industrial Development Corporation Ltd.
(KSIDC),IN 1995, became a co-promoter of Geojit by acquiring 24% stake in the
company, the only instance in india of a government entity participating in the equity of a
stock broking company.
22yearsof history in Indian Capital Market
Geojit BNP Paribas has 22 years of in-depth broking experience in the Indian Capital
Market. More than 4.5 lakh clients and over Rs 5,400 crores (as of 31st Mar.’09) in
Assets Under Management reflect the trust reposed in our expertise.
Pioneer in Online Trading in Feb. 2000
In the year 2000, Geojit BNP Paribas pioneered the simple concept of providing
individuals with the facility to trade online. This revolution has given the company the
first mover advantage in online trading. As a creative innovator, Geojit BNP Paribas uses
advanced technology in online trading to meet client requirements such as customized
online trading platforms and many other services.
Strong Shareholders
Geojit BNP Paribas is backed by strong shareholders. In 2007, global banking major BNP
Paribas joined the company’s other major shareholders - Mr. C.J.George, KSIDC (Kerala
State Industrial Development Corporation) and Mr.Rakesh Jhunjhunwala – when it took a
stake to become the single largest shareholder.
Wide range of products
Geojit BNP Paribas offers a wide range of trading and investment products and solutions.
Certified financial advisors help clients to arrive at the right financial solution to meet
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their individual needs. The wide range on offer includes - Equities | Derivatives |
Currency Futures | Custody Accounts | Mutual Funds | Life Insurance & General
Insurance | IPOs | Portfolio Management Services | Property Services | Margin Funding |
Loans against Shares Learn the craft You too can develop your trading skills by availing
of the effective guidance by our research department. We offer-Daily mails delivered to
our client’s mailbox on market conditions and recommendations
Technical analysis of BSE 200 Index scrip’s
Free monthly investment magazine
Services of professionally qualified executives at 500 offices across India.
Our strong research ideas have been instrumental in converting our clients into successful
traders.
Multichannel service-
Internet,
Phone,
Branch trading
Trade the way that you want to by selecting from multiple channel options-
Internet, Phone or Branch.
First mover advantage
Geojit BNP Paribas through its first mover advantage in different areas has been the first
to serve investors with its innovative offerings.
1st to launch internet trading in the year 2000.
1st to launch integrated internet trading system for cash and derivative segments in the
year 2002.
1st Indian stock broking company to commence domestic retail broking operations in any
foreign country.
1st in the industry to have a global player offering its name thereby creating Geojit
BNP Paribas.
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1st to launch exclusive branches for women in 2005.
Wide range of fund options
Geojit BNP Paribas gives you the option to choose from the 700 plus Mutual
Fund schemes offered by over 35 Asset Management companies such as
SBI Mutual Fund,
Reliance Mutual Fund,
Franklin Templeton India Mutual Fund,
Tata Mutual Fund,
Sundaram BNP Paribas Mutual Fund,
Fidelity Mutual Fund, and
HDFC Mutual Fund.
3.1b-Geojit Securities is now Geojit BNP Paribas Financial services
Mumbai March 13 BNP Paribas S.A. has become the single largest shareholder in Geojit
Financial Services Ltd through a preferential allotment of 5.68 crore shares and 2.28 crore
warrants. Geojit will now be rechristened `Geojit BNP Paribas Financial Services Ltd.'
The allotments follow shareholders' approval at the Extra Ordinary General Meeting held
on November 22, 2006 and other statutory approvals, the company informed the BSE.
BNP Paribas will acquire 27.18 per cent stake in the company at Rs 26 per share and after
the conversion of warrants into shares within 18 months at the same price, will increase
its holding to 34.35 per cent. BNP Paribas will make an open offer for acquiring an
additional 20 per cent stake in Geojit. The price for the open offer has not yet been
decided, said Mr Olivier Le Grand, Head of BNP Paribas Personal Investors.
Shares of Geojit Financial Services rose 5.21 per cent to close at Rs 38.35 on the BSE.
However, even post-open offer there are no plans to delist Geojit from the stock
exchanges, said Mr. C.J. George, Managing Director, Geojit Financial Services Ltd.
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The promoters' stake in Geojit will come down to around 30 per cent from around 45 per
cent (going by BSE).
For BNP Paribas the deal will cost around Rs 207 crore and the fund infusion will be
done in stages. It will fund expansion of business in the Middle East, branch expansion in
India and strengthen the distribution of financial products.
The company will continue to be managed by the current team with Mr George as the
Managing Director. Three members from BNP Paribas will be nominated on the board,
namely Mr Olivier Le Grand, Mr. Frederic Amoudru - Chief executive and Country
Manager of BNP Paribas in India and Mr. Rousseau - Head of BNP Paribas Securities,
Asia.
"By joining the global network of BNP Paribas, Geojit will be in a position to serve the
large Indian population living outside India, apart from gaining knowledge from BNP
Paribas' position as the market leader in online brokerage in continental Europe," said Mr
George.
Geojit wants to become a strong distribution platform for brokerage and savings products,
increase margin lending in equities, develop institutional business and strengthen the
business of Geojit Technologies Ltd.
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3.2- Nature of the Business
A Geojit securities limited /Geojit Financial BNP service limited is the holding company
for the subsidieries .The principal subsidieries include:
Geojit Financial BNP Services limited
Geojit Credits (p)
limited
Geojit Commodities
limited
Geojit financial services
& management Limited
Geojit Technologies (p) Geojit Financial Distribution
Limited (p) Limited
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Sigma system International
FZ LLC
Area of operation
STATES No of Branches
Andhra Pradesh 39
Bihar 1
Chandigarh 1
Chaattisgarh 1
Goa 1
Gujarat 23
Haryana 3
Jammu & Kashmir 1
Karnataka 62
Kerala 121
Madhya Pradesh 7
Maharashtra 54
Delhi 12
Panjab 4
Rajasthan 6
Tamilnadu 94
Uttar Pradesh 15
Uttaranchal 1
West Bengal 7
TOTAL 453
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11 Overseas Corporate Bodies 300 0.045
12 Clearing members 1,823,211 0.87%
13 Hindu undivided families 429,504 0.21%
TOTAL 208,990,870 100%
3.3 Vision and Mission Statement
VISION
To be a leading financial and commodities intermediary for individual and institutional
clients from india and overseas
Company will continually strive to raise the product and service standard by intelligent
application of technology and processes
MISSION
Company understands and respects customer needs to consistently deliver total quality
solutions through constant skills up gradation
Company believes that there culture helps to attract and retain the best talent
Company upholds uncompromising ethical standards and strives to maintain a distinctive
identity in public mind through innovation and quality
Company is committed to achieve profitable progress, consistently.
Company freely shares investment experience across all ages and strata of society to
encourage wise investment for a better future.
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CODE OF CONDUCT FOR THE DIRECTORS AND SENIOR OFFICERS
As per Clause 49 of the Listing Agreement with the Stock Exchanges, it shall be
obligatory for the Board of Directors of all listed Companies to lay down a code of
conduct for all Board members and senior management of the Company in order
to ensure good Corporate Governance.
I. CORPORATE GOVERNANCE Corporate governance is about commitment to
values and about ethical business conduct. It is about how an organization is managed.
This includes its corporate and other structures, its culture, its policies and the manner in
which it deals with various stakeholders. Accordingly, timely and accurate disclosure of
information regarding the financial situation, performance, ownership and governance of
the company, is an important part of corporate governance. This improves public
understanding of the structure, activities and policies of the organization. Consequently,
the organization is able to attract investors, and to enhance the trust and confidence of the
stakeholders.
We believe that sound corporate governance is critical to enhance and retain investor
trust. Accordingly, we always seek to attain our performance rules with integrity. The
Board extends its fiduciary responsibilities in the widest sense of the term. Our
disclosures always seek to attain the best practices in international corporate
governance. We are also responsible to enhance long term shareholder value and respect
minority rights in all our business decisions.
II. INTRODUCTION OF CODE (Preamble)
This Code of Ethics for Directors and Senior Executives (the “Code”) helps to maintain
the standards of business conduct for Geojit BNP Paribas Financial Services Limited (the
“Company”) and ensures compliance with legal requirements particularly of Companies
Act, SEBI Regulations and the Listing Agreement with Stock Exchanges. The purpose of
the Code is to deter wrongdoing and promote ethical conduct. The matters covered in
this Code are of utmost importance to the Company, our shareholders and our business
partners. Further, these are essential so that we can conduct our business in accordance
with our stated values.
The Code is applicable to the following persons, referred to as “Officers” :
Directors of the Company
Our Senior Management
Members of the Board of Subsidiary Company
Ethical business conduct is critical to our business. Accordingly, Officers are expected to
read and understand this Code, uphold these standards in day-to-day activities, and
comply with all applicable laws, rules and regulations, the Geojit BNP Paribas Code of
Conduct, Service rules and all applicable policies and procedures adopted by the
Company that govern the conduct of its employees.
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Because the principles described in this Code are general in nature, Officers should also
review the Company’s other applicable policies and procedures.
Officers should sign the acknowledgment form at the end of this Code and return the
form to the HR department indicating that they have received, read and understood, and
agree to comply with the Code. The signed acknowledgement form should be available
with officers concerned. Each year, as part of their annual review, Officers will be asked
to sign an acknowledgement indicating their continued understanding and adherence of
the code.
III. HONEST AND ETHICAL CONDUCT
We expect all Officers to act in accordance with highest standards of personal and
professional integrity, honesty and ethical conduct, while working on the Company’s
premises, at offsite locations where the Company’s business is being conducted, at
Company sponsored business and social events, or any other place where Officers
are representing the Company.
We consider honest conduct to be conduct that is free from fraud or misrepresentation or
deception. We consider ethical conduct to be conduct conforming to the accepted
professional standards of conduct. Ethical conduct includes ethical handling of actual or
apparent conflicts of interest between personal and professional relationships. This is
discussed in more detail in Section IV below.
IV. CONFLICTS OF INTEREST
an Officer’s duty to the Company demands that he or she avoids and discloses
actual and apparent conflicts of interest. A conflict of interest exists where the
interests or benefits of one person or entity conflict with the interests or benefits of
the Company. Examples include:
A. Employment/Outside employment: With regard to the employment with the
Company, Officers are expected to devote their full attention to the business
interests of the Company. Officers are prohibited from engaging in any activity
that interferes with their employment with the Company. Our policies prohibit
Officers from accepting simultaneous employment with suppliers, customers,
developers or competitors of the Company, or from taking part in any activity that
enhances or supports a competitor’s position. Additionally, Officers must disclose
to the Company’s Audit Committee, any interest that they have that may conflict
with the business of the Company.
B. Outside directorships: It is a conflict of interest to serve as a director of any
company that competes with the Company. Officers must first obtain approval
from the Company’s audit committee before accepting a directorship.
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C. Business Interests: If an Officer is considering investing in any customer, supplier,
developer or competitor of the Company, he or she must first take care to ensure
that these investments do not compromise on their responsibilities to the
Company. Our policy requires that Officers first obtain approval from the
Company’s Audit Committee before making such an investment. Many factors
should be considered in determining whether a conflict exists, including the size
and nature of the investments, the Officer’s ability to influence the Company’s
decisions, his or her access to confidential information of the Company or of the
other company, and nature of the relationship between the Company and the other
company. At the time of application for approval, full facts of the proposed
investment shall be placed before the Committee.
D. Related parties: As a general rule, Officers should avoid conducting Company’s
business with a relative, or have business in which a relative is associated in any
significant role. A relative means and includes spouse, children, parents,
grandparents, grandchildren, aunts, uncles, nieces, nephews, cousins, step
relationships, and in-laws. Subject to the rules and regulation, the Company
discourages the employment of relatives of Officers in key positions or
assignments within the same department. Further, the Company prohibits the
employment of such individuals in positions that have a financial dependence or
influence (e.g. an auditing or control relationship, or a supervisor/subordinate
relationship). Every employee drawing a monthly salary of Rs.10,000/- or more
shall disclose whether he is a relative or not of any of our directors.
E. Payments or gifts from others: Under no circumstance the Officers shall accept
any offer, payment, promise to pay, or authorisation to pay any money, gift, or
anything of value from customers, vendors, consultants, etc., that is perceived as
intended, directly or indirectly, to influence any business decision, any act or
failure to act, any commitment of fraud, or opportunity for the commitment of any
fraud. Inexpensive gifts, infrequent business meals, celebratory events and
entertainment, provided that they are not excessive or create an appearance of
impropriety, do not violate this policy. Questions regarding whether a particular
payment or gift violates this policy are to be directed to Finance Department.
Gifts given by the Company to suppliers or customers should be appropriate to the
circumstances and should never be of a kind that could create an appearance of
impropriety. The nature and cost must always be accurately recorded in the
Company’s books and records.
F. Corporate opportunities: Officers may not exploit for their own personal gain,
opportunities that are discovered through the use of corporate property, information
or position, unless the opportunity is disclosed fully in writing to the Company’s
Board of Directors and the Board declines to pursue such opportunity.
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G. Interested Contracts: Except with the consent of the Board of Directors of the
Company, any of the Director or his relative or a firm in which a director or his
relative is a partner, any other partner in such a firm, or a private company of
which the director is a member or director shall enter into any contract with the
Company for sale, purchase or supply of goods, materials or services, or for
underwriting the subscription of any shares in or debentures of the Company
except for purchase or sale of goods for market price or such contracts which
either party regularly trades or does business. For any clarification in this regard,
the officers are requested to contact to the Finance Department / Secretarial
Department / Legal Department.
H. Whistle Blower Policy: Employees who came across any unethical or improper
practice (not necessarily a violation of law) shall be free to approach the Audit
Committee without necessarily informing their supervisors. All officers are
requested to inform their subordinates about their this right through an effective
manner. For any clarification in this regard please contact Finance Department /
Secretarial Department / Legal Department.
I. Other Situations: It would be impractical to attempt to list all possible situations.
If a proposed transaction or situation raises any questions or doubts, please contact
Finance Department.
3.4 ACHIVEMENT AND AWARDS
The company crossed the following milestone to reach its present position as a
leading retail broking house in India.
1986
Geojit became the member of the Cochin stock exchange.
1994
The Kerala state industrial development corporation an arm of the government of
Kerala became a co promoter of the company by acquiring 24% equity stake in Geojit
financial services ltd. Based on the evaluation report of this is the only venture in
India where a state owned development institution is participating in the equity of a
stock broking company. Geojit became a corporate broking house.
1995
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Geojit comes out with a small initial public offer of rs-95 million which was
oversubscribed by 15 million and KSIDC equity stake comes down to 17%.
Geojit become a member of the NSE and installs its first trading terminal in
Cochin, Kerala.
1996
The company launches portfolio management services after obtaining required
registratration from SEBI.
1997
Geojit become a depository participant under national depository securities depository
ltd (NSDL) and begins providing depository services through its branches.
1999
Geojit becomes a member of the BSE In MUMBAI and activities Bombay Online
Trading in different branches.
The customer’s base of Geojit crosses the 50000 mark
2000
Geojit become the first broking firm in the country to offer online trading facility. The
then SEBI chairman, Mr.D.R.Mehta the facility on 1-2-2000
Commences Derivative Trading after obtaining registration as a clearing and
trading member in NSE.
2001
Geojit’s customer base crosses 100,000 Become Indian first DP to launch
depository transaction through Internet.
The company issues bonus shares in the ratio of 1:1
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2002
Geojit ties up with Met life for the marketing 7 distribution of insurance products
across the country.
The company becomes the first online brokerage house to launch integrated
internet trading system for both cash and derivative segments.
2003
Geojit commodities ltd, a wholly owned subsidiary of Geojit became member of
National Multi commodity exchange ltd. National commodity Exchange ltd.
Geojit raises more than Rs-100 million through issue of preferential shares.
2005
Barjeel Geojit Securities LLC becomes a member of Dubai Gold Commodity
Exchange.
Customer base of Geojit croses 2,50,000 Geojit reach speeds through a network of
more than 300 branches.
The company gets listed on NSE of India ltd.
The company implements Employees stock option scheme.
The company opens a first of its kind all woman’s branch in Cochin.
2006
Geojit launches Internet Trading on Reuters TIB Mercury platform.
2007
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On 13-3-2007 the formation of geojit BNP Paribas Financial Services ltd. was announced in
Mumbai and Paris. Through a preferential allotment BNP Paribas had taken 27% stake in
Geojit which will eventually increases to 34.35% .with the final step the French banking
major has become the largest share holder in Geojit Financial services Ltd. With presence in
more than 85 countries the bank has a headcount of more than 1,38,000.
3.5WORK FLOW MODEL
Geojit a member of NSE & BSE has a network of over 450 branches in India and
abroad, rendering quality equity trading services. Geojit not only has a strong offline
presence but also provides automated online trading services.
Geojit also provides a call & trade facility to its customers wherein they can place
and track their orders through our dedicated call centre Desk.
Geojit’s retail spread caters to the need of individuals investors Trading in equities is
made simple, safe and interesting with smart advice from the research desk through daily
SMS alerts, market pointers , periodical research reports stock recommendations and
customer meets organised frequently.
There are 3 types of trading platform offered by Geojit bnp financial for its customer
SILVER
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1) SILVER:
Silver platform is browser based solution where in one can enquire
and get the stock prices market depth, etc. For each scrip at a time. Minimum
brokerage concept does not apply for silver platform.
2) GOLD:
This Platform is a web based solution and the customer can login to the trading
platform from anywhere in the world.
3) PLATINUM:
The platinum version acts as a virtual dealers terminal providing live up dates and
confirmation.
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OPPORTUNITIES
STRENGTHS:
Geojit is one of the leading retail financial service companies in the country and in
the Middle East with membership in NSE and BSE.
Company continues to achieve cost efficiencies through the application of
technology.
Geojit is a charter member of the financial planning standards board of India and is
one of the largest brokers in the country.
It is listed on the BSE & NSE and its market capitalization is over Rs.777.6 crores
It is the first Indian stock broking company to commence domestic retail brokerage
operations in any foreign country through its joint venture Aloula Geojit.
Geojit renders quality equity trading services.
It is a highly innovative company and among many industries first to its
credit prominent is the launch of internal trading in 2000.
It launched branches exclusively for women investors.
It brand is popular and the brand image can be capitalized.
It has well experienced staff and good infrastructure.
It follows corporate governance norms and adopts best management practices.
Wide number of products and services and also branches.
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WEAKNESS:
Unable to market their products & services more efficiently
Many of their competitors have significantly greater financial, technical,
marketing and other resources than available to Geojit.
Unable to compete with the brokerage rates of their competitors.
Less number of branches in north India.
Lack of efficient and effective strategies in attracting customers.
OPPORTUNITIES:
The India financial market has a vary high growth potential. The macro economic
fundamental are sound to allow the economy to make rapid strides. Economic expansion
will result in greater disposable incomes and larger number of investors.
The manifold increase in capital mobile station from the primary market.
Increase the resource mobilization by mutual funds
Phenomenal growth in secondary market volumes.
Introduction of new products like mini derivative contracts and securities lending
and borrowing scheme.
Introduction of new instruments in the F&O segment etc.
Trapping new markets.
Target the rural and sub urban areas.
Growing India economy opens up huge market for stock broking companies.
Company believes that their culture helps to attract and retain the best talent.
Company is committed to achieve profitable progress consistently.
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THREATS:
The stock broking industry has recently witnessed intense competition falling
brokerage rates & the entry of several big player.
Increased level of competition is a cause of concerns.
Competition from financial institution like banks investing firms etc.
Uncertainty in the market.
Changes in India political economic conditions.
Changes in government policies and regulation.
Dependency on international market.
4-ANALYSIS AND INTERPRETATION OF DATA
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The analysis and interpretation of data conducted in Geojit BNP Paribas financial
services ltd Hassan, covers on overview of the Derivatives (F&O) segment month
wise, product wise, trade wise, with traded value analysis Trend analysis supported by
charts and Tables from the information collected during the project study
Table 1: The following table showing the trading Contracts from Oct
2009 to Mar 2010
Particulars Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Marc-10
Stock
Futures 14044526 13260546 11307332 12546679 10725789 12657646
Index
Futures 13615447 15178552 13337833 12056359 13891843 14379982
Stock
Options 1378569 1360703 1252898 1414178 1223627 1384453
Index
Options 26671252 32965274 29525940 27084605 34588704 30199846
Graph:1 The following Graph Showing the Derivatives trading
Contracts at NSE from Oct 2009 to Mar 2010
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Derivatives Contracts
40000000
34588704
35000000
32965274
29525940 30199846
30000000
26671252 27084605
25000000 Stock Future
20000000 Index Future
15178552 Stock Option
15000000 14044526 13337833 13891843 14379982 Index Option
13260546 12546679
12657646
13615447 11307332
12056359
10725789
10000000
5000000
1378569 1360703 1252898 1414178 1223627 1384453
0
Oct/09 Nov/09 Dec/09 Jan/10 Feb/10 Mar/10
Analysis
Above graph shows that stock future was 14044526 Contract on October 2009 where
as it Increased to 30199846 Contracts in March 2010. Index Future in October 2009
was 13615447 Contracts and it decreased to 12657646 Contracts in the month of
March 2010. Stock Option in October 2009 was 1378569 Contracts and it increased to
1384453 Contracts in the month of March 2010. And Index Option in October 2009
was 26671252 Contracts and it increased to 30199846 Contracts in the month of
March 2010.
Interpretation
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It can be interpreted that The Index futures are having more trade value compare to
stock Future. Index Option are having more trade value compare to stock options.
From the October 2009 to March 2010 Number Contract decreased due to the
market decline, economic exposure and Operational exposure
Table: 2 The following table Showing the Number of Contracts And
average daily Contracts from October-2009 to March-2010
Months Total Avg. Daily Trading
Oct-2009 55709794 2932094
Nov-2009 62765075 3138254
Dec-2009 55424003 2639238
Jan-2010 53101821 2794833
Feb-2010 60429963 3021498
Mar-2010 58621927 2791521
Working Note
Average Daily Trading = Total Contracts
------------------------------------------
No. Of trading days in month
Oct-2008 =55709794/19=2932094
Nov-2009=62765075/20=3138254
Dec-2009=55424003/21=2639238
Jan-2010=53101821/19=2794833
Feb-2010=60429963/20=3021498
Mar-2010=58621927/21=2791521
Analysis
The above table shows Number of Contracts from October-2009 to March -2010,
55709794, 62765075, 55424003, 53101821, 60429963, 58621927, respectively.
Interpretation
It can be interpreted that from October-2009 to November-2009 ontracts are increased
(55709794 to 62765075). And in Nov-2009 to Mar-2010 it decreased (58621927) due
to the market decline
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Table 3: The following table showing the Derivatives Trading
Volume at .NSE. From Oct-2009 TO Mar -2010 (in core)
Particulars Oct-20 Nov-20 Dec-20 Jan-20 Feb-20 Mar-20
09 09 09 10 10 10
Stock 465829 438220 395954 444134 354485 413257
Futures
Index 329610 363523 329496 298849 326871 292038
Futures
Stock 45387 43666 42855 51454 41285 38467
Options
Index 669591 816408 756677 695860 847236 753739
Options
Graph:2 The following Graph Showing the Derivatives trading volume
at NSE from Oct 2009 to Mar 201
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Derivatives Trading Volume
900000
847236
816408
800000
756677 753739
700000 669591 695860
600000 Stock Futures
500000 465829 438220 444134 Index Futures
413257
395954
400000 363523 354485
300000 329610 329496 298849 326871 292038 Stock Options
Index
200000
Options
100000
45387 43666 42855 51454 41285 38467
0 Oct/09 Nov/09 Dec/09 Jan/10 Feb/10 Mar/10
Analysis
Above graph shows that stock future Turnover was 4,65,829 crore on October 2009
Where as it decreased to 4,13,257 crore in March 2010. Index Future in October 2009
was 3,29,610 and it decreased to 2,92,038 in the month of March 2010. Stock Option
in October 2009 was 45,387 crore and it decreased to 38,467 crore in the month of
March 2010. And Index Option in October 2009 was 6, 69, 591 cores and it increased
to 7,53,739 crore in the month of March 2010
Interpretation
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It can be interpreted that The Stock Futures are having more trade value compare to
Index Future. Index Option is having more trade value compare to stock options.
From the October 2009 to March 2010 trade value decreased (except Index Option)
due to the market decline, economic exposure and Operational exposure
Graph: 4 The following Graph Showing the Derivatives trading
volume at NSE of Nov 2009
Analysis
Above graph shows that the Volume of Stock Future is 438220 crore (26.37%), Index
Future is 363523 crore(21.88%), Stock Option is 45666 crore (2.63%) & Index Option
is 816408 crore (49.12%) in the month of October
Interpretation
It can be interpreted The Stock Futures are having more trade value compare to Index
Future. Index Option are having more trade value compare to stock options.
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Graph:5 The following Graph Showing the Derivatives trading volume
at NSE of Dec 2009
Analysis
Above graph shows that the Volume of Stock Future is 395954 crore (25.97%) , Index
Future is 329496 crore (21.61%), Stock Option is 42855 crore (2.81%) & Index
Option is 756677 crore (49.61%) in the month of October
Interpretation
It can be interpreted that The Stock Futures are having more trade value compare to
Index Future. Index Option are having more trade value compare to stock options.
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Graph:6 The following Graph Showing the Derivatives trading
volume at NSE of Jan 2010
Analysis
Above graph shows that the Volume of Stock Future is 444134 crore (29.80%) , Index
Future is 298849 crore (20.05%), Stock Option is 51454 crore (3.45%) & Index
Option is 695860 crore (46.70%) in the month of October
Interpretation
It can be interpreted that The Stock Futures are having more trade value compare to
Index Future. Index Option are having more trade value compare to stock options.
Graph:7 The following Graph Showing the Derivatives trading
volume at NSE of Feb 2010
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Analysis
Above graph shows that the Volume of Stock Future is 354485 crore (22.58%), Index
Future is 326871 crore(20.82%), Stock Option is 41285 crore (2.63%) & Index Option
is 847236 crore (53.97%) in the month of October
Interpretation
It can be interpreted that The Stock Futures are having more trade value compare to
Index Future. Index Option are having more trade value compare to stock options.
Graph:8 The following Graph Showing the Derivatives trading volume
at NSE of Mar 2010
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Analysis
Above graph shows that the Volume of Stock Future is 413257 crore (27.60%), Index
Future is 292038 crore (19.50%), Stock Option is 38467 crore (2.56%) & Index
Option is 753739 crore (50.33%) in the month of October
Interpretation
It can be interpreted that the Stock Futures are having more trade value compare to
Index Future. Index Option are having more trade value compare to stock options.
4.2-Growth of Derivative Market in India
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Analysis
Above graph shows that the Growth of derivatives in India. Index Future Turnover
was 2365 Crore on 2000-01 Where as it increased to 3934389 Crore in 2009-2010.
Stock Future in 2001-2002was 51515 Crore and it increased to 5195247 Crore in the
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2009-2010. Index Option in 2001-2002 was 3765 Crore and it increased to 8027964
Crore in the 2009-2010. And Stock Option in 2001-2002 was 25163 Crore and it
increased to 506065.2 Crore in the 2009-2010.
Interpretation
It can be interpreted that in the 2000-2001 only Index Future are started & reaming
Three Could not open i.e. (Stock Option, Stock Future and Index Option). In 2001-
2002 starting all the Four Derivatives. In 2000 is very low turnover but after
constantly increasing. In 2009-2010 Index Option having more trade value but 2007-
2008 Stock Future is more Than the Index Option. And 2009-2010 good position &
rapidly increasing the derivative Market in India.
Graph:10 The following Graph Showing the Growth of Derivative
Market In India(Contract)
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Growth of Derivative Market
35000000
30000000
25000000
20000000
15000000
10000000
50000000
0
Year
Index Future
Stock Future
Index Option
Stock Option
Analysis
Above graph shows that the Growth of derivatives in India. Index Future was 90580
Contract on 2000-01 where as it Increased to 178306889 Contracts in 2009-2010.
Stock Future in 2001-2002was 1957856 Contract and it increased to 145591240
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Contract in the 2009-2010. Index Option in 2001-2002 was 175900 Contract and it
increased to 341379523 Contract in the 2009-2010. And Stock Option in 2001-2002
was 1037529 Contract and it increased to 14016270 Contract in the 2009-2010.
Interpretation
In can be interpreted that in the 2000-2001 only Index Future are started & reaming
Three Could not open i.e. (Stock Option, Stock Future And Index Option). In 2001-
2002 starting all the Four Derivatives. in 2000 is very Less number of contract but
after constantly increasing. And 2009-2010 good position & Rapidly increasing the
derivative Market in India.
4.3-Comparative Analysis – World Exchanges
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Table: 6 the following table showing the Top 10 Derivatives Exchanges
ranked by Number of Contracts Traded and/or Cleared. Exchanges that
operate under common ownership are combined. Rank Exchange 2008
Rank Exchange 2008
1 CME Group (includes CBOT and Nymex) * 3,277,645,351
2 Eurex (includes ISE) * 3,172,704,773
3 Korea Exchange 2,865,482,319
4 NYSE Euronext (includes all EU and US 1,675,791,242
markets) *
5 Chicago Board Options Exchange (includes 1,194,516,467
CFE) *
6 BM&F Bovespa * 741,889,113
7 Nasdaq OMX Group (includes all EU and US 722,107,905
markets) *
8 National Stock Exchange of India 590,151,288
9 JSE South Africa 513,584,004
10 Dalian Commodity Exchange 313,217,957
Graph: 11 The following Graph Showing the Top 10 Derivatives
Exchanged in the World (2008)
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Analysis
Above graph shows that the Top 10 derivatives Exchanges in the World. The CME Group
was more Exchanged and 1
st
Rank in the World Eurex is 2
nd
Rank in the World Korea
Exchange, NYSE Euronext, markets)*, Chicago Board Options Exchange, BM&F
Bovespa *, Nasdaq OMX Group are 3rd, 4th, 5th, 6th & 7th Respectively. National Stock Exchange of
India (NSE) 8th Ranked in the World. And JSE South Africa, Dalian Commodity Exchange was
9th&10th respectively.
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Interpretation
It can be interpreted that in the 2008 The NSE Turnover is 59,01,51,288 Crore but
CME Group turnover is 3,277,645,351 Crore. Big difference between both, According
to this data NSE got 8
th
Rank & CME Group got 1
st
Rank
Table: 7 The following table showing the Comparative analysis of the
Traded Value in the F&O Segment with the Cash Segment: From
Spt-2009 to Feb-2010
months Cash Segment F&O Segment
Spt-20 365063 1388378
09
Oct-20 362969 1510417
09
Nov-20 324477 1661816
09
Dec-20 292900 1524982
09
Jan-20 338443 1490297
10
Feb-20 245143 1569877
10
Graph:12 The following Graph Showing the Traded Value in the
F&O Segment with the Cash Segment:
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Analysis
Above graph shows that Cash Segment Turnover was 365063 crore on September
2009 where as it decreased to 245143 crore in Feb 2010.F&O Segment was 1388378
Crore on September 2009. Whereas it increased to 1569877 Crore in Feb 2010
Interpretation
It can be interpreted that The F&O Segment are having more trade value compare to
Cash Segment. Because F&O have more Flexible
.
4.4-FUTURES SEGMENT
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Table: 8 the following table showing the Top 5 Traded Symbols on
February 2010
Symbols Turnover (Rs Percentage
Cr) (%)
NIFTY 275349 42.29
BANKNIFTY 24027 3.69%
MINIFTY 13219 2.03%
TATAMOTORS 12471 1.92%
TATASTEEL 18357 2.82%
OTHERS 307555 47.25%
Graph :13 The following Graph Showing the FUTURES SEGMENT of
Top 5 Traded Symbols on February 2010
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50.00% 47.25%
45.00% 42.29%
40.00%
35.00% Sales
30.00%
25.00%
20.00% Column1
15.00%
10.00%
5.00%
0.00%
3.69% 2.03%
1.92% 2. 82%
Analysis
Above graph shows that Top 5 Traded Symbols on Feb 2010. NIFTY Turnover was
275349 crore (42.29%), BANKNIFTY was 24027 (3.69%), MININIFTY was 13219
(2.03), TATAMOTORS was 12471(1.92%), TATASTEEL was 18357 (2.82%), &
0THERS was 307555 (47.25%).
Interpretation
It can be interpreted that The NIFTY are having more trade value compare to others
The F&O are more traded in NSE. Other Four Symbols are important role in the
Future Market
Table: 9 the following table showing the Top 5 Symbols by Open
Interest (number of contracts) on February 2010
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Symbols Number of Percentage (%)
Contract
NIFTY 642864 34.65%
MINIFTY 79006 4.26%
RELIANCE 49335 2.66%
BHARTIARITEL 44162 2.38%
ICICIBANK 37054 2.00%
OTHERS 1003022 54.06%
Graph:14 The following Graph Showing the Top 5 Symbols by Open
Interest (number of contracts) on February 2010
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120000000.00%
100000000.00%
80000000.00% Number of %
60000000.00%
Contracts
40000000.00%
20000000.00%
34.65% 54.06%
0.00%
2.00%
4.26% .66% 2.38%
Analysis
Above graph shows that Top 5 Traded Symbols by open Interest on Feb 2010. NIFTY
was 642864 (34.65%), MININIFTY was 79006 (4.26%), RELIANCE was 49335
(2.66%), BHARTIARTEL was 44162(2.38%), ICICI was 37054 (2%) & 0THERS
was 1003022 (54.06%).
Interpretation
It can be interpreted that The NIFTY are having more trade value compare to others
Other Four Symbols are important role in the Future Market
4.5-OPTIONS SEGMENT
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Table:10 The following table showing the Top 5 Traded Symbols
on February 2010
Symbols Turnover (Rs Percentage (%)
CR)
NIFTY 8216393.57 95.26%
TATASTEEL 5764.04 0.65%
RELIANCE 4717.45 0.53%
HINDALCO 3474.30 0.39%
UNITECH 2815.05 0.32%
OTHERS 25356.67 2.85%
Graph:15 The following Graph Showing the OPTIONS SEGMENT of
Top 5 Traded Symbols on February 2010
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100. 00% 95.26%
80. 00% NIF TY
TA TA S TE E
60. 00% L
R E LIANC E
HINDALC O
40. 00% UNITE C H
20. 00% 0.65% 0.53% 0.39% 0.32% 2.85%
0. 00%
Analysis
Above graph shows that Top 5 Traded Symbols on Option Segment Feb 2010. NIFTY
was 95.26%, TATASTEEL was 0.65%, RELIANCE was O.53%, HINDALCO 0.39%
, UNITECH was O.32% & 0THERS was 2,85%.
Interpretation
It can be interpreted that The NIFTY are having more trade value compare to others.
The most of the people prefer Nifty Reason is less flexibility. The Nifty are important
Role in the Option Segment
Table:11 The following table showing the Top 5 Symbols by Open
Interest (number of contracts) on February, 2010
Call Options
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Symbols Number of Percentage
Contracts (%)
NIFTY 1394840 88.48%
RELIANCE 23486 1.49%
BHARTIARTEL 16283 1.03%
SBIN 9956 0.63%
NTPC 9326 0.59%
OTHERS 122520 7.77%
Graph:16 The following Graph showing the Showing the Top 5
Symbols by Open Interest (number of contracts) on February, 2010
Call Option
100. 00% 8888.48%.48%
80. 00% S ales
60. 00%
40. 00%
20. 00% 1.149%.49%1.103%03%. .63%.63%0 7.7.77%
0.59%
C olumn1
0. 00% 0.59%
NIF TY S B IN
Analysis
Above graph shows that Top 5 Traded Symbols by Option Segment (CALL OPTION)
Feb 2010. NIFTY was 1394840 (88.48%), RELIANCE was 23486 (1.49%),
BHARTIARTEL was 16283 (1.03%), SBIN 9956 (0.63%), NTPC was 9326 (0.59%)
& 0THERS was 122520 (7.77%).
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Interpretation
It can be interpreted that The NIFTY are having more trade value ( MORE THAN
75%) compare to others. The most of the people prefer Nifty Reason is Less
flexibility. the Nifty are important Role in the Option Segment
Table:12 The following table showing the Top 5 Symbols by Open Interest
(number of contracts) on February 2010
Put Option
Symbols Number of Contract Percentage (%)
NIFTY 1488288 95.43%
SBIN 8663 0.56%
BHARTIARTIEL 7811 0.50%
ICICIBANK 4863 0.31%
RELIANCE 4766 0.31%
OTHERS 45176 2.90%
Graph:17 The following Graph Showing the Top 5 Symbols by Open
Interest (number of contracts) on February, 2010
Put Option
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120. 00%
100.
00% 95.43%
S ales
80. 00%
60. 00%
40. 00%
20. 00% C olumn1
0. 00%
NIF TY IC IC IB A NK
0.31% 0.31%
0.56% 0.50% 2.90%
Analysis
Above graph shows that Top 5 Traded Symbols by Option Segment (PUT OPTION)
Feb 2010. NIFTY was 1488288 (95.43%), SBIN was 8663(0.56%), BHARTIARTEL
was 7811 (0.50%), ICICI 4863 (0.31%), RELIANCE was 4766 (0.31%) & 0THERS
was 45176 (2.90%).
Interpretation
It can be interpreted that The NIFTY are having more trade value (MORE THAN
75%) compare to others. The most of the people prefer Nifty Reason is Less
flexibility. The Nifty are important Role in the Option Segment
5-FINDINGS
The study revealed following findings
Initial stage of the growth of the contracts was slow because the derivatives trading
were introduced in the year 2000. In the initial stage people did not give importance to
derivatives. Later there was a rapid growth from 2005-2010
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1. Hedging strategies like future and options are essential as the FOREX market is
volatile in nature.
2. The market factors includes government policies, natural calamities, demand and
supply of commodities in the market etc are the major determinants of price
fluctuations in the market
3. Buying futures contracts is less risky than buying stocks. Thus, on a risk-adjusted
basis they outperform stocks by a significant margin
4. Buying option ( call & put ) is always better choice than the selling option (put &call)
because when we buy the call option loss is limited & profit is unlimited
5. In January 2003, the Security and Exchanged Board of India (SEBI) cleared the way
for mutual funds to trade derivatives.
6. In the month of March the daily Average is decreased from the 78493 to 71309 due to
decline in economic activity
7. Indian Currency derivatives are traded only in Over the Counter (OTC)
8. In the month of March the F&O Segment turnover is More than the Cash Segment
turnover
9. The NSE was Top 8
th
Derivatives Exchanged in the world. in 2008-2009
5.1-CONCLUSION
Derivatives are the instrument s which are quite new to the Indian financial market.
Although the financial derivatives market is gaining momentum, the growth rate is
repaid. The regulations and settlement procedures of derivatives need to be simplified.
Moreover, even today, it cannot be said that the derivatives market has reached the
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stage of perfection. An increased number of innovations are entering the financial
derivatives market but the imperfections in the market are still increasing. Such
barriers demand for the increasing role of regulations in the financial market, which
can bring in success that is yet awaited
To safeguard the investment from dilution in value, the investor has to adopt
strategies like hedging. A proper hedging is possible only when investor is able to
understand relationship between Future and Option market.
From the study it is found that the derivative markets consist of huge shares of Future
and Option trading. The analysis of the Derivative Market has proved that options
have more demand in to market as computed to other Derivatives.
The whole study has shown light to know more about derivatives market and its
performance in India
5.3-SUGESSTION
1. It is recommended that investors should invest in derivatives from a short-term
position perspective.
2. More commodities must be introduced for trading.
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3. Proper information has to be provided to the clients as per the new amendment of
SEBI, about Dematerialization concept
4. Restriction on Derivative trading should be reduced
5. Transactions should be transparent and disclosure to the common investors.
6. Increase the limits on trading of derivatives by foreign institutional investors.
7. Increase the number of stocks on which options and futures are traded.
8. SEBI should decide upon increasing contact size at NSE from 50 to 100
9. SEBI should permit to Currency Derivatives trade in Stock Exchange.
BIBILOGRAPHY:
Books:
1. N D Vohra -Futures & Options -2
nd
Edition -Tata McGraw-Hill publishing
co ltd -page no-1-64 &126-177
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2. N R Parasuraman- Fundamentals of Financial Derivatives- 2
nd
Edition
-Wiley precise Text Book- page No-1-67
3. John C Hull -Options Futures & other Derivatives-7
th
Edition
-PHI Learningpvt ltd -page no-45-71 & 219-235
4. John C Hull- Options Futures and other Derivatives -6
th
Edition Prentice-
Hull of India Pvt Ltd- page No-99-123
5. Gordon & Natarajan -Financial markets & services -5
th
Edition
-Himalaya publishing house -page no-397—421
6. IM Panday- Financial management- -9
th
Edition -Vikas publishing pvt
ltd-page no-417-427 & 704-713
7. Prasanna Chandra-Investment Analysis & Portfolio Management- 3
rd
Edition Tata McGraw-Hill publishing co Ltd- Page no-484-539
Journals and Articals:
i. Commodities and Derivatives-2009
ii. Commodity India-2009
iii. Indian Journal of Finance-2009-2010
iv. Business Line
v. Economic times
vi. Geodata-2009-2010
vii. Currency derivatives-NSE
Web Sites:
i. www.nse.com
ii. www.bse.com
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