PROJECT ON PRESENT SCENARIO OF DERIVATIVE MARKKET IN INDIA

Submitted in partial fulfillment of the requirements for Post Graduate Diploma in management (PGDM)

By Sawai Lal (ROLL NO- 40, BATCH 2011)

Class of 2011

Bharatiya Vidya Bhavans Usha & Lakshmi Mittal Institute of Management Copernicus Lane, Kasturba Gandhi Marg New Delhi

July 2012 I

ACKNOWLEDGEMENT

Every study requires a guidance of someone who is working in that field. Firstly we would like to thank Director Sir DR. RATTAN SHARMA for providing an opportunity of preparing a Grand Project Report and allowing us to use the resources of the institution during this project.

We are extremely thankful to our Industrial mentor Mr. Ajay Singh & collage mentor Prof . H. Indukar for their precious guidance regarding the preparation of the Survey Report. Their guidance has proved to be useful and without them, the preparation this report might not have been possible.

We are also thankful to the other faculty members of BULMIM for extending their valuable support for this project. We also extend our sincere thanks to the Respondents, who helped us during the course of our project and for their gracious attitude.

We would like to take this opportunity to extend our warm thoughts to those who helped us in making this project a wonderful experience. Last but not the least; we would also like to thank our family for their support and encouragement.

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Certificate of Originality (To be filled in by the student in his / her handwriting)

I --------------------------------------------------- Roll No -------------- Class of 2011, a full time bonfire student of first year of Post Graduate Diploma in Management (PGDM) Programme of Bharatiya Vidya Bhavans Usha and Lakshmi Mittal Institute of Management, New Delhi hereby certify that this project work carried out by me at ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- and the report submitted in partial fulfillment of the requirements of the programme is an original work of mine under the guidance of the industry mentor ---------------------------------------------------------------------------------------------------------------------------------------------------------- and is not based or reproduced from any existing work of any other person or on any earlier work undertaken at any other time or for any other purpose, and has not been submitted anywhere else at any time

(Students Signature) Date:

(Faculty Mentors Signature)

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Executive summary

This project has been initiated for the purpose of acquainting me with, right from the basics of the financial terminology used in the stock markets, further up to gaining in depth knowledge of all the issues concerning the management of various risks faced by investors and traders under different market scenarios.

It starts with the basic types of equity derivatives in India followed by the basic terminologies of futures and options and their practical applications in the real world. The project goes on to describe how future contracts are used by hedgers, speculators and arbitrageurs to make short term gains or provide a cushion to their portfolios. Different strategies with live examples have been explained to give a practical edge to the project.

The main part of the project deals with present scenario of derivatives market in India. It deals with how to avoid or minimize risk in derivatives market.Questionnaire based on company format. With the help of questionnaire prepared we got to know the response of participants in derivatives market and they how to manage their fund in derivatives market..

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LIST OF CONTENTS

CHAPTER. No. 1 2 3 3.3 3.4 4 5 6 7 8 9 10 11 12

Content OBJECTIVES OF STUDY INTRODUCTION LITERATURE REVIEW ABOUT THE COMPANY HOSTORY OF DERIVATIVE MARKET MAIN DERIVATIVES IN INDIA RESEARCH DESIGN RESEARCH METHODOLOGY DATA INTERPRATATION PROJECT REPORT RECOMMENDATIONS CONCLUSION LIMITATIONS OF THE STUDY BIBLIOGRAPHY APPENDICES

Page No 1 2 3 4-7 8-12 12-36 36-41 42 43-58 59 60 61 62 63 64-65

LIST OF FIGURES

Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Figures ABOUT THE COMPANY 3.1 ABOUT THE COMPANY 3.2 MAIN DERIVATIVES IN INDIA 3.3 NATURE OF CONTRACT 3.4 TRADED VALUE 3.5 HAVE YOU INTERESTED IN DERIVATIVE MARKET 6.1 PERCENTAGE OF INCOME AVAILABLE FOR INVESTMENT 6.2 PRIMARY INVESTMENT PURPOSE 6.3 KINDS OF RISK WHILE INVESTING 6.4 WHY PEOPLE DO NOT INVEST IN DERIVATIVE MARKET 6.5 PURPOSE OF INVESTMENT IN DERIVATIVE MARKET 6.6 ADVISE BEFORE INVESTING IN DERIVATIVE MARKET 6.7 PARTICIPATION IN 6.8 CONTACT MATURITY PERIOD FOR 6.9

Page No 7 7 16 33 33 43 44 45 46 47 48 49 50 51

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LIST OF TABLES

Sr. No. 1 2 3 4 5

Tables MAIN DERIVATIVES IN INDIA 3.1 PARTICIPANTS VIEW ON SCALE BASIS 6.1 PARTICIPANTS VIEW ON SCALE BASIS 6.2 PARTICIPANTS VIEW ON SCALE BASIS 6.3 PARTICIPANTS VIEW ON SCALE BASIS 6.4

Page No 16-18 56 56 57 58

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