Preview

Indian Derivative Market

Better Essays
Open Document
Open Document
1413 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Indian Derivative Market
IPS ACADEMY INDORE

Synopsis

On

“An Exploratory Study on Investor’s Attitude Towards Indian Derivative Market”

For partial Fulfillment of the Requirement for the Degree of

MBA (full time)

Batch 2011-2013

Submitted by: Submitted To:
Susheel Rathore Prof. KavitaTiwari
MBA - III SEM

TABLE OF CONTENTS

CHAPTER No. | CONTENT | PAGE NO. | 1 | INTRODUCTION | 1 | 2 | REVIEW OF LITERATURE | 4 | 3 | RATIONALE OF STUDY | 6 | 4 | OBJECTIVES OF STUDY | 7 | 5 | RESEARCH METHODOLOGY | 8 | 6 | REFERENCES | 9 |
CHAPTER 1

INTRODUCTION:

Derivatives trading in the stock market have been a subject of enthusiasm of research in the field of finance the most desired instruments that allow market participants to manage risk in the modern securities trading are known as derivatives. The derivatives are defined as the future contracts whose value depends upon the underlying assets. If derivatives are introduced in the stock market, the underlying asset may be anything as component of stock market like, stock prices or market indices, interest rates, etc. The main logic behind derivatives trading is that derivatives reduce the risk by providing an additional channel to invest with lower trading cost and it facilitates the investors to extend their settlement through the future contracts. It provides extra liquidity in the stock market. Derivatives are assets, which derive their values from an underlying asset. These underlying assets are of various categories like

• Commodities including grains, coffee beans, etc. • Precious metals like gold and silver. • Foreign exchange rate.

• Short term debt securities such as T-bills.

• Equities

For example, a dollar forward is a derivative contract, which gives the buyer a right & an obligation



References: 6.1 BIBLIOGRAPHY * Bansal M., Bansal N. (2003) - Derivatives & Financial Innovations, Bombay Stock Exchange. * Ajay Shah (2000) – Equity Market India * E. Sirisha (2001) – Stock Market Derivatives: Role of Indices ( 2nd Edition) 6.2 WEBLIOGRAPHY * http://www.wikipedia.com/ * http://www.newyorkfed.org/research/economists/sarkar/derivatives_in_india.pdf * www.sebi.gov.in/faq/derivativesfaq.html- * www.rediff.co.in/money/2008/apr/29deriv.html * www.nseindia.com/content/us/ismr2011ch6.pdf

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Fin 3826

    • 1307 Words
    • 6 Pages

    *** If you have any questions regarding grading, please contact Yang Yang. The other TA does not have your information. However, if you need help regarding course materials, you could contact any of us. All the e-mails to me or to your TA should start from FIN 3826 in the subject line or you will have the risk that they will not be read. For the privacy protection reason, we only correspond to e-mails from LSU system. Therefore, the e-mails from gmail, hotmail, and yahoo, etc, will not be read. Course Objectives and Outcomes To acquire an in-depth understanding of the major investment theories, which include capital market theory, portfolio theory, asset pricing models, options, and futures. To provide an understanding of the risk/return tradeoff that investors face, how risk can be reduced, what risk is important to investors, how risk is priced in financial markets, how derivative markets and instruments work, how derivative instruments are priced, and how derivatives can be used to reduce risk. To help you make more informed and, hopefully, more profitable investment decisions. To help you develop a theoretical foundation for future coursework in finance. Required Materials Required Text: Required Reading: Essentials of Investments, by Bodie, Kane and Marcus, 9th edition, Irwin/McGraw-Hill, 2012. The Wall Street Journal (WSJ)…

    • 1307 Words
    • 6 Pages
    Satisfactory Essays
  • Good Essays

    Reginald Rose has been a juror before, and he has used his experience to write a play in which he portrays the case of a murder of a boy’s father being put into the hands of people that do not take their responsibilities seriously. One of these characters includes the 7th juror. The author’s use of idiom suggests that in a democracy, there are often citizens that don’t take their role in a democracy seriously. When the writer states, “He’s a bull, this kid. Shoooom. A real jug handle”, (Rose, 2-5)., Rose is conveying his perspective through the 7th juror. The juror’s lack of interest in the case illustrates that there are people in a democracy that have a serious and important role but do not care, and only slack off. Holbrook has a similar…

    • 216 Words
    • 1 Page
    Good Essays
  • Good Essays

    If an equity portfolio is hedged with the appropriate futures contract sold short, any decline in the value of the equity shares will be offsets by an increase in the value of the future position. If the value of the equity shares rises, the corresponding futures contracts will lose value. At a certain level of futures loss additional deposits will be required to keep the contract open. If the portfolio rises in value, the cost of the hedging will increase in proportion to the portfolio increase.…

    • 834 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Derivatives have become popular in response to the increasing volatility and complexity of financial markets. A diverse range of new financial products have been created to enable market participants to handle the risks arising from trade in securities and to speculate on future expected movements in securities prices, without direct trade in the assets themselves. Derivative contract creates a promise to deliver or trade an underlying product at some time in the future. The contract gives one party a claim on an underlying asset or cash value of the asset, at a fixed date in the future. The other party is contractually bound to meet the corresponding liabilities. Financial derivatives are traded on organized market such as LIFFE (London International Financial Futures Exchange) and through the intermediation of the clearing house system, there is more flexibility of exchange, and the risk of credit default is reduced. The two parties need not know each other they only have to satisfy the exchange that they are creditworthy to transact.…

    • 2782 Words
    • 12 Pages
    Powerful Essays
  • Powerful Essays

    stocktrak report

    • 1901 Words
    • 7 Pages

    The learning objectives for students in this course are: (l) improve your understanding of financial securities and markets, (2) develop the ability to analyze investment companies, common stocks, and bonds for investment decisions, (3) understand how options are valued and how option contracts are used in hedging and speculating, (4) understand how to apply security analysis techniques in relatively efficient capital markets, and (5) gain practical experience in trading securities. The prerequisite for this course is the completion of FNCE 3301 with a grade of C- or better.…

    • 1901 Words
    • 7 Pages
    Powerful Essays
  • Best Essays

    Introduction This essay explains the pitfalls associated with derivatives instruments by making reference to the 2007 Global Financial Crisis. Derivatives are financial securities that are linked to a specific instrument or indicator or commodities called underlying instruments (Hull, 2009). There are as many derivatives as they are underlying instruments. Derivatives are essentially financial contracts which are entered into between two parties with respect to some other underlying instruments. Since they are contracts entered into with respect to underlying assets they do not have value on their own standing but derive it from that of instruments upon which they are entered into. According to the IMF (2010), even though it’s true that derivatives are linked to the value of underlying instruments, transactions in derivatives are separate transactions from those of underlying instruments upon which derivatives are based. This means that derivatives are financial securities with own roles, advantages and disadvantages which are distinct from those of underlying instruments.…

    • 2199 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    This chapter provides an overview of currency derivatives, which are sometimes referred to as “speculative.” Yet, firms are increasing their use of these instruments for hedging. The chapter does give speculation some attention, since this is a good way to illustrate the use of a particular instrument based on certain expectations. However, the key is that students have an understanding why firms would consider using these instruments and under what conditions they would use them.…

    • 10531 Words
    • 43 Pages
    Powerful Essays
  • Satisfactory Essays

    Appendix Financial Ratios

    • 3581 Words
    • 15 Pages

    |2. Derivative instruments for speculation | |1, 3, 4 | |1, 2 | |1, 2, 3, | |6, 7, 8, 9…

    • 3581 Words
    • 15 Pages
    Satisfactory Essays
  • Satisfactory Essays

    This chapter provides an overview of currency derivatives, which are sometimes referred to as “speculative.” Yet, firms are increasing their use of these instruments for hedging. The chapter does give speculation some attention, since this is a good way to illustrate the use of a particular instrument based on certain expectations. However, the key is that students have an understanding why firms would consider using these instruments and under what conditions they would use them.…

    • 6324 Words
    • 25 Pages
    Satisfactory Essays
  • Better Essays

    Nick Leeson's Double Life

    • 1622 Words
    • 7 Pages

    Barings main intention in Singapore was "to trade derivatives in a low risk, but very profitable arbitrage strategy." There is no actual tangible worth, but instead their value comes from "separating the risk portion from the underlying security and trading this derived element as a separate entity." There are two categories that derivatives fall in: options and futures. Option contracts allow the holder to buy or sell an underlying asset by a specified date at a specified price, while a future contract requires the seller to deliver a specific asset to the…

    • 1622 Words
    • 7 Pages
    Better Essays
  • Satisfactory Essays

    Is taking pictures one of your biggest hobbies? Then maybe instead of hiring professional photographers to cover your next baby shower, you can teach some people a thing or two by doing what not many people expect: taking pictures of the baby shower yourself! Now isn't that one of the best ways to save money ever?…

    • 326 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Distraction Solutions

    • 1298 Words
    • 6 Pages

    Sometimes they are inescapable or unpreventable, however, some of them can be avoided, for example: mobile phones, people arriving late, changing the subject,the way we format an email, talking about a different topic, making the receiver feelcomfortable, changing a meeting place etc can all be solutions to distractions which mayhinder effective communication. 3.…

    • 1298 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Report on Indiabulls

    • 13114 Words
    • 53 Pages

    The report is submitted as partial fulfillment of the requirement of MBA program of IBS Hyderabad. I, Prof. M Showry, here by authorize the submission of the Project Work titled “Scope And Promotion Of Currency Derivatives With Reference To Indiabulls Securities” undertaken by Mr. Krutarth Mankad (Enrollment Number : 10BSPHH010347) as partial fulfillment of the requirement of MBA Program of IBS Hyderabad. The project work was executed by the student under my guidance and no part of this report has been submitted for any other degree or recognition before.…

    • 13114 Words
    • 53 Pages
    Good Essays
  • Good Essays

    Commodity Market Derivatives

    • 29076 Words
    • 117 Pages

    Test Details Sr. No. Name of Module Fees (Rs.) Test Duration (in minutes)…

    • 29076 Words
    • 117 Pages
    Good Essays
  • Powerful Essays

    Financial Services

    • 12653 Words
    • 51 Pages

    Financial markets are an integral part of the economy of any nation. They play a key role…

    • 12653 Words
    • 51 Pages
    Powerful Essays