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1 INTRODUCTION
The term " DERIVATIVE" indicates the value which is entirely "derived"
from the value of the asset such as securities, commodities, bullion, currency, live
stock or anything else. In other words, Derivative means a forward, future, option or
any other hybrid contract of pre determined fixed duration, linked for the purpose of
contract fulfillment to the value of a specified real or financial asset or to an index of
securities.
Derivatives have been included in the definition of Securities in The
Securities Contracts (Regulations) Act, as a security derived from a debt instrument,
share, 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.
They include options and futures. Certain options are short-term in nature
and are issued by investors. These options may be long-term in nature and are issued
by companies in the process of financing their activities. The trading in derivatives are
things of US origin and in US the Organized exchanges began trading in options on
equities in 1973 and on debt from 1982.
The emergence of the market for derivative products, most notably
forwards, futures and options, can be traced back to the willingness of risk-averse
economic agents to guard themselves against uncertainties arising out of fluctuations
in asset prices. By their very nature, the financial markets are marked by a very high
degree of volatility. Through the use of derivative products, it is possible to partially
or fully transfer price risks by locking-in asset prices. As instruments of risk
management, these generally do not influence the fluctuations in the underlying asset
prices. However, by locking-in asset prices, derivative products minimize the impact
of fluctuations in asset prices on the profitability and cash flow situation of riskaverse investors.
Products initially emerged, as hedging devices against fluctuations in
commodity prices and commodity-linked derivatives remained the sole form of such
products for almost three hundred years. The financial derivatives came into spotlight
in post-1970 period due to growing instability in the financial markets. However,
since their emergence, these products have become very popular and by 1990s, they
accounted for about two-thirds of total transactions in derivative products. In recent
years, the market for financial derivatives has grown tremendously both in terms of
variety of instruments available, their complexity and also turnover. In the class of
equity derivatives, futures and options on stock indices have gained more popularity
than on individual stocks, especially among institutional investors, who are major
users of index-linked derivatives. Even small investors find these useful due to high
correlation of the popular indices with various portfolios and ease of use. The lower
costs associated with index derivatives Vis derivative products based on individual
securities is another reason for their growing use.
Various portals,
www.nseindia.com
1.6 HYPOTHESIS
In this section, I develop a stylized equilibrium model to analyze the eects of margin
requirements on banks welfare, default risk and on their trading volume in derivatives
contracts. I consider two banks with symmetric endowments yielding uncertain
payos. The banks can trade a derivatives contract with each other to hedge their
endowment. However, the nancial market is incomplete due to asymmetric
information. In order to reduce the burden created by idiosyncratic uninsurable
shocks, I allow banks to default on their obligations from derivatives trading. I then
introduce a margin requirement aimed at reducing default risk related to the trading of
the derivatives contract. Subsequently, I use the results obtained in this analysis to
derive a set of hypotheses about the impact of margin requirements on banks welfare,
default risk and on aggreagte derivatives tradingvolume that I then test within a more
realistic simulated market model.
I consider an economy consisting of two groups of banks5 with an initial
endowment of w0 > 0 units of a consumption good. I assume that banks behave as if
they maximized expected utility of terminal wealth having a common strictly
increasing, strictly concave utility function u(). There are two dates. At date 1, banks
can trade in a derivatives contract. At date 2, one of two equally probable observable
states of the world, s1 and s2, occurs. In each state, one bank receives an endowment
of x units of the consumption good. The other bank typically receives a larger
endowment y. However, each of the banks has a small probability of receiving z < x
instead of the larger endowment y. The occurrence of this bad draw is private
information and independent across banks.6
Table A.1 summarizes the structure of uncertainty and endowments in our
economy. I initially assume y > x > z > 0.
Each bank mirrors the other and therefore expected aggregate endowment in this
economy is constant. I assume the marginal utility in the state in which a bank
receives the certain endowment x is higher than expected marginal utility in the state
in which it receives an uncertain endowment.
Assumption 1:- u (wx) > u (wy ) + (1 )u (wz ),
where w = w0+ with = x, y, z. Assumption 1 suggests that in equilibrium a bank
would thus buy derivatives contracts that transfer wealth to the state in which it
receives the certain endowment x.
LITERATURE REVIEW
The product whose value is derived from the value of one or more basic
variables, called bases (underlying asset, index, or reference rate), in a contractual
manner. The underlying asset can be equity, forex, commodity or any other asset. For
example, wheat farmers may wish to sell their harvest at a future date to eliminate the
risk of a change in prices by that date. Such a transaction is an example of a
derivative. The price of this derivative is driven by the spot price of wheat which is
the underlying. In the Indian context the Securities Contracts (Regulation) Act,
1956 (SC(R) A) defines equity derivative to include
1. A security derived from a debt instrument, share, loan whether secured or
unsecured, risk instrument or contract for differences or any other form of security.
2. A contract, which derives its value from the prices, or index of prices, of underlying
securities.
The derivatives are securities under the SC(R) A and hence the trading of
derivatives is governed by the regulatory framework under the SC(R) A.1
The following factors have been driving the growth of financial derivatives:
1. Increased volatility in asset prices in financial markets,
2. Increased integration of national financial markets with the international markets,
3. Marked improvement in communication facilities and sharp decline in their costs,
4. Development of more sophisticated risk management tools, providing economic
agents a wider choice of risk management strategies, and
5. Innovations in the derivatives, which optimally combine the risks and returns over a
large number of financial assets, leading to higher returns, reduced risk as well as
trans-actions costs as compared to individual financial assets.
DERIVATIVES
Derivatives broadly can be classified into two categories, those that are traded on the
exchange and the/ those traded one to one or over the counter. They are hence
known as
Derivatives today
The Reserve Bank of India has permitted options, interest rate swaps, currency
swaps and other risk reductions OTC derivative products.
Besides the Forward market in currencies has been a vibrant market in India
for several decades.
e.g. The Indian Pepper and Spice Traders Association (IPSTA) and the Coffee
Owners Futures Exchange of India (COFEI).
The year 2000 will herald the introduction of exchange traded equity
derivatives in India for the first time.
Traditionally equity derivatives have a long history in India in the OTC market.
Options of various kinds (called Teji and Mandi and Fatak) in un-organized markets
were traded as early as 1900 in Mumbai
In the equity markets both the National Stock Exchange of India Ltd. (NSE) and The
Stock Exchange, Mumbai (BSE) have applied to SEBI for setting up their derivatives
segments.
The exchanges are expected to start trading in Stock Index futures by mid-May 2000.
Both the exchanges have set-up an in-house segment instead of setting up a separate
exchange for derivatives.
BSEs Derivatives Segment, will start with Sensex futures as its first product.
NSEs Futures & Options Segment will be launched with Nifty futures as the first
product.
Derivative players:
Hedgers: The objective of these kinds of traders is to reduce the risk. They are not in
the derivatives market to make profits. They are in it to safeguard their existing
positions. Apart from equity markets, hedging is common in the foreign exchange
markets where fluctuations in the exchange rate have to be taken care of in the foreign
currency transactions or could be in the commodities market where spiraling oil prices
have to be tamed using the security in derivative instruments.
Speculators: They are traders with a view and objective of making profits. They are
willing to take risks and they bet upon whether the markets would go up or come
down.
10
Existing
SYSTEM
New
Approach
Peril &Prize
Approach
1) Deliver based
Trading, margin
loss to extent of
on delivery basis
trading& carry
price change.
forward transactions.
11
Peril &Prize
1)Maximum
loss possible
to premium
paid
premium
Advantages
ARBITRAGEURS
Existing
SYSTEM
Approach
Peril &Prize
1) Buying Stocks in
1) Make money
New
Approach
1) B Group more
Peril &Prize
1) Risk free
promising as still
another exchange.
Market moves.
in weekly settlement
12
game.
forward transactions.
2) If Future Contract
more or less than Fair price
Advantages
13
2) Cash &Carry
arbitrage continues
HEDGERS
Existing
Approach
1) Difficult to
SYSTEM
Peril &Prize
1) No Leverage
offload holding
available risk
during adverse
reward dependant
market conditions
on market prices
Approach
New
Peril &Prize
1) Additional
cost is only
premium.
as circuit filters
Advantages
14
Availability of Leverage
15
these kind of mixed markets. Fifth, an important incidental benefit that flows from
derivatives trading is that it acts as a catalyst for new entrepreneurial activity. The
derivatives have a history of attracting many bright, creative, well-educated people
with an entrepreneurial attitude. They often energize others to create new businesses,
new products and new employment opportunities, the benefit of which are immense.
Sixth, derivatives markets help increase savings and investment in the long run.
Transfer of risk enables market participants to expand their volume of activity.
Derivatives thus promote economic development to the extent the later depends on the
rate of savings and investment.
1991
14 December 1995
18 November 1996
11 May 1998
7 July 1999
24 May 2000
25 May 2000
9 June 2000
12 June 2000
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25 September 2000
2 June 2001
Indian Market
Starting from a controlled economy, India has moved towards a world
where prices fluctuate every day. The introduction of risk management instruments in
India gained momentum in the last few years due to liberalization process and
Reserve Bank of Indias (RBI) efforts in creating currency forward market.
Derivatives are an integral part of liberalization process to manage risk. NSE gauging
the market requirements initiated the process of setting up derivative markets in India.
In July 1999, derivatives trading commenced in India
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18
Types of derivatives
The most commonly used derivatives contracts are forwards, futures and options
which we shall discuss in detail later. Here we take a brief look at various derivatives
contracts that have come to be used.
Forwards: A forward contract is a customized contract between two entities, where
settlement takes place on a specific date in the future at todays pre-agreed price.
Futures: A futures contract is an agreement between two parties to buy or sell an
asset at a certain time in the future at a certain price. Futures contracts are special
types of forward contracts in the sense that the former are standardized exchangetraded contracts.
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Options: Options are of two types - calls and puts. Calls give the buyer the right but
not the obligation to buy a given quantity of the underlying asset, at a given price on
or before a given future date. Puts give the buyer the right, but not the obligation to
sell a given quantity of the underlying asset at a given price on or before a given date.
Swaps: Swaps are private agreements between two parties to exchange cash flows in
the future according to a prearranged formula. They can be regarded as portfolios of
forward contracts. The two commonly used swaps are:
Interest rate swaps: These entail swapping only the interest related cash flows
between the parties in the same currency.
Currency swaps: These entail swapping both principal and interest between the
parties, with the cash flows in one direction being in a different currency than
those in the opposite direction.
Warrants: Options generally have lives of upto one year, the majority of options
traded on options exchanges having a maximum maturity of nine months. Longerdated options are called warrants and are generally traded over-the-counter.
LEAPS: The acronym LEAPS means Long-Term Equity Anticipation Securities.
These are options having a maturity of upto three years.
Baskets: Basket options are options on portfolios of underlying assets. The
underlying asset is usually a moving average or a basket of assets. Equity index
options are a form of basket options.
Swaptions: Swaptions are options to buy or sell a swap that will become operative at
the expiry of the options. Thus a swaption is an option on a forward swap. Rather than
have calls and puts, the swaptions market has receiver swaptions and payer swaptions.
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A receiver swaption is an option to receive fixed and pay floating. A payer swaption is
an option to pay fixed and receive floating.
Introduction to futures:
Futures markets were designed to solve the problems that exist in forward
markets. A futures contract is an agreement between two parties to buy or sell an asset
at a certain time in the future at a certain price. But unlike forward contracts, the
futures contracts are standardized and exchange traded. To facilitate liquidity in the
futures contracts, the exchange specifies certain standard features of the contract. It is
a standardized contract with standard underlying instrument, a standard quantity and
quality of the underlying instrument that can be delivered, (or which can be used for
reference purposes in settlement) and a standard timing of such settlement. A futures
contract may be offset prior to maturity by entering into an equal and opposite
transaction. More than 99% of futures transactions are offset this way.
The standardized items in a futures contract are:
Location of settlement
Futures Terminology
Spot price: The price at which an asset trades in the spot market.
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Futures price: The price at which the futures contract trades in the futures
market.
Contract cycle: The period over which a contract trades. The index futures
contracts on the NSE have one-month, two-months and three-months expiry
cycles, which expire on the last Thursday of the month. Thus a January expiration
contract expires on the last Thursday of January and a February expiration
contract ceases trading on the last Thursday of February. On the Friday following
the last Thursday, a new contract having a three-month expiry is introduced for
trading.
Expiry date: It is the date specified in the futures contract. This is the last day on
which the contract will be traded, at the end of which it will cease to exist.
Contract size: The amount of asset that has to be delivered under one contract.
For in-stance, the contract size on NSEs futures market is 200 Nifties.
Basis: In the context of financial futures, basis can be defined as the futures price
minus the spot price. There will be a different basis for each delivery month for
each contract. In a normal market, basis will be positive. This reflects that futures
prices normally exceed spot prices.
Cost of carry: The relationship between futures prices and spot prices can be
summarized in terms of what is known as the cost of carry. This measures the
storage cost plus the interest that is paid to finance the asset less the income
earned on the asset.
Initial margin: The amount that must be deposited in the margin account at the
time a futures contract is first entered into is known as initial margin.
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Marking-to-market: In the futures market, at the end of each trading day, the
margin ac-count is adjusted to reflect the investors gain or loss depending upon
the futures closing price. This is called markingtomarket.
Maintenance margin: This is somewhat lower than the initial margin. This is set
to ensure that the balance in the margin account never becomes negative. If the
balance in the margin account falls below the maintenance margin, the investor
receives a margin call and is expected to top up the margin account to the initial
margin level before trading commences on the next day.
Introduction to options
In this section, we look at the next derivative product to be traded on the
NSE, namely options. Options are fundamentally different from forward and futures
contracts. An option gives the holder of the option the right to do something. The
holder does not have to exercise this right. In contrast, in a forward or futures
contract, the two parties have committed themselves to doing something. Whereas it
costs nothing (except margin requirements) to enter into a futures contract, the
purchase of an option requires an upfront payment.
History of options
Although options have existed for a long time, they were traded OTC,
without much knowledge of valuation. Today exchange-traded options are actively
traded on stocks, stock indexes, foreign currencies and futures contracts. The first
trading in options began in Europe and the US as early as the eighteenth century. It
was only in the early 1900s that a group of firms set up what was known as the put
and call Brokers and Dealers Association with the aim of providing a mechanism for
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bringing buyers and sellers together. If someone wanted to buy an option, he or she
would contact one of the member firms.
The firm would then attempt to find a seller or writer of the option either from its own
clients or those of other member firms. If no seller could be found, the firm would
undertake to write the option itself in return for a price. This market however suffered
from two deficiencies. First, there was no secondary market and second, there was no
mechanism to guarantee that the writer of the option would honor the contract. It was
in 1973, that Black, Merton and Scholes invented the famed Black Scholes formula.
In April 1973, CBOE was set up specifically for the purpose of trading options. The
market for options developed so rapidly that by early 80s, the number of shares
underlying the option contract sold each day exceeded the daily volume of shares
traded on the NYSE. Since then, there has been no looking back.
Option Terminology
Index options: These options have the index as the underlying. Some options are
European while others are American. Like index futures contracts, index options
contracts are also cash settled.
Stock options: Stock options are options on individual stocks. Options currently
trade on over 500 stocks in the United States. A contract gives the holder the right
to buy or sell shares at the specified price.
24
Buyer of an option: The buyer of an option is the one who by paying the option
premium buys the right but not the obligation to exercise his option on the
seller/writer.
Writer of an option: The writer of a call/put option is the one who receives the
option premium and is thereby obliged to sell/buy the asset if the buyer exercises
on him. There are two basic types of options, call options and put options. Call
option: A call option gives the holder the right but not the obligation to buy an
asset by a certain date for a certain price. Put option: A put option gives the holder
the right but not the obligation to sell an asset by a certain date for a certain price.
Option price: Option price is the price which the option buyer pays to the option
seller.
Expiration date: The date specified in the options contract is known as the
expiration date, the exercise date, the strike date or the maturity.
Strike price: The price specified in the options contract is known as the strike
price or the exercise price.
American options: American options are options that can be exercised at any
time upto the expiration date. Most exchange-traded options are American.
European options: European options are options that can be exercised only on
the expiration date itself. European options are easier to analyze than American
options, and properties of an American option are frequently deduced from those
of its European counterpart.
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higher than the strike price, the call is said to be deep ITM. In the case of a put,
the put is ITM if the index is below the strike price.
Intrinsic value of an option: The option premium can be broken down into two
components - intrinsic value and time value. The intrinsic value of a call is the
amount the option is ITM, if it is ITM. If the call is OTM, its intrinsic value is
zero. Putting it another way, the intrinsic value of a call isNP which means the
intrinsic value of a call is Max [0, (S t K)] which means the intrinsic value of a
call is the (St K). Similarly, the intrinsic value of a put is Max [0, (K -S t )] ,i.e.
the greater of 0 or (K - St ). K is the strike price and St is the spot price.
Time value of an option: The time value of an option is the difference between its
premium and its intrinsic value. A call that is OTM or ATM has only time value.
Usually, the maximum time value exists when the option is ATM. The longer the time
to expiration, the greater is a calls time value, all else equal. At expiration, a call
should have no time value.
26
Options
Same as futures.
Same as futures.
Price is zero
27
Linear payoff
Nonlinear payoff.
Source: http://www.derivativesindia/scripts/glossary/indexobasic.asp
28
Take the case of a speculator who buys a two-month Nifty index futures
contract when the Nifty stands at 1220. The underlying asset in this case is the Nifty
portfolio. When the index moves up, the long futures position starts making profits,
and when the index moves down it starts making losses. Figure 5.1 shows the payoff
diagram for the buyer of a futures contract.
29
Profit
1220
NIFTY
loss
Profit
30
1220
Nifty
loss
Options payoffs
The optionality characteristic of options results in a non-linear
payoff for options. In simple words, it means that the losses for the buyer of an option
are limited, however the profits are potentially unlimited. For a writer, the payoff is
exactly the opposite. His profits are limited to the option premium, however his losses
are potentially unlimited.
These non-linear payoffs are fascinating as they lend themselves to be
used to generate various payoffs by using combinations of options and the underlying.
We look here at the six basic payoffs.
31
+60
1160
1220
1280
-60
Nifty
Loss
Profit
+60
32
Nifty
-60
Loss
33
exercised and the writer gets to keep the premium. Figure 5.6 gives the payoff for the
writer of a three month call option (often referred to as short call) with a strike of
1250 sold at a premium of 86.60.
PROFIT
1250
Nifty
86.60
LOSS
34
between the Nifty-close and the strike price. The loss that can be incurred by the writer of the
option is potentially unlimited, whereas the maximum profit is limited to the extent of the upfront option premium of Rs.86.60 charged by him.
Profit
86.60
0
1250
Nifty
Loss
35
The figure shows the profits/losses for the buyer of a three-month Nifty
1250 put option. As can be seen, as the spot Nifty falls, the put option is in-the-money.
If upon expiration, Nifty closes below the strike of 1250, the buyer would exercise his
option and profit to the extent of the difference between the strike price and Niftyclose. The profits possible on this option can be as high as the strike price. However if
Nifty rises above the strike of 1250, he lets the option expire. His losses are limited to
the extent of the premium he paid for buying the option.
Profit
0
61.70
Nifty
1250
Loss
36
option (often referred to as short put) with a strike of 1250 sold at a premium of
61.70.
Profit
61.70
1250
Loss
37
Nifty
We use fair value calculation of futures to decide the no-arbitrage limits on the price
of a futures contract. This is the basis for the cost-of-carry model where the price of
the contract is defined as:
F=S+C
Where:
F: Futures price
S: Spot price
C: Holding costs or carry costs
This can also be expressed as:
F=s (1+r) T
Where:
r: Cost of financing
T: Time till expiration
If F < s (1+r) T or F > s (1+r) T, arbitrage opportunities would exist i.e. whenever the
futures price moves away from the fair value, there would be chances for arbitrage.
We know what the spot and future prices are, but what are the components of holding
cost? The components of holding cost vary with contracts on different assets. At times
the holding cost may even be negative. In the case of commodity futures, the holding
cost is the cost of financing plus cost of storage and insurance purchased etc. In the
case of equity futures, the holding cost is the cost of financing minus the dividends
returns.
38
Note: In the futures pricing examples worked out in this book, we are using the
concept of discrete compounding, where interest rates are compounded at discrete
intervals, for example, annually or semiannually. Pricing of options and other
complex derivative securities requires the use of continuously compounded interest
rates. Most books on derivatives use continuous compounding for pricing futures too.
However, we have used discrete compounding as it is more intuitive and simpler to
work with. Had we to use the concept of continuous compounding, the above
equation would have been expressed as:
F= Se rT
Where:
r: Cost of financing (using continuously compounded interest rate)
T: Time till expiration
e: 2.71828
39
1. What is the spot price of silver? The spot price of silver, S= Rs.7000/kg.
2. What is the cost of financing for a month? (1+0.15) 30/365
3. What are the holding costs? Let us assume that the storage cost = 0.
In this case the fair value of the futures price, works out to be = Rs.708.
F=s (1+r) T + C = 700(1.15) 30/365 =Rs. 708
If the contract was for 3 month period i.e. expiring 30 th March the
cost of financing would increase the futures price. Therefore, the futures price would
be C = 700(1.15)
90/365
for 10,000 kg. Of silver instead of 100 gms, then it would involve a non-zero storage
cost, and the price of the future contract would be Rs. 708 +the cost of storage.
COMPANY PROFILE
AXIS Bank is one of the fastest growing banks in private sector. The Bank
operates in four segments, namely treasury, retail banking, corporate/ wholesale
banking and other banking business. The treasury operations include investments in
sovereign and corporate debt, equity and mutual funds, trading operations, derivative
trading and foreign exchange operations on the account, and for customers and central
funding. Retail banking includes lending to individuals/ small businesses subject to
the orientation, product and granularity criterion. It also includes liability products,
card services, Internet banking, automated teller machines (ATM) services,
depository, financial advisory services, and non resident Indian (NRI) services. The
40
41
their merchant acquiring business. In the year 2005, the Bank raised $239.3 million
through Global Depositary Receipts. They won the award 'Outstanding Achievement
Award' for the year 2005 from Indian Banks Association for IT Infrastructure,
delivery capabilities and innovative solutions. In December 2005, the Bank set up
Axis Securities and Sales Ltd (originally incorporated as UBL Sales Ltd) to market
credit cards and retail asset products. In October 2006, they set up Axis Private Equity
Ltd, primarily to carry on the activities of managing equity investments and provide
venture capital support to businesses. In the year of 2007, the bank again raised
$218.67 million through Global Depository Receipts. They opened 153 new branches
during the year, which includes 43 extension counters that have been upgraded to
branches and 8 Service branches/ CPCs. They also opened new overseas offices at
Singapore, Dubai and Hong Kong and a representative office in Shanghai. During the
year 2007-08, the Bank opened 143 new branches, taking the number of branches to
651 which included 33 extension counters that have been upgraded to branches. Also,
they expanded overseas with the opening of a branch at the Dubai International
Finance Centre. The Bank changed their name from UTI Bank Ltd to Axis Bank Ltd
with effect from July 30, 2007 to avoid confusion with other unrelated entities with
similar name. During the year 2008-09, the Bank opened 176 new branches that
include 12 extension counters that have been upgraded to branches taking the total
number of branches and ECs to 835. During the year, they opened 831 ATMs, thereby
taking the ATM network of the Bank from 2,764 to 3,595. Also, they opened a
Representative Office in Dubai. In May 2008, the Bank established Axis Trustee
Services Company Ltd as a wholly owned subsidiary company, which is engaged in
trusteeship activities. In December 2008, they launched their new investment advisory
service exclusively for High Net Worth clients. In January 2009, the Bank set up Axis
42
Asset Management Company Ltd to carry on the activities of managing a mutual fund
business. Also, they incorporated Axis Mutual Fund Trustee Ltd to act as the trustee
for the mutual fund business. During the year 2009-10, the Bank opened 200 branches
taking the total number of branches Extension Counters (ECs) to 1,035. In March
2009, 2010, they opened their 1000 branch at Bandra West, Mumbai. In September
2009, Axis Bank launched the private banking business in the domestic market,
christened 'Privee' to cater to highly affluent individuals and families offering them
unique investment opportunities During the year, the Capital Markets SBU was
restructured with the debt capital market business (hitherto a part of the capital
markets) carved into a separate vertical. As a result, the Bank's Capital Markets SBU
comprises equity capital markets (ECM) business, mergers and acquisitions and
private equity syndication. In February 24, 2010, the Bank launched the 'AXIS CALL
& PAY on atom', a unique mobile payments solution using Axis Bank debit cards.
Axis Bank is the first bank in the country to provide a secure debit card-based
payment service over IVR. During the year 2010-11, 407 new branches were added to
the Bank's network taking the total number of branches and extension counters (ECs)
to 1,390. Of these, 564 branches/ ECs are in semi-urban and rural areas and 826
branches/ECs are in metropolitan and urban areas. The Bank is present in all states
and Union Territories (except Lakshadweep) covering 921 centres. The ATM network
of the Bank increased from 4,293 to 6,270. During the year, the Bank also opened a
Representative Office in Abu Dhabi. This was in addition to the existing branches at
Singapore, Hong Kong and DIFC (Dubai International Financial Centre) and
representative offices at Shanghai and Dubai. In March 7, 2011, the Bank
incorporated a new subsidiary namely Axis U.K. Ltd. as a private limited company
registered in the United Kingdom (UK) with the main purpose of filing an application
43
with Financial Services Authority (FSA), UK for a banking license in the UK and for
the creation of necessary infrastructure for the subsidiary to commence banking
business in the UK.
FUTURES
DATE
44
MARKET PRICE
FUTURE PRICE
5-Mar-2012
6-Mar-2012
7-Mar-2012
9-Mar-2012
12-Mar-2012
13-Mar-2012
14-Mar-2012
15-Mar-2012
16-Mar-2012
19-Mar-2012
20-Mar-2012
21-Mar-2012
22-Mar-2012
23-Mar-2012
26-Mar-2012
27-Mar-2012
28-Mar-2012
29-Mar-2012
30-Mar-2012
Source: www.nseindia.com
45
1168.8
1147.1
1142.15
1191
1236.5
1222
1257.9
1274.6
1243
1228.9
1207.2
1188.5
1239.8
1184
1176.55
1150.35
1130.8
1104.95
1129.65
1146.05
1152.4
1170.1
1213.5
1223.95
1243.85
1280.75
1241.15
1216.05
1204.4
1191.5
1238.1
1176.4
1183.7
1129.4
1143
1117.75
1124.8
1152.85
AXIS BANK
1300
1250
1200
1150
1100
1050
1000
FUTURE PRICE
If a person buys 1 lot i.e. 250 futures of AXIS BANK on 5-Mar-2012 and sell
on 29-Mar-2012 then he will get a loss of 1124.8 1146.05 = -21.25 per share, so he
will get a loss of 5312.5 i.e.(-21.25*250). If he sells on 30-Mar-2012 then he will
get a profit of 1152.85 -1146.05= 6.8 i.e. a profit of 6.8 per share, so his total profit is
1700 i.e. (6.8*250).
The closing price of AXIS BANK at the end of the contract period is 1152.85 and this
is considered as settlement price.
46
The objective of this analysis is to evaluate the profit/loss position of futures. This
analysis is based on sample data taken of HDFC BANK scrip. This analysis
considered the MAR 2012 contract of HDFC BANK. The lot size of is HDFC BANK
is 500, the time period in which this analysis done is from 5-Mar-2012 to 30-Mar2012.
Table 3.2
DATE
MARKET PRICE
5-Mar-2012
6-Mar-2012
7-Mar-2012
9-Mar-2012
12-Mar-2012
13-Mar-2012
14-Mar-2012
15-Mar-2012
16-Mar-2012
19-Mar-2012
20-Mar-2012
21-Mar-2012
22-Mar-2012
23-Mar-2012
26-Mar-2012
27-Mar-2012
28-Mar-2012
29-Mar-2012
30-Mar-2012
Source: www.nseindia.com
47
671.2
659.05
652.7
666.75
688.6
679.3
691
680.3
668.95
671
658.5
660.7
669.4
664
658.95
657.55
664.65
655.85
678.6
FUTURE PRICE
662.7
656.8
659.95
683.25
676.05
687.45
683.3
667.2
670.35
653.75
660.3
670.45
661.05
661.95
652.25
666.85
660.35
664.8
678.25
HDFC BANK
700
690
680
670
660
650
640
630
MARKET PRICE
If a person buys 1 lot i.e.500 futures of HDFC BANK on 5-Mar-2012 and sell
on 28-Mar-2012 then he will get a loss of 660.35 662.7 = -2.35 per share, so he will
get a loss of 1175 i.e.(-2.35*500). If he sells on 29-Mar-2012 then he will get a profit
of 664.8 662.7 = 2.1 i.e. a profit of 2.1 per share, so his total profit is 1050 i.e.
(2.1*500).
The closing price of HDFC BANK at the end of the contract period is 664.8 and this
is considered as settlement price.
48
The objective of this analysis is to evaluate the profit/loss position of futures. This
analysis is based on sample data taken of ICICI BANK scrip. This analysis considered
the MAR 2012 contract of ICICI BANK. The lot size of ICICI BANK is 250, the time
period in which this analysis done is from 5-Mar-2012 to 30-Mar-2012.
Table 3.3
DATE
MARKET PRICE
5-Mar-2012
6-Mar-2012
7-Mar-2012
9-Mar-2012
12-Mar-2012
13-Mar-2012
14-Mar-2012
15-Mar-2012
16-Mar-2012
19-Mar-2012
20-Mar-2012
21-Mar-2012
22-Mar-2012
23-Mar-2012
26-Mar-2012
27-Mar-2012
28-Mar-2012
29-Mar-2012
30-Mar-2012
Source: www.nseindia.com
49
905
874.4
856.35
884.65
937.55
939.6
951.15
960
942
932.5
912.8
908.75
943.3
910
907
889.1
877.15
852.75
867.25
FUTURE PRICE
879.3
861.05
869.75
918.88
933.25
938
962.75
936.75
921.8
912.5
913.85
941
901.7
912.25
874.55
880.05
859.5
856.45
890.9
ICICI BANK
1000
950
900
850
800
750
MARKET PRICE
FUTURE PRICE
If a person buys 1 lot i.e. 250 futures of ICICI BANK on 5-Mar-2012 and sell
on 30-Mar-2012 then he will get a loss of 890.9 879.3=11.6 per share, so he will
get a Profit of 2900 i.e. (11.6*250).
The closing price of ICICI BANK at the end of the contract period is 890.9 and this is
considered as settlement price.
50
The objective of this analysis is to evaluate the profit/loss position of futures. This
analysis is based on sample data taken of YES BANK scrip. This analysis considered
the MAR 2012 contract of YES BANK. The lot size of is YES BANK is 1000, the
time period in which this analysis done is from 5-Mar-12 to 30-Mar-12.
Table 3.4
DATE
MARKET PRICE
5-Mar-2012
6-Mar-2012
7-Mar-2012
9-Mar-2012
12-Mar-2012
13-Mar-2012
14-Mar-2012
15-Mar-2012
16-Mar-2012
19-Mar-2012
20-Mar-2012
21-Mar-2012
22-Mar-2012
23-Mar-2012
26-Mar-2012
27-Mar-2012
28-Mar-2012
29-Mar-2012
30-Mar-2012
Source: www.nseindia.com
51
350.05
338.6
340.3
345.4
371.5
368.65
373.25
387
375.45
369.85
362.2
365.2
375.65
368.35
370.95
362.5
355
346.25
360.05
FUTURE PRICE
341.45
342.3
340.5
364.25
366.7
369.15
387.15
375.2
367.45
362.3
367.55
377.05
366.05
373
358.15
355.15
349.5
361.55
368.6
YES BANK
400
390
380
370
360
350
340
330
320
310
2-Mar-12
7-Mar-12
12-Mar-12
17-Mar-12
MARKET PRICE
22-Mar-12
27-Mar-12
1-Apr-12
FUTURE PRICE
If a person buys 1 lot i.e.1000 futures of YES BANK on 5-Mar-2012 and sell
on 30-Mar-2012 then he will get a profit of 368.6-341.45 =27.15 per share, so he will
get a profit of 27150 i.e.(27.15*1000). If he sells on 7-Mar-2012 then he will get a
loss of 340.5-341.45=-0.95 i.e. a loss of 0.95 per share, so his total loss is 950 i.e.
(1000*0.95)
The closing price of YES BANK at the end of the contract period is 368.6 and this is
considered as settlement price.
OPTIONS
52
ANALYSIS OF HDFC:
The following table explains the market price and premiums of calls.
Second column explains the SPOT market price in cash segment on that date.
The third column explains call premiums amounting at these strike prices;
500, 520, 560, 580, 600, 620..
Call options:
TABLE 4.1
53
Strike prices
Date
Market
price
500
520
560
580
600
620
5-Mar-2012
671.2
28
15.8
4.75
2.5
1.55
0.15
6-Mar-2012
659.05
22.1
13.25
3.55
1.8
0.4
0.15
7-Mar-2012
652.7
28.65
17.4
5.05
2.55
0.4
0.15
9-Mar-2012
666.75
34.4
20.75
6.4
2.85
0.4
0.15
12-Mar-2012
688.6
29.55
17.7
4.55
2.05
1.3
0.15
13-Mar-2012
679.3
33.5
19.05
4.1
1.65
1.3
0.15
14-Mar-2012
691
31.4
20.85
4.85
2.05
1.3
0.15
15-Mar-2012
680.3
22.1
10.55
1.9
1.05
1.3
0.15
16-Mar-2012
668.95
17.5
8.15
1.2
1.3
0.15
19-Mar-2012
671
11
4.15
0.55
0.7
0.15
20-Mar-2012
658.5
13.65
5.3
0.6
0.55
0.7
0.15
21-Mar-2012
660.7
22.4
9.2
0.8
0.5
0.15
0.15
22-Mar-2012
669.4
11.3
3.8
0.25
0.15
0.15
23-Mar-2012
664
16.35
5.2
0.2
0.25
0.1
0.15
26-Mar-2012
658.95
14.05
3.65
0.2
0.15
0.05
0.15
27-Mar-2012
657.55
18.2
5.8
0.2
0.1
0.05
0.15
28-Mar-2012
664.65
14
1.5
0.05
0.1
0.05
0.15
29-Mar-2012
655.85
10
0.1
0.05
0.05
0.05
0.15
30-Mar-2012
678.6
30.45
18.45
4.2
1.8
2.3
0.05
Source: ww.nseindia.com
CALL OPTION
54
Those who have purchase call option at a strike price of 600, the premium payable is
1.55.
On the expiry date the spot market price enclosed at 678.6 As it is out of the money
for the buyer and in the money for the seller, hence the buyer is in loss.
So the buyer will lose only premium i.e. 1.55 per share.
So the total loss will be 775 i.e.500*1.55.
Put options:
TABLE 4.2
Strike prices
Date
55
Market
price
500
520
560
580
600
620
5-Mar-2012
671.2
11.8
20.75
41
140.05
158.45
177.15
6-Mar-2012
659.05
13.85
22.2
41
140.05
158.45
177.15
7-Mar-2012
652.7
9.4
17
41
140.05
158.45
177.15
9-Mar-2012
666.75
6.4
13.3
41
140.05
158.45
177.15
12-Mar-2012
688.6
6.65
13.95
41
140.05
158.45
177.15
13-Mar-2012
679.3
4.35
9.95
41
140.05
158.45
177.15
14-Mar-2012
691
3.25
7.95
41
140.05
158.45
177.15
15-Mar-2012
680.3
6.8
15.45
41
140.05
158.45
177.15
16-Mar-2012
668.95
7.15
16.45
41
140.05
158.45
177.15
19-Mar-2012
671
11.2
22.85
41
140.05
158.45
177.15
20-Mar-2012
658.5
6.6
18.15
41
140.05
158.45
177.15
21-Mar-2012
660.7
3.25
10.05
41
140.05
158.45
177.15
22-Mar-2012
669.4
6.9
18.4
41
140.05
158.45
177.15
23-Mar-2012
664
3.6
11.35
41
140.05
158.45
177.15
26-Mar-2012
658.95
13
41
140.05
158.45
177.15
27-Mar-2012
657.55
1.2
41
140.05
158.45
177.15
28-Mar-2012
664.65
1.3
8.85
47
140.05
158.45
177.15
29-Mar-2012
655.85
0.05
2.75
47
140.05
158.45
177.15
30-Mar-2012
678.6
6.45
13
67.3
83.2
100.2
117.95
Source: www.nseidia.com
As brought 1 lot of HDFC Bank that is 500, those who buy for 600 paid 158.45
premium per share.
56
Strike price
600.00
Spot price
678.60
-78.6
Premium (-)
158.45
-79.85*500= -39925
profit.
The profit is equal to the loss of buyer i.e. 39925.00.
Second column explains the SPOT market price in cash segment on that date.
57
The third column explains call premiums amounting at these strike prices;
820, 840, 860, 880, 900, 920.
Call options:
TABLE 4.3
Strike prices
Date
Market
price
820
840
860
880
900
920
5-Mar-2012
1168.8
90.15
81.2
72.95
65.35
250
52.15
6-Mar-2012
1147.1
90.15
81.2
72.95
65.35
250
52.15
58
7-Mar-2012
1142.15
90.15
81.2
72.95
65.35
250
52.15
9-Mar-2012
1191
90.15
81.2
72.95
65.35
250
52.15
12-Mar-2012
1236.5
90.15
81.2
72.95
65.35
250
52.15
13-Mar-2012
1222
90.15
81.2
72.95
65.35
250
52.15
14-Mar-2012
1257.9
90.15
81.2
72.95
65.35
250
52.15
15-Mar-2012
1274.6
90.15
81.2
72.95
65.35
250
52.15
16-Mar-2012
1243
90.15
81.2
72.95
65.35
250
52.15
19-Mar-2012
1228.9
90.15
81.2
72.95
65.35
250
52.15
20-Mar-2012
1207.2
90.15
81.2
72.95
65.35
250
52.15
21-Mar-2012
1188.5
90.15
81.2
72.95
65.35
250
52.15
22-Mar-2012
1239.8
90.15
81.2
72.95
65.35
275
52.15
23-Mar-2012
1184
90.15
81.2
72.95
65.35
275
52.15
26-Mar-2012
1176.55
90.15
81.2
72.95
65.35
275
52.15
27-Mar-2012
1150.35
90.15
81.2
72.95
65.35
275
52.15
28-Mar-2012
1130.8
90.15
81.2
72.95
65.35
275
52.15
29-Mar-2012
1104.95
90.15
81.2
72.95
65.35
275
52.15
30-Mar-2012
1129.65
90.15
81.2
72.95
65.35
52.15
Source: www.nseindia.com
payable is 52.15.
59
On the expiry date the spot market price enclosed at 1129.65. As it is In of the
money for the buyer and Out of the money for the seller, hence the buyer is in profit.
So the buyer will get profit by MP-SP i.e. 1129.65-920=209.65 per share.
Put options:
TABLE 4.4
Strike prices
Date
Market price
820
840
860
880
900
920
5-Mar-2012
1168.8
74.7
85.25
96.5
108.45
6-Mar-2012
1147.1
74.7
85.25
96.5
108.45
7-Mar-2012
1142.15
74.7
85.25
96.5
108.45
9-Mar-2012
1191
74.7
85.25
96.5
108.45
60
12-Mar-2012
1236.5
74.7
85.25
96.5
108.45
13-Mar-2012
1222
74.7
85.25
96.5
108.45
14-Mar-2012
1257.9
74.7
85.25
96.5
108.45
15-Mar-2012
1274.6
74.7
85.25
96.5
108.45
16-Mar-2012
1243
74.7
85.25
96.5
108.45
19-Mar-2012
1228.9
74.7
85.25
96.5
108.45
20-Mar-2012
1207.2
74.7
85.25
96.5
108.45
21-Mar-2012
1188.5
74.7
85.25
96.5
108.45
22-Mar-2012
1239.8
74.7
85.25
96.5
108.45
23-Mar-2012
1184
74.7
85.25
96.5
108.45
26-Mar-2012
1176.55
74.7
85.25
96.5
108.45
27-Mar-2012
1150.35
74.7
85.25
96.5
108.45
28-Mar-2012
1130.8
74.7
85.25
96.5
108.45
29-Mar-2012
1104.95
74.7
85.25
96.5
108.45
0.25
30-Mar-2012
1129.65
74.7
85.25
96.5
108.45
Source: www.nseindia.com
As brought 1 lot of AXIS Bank that is 250, those who buy for 920 paid 3 premium per
share.
61
Strike price
920.00
Spot price
1129.65
-209.65
Premium (-)
3
-206.65 x 250= -51662.5
he is in profit.
The profit is equal to the loss of buyer i.e. -51662.5
Second column explains the SPOT market price in cash segment on that date.
The third column explains call premiums amounting at these strike prices;
180, 200, 220, 240, 260.
62
Call option
TABLE 4.5
Strike prices
Date
Market
price
180
200
220
240
260
5-Mar-2012
350.05
66.45
50.65
37.2
26.45
18.25
6-Mar-2012
338.6
66.45
50.65
37.2
26.45
18.25
7-Mar-2012
340.3
66.45
50.65
37.2
26.45
18.25
9-Mar-2012
345.4
66.45
50.65
37.2
26.45
18.25
63
12-Mar-2012
371.5
66.45
50.65
37.2
26.45
18.25
13-Mar-2012
368.65
66.45
50.65
37.2
26.45
18.25
14-Mar-2012
373.25
66.45
50.65
37.2
26.45
18.25
15-Mar-2012
387
66.45
50.65
37.2
26.45
18.25
16-Mar-2012
375.45
66.45
50.65
37.2
26.45
18.25
19-Mar-2012
369.85
66.45
50.65
37.2
26.45
18.25
20-Mar-2012
362.2
66.45
50.65
37.2
26.45
18.25
21-Mar-2012
365.2
66.45
50.65
37.2
26.45
18.25
22-Mar-2012
375.65
66.45
50.65
37.2
26.45
18.25
23-Mar-2012
368.35
66.45
50.65
37.2
26.45
18.25
26-Mar-2012
370.95
66.45
50.65
37.2
26.45
18.25
27-Mar-2012
362.5
66.45
50.65
37.2
26.45
18.25
28-Mar-2012
355
66.45
50.65
37.2
26.45
18.25
29-Mar-2012
346.25
66.45
50.65
37.2
26.45
18.25
30-Mar-2012
360.05
66.45
50.65
37.2
26.45
18.25
Source: www.nseindia.com
Those who have purchase call option at a strike price of 240, the premium payable is
26.45.
On the expiry date the spot market price enclosed at 360.05. As it is out of the money
for the buyer and in the money for the seller, hence the buyer is in loss.
So the buyer will lose only premium i.e. 26.45 per share.
64
Put option:
TABLE 4.6
Strike prices
Date
Market
price
180
200
220
240
260
5-Mar-2012
350.05
2.75
6.45
12.55
21.35
19.45
6-Mar-2012
338.6
2.75
6.45
12.55
21.35
19.45
7-Mar-2012
340.3
2.75
6.45
12.55
21.35
19.45
9-Mar-2012
345.4
2.75
6.45
12.55
21.35
19.45
12-Mar-2012
371.5
2.75
6.45
12.55
21.35
19.45
13-Mar-2012
368.65
2.75
6.45
12.55
21.35
19.45
14-Mar-2012
373.25
2.75
6.45
12.55
21.35
19.45
65
15-Mar-2012
387
2.75
6.45
12.55
21.35
19.45
16-Mar-2012
375.45
2.75
6.45
12.55
21.35
19.45
19-Mar-2012
369.85
2.75
6.45
12.55
21.35
19.45
20-Mar-2012
362.2
2.75
6.45
12.55
21.35
19.45
21-Mar-2012
365.2
2.75
6.45
12.55
21.35
19.45
22-Mar-2012
375.65
2.75
6.45
12.55
21.35
19.45
23-Mar-2012
368.35
2.75
6.45
12.55
21.35
19.45
26-Mar-2012
370.95
2.75
6.45
12.55
21.35
19.45
27-Mar-2012
362.5
2.75
6.45
12.55
21.35
19.45
28-Mar-2012
355
2.75
6.45
12.55
21.35
19.45
29-Mar-2012
346.25
2.75
6.45
12.55
21.35
19.45
30-Mar-2012
360.05
2.75
6.45
12.55
21.35
19.45
Source: www.nseindia.com
PUT OPTION
BUYERS PAY OFF:
As brought 1 lot of YES Bank that is 1000, those who buy for 240 paid 21.35
premium per share.
240.00
Spot price
360.05
-120.50
66
Premium (-)
21.35
-98.7*1000 = -98700
profit.
The profit is equal to the loss of buyer i.e. -98700.
ANALYSIS OF ICICI:
The following table explains the market price and premiums of calls.
Second column explains the SPOT market price in cash segment on that date.
The third column explains call premiums amounting at these strike prices;
600, 620, 640, 660, 700.
67
Call options:
Table 4.7
Strike prices
Date
Market price
600
620
640
660
700
5-Mar-2012
905
131.6
118.95
107.25
96.35
77.15
6-Mar-2012
874.4
131.6
118.95
107.25
96.35
77.15
7-Mar-2012
856.35
131.6
118.95
107.25
96.35
77.15
9-Mar-2012
884.65
131.6
118.95
107.25
96.35
77.15
12-Mar-2012
937.55
131.6
118.95
107.25
96.35
77.15
13-Mar-2012
939.6
131.6
118.95
107.25
96.35
77.15
14-Mar-2012
951.15
131.6
118.95
107.25
96.35
77.15
15-Mar-2012
960
131.6
118.95
107.25
96.35
77.15
68
16-Mar-2012
942
131.6
118.95
107.25
96.35
77.15
19-Mar-2012
932.5
131.6
118.95
107.25
96.35
77.15
20-Mar-2012
912.8
131.6
118.95
107.25
96.35
77.15
21-Mar-2012
908.75
131.6
118.95
107.25
96.35
77.15
22-Mar-2012
943.3
131.6
118.95
107.25
96.35
77.15
23-Mar-2012
910
131.6
118.95
107.25
96.35
77.15
26-Mar-2012
907
131.6
118.95
107.25
96.35
77.15
27-Mar-2012
889.1
131.6
118.95
107.25
96.35
77.15
28-Mar-2012
877.15
131.6
118.95
107.25
96.35
77.15
29-Mar-2012
852.75
131.6
118.95
107.25
96.35
77.15
30-Mar-2012
867.25
131.6
118.95
107.25
96.35
77.15
Source: www.nseindia.com
69
Put options:
Table 4.8
Strike prices
Date
Market price
600
620
640
660
700
5-Mar-2012
905
31.05
37.95
45.75
54.4
6-Mar-2012
874.4
31.05
37.95
45.75
54.4
7-Mar-2012
856.35
31.05
37.95
45.75
54.4
9-Mar-2012
884.65
31.05
37.95
45.75
12-Mar-2012
937.55
31.05
37.95
45.75
13-Mar-2012
939.6
31.05
37.95
45.75
14-Mar-2012
951.15
31.05
37.95
45.75
15-Mar-2012
960
31.05
37.95
45.75
70
16-Mar-2012
942
31.05
37.95
45.75
19-Mar-2012
932.5
31.05
37.95
45.75
0.5
20-Mar-2012
912.8
31.05
37.95
45.75
0.5
21-Mar-2012
908.75
31.05
37.95
45.75
0.5
22-Mar-2012
943.3
31.05
37.95
45.75
0.5
23-Mar-2012
910
31.05
37.95
45.75
0.5
26-Mar-2012
907
31.05
37.95
45.75
0.5
27-Mar-2012
889.1
31.05
37.95
45.75
0.5
28-Mar-2012
877.15
31.05
37.95
45.75
0.5
29-Mar-2012
852.75
31.05
37.95
45.75
0.5
30-Mar-2012
867.25
31.05
37.95
45.75
0.5
Source: www.nseindia.com
PUT OPTION:
BUYERS PAY OFF:
As brought 1 lot of ICICI Bank that is 350, those who buy for 700 paid 3 premium per
share.
700.00
Spot price
867.25
-167.25
71
Premium (-)
3
-164.25 * 250= -41062.5
he is in profit.
The profit is equal to the loss of buyer i.e. -41062.5
SUGGESTIONS:
In order to increase the market in India, SEBI should revise some of their
regulations like contract size, participation of FII in the derivatives market.
Contract size should be minimized because small investors cannot afford this
much of huge premiums.
72
SEBI has to take measures to use effectively the derivatives segment as a tool
of hedging.
CONCLUSION:
The market in India has been expanding rapidly and will continue to
grow. While much of the activity is concentrated in foreign and a few private sector
banks, increasingly public sector banks are also participating in this market as market
makers and not just users. Their participation is dependent on development of skills,
adapting technology and developing sound risk management practices are very useful
for hedging and risk transfer, and hence improve market efficiency, it is necessary to
keep in view the risks of excessive leverage, lack of transparency particularly in
73
BIBILOGAPHY
BOOKS:
1. Options Futures, and other by John C Hull
2. Financial Institutions Markets & Services FAQ by Ajay Shah
3. NSEs Certification in Financial Markets: - Derivatives Core module
4. Investment Monitor Magazine
Reports
1. Regulatory framework for financial Markets in India by Dr. L.C.Gupta
2. Risk containment in the markets by Prof.J.R.Verma
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WEBSITES:
www.nseindia.com
http://www,nseindia/ontent.fofo_historical data.htm
http://www.derivativesindia/scripts/glossary/indexobasic.asp
http://www.bseindia/about/derivatives.asp#tyepsofpod.htm
http://business.mapsofindia.com/investment-industry/indian-derivativesmarket.html
www.derivativesindia.com
www.sebi.gov.in
www.rediff/money/derivatives.htm
www.igidr.ac.in/~ajayshah
75
www.iinvestor.com
www.appliederivatives.com
www.derivativesreview.com
www.economictimes.com
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