1.

1 INTRODUCTION OF DERIVATIVES

The Derivative market is the financial market for derivative, financial instrument like futures
contracts or options, which are derived from other forms of assets. The market can be divided
into two, that for exchange-traded derivatives and that for over-the-counter derivative. A derivative
is a contract between two parties which derived its value/price from an underlying assets. The most
common types of derivative are futures, options, forwards and swaps. It is a financial instruments
which derived its value/price from the underlying assets. Originally, Purpose is first created which
can consist of one security or a combination of different securities. The value of the underlying
assets keep changing continuously.

Usually, Common underlying assets used in derivative are

 bonds
 commodities
 currencies
 Interest rates
 Market indexes
 stocks

TYPES OF FINANCIAL DERIVATIVE

1. Forward –
Forward contract is over the counter (OTC) in nature. . Size of the forward contract is
customized as per the terms of agreement between the buyer and seller. Contract price of forward
contract is not transparent, as it is not publicly disclosed and it is settled by physical delivery. In
forward contract there is no provision of „mark-to-market‟ margin requirement. Forward
contract is less liquid due to its customized nature & mutual trade and it is not regulated by any
authority or exchange.

1
2. Future –
A future contract is a standardized forward contract that can be easily traded. Forward market
laid the foundation for future contract. Futures contract is entered on the centralized trading
platform of the exchange and it is standardized in terms of quantity and quality as specified by
the exchange. Contract price of futures contract is transparent as it is available on the centralized
trading screen of the exchange. Futures contract is more liquid as it is traded on the exchange

3. Options -

Options are derivative instruments as their fair price derives from the value of the other asset,
called the underlying. An option to buy something is called a call; an option to sell is called a
put. The price specified at which the underlying may be traded is called the strike price. Options
have an expiration date. If the option is not exercised by the expiration date, it becomes void and
worthless.
In an option contract there are two parties:

 BUYER –the buyer of any options is pays the premium.

 SELLER –the seller of any options is receives the premium.

 Options are classified into two categories-calls and puts.

 Calls-A call gives the holder the right to buy an asset at a certain price within a specific
period of time. Calls are similar to having a long position on a stock. Buyers of calls hope
that the stock will increase substantially before the option expires.

 Puts-A put gives the holder the right to sell an asset at a certain price within a specific
period of time. Puts are very similar to having a short position on a stock. Buyers of puts
hope that the price of the stock will fall before the option expires.

2
4) Swap–
A swap is a private agreement/contract between two parties to exchange different streams of cash
flows in the future according to a pre-determined formula. Swaps can be regarded as portfolios of
forward contracts. The agreement specifies the dates when the cash flows are to be paid and the
manner in which they are to be calculated. The idea is that the two parties agree to swap two
different types of payments. A payment is either fixed or is designed to float or vary according to
future values of one or more market variable.

Derivatives are tradable products whose price is based upon another market. Derivatives
are security, whose value based upon other more basic underlying variables. In recent years,
derivative security has become increasingly important in the finance field. Futures & Options are
now actively traded on many different exchanges. Forward contracts, swaps and many different
types of options are regularly traded outside the exchanges by financial institutions and their
corporate clients in over-the-counter markets. Other more specialized derivative securities often
form part of a bond or stock issue. Derivative Securities are also known as contingent claims.
Generally, the variables underlying derivative securities Are the prices of traded securities.

For example, A stock option is a derivative security whose value is contingent on the price of
the stock. It is generally seen that derivative securities can be contingent on almost any variable.

3
 INDUSTRY PROFILE

INDIAN STOCK BROKING INDUSTRY:-

The Indian broking industry is one of the oldest trading industries that have been around
even before the establishment of the BSE in 1875. Despite passing through a number of changes
in the post liberalization period, the industry has found its way towards sustainable growth.

In 1860, the exchange flourished with 60 brokers. In fact the "Share Mania' in India began
when the American Civil War broke and the cotton supply from the US to Europe stopped.
Further the brokers increased to 250. At the end of the war in 1874, the market found a place in a
street (now called Dalal Street).

Historical records show that as early as 1864, there were about 1.000 brokers with the
stock markets functioning from three places in Mumbai: between 9 am to 7 pm at the junction of
Meadows Street and Rampart Row, from day break 9 am and from 7 pm to early hours of next
morning at Bazargate.

Reports on stock markets around that time indicate that an ordinary broker in 1864 earned about
Rs. 200 per day, a huge sum in those days. The boom period came to an abrupt end in 1865
"Never had I witnessed in any place a run so widely distributed nor such distress followed so
quickly on the heels of such property" that wrote Richard Temple, who served as the Governor
of Bombay at that time. An interesting aspect is that despite the collapse of the stock market.
most of the brokers met their payment commitments.

The Equity Broking Industry in India has several unique features like it is more than a
century old, dynamic, forward looking. and good service providers, well conversant, highly
innovative and even adaptable. The regulations and reforms been laid down in the Equity Market

4
has resulted in rapid growth and development. Basically, the growth in the equity market is
largely due to the effective intermediaries. The Broking Houses not only act as an intermediate
link for the Equity Market but also for the Commodity Market, Foreign Currency Exchange
Market, and many more.
A capital market is a market for securities (debt or equity), where business
enterprises (companies) and governments can raise long-term funds. It is defined as a market in
which money is provided for periods longer than a year, as the raising of short-term funds takes
place on other markets (in, the money market).
The Indian broking industry is one of the oldest trading industries that have been around
even before the establishment of the BSE in 1875. Despite passing through a number of changes
in the post liberalization period, the industry has found its way towards sustainable growth.

Pre-Independence Scenario Establishment of Different Stock Exchanges :-

 1875-- "The Native Share and Stock Brokers Association" (also known as "The Bombay

Stock Exchange") was established in Bombay

 1894-- Establishment of "The Ahmedabad Share and Stock Brokers' Association"

 1908-- "The Calcutta Stock Exchange Association was formed

 1920--- Madras witnessed boom and business at "The Madras Stock Exchange was
transacted with 100 brokers.

 1923-- When recession followed, number of brokers came down to 3 and the Exchange
was closed down.

5
History of Stock Broking

The history of stock brokers can be traced back to the origins of the first stock exchange in 1602
at Amsterdam Even before that brokers are said to have existed in France dealing with
government securities The Amsterdam Stock Exchange was involved in buying and selling of
shares for the Dutch East India Company. However, the first real stock exchange came up in
Philadelphia in the United States during the late 19th century Later it was the New York stock
exchange which saw a NSE in its popularity Wall Street, as it was called, became the hub of
brokerage activities. Earlier stock brokers were largely unorganized, but later most of them
joined hands to form institutes and organizations Till the 1980's stock broking services were
used only by the wealthy class who could afford them. Later with the advent of the Internet.
stock broking became very easy. Thus, the price tag on stock brokers lower considerably and
their services became available even to the common man The stock broking duties are now
mostly taken up by major organizations with the smaller companies being absorbed by them in
India too with increasing globalization the major corporations are penetrating deeper into the
Society.

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 COMPANY PROFILE

SHAREKHAN LTD.

3.1 PROFILE OF THE ORGANISATION

Name of the company: - Sharekhan Ltd.

Year of Establishment: - 2000

Branch Office :- Sharekhan Ltd.

1B, 1st Floor, Nexus Point,

Near Bhosala Military School,

Model colony, Nashik – 422005.

Nature of Business :- Service Provider.

Service’s :- Depository services, Online

Services and Technical Research.

Number of Employees: - 40.

Website :- www.sharekhan.com

Slogan :- You’re Guide to Financial Jungle

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 VISION & MISSION

 VISION: - To be the best retail brokering brand in retail business of stock market.

 MISSION :- To educate and empower the individual investor to make better investment
better decision through the quality advise and superior services.

8
3.2 COMPANY HISTORY

Sharekhan Ltd: Is one of the leading retail stock broking house of SSKI Group which is running
successfully since 1922 in the country. It is the retail broking arm of the Nashik based SSKL
Group, which has over eight decades of experience in the stock broking business. Sharekhan offers
its customers a wide range of equity related services including trade execution on BSE, NSE,
Derivatives, depository services, online trading, investment advice etc. The firm’s online trading
and investment site www.sharekhan.com was launched on Feb 8, 2000. The site gives access to
superior content and transaction facility to retail customers across the country. Known for its
jargon-free, investor friendly language and high quality research, the site has a registered base of
over one lakh customers. The content-rich and research oriented portal has stood out among its
contemporaries because of its stead fact dedication to offering customers best of breed technology
and superior market information. The objective has been to let customers make informed decisions
and to simplify the process of invention in stocks. Sharekhan launched speed trade, a net based
executable application that emulates the broker terminals along with host of other information
relevant to the day traders. This was for the first time that a net based trading station of this caliber
was offered to the traders. In the last six months speed trade has become a defector standard for
the day trading community over the net.

Sharekhan’s ground network includes over 331 centers in 137 cities in India which provide a host
of trading related services. Sharekhan has always believed in investing in technology to build its
business. The company has used some of the best-known names in the IT industry, like sun
Microsystems, Oracle, Microsoft, and Cambridge

Technologies, Nexgenix, Vignette VeriSign Financial Technologies India Ltd, spider Software Pvt
Ltd. To build its trading engine and content. It has 60 institutional clients spread over India, Far
East, UK and US. For Institutional Investors generate about 65% of the organization’s revenue
with a daily turnover of over US$ 2million. The group has placed over US$ 1 Billion in private
equity deals. Some of the clients include BPL cellular Holding, Gujarat Pipavav, Essar, Hutchison,
Planet Asia and Shopper’s Stop.

9
3.3 INTRODUCTION OF STOCK MARKET

 India's oldest and first stock exchange: Mumbai (Bombay) Stock Exchange. Established in
1875. More than 6,000 stocks listed.

 Total number of stock exchanges in India: 21

 They are in: Ahmadabad, Bangalore, Calcutta, Chennai, Delhi, Guwahati etc.

 There is also a National Stock Exchange (NSE) which is located in Mumbai.

 There is also an Over the Counter Exchange of India (OTCEI) which allows listing of small
and medium sized companies.

 The regulatory agency which oversees the functioning of stock markets is the Securities and
Exchange Board of India (SEBI), which is also located in Bombay.

10
STOCK EXCHANGES ACROSS THE COUNTRY ARE:

Bombay Stock Exchange:

Bombay Stock Exchange Limited (BSE) is the oldest stock exchange in Asia with a rich heritage.
Popularly known as "BSE", it was established as "The Native Share & Stock Brokers Association"
in 1875. It is the first stock exchange in the country to obtain permanent recognition in 1956 from
the Government of India under the Securities Contracts (Regulation) Act, 1956.The Exchange's
pivotal and pre-eminent role in the development of the Indian capital market is widely recognized
and its index, SENSEX, is tracked worldwide. The Trading hour of BSE exchange 9:15AM to 3:30
PM. Monday to Friday.

National Stock Exchange

The National Stock Exchange (NSE) is India's leading stock exchange covering various cities
and towns across the country. NSE was set up by leading institutions to provide a modern, fully
automated screen-based trading system with national reach.

NSE has played a catalytic role in reforming the Indian securities market in terms of
microstructure, market practices and trading volumes. The market today uses state-of-art
information technology to provide an efficient and transparent trading, clearing and settlement
mechanism, and has witnessed several innovations in products & services viz. demutualization
of stock exchange governance, screen based trading, compression of settlement cycles,
dematerialization and electronic transfer of securities, securities lending and borrowing,
professionalization of trading members, fine-tuned risk management systems. The Trading hour
of NSE exchange 9:15AM to 3:30 PM. Monday to Friday.

11
3.4 PRODUCT AND ACTIVITIES PROVIDED TO THE CUSTOMERS

Product and Services

• Equities & Equity Derivatives (NSE, BSE)

• Commodity Futures (MCX, NCDEX)

• Currency Futures (MCX – SX)

• Depository Services (NSDL, CDSL)

• Mutual Funds (AMFI)

• Insurance – Life and Non-Life / Group Insurance

• IPOs , Bonds and fixed Deposits

• Distribution of retail asset products

Equity Broking
SHAREKHAN LTD, as a member of the National Stock Exchange and the Bombay Stock
Exchange, offers you equity trading through a network of various offices across the country. It is
our objective to offer you a range of services to suit your trading needs. Therefore, apart from
investment activity, you can undertake day trading at both the above exchanges.
Seamless Execution
SHAREKHANLTD provides unmatched flexibility and the power of choice to the clients for
executing trades through multiple channels, viz., through our main office or branches, at any of
our franchise centers or over telephone. A client may use any of these secured channels to
communicate his/her orders, and he/she would be identified by his/her account code. We have
endeavored to design all our processes and systems with a client-centric focus to provide a client
the convenience of transacting with us through the mode and channel of his/her preference.

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1. Technical Analysis
SHAREKHAN LTD has its own Equity Research team with rich experience in identifying and
analyzing attractive investment opportunities with fundamental long-term growth potential. The
team also has a division specializing in Technical Analysis, which offers technical tips for short
term and day trading

2. Daily Analysis
Outlines the days market outlook, latest domestic and international market developments, our
call on the upcoming economic and market environment and highlights the stocks which we
expect to outperform over the months ahead

3. Derivatives Trading
SHAREKHAN LTD provides trading facilities in Equity Derivatives at National Stock
Exchange (NSE) since 200 and over the years, been able to generate substantial revenues with
rising volumes from wide scale participation of retail investors in this segment.

4. Depository Services
SHAREKHAN LTD is a depository participant with CDSL and NSDL. Sharekhan Ltd offers a
range of services including:

o Account opening facilities

o Dematerialization of physical shares

o Re-materialization

o Pledging

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FINANCIAL PRODUCT DISTRIBUTION

1. Mutual Funds:-
Our team tracks the performance of Mutual Funds across the gamut of investor options and
advises /investors. In addition to tracking the key performing funds and analyzing the portfolios
and maturity profiles of different funds, our FPD team is geared to advice investors on the
available options / NFOs to best suit their investment needs. Team also regularly interacts with
fund managers and communicates their outlook to the investors.

2. Insurance
SHAREKHAN LTD is a leading intermediary in the LIFE and General Insurance market
licensed by Insurance Regulatory and Development Authority of India.
At SHAREKHAN LTD, we analyze the client's requirement and capacity to understand their risk
exposure and then evaluate their insurance portfolio in terms of its adequacy to protect the same.
Our focus is to develop cost effective and near foolproof insurance package for our clients. In the
event of a claim, our team facilitates the process to ensure speedy settlements .

3. Bonds/ Corporate Fixed Deposits/ IPO’s

For investors who prefer risk-free returns without the tension of volatile markets, the best option
is the GOI Savings Bond. These bonds have sovereign guarantee and thus give safe returns.
SHAREKHAN takes the help of its own Research Desk in order to choose and cater Fixed
Deposits of blue chip corporate. In case of IPOs of Equities, SHAREKHAN the entire major
issues that hit the Indian Capital Market.

4. Customized Services
And if you are interested in any of the above investments, we would be privileged to be of
assistance to you to invest your money safely. All you have to do is to call your nearest
SHAREKHAN LTD Office and any of our team members will get in touch with you.

14
5. Retail Portfolio Management Services
SHAREKHAN LTD provides Portfolio Management Services to their clients.

It Has Following Types.


Pro-Tech Nifty-Fifty
Pro-Prime Top Equity
Pro-Prime Diversified Equity

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3.5 HIERARCHY OF THE ORGANIZATION

3.6 SHAREKHAN LIMITED’S MANAGEMENT TEAM:-

16
Mr. Shankar Vailaya – Director (Operations).

A graduate in commerce form the University of Manga lore and an Associate of The
Member of the Institute of Chartered accountants of India. Mr. Shankar Vailaya heads the
operations, finance and legal functions, He is responsible for settlements, depository
operations, risk and compliance and regulatory & other legal commitments and treasury.

Mr. Jaideep Arora – Director (products & Technology)

Jaideep Arora, completed his B.tech from IIt and his PGDM from IIM (Kolkata).

Jaideep Arora Worked with ICICI for 8 years where his work spanned a gamut of functions,
which included project finance, equity sales and brokerage, investments etc. During his
tenure there he setup and headed the ‘Institutional Equity Brokerage Desk’ at ICICI
Securities & finance Co. Ltd.

Mr. Varun Sridhar :- Director (Retail)

Senior manager with extensive retail banking experience in developing and difficult
markets in Asia, Middle-east and Eastern Europe. Led and supported strategic projects such
as acquisition of a bank/digital broker, restructuring a 10k+ fte bank, re launching a retail
banking operation amidst an economic and launching new digital businesses.

17
3.7 PORDUCT & SERVICES OF SHAREKHAN LIMITED:-

1. Equity and derivatives trading. 2. Depository services.

3. Online services. 4. Commodities trading.

5. Dial-n-trade. 6. Portfolio management.

7. Share shops. 8. Fundamental Research.

9. Technical research

18
RESEARCH METHODOLOGY

4.1 WHAT IS RESEARCH?

A derivative is a financial security with a value that is reliant upon or derived from an
underlying asset or group of assets. The most common underlying assets include stocks, bonds,
commodities, currencies, interest rates and market indexes. Derivatives can either be traded
over-the-counter (OTC) or on an exchange.

Definition of Research: -

“Research is "creative and systematic work undertaken to increase the stock of knowledge,
including knowledge of humans, culture and society, and the use of this stock of knowledge to
devise new applications." ”

Definition of methodology:-

“Methodology is the process in which different way to use for gathering the information about
the particular type.”

4.2 DATA COLLECTION:-

The data collection methods include both the primary and secondary collection.

 Primary collection methods:- This methods includes the data collection from the
personal discussion with the authorized clerks and members of the Sharekhan ltd.

 Secondary collection methods:- The secondary collection methods includes the lectures
of the superintend of the department of market operations and so on.., also the data
collected from the Manager of the ISE and Sharekhan staff and other Information is
taken from the official website of the Sharekhan ltd which is www.sharekhan.com.

19
 4.3 SOURCES OF DATA:-

Both primary and secondary data were gathered and utilized for the study of portfolio
management. The statements cover the aspects of portfolio management and associated issues.
Data collection tools, to obtain the data for the purpose of present study the following tools used:

 The data has been collected through Sharekhan staff the project guide and stock
brokers.
 The data has been collected through reports Research records, newspapers and
internet.

Data analysis are analyzed using basic parametric techniques such as percentages and averages
where ever they are required.

20
4.4 NEED AND SIGNIFICANCE OF THE STUDY
The need of topic caters as per the norms let down by Savitribai Phule Pune University. Under the
topic “Study of Financial Derivative Share Market‟‟. It is essential to study of stock market before
Investment. In stock market plenty of ways are to earn more & more money and plenty of ways
are too loose it also. Therefore the study can give us brief idea of right ways to invest the money
and also study give analysis of two months stock market. The project study of futures and options
in the equity derivative market was undertaken with the view to get an insight into the equity
derivative market.
The project covers the basic concepts of futures and options which are useful in understanding the
functionality of this market.

4.5 OBJECTIVE OF STUDY:-

 To study various concepts of financial derivative market.

 To understand online trading and settlement of derivatives at Sharekhan ltd.
 To study the market scrip of 5 automobile companies (.Ashok Leyland, Tata motors,
Mahindra & Mahindra, Escorts, Bajaj Auto).

4.6 SCOPE OF THE STUDY:-

 The scope of this project is limited to the study of the Indian equity derivative market.
 Under the equity derivative market only some scripts have been considered in this project.
 In this project report, futures and options have been studied in detail.
 Futures contracts are extensively used as a hedging tool to minimize the risk arising out on
account of price changes in the market.
 How the derivatives are traded and settled is explained in this report.

21
4.7 LIMITATIONS OF STUDY

1) It will be very lengthy to include every scrip in the study only some scrip have been taken into
consideration.

2) Every strategy is not discussed here, only some major strategies are included.

3) Currency and Interest rate derivatives are not discussed.

22
5. Data Presentation & Data Analysis

I have selected five scripts from the futures market for analysis of data. These five
companies are-

1. Ashok Leyland

2. Tata Motors

3. Mahindra & Mahindra

4. Escorts

5. Bajaj Auto

The project includes price volume data & graph analysis of these 5 scripts.

How to read the graphs:-

 The bellow graphical presentation are takes from Sharekhan online trading software.

 The graphs are called Japanese Candle Stick Graph‟.

 Every candle shows one day stock movement.

 The „Green‟ candle shows UP movements (Bullish) of the stock and „Red‟ candle shows
DOWN movements (Bearish) of the stock.

 Dotted vertical line indicates Two months average price of stock, while bottom of the graph
represent one day volume of stock.

23
 CONTRACT-WISE PRICE VOLUME DATA
NF-ASHOK LEYLAND From 09 JUNE 2019 to 25 JULY 2019

NAME DATE OPEN HIGH LOW CLOSE QUANTITY

Ashok Leyland 09-June-19 63.3 63.35 62.9 62.95 3228000
Ashok Leyland 11-June-19 63.85 64.05 63.7 63.95 3492000
Ashok Leyland 12-June-19 62.6 62.9 62.2 62.55 4224000
Ashok Leyland 13- June -19 63.6 63.75 63.4 63.5 2628000
Ashok Leyland 16- June -19 62.55 62.65 62.5 62.55 2772000
Ashok Leyland 17- June-19 60 60 59.75 59.8 4122000
Ashok Leyland 18- June -19 59.45 59.95 59.4 59.8 3204000
Ashok Leyland 19- June -19 58.3 58.6 58.25 58.6 3162000
Ashok Leyland 20- June -19 69.6 70.05 69.15 69.65 11208000
Ashok Leyland 23- June -19 76.55 77.25 76.5 76.6 4788000
Ashok Leyland 24- June -19 74.95 75.9 74.95 75.8 3798000
Ashok Leyland 25- June -19 70.55 70.8 70.1 70.55 5070000
Ashok Leyland 26- June -19 73.6 73.9 73.3 73.3 1416000
Ashok Leyland 27- June -19 72.25 72.7 72.2 72.55 1974000
Ashok Leyland 30- June -19 69.5 69.6 68.2 68.25 3702000
Ashok Leyland 01-July-19 66.1 67.65 66.1 67.25 4710000
Ashok Leyland 03- July -19 67.8 68.3 67.8 68.2 2856000
Ashok Leyland 04- July -19 68 68.45 67.8 67.8 2844000
Ashok Leyland 07- July -19 64.35 64.9 64.3 64.7 2946000
Ashok Leyland 09- July -19 69.1 69.55 68.85 68.9 4506000
Ashok Leyland 10- July -19 68.85 69.05 68.65 68.75 2292000
Ashok Leyland 11- July -19 68.6 68.9 68.55 68.65 2184000
Ashok Leyland 14- July -19 67.7 67.95 67.6 67.75 1932000
Ashok Leyland 15- July -19 69.25 69.6 69.25 69.5 2382000
Ashok Leyland 16- July -19 71.75 71.95 71.7 71.85 3234000
Ashok Leyland 17- July -19 73.6 74.2 73.55 74.1 4878000
Ashok Leyland 18- July -19 77.4 77.4 76.6 76.6 4728000
Ashok Leyland 22- July -19 75.5 75.65 75.3 75.4 1704000
Ashok Leyland 23- July -19 75.4 75.6 75.05 75.15 1650000
Ashok Leyland 24- July -19 75.8 76.05 75.65 75.85 1824000
Ashok Leyland 25- July -19 74.15 74.35 74.1 74.3 276000

24
INTERPRETATION:-
As per the above graph, the Opening price of Ashok Leyland on date 9 June 2019 is 63.3 and
Closing price on 25 July 2019 is 74.3 (difference of 11). It is observed that highest price is 76.05
and lowest price is 59.8 of the Ashok Leyland.

25
 CONTRACT-WISE PRICE VOLUME DATA
NF-TATA MOTERS From 09 JUNE 2019 to 25 JULY 2019

NAME DATE OPEN HIGH LOW CLOSE QUANTITY

TATA Motors 09-June-19 122.55 122.6 122.05 122.25 3243000
TATA Motors 11- June -19 134.65 135.45 134.55 135.3 6159000
TATA Motors 12- June -19 128.45 129.8 128.15 129.5 6585000
TATA Motors 13- June -19 130 130.4 129.8 130.1 3453000
TATA Motors 16- June -19 128.9 129.35 128.75 129.1 2748000
TATA Motors 17- June -19 122.3 122.85 122.15 122.6 4146000
TATA Motors 18- June -19 121.85 123.05 121.6 122.8 4173000
TATA Motors 19- June -19 124.15 124.75 124 124.35 3240000
TATA Motors 20- June -19 133.55 134.05 133.2 133.95 4656000
TATA Motors 23- June -19 128.1 128.25 128 128 1863000
TATA Motors 24- June -19 131.05 131.9 130.65 131.7 3147000
TATA Motors 25- June -19 123.35 123.6 123.05 123.5 2973000
TATA Motors 26- June -19 124.8 125 124 124.3 1806000
TATA Motors 27- June -19 120.45 121 120.4 120.65 2817000
TATA Motors 30- June -19 118.1 118.3 117.9 118.1 1890000
TATA Motors 01-July-19 115.6 116.65 115.4 115.5 2205000
TATA Motors 03- July -19 122.9 123.75 122.3 123.75 4527000
TATA Motors 04- July -19 119.9 120.05 119.1 119.15 2259000
TATA Motors 07- July -19 117.7 118.25 117.6 117.7 2556000
TATA Motors 09- July -19 121.6 121.75 121.15 121.4 3336000
TATA Motors 10- July -19 116.95 117.3 116.85 117.1 2844000
TATA Motors 11- July -19 121.9 122 121.3 121.75 3156000
TATA Motors 14- July -19 127.85 128.3 127.45 128 3735000
TATA Motors 15- July -19 127.65 127.65 127.1 127.1 2157000
TATA Motors 16- July -19 126.15 126.5 126.05 126.25 2538000
TATA Motors 17- July -19 141.55 142.55 138.7 142.25 17001000
TATA Motors 18- July -19 137.35 137.45 136.5 137.05 4380000
TATA Motors 22- July -19 131.9 132.55 131.45 131.7 3606000
TATA Motors 23- July -19 133.3 133.35 132.4 132.8 2517000
TATA Motors 24- July -19 133.05 134.3 133.05 133.75 2952000
TATA Motors 25- July -19 128.6 128.95 128.35 128.5 1164000

26
INTERPRETATION:-
As per the above graph, the Opening price of Tata Motors on date 9 June 2019 is 122.55 and
Closing price on 25 July 2019 is 128.5 (difference of 07). It is observed that highest price is 142.55
and lowest price is 115.5 of the Tata Motors.

27
 CONTRACT-WISE PRICE VOLUME DATA
NF-MAHINDRA & MAHINDRA From 09 JUNE 2019 to 25 JULY 2019
NAME DATE OPEN HIGH LOW CLOSE QUANTITY
M&M 09-June-19 534.65 536.4 534.35 535.55 363000
M&M 11- June -19 547.5 547.75 545.1 546 435000
M&M 12- June -19 543.95 545 542.7 543.65 409000
M&M 13- June -19 552.7 553.4 551.5 553 355000
M&M 16- June -19 538.6 538.95 538 538.05 496000
M&M 17- June -19 522 523.85 520.9 523.6 488000
M&M 18- June -19 527 529.5 526.3 529.05 252000
M&M 19- June -19 519.55 521.7 519.55 520.5 236000
M&M 20- June -19 568.1 570.8 567.5 567.5 1320000
M&M 23- June -19 567 567 560.1 566 303000
M&M 24- June -19 559.25 562.75 558.9 561.6 556000
M&M 25- June- 19 535.35 538.5 535.2 537.1 611000
M&M 26- June -19 567.5 567.75 566.3 567 550000
M&M 27- June -19 557.6 559.5 556.85 558 507000
M&M 30- June -19 551.45 553.5 550.6 551.15 359000
M&M 01-July-19 558.4 562.25 558.4 561.9 392000
M&M 03- July -19 564.35 565.4 563 565 449000
M&M 04- July -19 566.5 567.95 564.75 565 425000
M&M 07- July -19 553.75 556.15 553.65 554.2 327000
M&M 09- July -19 576.95 579.6 576.75 578.1 605000
M&M 10- July -19 567.7 570.4 567.4 569 339000
M&M 11- July -19 562.45 563.3 561.65 562 389000
M&M 14- July -19 568.65 570.15 568.1 568.75 231000
M&M 15- July -19 583.2 583.8 582.45 583.8 476000
M&M 16- July -19 586.65 587.7 583.6 584.55 398000
M&M 17- July -19 594.2 594.2 588.9 592.05 584000
M&M 18- July -19 595.3 597 594.35 596.05 364000
M&M 22- July -19 597.35 600.35 597.1 598.5 407000
M&M 23- July -19 593.5 594.2 591.6 593.75 275000
M&M 24- July -19 582.1 584.5 581.45 583.4 254000
M&M 25- July -19 576.6 576.6 576.55 576.55 7000

28
INTERPRETATION:-
The stock of Mahindra (M&M) has lost 29 per cent over the past 12 months on account of slack
demand. The announcement of its Joint Venture (JV) with Ford India
May have a limited effect on its stock valuation given the weak demand for its high-margine
tractor division and rising headwinds for the passenger car business in the form of new emission
norms. As per the above graph, the Opening price of Mahindra & Mahindra on date 9 June 2019
is 534.65 and Closing price on 25 July 2019 is 576.55 (difference of 42). it is observed that highest
price is 594.2 and lowest price is 534.2 of the Mahindra & Mahindra.

29
 CONTRACT-WISE PRICE VOLUME DATA
NF-ESCORTS From 09 JUNE 2019 to 25 JULY 2019

NAME DATE OPEN HIGH LOW CLOSE QAUANTITY

Escorts 09-June-19 504.25 506 503.8 505 625900
Escorts 11- June -19 532.2 534.7 530.6 534 722700
Escorts 12- June -19 524.9 527.4 524.5 524.6 614900
Escorts 13- June -19 537 538.45 536.35 538 437800
Escorts 16- June -19 536.9 537.7 536.8 537.5 458700
Escorts 17- June -19 504.85 506.1 502.5 503.2 697400
Escorts 18- June -19 512.45 517.3 511.45 517 536800
Escorts 19- June -19 514.35 517.55 514.35 516.35 379500
Escorts 20- June -19 568.05 581.5 565.7 579.05 727100
Escorts 23- June -19 626 638 626 638 295900
Escorts 24- June -19 608 609.8 605.2 609 455400
Escorts 25- June -19 588.9 592.15 588.9 591.25 265100
Escorts 26- June -19 610.05 618.7 609 613.5 465300
Escorts 27- June -19 591.7 599.5 591.2 598.25 557700
Escorts 30-June- 19 582.55 590.8 582.5 590 799700
Escorts 01-July-19 611.95 614.25 611.1 612.8 492800
Escorts 03- July -19 620.6 625 620.3 624.8 641300
Escorts 04- July -19 603.25 604.5 597.6 598.4 493900
Escorts 07- July -19 601.25 604.5 601.25 602.3 297000
Escorts 09- July -19 611.9 616 610.95 615.8 589600
Escorts 10- July -19 605.9 607.7 603.35 603.65 440000
Escorts 11- July -19 600.5 602.4 598.05 601 437800
Escorts 14- July -19 614.05 615.6 612.5 612.5 289300
Escorts 15- July -19 630.1 633.9 629.8 633.1 619300
Escorts 16- July -19 630.9 633.05 628.1 628.1 500500
Escorts 17- July -19 649.75 650.1 646.45 648.05 477400
Escorts 18- July -19 654 654 650.55 651 337700
Escorts 22- July -19 647.55 647.55 645.6 646.5 174900
Escorts 23- July -19 658 658.05 655.3 656.3 207900
Escorts 24- July -19 649.95 652.85 647.35 648.45 312400
Escorts 25- July -19 646.25 647.8 646 646 44000

30
INTERPRETATION:-
As per the above graph, the Opening price of Escorts on date 9 June
2019 is Rs 504.25 and Closing price on 25 July 2019 is 646 (difference of 142). It is observed that
highest price is 658.05 and lowest price is 511.45 of the Escorts.

31
 CONTRACT-WISE PRICE VOLUME DATA
NF-BAJAJ AUTO From 09 JUNE 2019 to 25 JULY 2019

NAME DATE OPEN HIGH LOW CLOSE QUANTITY

Bajaj Auto 09-June-19 2831.95 2833.65 2820.55 2822.7 78000
Bajaj Auto 11- June -19 2909.35 2911.25 2900.15 2902.1 137750
Bajaj Auto 12- June -19 2862 2866.65 2859.65 2864.2 44250
Bajaj Auto 13- June -19 2891 2891.45 2882.2 2890.7 51750
Bajaj Auto 16- June -19 2879 2879.7 2872.75 2879.55 38000
Bajaj Auto 17- June -19 2782.2 2790.65 2779 2790.65 88750
Bajaj Auto 18- June -19 2780.75 2787.15 2780 2782.9 47250
Bajaj Auto 19- June -19 2745.5 2748.95 2745 2747.35 45250
Bajaj Auto 20- June -19 2932.85 2943.5 2930.8 2940.95 93750
Bajaj Auto 23- June -19 2996 2996.95 2994 2995 25750
Bajaj Auto 24- June -19 2969.4 2975 2963.65 2974 37500
Bajaj Auto 25- June -19 2943.5 2955.55 2927.05 2942.6 92750
Bajaj Auto 26- June -19 2968.55 2971 2968.15 2970.6 53750
Bajaj Auto 27- June -19 2977.2 2982.15 2972.95 2980.1 34000
Bajaj Auto 30- June -19 2960 2965.35 2949.15 2949.15 37750
Bajaj Auto 01-July-19 2925 2939.15 2925 2929.8 47750
Bajaj Auto 03- July -19 2914 2918.45 2901.65 2905.5 67750
Bajaj Auto 04- July -19 2876.3 2881.45 2872.35 2874 52500
Bajaj Auto 07- July -19 2903 2905.25 2895.6 2900 61750
Bajaj Auto 09- July -19 2909.7 2914 2895.05 2903.1 82500
Bajaj Auto 10- July -19 2896.6 2909 2894.1 2903.5 40750
Bajaj Auto 11- July -19 2906.4 2909.35 2903 2903.55 22000
Bajaj Auto 14- July -19 2956.45 2959.9 2950.2 2953 64750
Bajaj Auto 15- July -19 3022.3 3030 3019.05 3030 55500
Bajaj Auto 16- July -19 3033.9 3035.1 3030 3035 65250
Bajaj Auto 17- July -19 3125.45 3139.2 3118.6 3135 186000
Bajaj Auto 18- July -19 3089.05 3104.6 3088 3096.5 66500
Bajaj Auto 22- July -19 3124.9 3132.2 3124.8 3125.2 50250
Bajaj Auto 23- July -19 3176.85 3179.25 3166.1 3170 155250
Bajaj Auto 24- July -19 3175.3 3179.95 3165.95 3176 66500
Bajaj Auto 25- July -19 3140 3143.3 3139.2 3142.2 6750

32
INERPRETAION:-
As per the above graph, the Opening price of Bajaj Auto on date 9 June
2019 is 2831.95 and Closing price on 25 July 2019 is 3142.2 (difference of 311). It is observed that
highest price is 3179.25 and lowest price is 2745 of the Bajaj Auto.

33
  THE ABOVE DATA IS FIVE COMPANIES.

NAME OPENING CLOSING HIGH LOW

Ashok Leyland 63.3 74.3 76.05 59.8
Tata Motor 122.55 128.5 142.55 115.5
M&M 534.65 576.55 594.2 534.2
Escorts 504.25 646 658.05 511.45
Bajaj Auto 2831.95 3142.2 3179.25 2745

opning closing high low

3179.25
3142.2
2831.95

2745
658.05
576.55
534.65

594.2

511.45
504.25
646
534.2
142.55
122.55
128.5

115.5
76.05
74.3
63.3

59.8

ASHOK LAYLAND TATA MOTOR M& M ESCORTS BAJAJ AUTO

INTERPRETATION:-

From the above data the share price of Bajaj auto in the month of July is Rs.3179.25 followed by
share price escorts ltd is Rs. 658.05. It is found that the Ashok Leyland and Tata motors having
less share price.

34
6. FINDINGS

1. Reason for decline in the per share price.

 Ashok Leyland:- Company share prices are fluctuating because of technological

upgradations in the market and changes in government policies like promotion of
BS-4 Engine in motor vehicle, and abandoned the use of old engines.

 TATA Motors:- Competition is one of the reason for affecting share price.

 Mahindra And Mahindra:- Fluctuation in market condition, such as recession in

India & technological upgradations in the market affect share price.

 Escorts:- Weather conditions (Floods) affected the overall sales of the company.

 Bajaj Auto:- Bajaj company minimizes production of current motors to introduce

new electronic motors.

2. The scrip value of all the Auto Mobile sector mentioned above is declined Due to use
promotion of E-vehicle by the government. Due to increase in the services like Ola , Uber
and many more the sale of automobile in India was influenced.

3. As per the present condition it is good to invest on banking sector & worst to Investing
Auto Mobile sector.

4. There are many reasons that the market is going down such as political Issues inflation etc.

5. Derivative market is a good return market but it can also result into loss compared to equity
market.

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 7. SUGGESTIONS

1. People with low investment capacity, and low risk bearing attitude and those have less
knowledge should not enter into derivative market.

2 .Investors Portfolio should only consist of 15 -20 % Derivatives contracts or scripts.

As derivative trading is very risks investors should have only a small portion of their

Portfolio consisting of derivative.

3. Knowledge needs to be spread concerning the risk and return of derivative market.

4. SEBI should conduct seminars regarding the use of derivative to educate individual

Investors.

5. An investor should always try to forecast the correct market movement before investing in any
script.

6. Promoting derivative market by advertisements.

7. Sharekhan should increase their customer base.
8. Increasing research and development, on derivative contract.

36
 8. CONCLUSION:-

1. According to responses given by brokers and investors a conclusion can be attained that there
is great market ahead for derivatives in future.

2. The Indian financial derivative market is still under developing stage but it offers tremendous
growth potential.

3. Structure and tax laws have a heavy bearing on the behavior of market variables in the market.

4. Even average turnover at NSE has increased over last 10 year which is shown us trend that in
future there will be rise in derivatives trading.

37
 9. ANNEXURE – 1 REFERENCES

Reference :-

1) National Stock Exchange of India Limited, “NISM derivative Module”.

2) Capital Market Module.

Websites:-
1. https://www.nseindia.com/

2.http://www.bseindia.com/

3.http://www.moneycontrol.com/

4.http://www.sharekhan.com/welcome/default.html

Book

5. Basics of Indian stock market.( Angshuman Adhikari )

38
 QUESTIONNAIRE
1) What is derivatives?

Answer : Derivatives is a contract or a whose value is derived from value of some other asset
known as underlying. Derivatives are based on wide range of underlying asset. There are many
types of derivatives such as Commodity, Currency and Equity Derivatives.

2) Why to trade in derivatives?

Answer : Some basic reason to trade derivatives as under:

1. To prevent the price changes in future (up and down).

2. To hedging you holding assets or open position.

3. To predict the future movements in price of underlying assets and base on the view, take
positions in derivatives contracts.

3) Who are the participants of derivatives?

Answer: There are three major participants if derivatives:

1. Hedgers
2. Speculators / Traders
3. Arbitrageurs.

4) What are the benefit to trade in derivatives?

Answer: There are some benefits to trade derivatives as under:

1. Available three month contact on present day.

2. Required only 10-20% margin of total turnover.

3. Allowed Short position till the expiry of contract.

4. Lot size and expiry are fixed of every contract.

5) What is risk mean by derivatives investor?

Answer: Risk means uncertainty in the market or how much loss bear in taken position or trade.

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