A REPORT ON DERIVATIVES MARKET FUTURES AND OPTIONS AS HEDGING TOOLS

By A.SIVA KRANTHI Y10MBA134089

ACKNOWLEDGMENT
I would like to express my profound gratitude to all those who have been helpful in the preparation of my project report. To start with, I would like to thank the organization Share khan Securities Limited. for providing me the opportunity to undertake the project in their company.I am deeply indebted to Mr.Syam Prasad for his continuous support, and for the effort which he has taken throughout my project study. I am deeply grateful, to my faculty guide Mr.DEVID RJA SIR for his invaluable suggestions,comments, feedback and support throughout the internship.

CONTENTS Chapter-I Introduction Objectives Need of the Study Methodology Limitations

Chapter-II Industry Profile Company Profile Chapter-III Theoretical Frame work

Chapter-IV Data Analysis and Interpretation

Chapter-V Findings Summary Suggestions Bibliography

CHAPTER - I

Introduction Need &scope of the Study Objectives Limitations Methodology

INTRODUCTION:
India is well-established securities market with long history of organized trading. The growth in the stock exchanges of the country is spectacular and can be attributed to increase in the number of instruments offered, listed companies and tight credit policy of banks. As a result of which Indian corporate sector has been relying upon capital markets for raising funds for their needs. Consequently, a large population of the investors small and big has been created in India. The project I undertaken in this context is to study Application of Futures and Options as the hedging tools.

NEED FOR THE STUDY:

Hedgers use futures and options markets to reduce or eliminate risk (which is associated with the price of an asset). A hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity. Hedging does not always make money. The best that can be achieved using hedging is the removal of unwanted exposure, i.e. unnecessary risk. The hedged position will make less profits than the unhedged position, half the time. One should not enter into a hedging strategy hoping to make excess profits for sure; all that can come out of hedging is reduced risk. So, I have done the study to know how the hedging takes place and how one c an occupy safety positions and can minimize risk.

OBJECTIVES OF THE STUDY :

1. To understand the nature and working of derivatives and its various types. 2. To understand the scope of the Indian market for derivatives 3. To understand the need and usefulness for using futures and options as a hedging tool.
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ASSUMPTIONS AND LIMITATIONS :

1. The stock futures and options considered for analysis has purposely been selected as one having stocks in precise quantities equal to their lot sizes in the F & O segment , to achieve easier and optimal hedging of the portfolio and also making it easier for analysis and understanding of the impact of the strategies on the portfolio. There also exists a different way to hedge portfolios which have stocks in odd lot sizes like the optimal hedging ratio, delta hedging, etc. 2. In the analysis the period of one month option contract expiry i.e, 1st Jan to 24th Feb2011has been considered to ensure ease of calculation and relevance to the current market scenario and hence practical learning. 3. The stock options considered in analysis have assumed to be held till expiry and then exercised if it ends being in the money or left to be expired if they are out of the money or at the money. This helps in calculation of actual returns using these strategies.

4. Although varied gains could have been possible by selling the options at different stages of the duration, they have assumed to be held till expiry to analyze the complete effects of such strategies particularly. 5. The options have been priced (premiums) at the closing price of the opening day of the series i.e., 1st Jan Hence the investment in the options of the stocks is also considered to be according the closing levels of the premium on that day.

6. Likewise as above, even the stock futures and the cash prices of the stock considered are the closing prices of each particular day and the purchase prices are the first days closing prices i.e., 1st Jan.

METHODOLOGY :
This project aims at a theoretical as well as practical understanding of the derivatives market and various strategies that are used by investors for trading and hedging their returns in the derivatives markets Firstly, an immense learning experience both on the theoretical and practical aspects of derivatives and hedging strategies had been provided throughout our duration at the company. This helped to understand the general nature of operation of the company and understand reasons as to why consumers use options for trading strategies in the company. Later we were made to practically understand the trading mechanism for the cash as well as derivatives market by exposure to the trading softwares used in the company for both the offline and online setup. For more theoretical in depth understanding of the topics relevant to the project a lot of relevant literature has been read and understood for analyzing different views on the topics. Each strategy was understood from the perspective of five different criteria of profit, loss, when to use, time decay and break even. The company then provided me with a clients portfolio so as to understand the practical application of all the strategies on a clients portfolio. Then analyzing the returns through the strategies the magnitude of returns as well as the risk associated is determined by different statistical tools like mean, standard deviation, etc. This then helps us to suggest strategies for different investors according to their risk appetite and return expected. Sources of Data : Primary Data : Collected data through personal interaction with authorized officials and clients of Share Khan Ltd. Secondary Data : Collected data from several websites Brochures and Materials provided by Share Khan Ltd. Various books relating to derivatives
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CHAPTER II

Industry Profile Company Profile

INDUSTRY PROFILE :
STOCK BROKING OPERATIONS AN OVER VIEW As capital market operations is a complex activity which require an in depth knowledge of stock market and about the company performance, security analysis of the stock. A full time practicing firm/person is needed to advise for our investment; in fact a broker can also invest his own money to make profit out of stock market operations. A stockbroker invests in the stock market for individuals or corporations so whenever individuals or corporations want to buy or sell stocks they must go through a brokerage house. Stockbrokers often advise and counsel their clients on appropriate investments. Brokers explain the workings of the stock exchange to their clients and gather information from them about their needs and financial ability, and then determine the best investments for them. The broker then sends the order out to the floor of the securities exchange by computer or by phone. When the transaction has been made, the broker supplies the client with the price. The buyer pays for the stock and the broker transfers the title of the stock to the client and performs clearing and settlement procedures. The settlement process is discussed in subsequent pages. The beginning stockbrokers first priority is learning the market. One broker said, First you have to decide whether you have an interest in the stock market. This will determine how well you will do. If you are just interested in making money you wont get very far. Stockbrokers spend their time in a fast-paced office, usually working from nine to five, unless they are just starting out or have to meet with clients. The new broker spends many hours on the phone building up a client base. Sometimes brokers teach financial education classes to expose themselves to potential investors who may then become their clients.

Brokerage clerks handle much of the day-to-day operations of brokerages, performing a number of different jobs with a wide range of responsibilities; all involve computing and recording data pertaining to securities transactions.
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Brokerage clerks also may contact customers, take orders, and inform clients of changes to their accounts. Some of these jobs are more clerical. Brokerage clerks, who work in the operations departments of securities firms, on trading floors, and in branch offices, also are called margin clerks, dividend clerks, transfer clerks, and brokers assistants.

Brokerage clerks in the operations areas of securities firms perform many duties to facilitate the sale and purchase of stocks, bonds, commodities, and other kinds of investments. These clerks produce the necessary records of all transactions that occur in their area of the business. Job titles for many of them depend upon the type of work that they perform. Purchase-and-sale clerks, for example, match orders to buy with orders to sell. They balance and verify trades of stock by comparing the records of the selling firm with those of the buying firm. Dividend clerks ensure timely payments of stock or cash dividends to clients of a particular brokerage firm. Transfer clerks execute customer requests for changes to security registration and examine stock certificates to make sure that they adhere to banking regulations. Receive-and-deliver clerks facilitate the receipt and delivery of securities among firms and institutions. Margin clerks record and monitor activity in customers accounts to ensure that clients make payments and stay within legal boundaries concerning their purchases of stock.

Technology is changing the nature of many of these jobs. A significant and growing number of brokerage clerks use custom-designed software programs to process transactions more quickly. Only a few customized accounts are still handled manually. Furthermore, the rapid expansion of online trading reduces the amount of paperwork because brokerage clerks are able to make trades electronically.

Stockbroker and the investor:

The stockbroker should provide adequate information regarding the stocks. He should be capable of giving short term and long-term investment
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suggestions to the investor and able to confirm the purchase and sale of securities quickly. He should have adequate experience in the market to take correct decision. He should have contact with other stock exchanges to execute the orders profitably and also offer incidental service like arranging for financing the clients transaction.

Types of stockbrokers:
The stock brokers the key players in secondary market. categories of brokers as stated below. There are various

Floor Brokers: They are representatives of the brokers, who enter the trading floor and execute orders for their clients of for members. Commission Broker: A commission broker is a broker who buys and sells securities on behalf of his clients for a commission. He does not purchase or sell his own name. A broker act for the large number of his clients, and therefore, he deals in a large variety of securities. Jobbers: A jobber is an independent broker who deals in securities as a owner, keeps them for a very short period and sells them for profit known as the jobbers turn. Thus a jobber does not work for commission but works for profits. A jobber transacts in the market for quick returns. In the London Stock Exchange even member has to act as a broker or as a jobber. In India, there is no such rigid classification. Badla Financiers/Badliwallas: Badliwallas are the intermediaries who finance the forward deals in specified securities in return for interest. This interest is called Badla rate. Arbitragers: They are brokers who buy securities in one market and sell them in another market to take the advantages of the price differences prevailing in different markets for same scripts. Wolves: They are clever speculators. They perceive the changing trends in the market and trade fast and make a fast duck.

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Buying and selling of shares:

To buy and sell the script the investor has to locate register broker or a sub broker who render prompt and efficient services to him. The order to buy of sell specified number of scrip of the company of investors choice ate laced with the broker, the order may be of any of the below mentions type after receiving the order the broker tries to execute the order in his computer terminal. Once matching order is found, the order is executed. The broker delivers the contract note. To the investor, it gives the details regarding the name of the company, number of scripts bought, price, brokerage, and the date of delivery of share. In the physical trading form, once the broker gets the script certificate through the clearing houses the stock broker delivers the share certificate along with transfer deed to the investor. The investor has to fill the transfer deed and stamp it. The stamp duty is one of the percentage consideration, the investor should lodge the share certificate and transfer deed to the register or transfer agent of the company if it is bought in the demit form the broker has to give a matching instruction to his depository participant to transfer shares bought to the investor account. The investor should be account holder in any of depository participant. In the case of sell of shares on receiving payment from the purchasing broker, the broker effects the payment to the investor

Orders:
Buy and sell orders placed with members of the stock exchange by the investor. The broker is responsible for getting the best price for his customer at the time the order is placed.

Online Trading:
The Net is used as a medium of trading in Internet trading. Orders are communicated to the stock exchange through website. Internet trading started in India on 1st April 2000 with 79 members seeking permission for online trading. The SEBI committees on Internet based securities trading services trading services
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has allowed the net to be used as an Order Routing System (ORS) through registered stock brokers on behalf of their clients for execution of transaction. The user should have the user id and password to enter into the electronic ring. He should also have a demat account and bank account. The system permits only a registered client to log in using user ID and password. Order can be placed using place order window of the website. The client has to enter stock code and other parameters such as quantity and price of the scrip on the place order window. The client can review the order placed by clicking the review option. He can also reset to clear the values Satisfactory orders are sent by clicking the send option. The client receives an order confirmation message with order number and value of the order. If the order is rejected by the broker or stock exchange of r certain reasons such as invalid price limit, a related message appears at the bottom of the screen. The time taken to execute the order is 10 seconds. When the trade is executed, the broker asks for the transfer of funds by the investor to his account. Stocks are credited/debited according to the buy/sell order in the demat accounts.

Regulatory Framework
The securities and Exchange Board of India was constituted in 1998 under a resolution of government of India. It was later made statutory body by the SEBI act 1992. According to this act, the SEBI shall constitute of a chairman and five other members appointed by the central government with the coming into effect of the Securities and Exchange Board of India act, 1992. Some of the power and functions exercised by the central government, in respect of the regulation of stock exchange were transferred to the SEBI.

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Objects and functions of SEBI:

I. To protect the interest of investors in securities. II. Regulation the business in stock exchange and any other securities market. III. Registering and regulation the working of intermediaries associated with securities market as well as working of mutual fund. IV. Promoting and regulating self-regulating organizations. V. Prohibiting insides trading in securities. VI. Regulation substantial acquisition of share and take over of companies. VII. Performing such functions and exercising such powers under the provisions of capital issues (control) act, 1947 and the securities to it by the central government. Securities and Exchange Board of India (Stock Brokers And Sub-Brokers) Regulations, 1992, In respect of stockbroker and sub-broker, SEBI has made 12 amendments from November 28, 1995 to September 27,2002. SEBI has been setup to ensure that the stock exchanges discharge their selfregulatory role properly. Even since SEBI began to monitor brokers, stock broker. Stock broking is emerging as a professional advisory service, in tune with the requirements of a mature, sophisticated, screen-based, ring less, automated stock exchanges in the country. New Membership -CM and F&O segment

Eligibility
The following persons are eligible to seek membership of the Exchange as Trading Members (Brokers): a. Individuals b. Partnership Firms registered under the Indian Partnership Act, 1932.
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c. Corporations, Companies or institutions or subsidiaries of such Corporations, Companies or institutions set up for providing financial services. d. Such other persons or entities as may be permitted from time to time by RBI/SEBI under the securities Contracts (Regulations) Rules, 1957. General Eligibility Conditions: Criteria AGE Individuals Firms Corporate

Minimum age: Minimum age: Minimum age: 21 years 21 years 21 years for (applicable for Maximum age: (applicable partners) directors) 60 years Indian Citizen Registered partnership firm under Indian partnership Act, 1932 Corporate registered under The Companies Act, 1956 (Indian)

STATUS

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COMPANY PROFILE :
SHAREKHAN Ltd.
Share khan 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 Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Share khan 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 firms 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 jargonfree, 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 steadfast 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 investing in stocks. On April 17, 2002 Share khan 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 de facto standard for the Day Trading community over the net. Share khan is the retail broking arm of SSKI, an organization with more than eight decades of trust decades of trust & credibility in the stock market. Leading domestic player in Indian institutional business Over US $ 5 billion of private equity deals Awarded top domestic brokerage house four times by Euro Money & Asia Money Amongst pioneers of investment research in the Indian market In 1984, ventured into institutional broking & corporate finance. Indias largest chain of branded retail share shops 1200 shops in 400 towns.
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Services:
Broking in equities & derivatives on NSE & BSE Depositary services Commodities trading in MCX & NCDEX IPO Services Portfolio Management Services Distribution services

Awards:
Rated among the top 20 wired companies along with Reliance, HLL, Infosys etc by Business Today Jan 2005 edition. PIONEERS of online trading in India. Amongst the top 3 online trading wed sites from India. Most preferred financial destination amongst online banking customers. Winner of Best Financial Website Award Awarded to Share Khan at the Awaaz Consumer Awards 2005 in the Stock Broking category. Research conducted by AC NielsenORG MARG for Awaaz. Technology: Robust platform Processing 1,30,000 transactions everyday Scalable at low cost Share khans ground network includes over 1200 centers in 400 cities in India which provide a host of trading related services. Share khan 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, Cambridge Technologies, Nexgenix, Vignette, Verisign
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Financial Technologies India Ltd, Spider Software Pvt Ltd. To build its trading engine and content. The Morakhiya family holds a majority stake in the company. HSBC, Intel & Carlyle are the other investors. With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKIs institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organizations revenue, with a daily turnover of over US$ 2 million. The Corporate Finance section has a list of very prestigious clients and has many firsts to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shoppers Stop. Share khan Limited is a retail financial services provider with a focus on equities, derivatives and commodities brokerage execution on the National Stock Exchange of India Ltd. (NSE), Bombay Stock Exchange Ltd. (BSE), National Commodity and Derivatives Exchange India (NCDEX) and Multi Commodity Exchange of India Ltd. (MCX). Share khan provides trade execution services through multiple channels - an Internet platform, telephone and retail outlets and is present in 400 cities through a network of 1200 locations. The company was awarded the 2005 Most Preferred Stock Broking Brand by Awwaz Consumer Vote.

The Business Challenges:

Easily access customer portfolio information in a secure contact centre environment. Seamlessly integrate with back-end applications and streamline customer data to contact centre agents. Easily manage upgrades and technology issues to accommodate growing customer base.
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The Solution:
Share khan selected Aspect Ensemble from the Aspect Software Unified IP Contact Center product line, a unified contact centre solution delivering advanced multichannel contact capabilities, because it provided the best total value over other solutions evaluated. It enabled Share khan to meet customer service needs for inbound call handling, voice self service, predictive outbound dialing, call blending, call monitoring and recording, and creating outbound marketing campaigns, among other capabilities.

The Results:
Increased agent efficiency and productivity Enabled company to execute proactive customer service calls and expand services offered to Customers. Enhanced call monitoring for improved service quality financial services is a highly competitive and volume-driven industry which demands high standards of customer service, effective consultation and quick deliverables. This is something Share khan Limited, a retail financial services provider based in India, understands. The company offers several user-friendly services for customers to manage their stock portfolios, including online capabilities linked to an information database to help customers confidently invest, and inbound customer services using voice self-service technology and customer service agents handling telephone orders from clients.

Managing Business Growth:

With a customer base of more than 10, 00,000, Share khan continues to grow at a fast pace. The company required reliable contact centre technology that could handle its growing customer base and expanding services portfolio. Downtime in the contact centre, even for a short period of time, was unacceptable as it could result in financial losses and more importantly, a decrease in customer loyalty. As a result, customer satisfaction was a top priority in Share khans agenda. Its primary objective was to help and support its customers in managing their shares portfolio in the best possible manner. In anticipation of market trends,
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which estimated that multiple applications, up-selling, and cross-selling among stockbrokers would grow in the near future, Share khan needed a sound solution to manage complex customer queries. Unfortunately, technology turned out to be our biggest nightmare, said Ketan Parikh, Chief Technology Officer at Share khan. The agents and even senior management spent a copious amount of time resolving routine technical issues and other day-to-day problems. As a result, our business growth and expansion plans took a back seat. We started losing focus of our business goals and that was detrimental to our business. We needed an effective solution, fast.

Search for an Ideal Solution:

Share khan searched for a vendor who could resolve the technology integration issues in the contact centre and get the organization back on its growth track with minimal complications. Aspect Software, boasting a strong brand name and intense market penetration, was a natural choice, Parekh added. Our conviction in choosing Aspect Software was further strengthened after meeting with the companys team of professionals. The team articulately demonstrated the capabilities of the solutions to us and committed themselves to providing worldclass technical support to resolve day-today technical issues. It was definitely more than we could have asked for. Impressed with their product offerings, Share khan selected Aspect Software to implement hundreds of seats of Aspect Ensemble at its contact centre in Mumbai, India. Aspect Ensemble is a complete contact centre solution that unites inbound, outbound and blended multichannel contact (voice, email, the web and fax), while also delivering voice portal, recording and quality management, and unified reporting and administration capabilities. With clear goals in mind, the Aspect Software team implemented the solution and in the process forged a strong relationship with Share khan. Through active counseling and technical support, Aspect Software aptly demonstrated its expertise and leadership in contact centre solutions, Parikh said. Even when our telephony provider failed to make necessary customizations to their equipments, Aspect Software called on their telephony experts to prepare new binaries and codes to be applied on the Aspect Ensemble. Aspect Software engineers also shared industry best practices with us. The voice self-service capabilities in Aspect Ensemble seamlessly integrated with
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Share khans customer information database, without any customization. Supported by Aspect Ensemble, Share khan can now effortlessly handle customers calls and day-to-day problems quickly, and offer a variety of new services to its customers.

Powered by Aspect:
The voice portal capability in Aspect Ensemble verifies up every customer call and prompts the caller for their customer identification and PIN number. Once these are entered on the phone, Aspect Ensemble communicates with the Share khans backend customer databases through SQL and Oracle, and requests an authorization. Upon authorization by the Share khan system, Aspect Ensemble routes the call to the next available agent along with all of the customers data. If the callers information is incorrect after three attempts, it is not authorized by the Share khan system and the call is rejected. If the caller does not have a customer ID, the caller is presented the option of being routed to customer service, or being designated as a Depository Participant (DP) enquiry or a new account. In addition to the inbound capabilities, Share khan was able to add fully-automated outbound call services with Aspect Ensemble. The solution enables Share khan to execute proactive outbound customer service campaigns, using tools such as automated outbound dialing and information feeds on the top 10 stocks of the market daily to customers. Similarly, automated and personalized market feedback and intelligence are regularly provided to Share khans portfolio management services customers through the solutions outbound dialing capabilities. With the automation of processes, our agents have become more productive because their time is better utilized and, of course, the level of customer service has gone up considerably. The management team is able to analyze and monitor the quality of customer service and make business critical decisions more effectively, Parikh concluded. Motivated by the success with Aspect Software products at its facility at Raghuwanshi Mill (Mumbai), Share khan has plans to set up a disaster recovery site and is working with Aspect Software to provide technology for its second contact centre.
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Pepper: Triangle:
The fall from the top appears to be a three wave fall and Pepper has being consolidating in a triangular pattern. On the lower side wave E is expected which will take it to 22123 and on the higher the resistance exist at 23200. However, if 23200 is taken off then the bearish alternate will be ruled out and the fresh leg on the upside will start. Since wave 2 was a zigzag, wave 4 looks to be a triangle which will meet the guideline of alternation. Hence, we continue to maintain our bias down for the target of 22123 and a reversal above 23200.

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CHAPTER III

Theoretical Frame work

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LITERATURE REVIEW :
DERIVATIVES AN INTRODUCTION Derivatives are financial instruments whose value is derived from the value of other, more basic underlying assets called bases, in a contractual manner. Underlying asset can be a commodity, currency, equity, interest rate, exchange rate etc. A very basic example of a financial derivative is a farmer producing sugarcane entering into a contract to sell his harvests at a future date at a predetermined price, in order to eliminate the risk of change in demand and hence a change in price by that pre-specified date. The price of such derivative is driven by the spot price of sugarcane which in this case is the underlying. In India, Derivatives are securities under the Securities Contracts (Regulation) Act, 1956 and trading of derivative is governed by the regulatory framework under the SC(R) A. SC(R) A, 1956 defines derivatives to includeA 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.

DERIVATIVE PRODUCTS :
There are various types of derivative products. They are briefly explained below: Forwards: A forwards contract is a customized contract between two entities, where settlement takes place on a pre-specified future date at todays pre-agreed price. It is a legally binding agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. They are not traded and are not standardized.

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Futures: It is a legally binding agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. They are entered into through exchange, traded on exchange and clearing corporation/house provides the settlement guarantee for trades. They are standardized. Options: Option is the right given by the option seller to the option buyer to buy or sell an asset at a specific price on or before a specific date. They are not legally binding and the buyers have an option to dishonor the contract for a loss amount of premium paid. Options are of two typesCalls 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 future date. Puts give the seller the right but not the obligation to sell a given quantity of the underlying asset, at a given price on or before a future date. Swaps: Swaps are private agreements between two parties to exchange cash flows in future according to a prearranged formula. 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 flow in one direction being in a different currency than those in the opposite direction. Of all these derivative products, only Futures and Options are traded on the Indian Stock exchanges. WHY DERIVATIVES? Basically, there are three broad categories of participants operating in the derivative markets. These categories represent different purpose for which derivatives are used. These participants are: Hedgers use futures and options markets to reduce or eliminate risk (which is associated with the price of an asset). A hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. Hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity.
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Speculators wish to bet on future movements in the price of an asset. Futures and Options can give them an extra leverage; that is they can increase both the potential gains and the potential losses in a speculative venture. Financial speculation, involves the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives, or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. Arbitrageurs are in the business to take advantage of a discrepancy between prices in two different markets. Arbitrage is the practice of taking advantage of a price differential between two or more markets: a combination of matching deals is struck that capitalize upon the imbalance, the profit being the difference between the market prices TERMINOLOGY OF DERIVATIVES General terms and concepts related to derivatives: Spot price(ST): Spot price of an underlying asset is the price that is quoted for immediate delivery of an asset.for example in NSE ,the spot price of reliance ltd.At any given time is the price are which the reliance ltd.shares are being traded at that point of time in the cash market segment of the NSE.spot price is also referred to as cash price some times. Forward price (or) futures price(F) : Forward price or an future price is the price that is agreed upon at the date of contract for the delivery of an asset at a specific future date.these prices are dependent on the spot price,the prevailing interest rate and the expiry date of the contract. STRIKE PRICE(K) : The price at which the buyer of an option can buy the stock(in case of call option) or sell the stock(in case of put option) on or before the expiry date of option contracts is called strike price.It is the price at which the stock will be bought and
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sold when the option is exercised.strike price is used in case of option only;it is not used for futures or forwards. EXPIRATION DATE : In the case of futures ,forwards and index options,Expiration date is the only date on which settlement takes place.In case of stock options,on the other hand,expiration date (or simply expiry),is the last date on which the option can be exercised.It is also called the final settlement date. TYPES OF OPTIONS : Options can be divided into two different categories depending upon the primary exercise styles associated with the options.These two categories are; a.EUROPEAN OPTIONS:European options are the options that can be exercised only on the expiration date.All options based on indices such as Nifty,MinyNifty,CNX IT traded at the NSE are European options which can be exercised by the buyer(of the option) only at the expiry date. b.AMERICAN OPTIONS:American options are options that can be exercised on any day on or before the expiry date.All options on individual stocks like Reliance,SBI and Infosys traded at NSE are American options.they can be exercised by the buyer on any day on or before the settlement. CONTRACT SIZE: The futures and options are standardized contract traded on an exchange,they have a fixed contract size . one contract of a derivatives instrument represents a certain number of shares of the underlying asset.For example ,if one contract of BHEL consists of 300 shares of BHEL ,then if one buys one future contract of BHEL,Then for every Re 1 increase in BHELS futures price ,the buyer will make the profit if 300 x 1=Rs.300 and for every Re 1 fall in future price ,he will loose Rs 300. CONTRACT VALUE : Contract value is the notional value of transaction in case one contract is bought or sold .It is is the contract size multiplied by the size of the futures . contract value is
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used to calculate margins etc. for contracts.In the example above if BHEL futures are trading at Rs.2000 the contract value would be Rs.2000*300=Rs.6 lacs. MARGINS : In the spot market ,the buyer of a stock has to pay the entire transaction amount(for purchasing the stock)to the seller.For example,if Infosys is trading at Rs 2000 a share and an investor wants to buy 100 infosys shares ,then he has to pay Rs 2000 x 100=Rs.200000 to the seller.The settlement will take place on T+2 basis;that is two days after the transaction date. In a derivatives contract a person enters in to a trade today(buy or sell) but the settlement happens on a future date.Because of this ,there is a high possibility of default by any of the parties.Futures and option contracts are traded through exchanges and the counter party risk is taken care of bythe clearing corporation .In order to prevent any of the parties from defaulting on his trade commitement,the clearing corporation levies a margin on the buyer as well as seller of the futures and option contracts.This margin is percentage(approximately 20%)of the total contract value.Thus for the aforementioned example,if a person wants to buy 100 INFOSYS futures ,then he will have to pay 20% of the contract value of Rs 2,00,000=Rs 40,000 as a margin to the clearing corporation.This margin is applicable to both the buyer and the seller of the future contract.

USE OF DERIVATIVES:
1. RISK MANAGEMENT: The most important purpose of the derivative market is risk management.Risk management for an investor consists of the following three processes: Identifying the desired level of risk that the investor is willing to take on his investments; Identifying and measuring the actual level of risk that the investor is carrying and

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 Making arrangements which may include trading of derivative contracts that allow him to match the actual and desired level of risk. 2.MARKET EFFICIENCY: Efficient markets are fair and competitive and do not allow any investor to make risk free profits.Derivatives assists in improving the efficiency of market,By providing self correct mechanism.Risk free profits are not easy to make in more efficient markets.when trading occurs ,there is a possibility that some amount of mispricing might occur in the market.The arbitrageurs steps in to take the advantage of the mispricing by buying from the cheaper market and selling in the higher market.Their actions quickly narrow the prices and thereby reducing the inefficiencies. 3. PRICE DISCOVERY : One of the primary function of derivative market is price discovery.They provide the valuable information about the prices and expected price fluctuations of the underlying assets in two ways : First many of these assets are traded in the markets in different geographical locations.Because of these assets may be traded at different prices in different markets.In derivative markets ,the price of the contract often serves as the proxy for the price of the underlying asset.For example gold may trade at different prices in Mumbai and Delhi but a derivative contract on gold would have one value and so traded in Mumbai and Delhi can validate the prices of the spot markets in their respective location to see if it is cheap or expensive and trade accordingly. Second the prices of the future contract serves as the price that can be used to get a sense of the market expectation of future prices.For example,say there is an company that produces sugar and expects that the production of sugar will take two months from today.As sugar prices fluctuates daily,the company does not know if after two months the price of sugar will be higher or lower than it is today.How does predict where the price of sugar will be in future?It can do this by
29

monitoring prices of the derivative contract on sugar.If the price of the sugar is trading higher than the spot price that means that the market is expecting the sugar spot price to go up in the future .If there were no derivative price it would have to wait for two months before knowing the market price of the sugar that day .Based on derivatives price the management of the sugar company can make strategic and tactical decisions of how much sugar to produce and when. 5. HEDGING: The best way to understand hedging is to think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event. This doesn't prevent a negative event from happening, but if it does happen and you're properly hedged, the impact of the event is reduced. So, hedging occurs almost everywhere, and we see it everyday. For example, if you buy house insurance, you are hedging yourself against fires, break-ins or other unforeseen disasters. Portfolio managers, individual investors and corporations use hedging techniques to reduce their exposure to various risks. In financial markets, however, hedging becomes more complicated than simply paying an insurance company a fee every year. Hedging against investment risk means strategically using instruments in the market to offset the risk of any adverse price movements. In other words, investors hedge one investment by making another. Technically, to hedge you would invest in two securities with negative correlations. Of course, nothing in this world is free, so you still have to pay for this type of insurance in one form or another. Although some of us may fantasize about a world where profit potentials are limitless but also risk free, hedging can't help us escape the hard reality of the risk-return tradeoff. A reduction in risk will always mean a reduction in potential profits. So, hedging, for the most part, is a technique not by which you will make money but by which you can reduce potential loss. If the investment you are hedging against makes money, you will have typically reduced the profit that you could have made, and if the investment loses money, your hedge, if successful, will reduce that loss.
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How Do Investors Hedge?

Hedging techniques generally involve the use of complicated financial instruments known as derivatives, the two most common of which are options and futures. With these instruments you can develop trading strategies where a loss in one investment is offset by a gain in a derivative.

EXAMPLE: Say you own shares of Cory's Tequila Corporation (Ticker: CTC). Although you believe in this company for the long run, you are a little worried about some shortterm losses in the tequila industry. To protect yourself from a fall in CTC you can buy a put option (a derivative) on the company, which gives you the right to sell CTC at a specific price (strike price). This strategy is known as a married put. If your stock price tumbles below the strike price, these losses will be offset by gains in the put option. The other classic hedging example involves a company that depends on a certain commodity. Let's say Cory's Tequila Corporation is worried about the volatility in the price of agave, the plant used to make tequila. The company would be in deep trouble if the price of agave were to skyrocket, which would severelyeat into profit margins. To protect (hedge) against the uncertainty of agave prices, CTC can enter into a futures contract (or its less regulated cousin, the forward contract), which allows the company to buy the agave at a specific price at a set date in the future. Now CTC can budget without worrying about the fluctuating commodity. If the agave skyrockets above that price specified by the futures contract, the hedge will have paid off because CTC will save money by paying the lower price. However, if the price goes down, CTC is still obligated to pay the price in the contract and actually would have been better off not hedging. Keep in mind that because there are so many different types of options and futures contracts an investor can hedge against nearly anything, whether a stock, commodity price, interest rate and currency - investors can even hedge against the
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weather. The Downside Every hedge has a cost, so before you decide to use hedging, you must ask yourself if the benefits received from it justify the expense. Remember, the goal of hedging isn't to make money but to protect from losses. The cost of the hedge - whether it is the cost of an option or lost profits from being on the wrong side of a futures contract - cannot be avoided. This is the price you have to pay to avoid uncertainty. 6. SHORT SELL : In finance, short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker) with the intention of buying identical assets back at a later date to return to the lender. It is a form of reverse trading. Mathematically, it is equivalent to buying a "negative" amount of the assets. The short seller hopes to profit from a decline in the price of the assets between the sale and the repurchase, as the seller will pay less to buy the assets than the seller received on selling them. Conversely, the short seller will incur a loss if the price of the assets rises. Other costs of shorting may include a fee for borrowing the assets and payment of any dividends paid on the borrowed assets. "Shorting" and "going short" also refer to entering into any derivative or other contract under which the investor profits from a fall in the value of an asset.

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Going short can be contrasted with the more conventional practice of "going long", whereby an investor profits from any increase in the price of the asset. To profit from a decrease in the price of a security, a short seller can borrow the security and sell it expecting that it will be cheaper to repurchase in the future. When the seller decides that the time is right (or when the lender recalls the securities), the seller buys equivalent securities and returns them to the lender. The process relies on the fact that the securities (or the other assets being sold short) are fungible; the term "borrowing" is therefore used in the sense of borrowing $10, where a different $10 note can be returned to the lender (as opposed to borrowing a car, where the same car must be returned). A short seller typically borrows through a broker, who is usually holding the securities for another investor who owns the securities; the broker itself seldom purchases the securities to lend to the short seller. The lender does not lose the right to sell the securities while they have been lent, as the broker will usually hold a large pool of such securities for a number of investors which, as such securities are fungible, can instead be transferred to any buyer. In most market

33

conditions there is a ready supply of securities to be borrowed, held by pension funds, mutual funds and other investors. The act of buying back the securities that were sold short is called "covering the short" or "covering the position". A short position can be covered at any time before the securities are due to be returned. Once the position is covered, the short seller will not be affected by any subsequent rises or falls in the price of the securities, as he already holds the securities required to repay the lender. The terms shorting and going short are also used as blanket terms for tactics that allow an investor to gain from the decline in price of a security. Such tactics are generally based on a derivative contract, such as an option, a future or a similar synthetic position. For example, a put option consists of the right to sell an asset at a given strike price; the owner of the option therefore benefits when the market price of the asset falls below that price, as he can buy the asset at the lower price and sell it under the option at the strike price. Similarly, a short position in a futures contract means the holder of the position has an obligation to sell the underlying asset later at a given price; if the price falls below the given price, the person with the short position can buy the asset at the lower price and sell it under the future at the higher price. Worked examples Profitable trade Shares in C & Company currently trade at $10 per share. 1. A short seller borrows 100 shares of C & Company and immediately sells them for a total of $1,000. 2. Subsequently, the price of the shares falls to $8 per share. 3. Short seller now buys 100 shares of C & Company for $800. 4. Short seller returns the shares to the lender, who accepts the return of the same number of shares as was lent, despite the fact that the market value of the shares has decreased.

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5. Short seller retains as profit the $200 difference (minus borrowing fees) between the price at which he sold the shares he borrowed and the lower price at which he was able to purchase the shares he returned.

Loss-making trade Shares in C & Company currently trade at $10 per share. 1. A short seller borrows 100 shares of C & Company and immediately sells them for a total of $1,000. 2. Subsequently the price of the shares rises to $25. 3. Short seller is required to return the shares and to meet the obligation, is compelled to buy 100 shares of C & Company for $2,500. 4. Short seller return the shares to the lender who accepts the return of the same number of shares as was lent. 5. Short seller incurs as a loss the $1,500 difference between the price at which he sold the shares he borrowed and the higher price at which he had to purchase the shares he returned (plus borrowing fees 7 .The Short Futures Position: How You Can Benefit Best One of the most unique ways in which you can invest your money is through futures trading. Most traders can actually maximize their profits from declining prices. Trading with this kind of market involves the accuracy of the prediction of prices that each player makes. And speaking of the players in the futures market, traders usually pick a position depending on the purpose of his trade. In particular, traders who want to get involved on the market floor must adopt a short position that could make profit out of a dip in futures contract. On one hand, future traders choose the short position for various reasons. If you want to invest and make it big in the futures market, the following pieces of information can guide you in your trading futures venture.

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Choosing the Trade Position As mentioned earlier, the reasons traders take on the short position is because they might be seeking offload contracts that they have profited already or they see significant play that will result in the lowering of the commodity prices through the futures contract. Hence, the short position is actively done when the trader borrows a futures contract from the third body. The short position then allows the trader to sell the contract at the current price in the market for the hope of gaining profit in the days to come. Adopting a Short Position Once you decide to choose the short position in the trade futures, one of the things that you will need is the service of a broker or third party to let you borrow a futures contract. When the contract is in your hands, it is now the time that you sell it at its present price. After the trader has made profit from the contract, he will have to return the futures contract to the party whom he lent the contract. Speculation is the game of the trade; hence, the investor adopting on a short futures position must profit when the price of the contract flows through the date of expiration that the he agreed with the third party. Moreover, taking the short position in trading futures in the market or in online futures trading is basically about making a bet whether the futures contract price will increase or decrease. If the price of the contract decreases, the trader gets to win the contract. The Advantage of Short Position Every trade has its utmost advantage, and in the case of the short position in futures trading, there are also favorable opportunities as well as the risk that investors have to deal with. Two types of traders are generally the key players in the trading futures field; namely, the speculators seeking profit from the decrease in the price of underlying commodity and the producers who aim to lock the price of the commodity at the basic selling price. In these two players, the producer takes the short position. The producer will then own the commodity while the futures contract is still at hand with the contract buyer

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8. OPTIONS
An option contract is an agreement between two parties to buy/sell an asset (stock or futures contract as an example) at a fixed price and fixed date in the future. An option gives the buyer, the right but not the obligation to buy certain commodity at or before a future date at certain price. It is fundamentally different from a futures contract. In options, the buyer may or may not exercise his right to buyer. He can forego the contract after suffering a minimal loss of the amount of premium paid. Trades in Options are also cash-settled. There are two types of options: 1. CALL OPTION: A call option gives the buyer a right to buy certain asset at or before a future date at certain price. Break-Even Point= Strike Price + Premium 2. PUT OPTION: A put option gives the buyer of the contract a right to sell a particular asset on or before a certain future date at a certain price. A put buyer is bearish about the market. He expects the prices to fall and therefore he hedges his risk by entering into a put agreement in which he can sell the asset in future at a pre-decided price. The break-even for a put option is: Break Even Point= Strike Price Premium 9. OPTIONS NOMENCLATURE : Index option: these options have index as the underlying. Nifty and SENSEX are traded. And the spot market of Nifty and Sensex acts as the underlying. Stock options: stock options are options on individual stocks. Currently, we have 226 stock options in NSE and 126 in BSE that are open for trade. The stocks in the spot market act as the underlying.
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Option Buyer: The buyer of an option is the one who by paying the options Premium buys the right but not the obligation to exercise his option on the seller/writer. Option Writer: The writer of a call/put options is the one who receives the option premium and is thereby obliged to sell/buy the asset if the buyer exercises the right on him. Option price: Option prices are the price, which the option buyer pays to option seller. It is also referred to as option premium. Expiration date: The date specified in the options contract is known as the expiration date. This is the last day on which the option is traded. Strike price: The price specified in the options contract is known as the strike price or the exercise price. This is the price at which the option can be exercised. In-the-money option: An in-the money (ITM) option that would lead to a Positive cash flow to the holder if it were exercised immediately. A call option on the Index is said to be in money when the current index is stands at a level higher than the strike price, (i.e. spot price> strike price). In the case of a put, it is ITM if the index is below the strike price. At-the-money option: An at-the money (ATM) option is an option that would lead to Zero cash flow if it were exercised immediately. An option on the index is at-the money when the current spot price equals the strike price (i.e. spot price = strike price). Out-of the money option: An out-of money (OTM) option is an option that would lead to a negative cash flow it was exercised immediately. A call option on the index is out-ofthe- money when the current spot price stands at a level, which is less than the strike price.

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10. PRICING OF OPTIONS : Option Pricing Models The purpose of an option pricing model is to determine the theoretical fair value for a call or putoption given certain known variables. In other words - to determine an option's expected return. Basically, the expected return of an option contract is a function of two variables: The payoff of the option at maturity date The probability of the option being in-the-money at maturity 1.Black and Scholes Option Model Fisher Black, Myron Scholes and Robert Merton were the three academics that developed the much acclaimed option pricing model now called Black and Scholes. The Black and Scholes option pricing model was the result of the educational paper called Real Options, written by these academics in 1973. The model was so highly praised that they were awarded the prestigious Noble Prize in 1997. The Black and Scholes model has spawned a family of other pricing variations since then, although the Black and Scholes still remains the foundation model for pricing options today. Black Scholes Inputs S = Stock Price X = Exercise Price r = Risk Free Interest Rate T = Time to Expiration (Years) N(x) = The Cumulative Normal Distribution Function = Standard Deviation

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Black Scholes Formula The Black Scholes equation states that a: Call Option = Where:

Given put call parity

The price of put option must there beMost of the inputs for the Black Scholes Model are a given, i.e. we know with certainty what the exercise price is, how many days until the option expires, where the underlying instrument is currently trading and we also know what interest rates currently are. However, we do not know what volatility the underlying will experience between the time of trade and the expiry date. That is why volatility is so important when it comes to option pricing - the volatility of the underlying asset really determines how likely the option contract will be in, at or out-of-the-money by the expiration date.

2.A Short Option Pricing Method If you've no time for Black and Scholes and need a quick estimate for an at-the-money call or put option, here is a simple formula. Price = (0.4 * Volatility * Square Root(Time Ratio)) * Base Price

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Time ratio is the time in years that option has until expiration. So, for a 6 month option take the square root of 0.50 (half a year).

11. TIME VALUE OF OPTIONS : Most investors and traders new to options markets prefer to buy calls and puts because of their limited risk and unlimited profit potential. Buying puts or calls is typically a way for investors and traders to speculate with only a fraction of their capital. But these straight option buyers miss many of the best features of stock and commodity options - such as the opportunity to turn timevalue decay into potential profits. When they establish a position, option sellers collect time-value premiums, paid by option buyers. Rather than struggling against the ravages of time value, the option seller can benefit from the passage of time, and time-value decay becomes money in the bank even if the underlying is stationary. For option writers (sellers), time-value decay thus becomes an ally instead of a foe. If you have ever sold covered calls against stock positions, you can appreciate the beauty of selling time value. In this article I focus on the importance of time value in the option-pricing equation. But before turning to a detailed look at the phenomenon of time value and time-value decay, let's review some basic option concepts that will make it easier for you to understand what we mean by time value. Depending on where the underlying price is in relation to the option strike price, the option can be in, out or at the money. Let's look at this relationship while keeping in mind our central focus value on time. When we say an option is at the money, we mean the strike price of the option is equal to the current price of the underlying stock or commodity. When the price of a commodity or stock is the same as the strike price (also known as the exercise price) it has zero intrinsic value, but it also has the maximum level of time value compared to that of all the other option strike prices for the same month. Figure 1 provides a table of possible positions of the underlying in relationship to an option's strike price.
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As can be seen in Figure 1 above, when a put option is in the money, the underlying price is less than the option strike price. For a call option, 'in the money' means that the underlying price is greater than the option strike price. For example, if we have an S&P 500 call with a strike price of 1100 (an example we will use to illustrate time value below), and if the underlying stock index at expiration closes at 1150, the option will have expired 50 points in the money (1150 - 1100 = 50). In the case of a put option at the same strike price of 1100 and the underlying at 1050, the option at expiration also would be 50 points in the money (1100 -1050 = 50). For out-of-the-money options, the exact reverse applies. That is, to be out of the money, the put's strike would be less than the underlying price, and the call's strike would be greater than the underlying price. Finally, both put and call options would be at the money when the strike price and underlying expire at the exact same price. While we are referring here to the position of the option at expiration, the same rules apply at any time before the options expire. With these basic relationships in mind, let's now take a closer look at time value and the rate of time-value decay (represented by theta, from the Greek alphabet). If we leave volatility aside for now, the time-value component of an option, also known as extrinsic value, is a function of two variables: (1) time remaining until expiration and (2) the closeness of the option strike price to the money. All other things remaining the same (i.e. no changes in the underlying and volatility levels), the longer the time to expiration, the more value the option will have in the form of
42

time value. But this level is also affected by how close to the money the option is. For example, two call options with the same calendar month expiration (both having the same time remaining in the contract life) but different strike prices will have different levels of extrinsic value (time value). This is because one will be closer to the money than the other. Figure 2 below illustrates this concept, indicating when time-value would be higher or lower and whether or not there will be any intrinsic value (which arises when the option gets in the money) in the price of the option. As Figure 2 indicates, deep in-the-money options and deep out-of the money options have little time value. Intrinsic value increases the more in the money the option becomes. And at-the-money options have the maximum level of time value but no intrinsic value. Time value is at its highest level when an option is at the money because the potential for intrinsic value to begin to rise is the greatest right at this point.

A call option gives the buyer, the right to buy the asset at a given price. This 'given price' is called 'strike price'. It should be noted that while the holder of the call option has a right to demand sale of asset from the seller, the seller has only the obligation and not the right. For eg: if the buyer wants to buy the asset, the seller has to sell it. He does not have a right. Similarly a 'put' option gives the buyer a right to sell the asset at the 'strike price' to the buyer. Here the buyer has the right to sell and the seller has the obligation to buy.
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So in any options contract, the right to exercise the option is vested with the buyer of the contract. The seller of the contract has only the obligation and no right. As the seller of the contract bears the obligation, he is paid a price called as 'premium'. Therefore the price that is paid for buying an option contract is called as premium 12. SHORT PUT: A Bullish options strategy that involves selling short or "writing" a put option. When the stock rises above the strike price of the short put by expiration, the put options expire worthless and entire premium from its sale is earned. The seller of the short put (gets the premium) is betting the stock price will be above the strike price on expiration so he can keep the premium. The buyer of the short put (pays the premium) bets the stock price will be below the strike price on expiration so he can sell the shares at the strike price, i.e., above the (then) market price SHORT PUT: SELL NOW, BUY LATER A trader who believes that a stock price will increase can sell a put. The trader selling a put has an obligation to buy the stock from the put buyer at the put buyer's option. If the stock price increases, the short put position will make a profit in the amount of the premium. If the stock price decreases below the exercise price by more than the amount of the premium, the trader will lose money, with the potential loss being up to the full value of the stock. Risk: Up to the full value of the stock. Reward: Limited to the amount of Premium received When to Use: Trader is very bullish on the stock. Breakeven: Strike Price- Premium

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EXAMPLE OF SHORT PUT: The buyer of a put option will not exercise his option (to sell) if, on expiry, the price of the asset in the spot market is more than the strike price of the call. For eg: B bought a put at a strike price of Rs 600. On expiry the price of the asset is Rs 619. A will not exercise his put option. Because he can sell the same asset in the market at Rs 619, rather than giving it to the seller of the put option for Rs 600.

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CHAPTER -IV

DATA ANALYSIS & INTERPRETATION

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ANNEXURE 1: 1.UNITECH:
DATE 3rd Jan 2011 Investment p/l
SYMBOL UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

266400 -89400
Buy Stock @66.6 HIGHPRICE 67.5 68 66.8 65.65 62.9 62.5 59.8 59.4 61.65 60.9 58.8 58.15 59.5 59.1 58.95 58.2 58.6 57 53.45 50.95 49 47.05 46.75 46.3 46 LOW PRICE 65.35 65.25 64.35 61.25 61.05 58.8 54.4 54.15 57.65 56.85 55.55 55.55 56.2 56.95 56.65 56.75 55.75 52.9 48.6 46.9 42.35 44 44.3 42.6 43.4 CLOSE PRICE 66.6 65.6 64.85 61.6 61.4 59.3 55.35 58.95 59.8 57.45 56.9 57.6 59.05 57.9 57.15 57.9 55.95 53.3 51.05 48.05 43.05 45.15 46.45 43.1 44.25 QTY 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 TOTAL VALUE 266400 262400 259400 246400 245600 237200 221400 235800 239200 229800 227600 230400 236200 231600 228600 231600 223800 213200 204200 192200 172200 180600 185800 172400 177000 P/L 0 -4000 -7000 -20000 -20800 -29200 -45000 -30600 -27200 -36600 -38800 -36000 -30200 -34800 -37800 -34800 -42600 -53200 -62200 -74200 -94200 -85800 -80600 -94000 -89400

Analysis : As on 3rd January, the amount invested in the shares of UNITECH was 266400 by purchasing the 4000 quantity of shares at close price of Rs.66.6 (4000 x 66.6 = 266400) But on 7th February the price of the shares of the company fell down to Rs.44.25 Thus by selling the shares after holding it till 7 th February , the total loss is Rs.89400 was observed.
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Loss on 1 share by selling the shares on 7th February 66.6 -44.25 =22.35 Hence, total loss by selling 4000 shares = 4000 x 22.35 =89400.

a. Short future :
Investment Profit/ Loss Expiry date : 249600 : -72000 : 24-Feb-2011

SHORT FUTURE @62.4 SYMBOL UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH DATE 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 HIGHPRICE 66.2 63.4 63 60.1 59.8 62 61.4 59 58.4 59.65 59.4 59.35 58.6 59 57.1 53.85 LOW PRICE 62.05 61.6 59.45 55 54.6 58.05 57.55 56.6 56.05 56.8 57.4 57.2 57.2 56.2 53.35 48.9 CLOSE PRICE 62.4 61.9 59.75 55.9 59.6 60.25 58.05 57.25 58.1 59.3 58.5 57.75 58.35 56.4 53.8 51.4 QTY 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 TOTAL VALUE 249600 247600 239000 223600 238400 241000 232200 229000 232400 237200 234000 231000 233400 225600 215200 205600 P/L 0 -2000 -10600 -26000 -11200 -8600 -17400 -20600 -17200 -12400 -15600 -18600 -16200 -24000 -34400 -44000

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UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH

31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

51.2 48.7 47.2 46.85 46 46.1

47.25 42.4 44.2 44.6 42.5 43.8

48.45 43.1 45.2 46.5 43 44.4

4000 4000 4000 4000 4000 4000

193800 172400 180800 186000 172000 177600

-55800 -77200 -68800 -63600 -77600 -72000

Analysis: Enter into short futures on 6th January at Rs. 62.4 By holding it till 7th February, we may reduce the loss from Rs.89400 to 72000 Loss on 1 share by selling the shares on 7th February 62.4 - 44.4 = 18 Hence, total loss by selling 4000 shares = 4000 x 18= 72000

b.Short put :
Date : 3rd Jan 2011 Investment Profit/ Loss Expiry date : 249600 : -72000 : 24-Feb-2011

SHORT PUT @4 SYMBOL UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH DATE 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 STK.PRICE 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 CLOSE PRICE 4 4 2 3.95 3.95 3.95 3.95 3.95 3.15 3.15 2.3 2.25 2.05 2.8 3.65 SETTLE PRICE 1.6 1.5 2 3.95 3 2.6 3.4 3.3 3.15 2.35 2.3 2.25 2.05 2.8 3.65 NO.OF CTRT 0 0 1 1 0 0 0 0 4 0 15 12 26 45 109 QTY 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 TOT.VALUE 16000 16000 8000 15800 15800 15800 15800 15800 12600 12600 9200 9000 8200 11200 14600 P/L 0 0 -8000 -200 -200 -200 -200 -200 -3400 -3400 -6800 -7000 -7800 -4800 -1400

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UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH UNITECH

28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

55 55 55 55 55 55 55

5.6 7.55 11.9 12.95 9 12.5 12.5

5.6 7.55 11.9 12.95 9 12.5 11.1

119 33 64 15 2 5 0

4000 4000 4000 4000 4000 4000 4000

22400 30200 47600 51800 36000 50000 50000

6400 14200 31600 35800 20000 34000 34000

Analysis : Enter into a short put on 6th Jan at Rs.4 By holding it till 7th Feb, we can gain the profit of Rs.34000 Profit on 1 share by selling the shares on 7th February 12.5 4 =8.5 Hence, total profit by selling 4000 shares = 4000 x 8.5= 34000

50

ANNEXURE 2 TATA CONSULTANCY SERVICES LTD Date : 3rd Jan 2011 Investment Profit/ Loss
SYMBOL TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan11 11-Jan11 12-Jan11 13-Jan11 14-Jan11 17-Jan11 18-Jan11 19-Jan11 20-Jan11 21-Jan11 24-Jan11 25-Jan11 27-Jan11 28-Jan11 31-Jan11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 HIGHPRICE 1176.95 1166.15 1165.9 1182 1186.85 1149 1135.55 1151.6 1155.95 1150 1146.55 1208.9 1209 1218.75 1220 1220 1219.3 1209.95 1203.6 1169 1165 1198.9 1195.7 1183.1 1173.5

: 579025 : -13450
Buy Stock @1158.05 LOWPRICE 1154.55 1138.1 1141.75 1153.1 1138.15 1121 1087.8 1108 1116.2 1120 1120 1164.35 1185 1180 1204 1198.25 1180 1181.6 1165.25 1128.55 1133 1162.35 1170.65 1140.25 1126.5 CLOSEPRICE 1158.05 1144.75 1158.95 1171.7 1142.65 1130.9 1098.5 1135.95 1124.25 1120.15 1137.4 1202.55 1193 1212.2 1211.65 1209.2 1188.55 1199.4 1181.35 1159.5 1150.15 1182.45 1183.7 1148.8 1131.15 QTY 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 TOTALVALUE 579025 572375 579475 585850 571325 565450 549250 567975 562125 560075 568700 601275 596500 606100 605825 604600 594275 599700 590675 579750 575075 591225 591850 574400 565575 0 -6650 450 6825 -7700 -13575 -29775 -11050 -16900 -18950 -10325 22250 17475 27075 26800 25575 15250 20675 11650 725 -3950 12200 12825 -4625 -13450

Analysis :
As on 3rd March, the amount invested in the shares of TCS was Rs.579025 by purchasing the 500 quantity of shares at close price of Rs.1158.05 (500 x 1158.05 = 579025)

51

But on 7th February, the price of the shares of the company fell down to 1131.15 Thus by selling the shares after holding it till 7 th February, the total loss of Rs.13450 was observed. Loss on 1 share by selling the shares on 7th February 1158.05 1131.15 = 26.9 Hence, total loss by selling 500 shares = 500 x 22.35 = 13450.

b.SHORT FUTURE
DATE 3rd Jan 2011 Investment 577675 p/l -9075
SYMBOL TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS DATE 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 EXP DATE 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 24-Feb-11 HIGHPRICE 1199.2 1160.3 1137.7 1158.35 1160 1159.15 1150.1 1212.2 1212 1221 1220.1 1221.7 1221.25 1211 1205 1175.25 1164.2 1201.7 1199.7 1189 1170 SHORT FUTURE @1153.35 LOW CLOSE PRICE PRICE 1149.1 1130 1096 1120.1 1123.25 1122.25 1124.5 1169.9 1190.6 1185.7 1208.2 1203.25 1185.9 1188 1172 1137 1135.5 1162 1172.5 1140 1130.95 1153.35 1133.3 1106.25 1139.65 1130.8 1125.85 1142.2 1208.55 1196.8 1217.8 1215.3 1211.15 1192.6 1202.3 1188.35 1161.6 1151.95 1183.15 1189.2 1145.45 1135.2 QTY 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 TOTAL VALUE 576675 566650 553125 569825 565400 562925 571100 604275 598400 608900 607650 605575 596300 601150 594175 580800 575975 591575 594600 572725 567600 P/L 0 -10025 -23550 -6850 -11275 -13750 -5575 27600 21725 32225 30975 28900 19625 24475 17500 4125 -700 14900 17925 -3950 -9075

52

ANALYSIS:

Enter into short future on 6th Jan at Rs. 1153.35 But on 7th February, the share price fall down to 1135.2 Loss on 1 share by selling the shares on 7th February 1153.35 1135.2 = 18.15 Hence, total loss by selling 500 shares = 500 x 18.15 = 9075 By holding it till 7TH Feb,we may reduce the loss Rs 13450 from to 9075 b.SHORT PUT
DATE Investment p/l EXP.DATE 1700 -100 24-Feb-11
SHORT PUT @3.4 SYMBOL TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS TCS DATE 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 STK.PRICE 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 CLSPRICE 3.4 3.4 10.55 7.9 10 10.2 10.25 5 5 5 5 5 2.3 2.7 2.65 4 3.85 2.7 2.2 3.3 SET. PRICE 3.4 3.2 10.55 7.9 10 10.2 10.25 5 3.55 2.3 1.85 1.3 2.3 2.7 2.65 4 3.85 2.7 2.2 3.3 NO.OFCTRT 2 0 8 3 6 7 4 6 0 0 0 0 2 2 20 30 35 34 11 11 QTY 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 TOT.VAL 1700 1700 5275 3950 5000 5100 5125 2500 2500 2500 2500 2500 1150 1350 1325 2000 1925 1350 1100 1650 0 3575 2250 3300 3400 3425 800 800 800 800 800 -550 -350 -375 300 225 -350 -600 -50 P/L

3rd Jan 2011

53

TCS

7-Feb-11

1000

3.2

3.2

35

500

1600

-100

ANALYSIS:

Enter into a short put on 6th Jan at Rs 3.4 But on 7th February, the share price fall down to 3.2 Loss on 1 share by selling the shares on 7th February 3.4 3.2 = 0.2 Hence, total loss by selling 500 shares = 500 x 0.2 = 100 By holding it till 7th Feb ,we can reduce the loss to Rs.100

ANNEXURE:3 3.SAIL
DATE Investment p/l
SYMBOL
SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL

3rd Jan 2011

3333333333333

187950 -27550
HIGHPRICE LOW PRICE
183.5 187.1 184.2 184.1 178 175.1 171 172.5 171.3 159.25 156.4 157.5 162 165.6 166.8 165 159.55 157.2 155.35 155.7 157.4

DATE
3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11

Buy Stock @187.95 CLOSE PRICE QTY

187.95 189.2 185.55 185.15 178.85 177.25 175.65 177 172.3 161.4 157.15 162 169.75 168.35 167.7 165.35 160.85 158.2 158.35 160.9 160.8 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

TOTAL VALUE
187950 189200 185550 185150 178850 177250 175650 177000 172300 161400 157150 162000 169750 168350 167700 165350 160850 158200 158350 160900 160800

P/L
0 1250 -2400 -2800 -9100 -10700 -12300 -10950 -15650 -26550 -30800 -25950 -18200 -19600 -20250 -22600 -27100 -29750 -29600 -27050 -27150

188.4 189.7 188.4 187.9 186 179.4 177.8 178.6 179.8 168 162.9 162.75 171.5 169.75 168.95 169 167.8 162.9 160.5 161.95 162.9

54

SAIL SAIL SAIL SAIL

2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

163 165.15 165.7 162.75

159.55 158.5 160.15 159

160.15 164.4 161.55 160.4

1000 1000 1000 1000

160150 164400 161550 160400

-27800 -23550 -26400 -27550

ANALYSIS:

As on3rd MARCH the amount invested in the shares of SAIL was Rs . 187950 by purchasing the 1000 of shares at close price of RS.187.95 (1000 x 187.95 = 187950 ) But on 7th Feb the price of the shares of the company fell down to Rs. 160.4 Loss on 1 share by selling the shares on 7th February 187.95 160.4= 27.55 Hence, total loss by selling 500 shares = 1000 x 27.55 = 27550 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. -27550 was observed.

a.SHORT FUTURE:
DATE:3rd Jan 2011 Investment p/l
SYMBOL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL DATE 7-Jan-11 10-Jan11 11-Jan11 12-Jan11 13-Jan11 14-Jan11 17-Jan11 18-Jan11 19-Jan11 20-Jan11 21-Jan11 24-Jan11 25-Jan11 27-Jan11 28-Jan11 HIGHPRICE 182 176.5 174.5 175.5 176.5 165.1 161.25 163.65 171.8 170 169.55 168.9 168.55 163.65 161.15

176050 -15250
Short future @176.05 LOW PRICE 175.25 172.5 166.75 169.55 167.7 158.2 155.45 158.6 163 166 167.5 165.85 160.4 158.3 156.15 CLOSE PRICE 176.05 174.15 172.85 174.1 168.9 160.05 156.05 162.9 169.9 169.2 168.1 166.3 161.7 159 159.5 QTY 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TOTAL VALUE 176050 174150 172850 174100 168900 160050 156050 162900 169900 169200 168100 166300 161700 159000 159500 P/L 0 -1900 -3200 -1950 -7150 -16000 -20000 -13150 -6150 -6850 -7950 -9750 -14350 -17050 -16550

55

SAIL SAIL SAIL SAIL SAIL SAIL

31-Jan11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

162.7 163.4 163.4 165.75 166.05 162.9

156.55 158.2 160.5 159.35 160.4 160

162.1 161.35 161.15 165.1 161.55 160.8

1000 1000 1000 1000 1000 1000

162100 161350 161150 165100 161550 160800

-13950 -14700 -14900 -10950 -14500 -15250

ANALYSIS: Enter into short future on 6th Jan at Rs. 176.05 But on 7th February, the share price fall down to 160.8 Loss on 1 share by selling the shares on 7th February 176.05 160.8 = 15.25 Hence, total loss by selling 1000 shares = 1000 x 15.25 = 15250 By holding it till 7TH Feb,we may reduce the loss Rs 27550 from to 15250

b.SHORT PUT:
DATE 3rd Jan 2011
Investment p/l EXP.DAT 9250 -31900 24-Feb-11 CLOSE PRICE
9.25 11 13 13 15.05 21.95 24.05 20 12.5 12.5 15

SYMBOL
SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL

DATE
7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11

STK.PRICE
180 180 180 180 180 180 180 180 180 180 180

Short put @9.25 SETTLE NO.OF PRICE CTRT

9.25 11 13 10.5 15.05 21.95 24.05 20 12.5 17.2 15 8 3 2 0 9 2 1 1 1 0 1

QTY
1000

TOT.VALUE
9250 11000 1000 13000 1000 13000 1000 15050 1000 21950 1000 24050 1000 20000 1000 12500 1000 12500 1000 15000 1000

P/L
0 1750 3750 3750 5800 12700 14800 10750 3250 3250 5750

56

16000 SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL SAIL 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 180 180 180 180 180 180 180 180 180 180 16 20 20.9 23.8 23.8 23.8 23.8 23.8 23.8 23.8 16 20 20.9 23.8 20.35 20.15 20.5 17.05 19.15 19.85 1 4 1 1 0 0 0 0 0 0 1000 20000 1000 20900 1000 23800 1000 23800 1000 23800 1000 23800 1000 23800 1000 23800 1000 23800 1000

6750 10750 11650 14550 14550 14550 14550 14550 14550 14550

ANALYSIS: Enter into a short put on 7th Jan at Rs 9.25. So investment is 9.25 x 1000=9250 But the share price was increased to 23.8 on 7th February. Profit on 1 share by selling the shares on 7th February 23.8 9.25 = 14.55 Hence, total profit by selling 1000 shares = 1000 x 14.55 = 14550 By holding it till 7th Feb ,we can earn the profit of Rs.14550

ANNEXURE4; 4.RELIANCE:
DATE Investment p/l SYMBOL
RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE

3rd Jan 2011

mmmmmmmmmmm

263900 -31637.5 HIGHPRICE

1066.5 1079.9 1090 1091.4 1087.75 1070.45 1048.7 1035.65 1039.15

DATE
3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11

LOW PRICE
1052.6 1057.3 1070 1074.6 1058 1021.2 998.6 1003 1011.1

Buy Stock @1055.6 CLOSEPRICE QTY

1055.6 1077.1 1075.8 1085.6 1065.4 1033.45 1013.75 1030.8 1015.35 250 250 250 250 250 250 250 250 250

TOTALVALUE 263900 269275 268950 271400 266350 258362.5 253437.5 257700 253837.5

P/L 0 5375 5050 7500 2450 -5537.5 -10462.5 -6200 -10062.5

57

RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE 4RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE

14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

1029.8 1008 1008 1005 977.6 992.5 995.9 984.95 967.4 945.9 928.85 927.7 927.9 947.5 947.4 938.8

998 992.05 990 975 954.55 973 964.1 956.25 940 902 903.1 888.55 907.3 915 913.15 914.4

1001.5 997.9 994.85 980.15 969.85 986.8 971.6 958.5 942.7 913 919.3 895.5 921.3 943.9 920 929.05

250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250

250375 249475 248712.5 245037.5 242462.5 246700 242900 239625 235675 228250 229825 223875 230325 235975 230000 232262.5

-13525 -14425 -15187.5 -18862.5 -21437.5 -17200 -21000 -24275 -28225 -35650 -34075 -40025 -33575 -27925 -33900 -31637.5

ANALYSIS: As on3rd MARCH the amount invested in the shares of SAIL was Rs . 263900 by purchasing the 250 number of shares at close price of Rs1055.6 (250 x 1055.6 = 263900) But on 7th Feb the price of the shares of the company fell down to Rs. 929.05 Loss on 1 share by selling the shares on 7th February 1055.6 929.05 = 126.55 Hence, total loss by selling 250 shares = 250 x 126.55 = 31637.5 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 31637.5 was observed.

a.SHORT FUTURE:
DATE
Investment p/l EXP.DATE 255712.5 -22487.5 24-Feb-11 Short future @1022.85

3rd Jan 2011

58

SYMBOL
RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE

DATE
11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

HIGHPRICE
1060.35 1046.25 1049 1040.9 1016.6 1017.6 1014.4 985 999 1002.9 991 974 951.85 935 932.3 931 949.4 948.4 943.4

LOWPRICE
1006 1010.65 1019.55 1005.1 1000.05 996.6 984 964.35 981.65 972.25 965 946.25 908.3 908 895 910.1 917.15 913.6 914.5

CLOSE PRICE
1022.85 1042.8 1023.3 1009 1007.85 1005.1 989.55 980 993.95 979.85 966.75 949.75 920.55 925.75 901.55 923.75 946.45 919.45 932.9

QTY
250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250

TOTALVALUE 255712.5 260700 255825 252250 251962.5 251275 247387.5 245000 248487.5 244962.5 241687.5 237437.5 230137.5 231437.5 225387.5 230937.5 236612.5 229862.5 233225

P/L 0 4987.5 112.5 -3462.5 -3750 -4437.5 -8325 -10712.5 -7225 -10750 -14025 -18275 -25575 -24275 -30325 -24775 -19100 -25850 -22487.5

ANALYSIS: Enter into short future on 6th Jan at Rs. 1022.85 So, the amount of investment is (250 x 1022.85 = 255712.5 But on 7th February, the share price fall down to 932.9 Loss on 1 share by selling the shares on 7th February 1022.85 932.9= 89.95 Hence, total loss by selling 250 shares = 250 x 89.95 = 22487.5 By holding it till 7TH Feb,we may reduce the loss Rs 31637.5 from to 22487.
59

b.SHORT PUT:
DATE Investment p/l EXP.DATE SYMBOL RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE RELIANCE DATE 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 5025 15337.5 24-Feb-11 Short put @20.1 STK.PRICE 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 1020 CL.PRICE 20.1 26.3 35 28.6 45.5 45.5 39 69.55 47.45 54 65.9 76.4 108.8 108.8 125 96.45 81.45 81.45 81.45 SET.PRICE 40 26.3 35 28.6 45.5 44.45 39 69.55 47.45 54 65.9 76.4 108.8 99.05 125 96.45 81.45 100.2 91.3 NO.OFCTRT 0 2 2 2 6 0 3 3 18 1 10 27 19 0 4 12 4 0 0 QTY 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 TOT.VALUE 5025 6575 8750 7150 11375 11375 9750 17387.5 11862.5 13500 16475 19100 27200 27200 31250 24112.5 20362.5 20362.5 20362.5 P/L 0 1550 3725 2125 6350 6350 4725 12362.5 6837.5 8475 11450 14075 22175 22175 26225 19087.5 15337.5 15337.5 15337.5 3rd Jan 2011

ANALYSIS:

Enter into a short put on 6th Jan at Rs 20.1 So the amount invested is (250 x 20.1= 5025 )
60

But on 7th February, the share price goes up to 81.45 Profit on 1 share by selling the shares on 7th February 81.45 20.1 = 61.35 Hence, total profit by selling 250 shares = 250 x 61.35 = 15337.5 By holding it till 7th Feb ,we can earn the profit of Rs. 15337.5

ANNEXURE 5 5.BHARTI AIRTEL:

DATE Investment p/l
SYMBOL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

3rd Jan 2011

359350 -25500
Buy Stock @359.35
HIGHPRICE 365 361.85 356.05 355.3 354.8 343.95 346.9 351.25 354 351.45 352 351.35 348.4 343 339.95 337.9 340.85 340 332.25 323.65 327.85 325.8 342.45 343.5 344.25 LOW PRICE 354.75 353.15 347.55 349.15 334.4 335.05 334 336 345.1 341.25 339.65 343.1 341.7 338 331 332.5 333.1 324.25 322.5 311 310 304.45 320.45 330.5 332 CLOSE PRICE 359.35 356.4 349 353.2 338.5 339.1 338.45 349.1 346.65 343.75 348.5 344.4 344.45 340.3 336.05 333.1 337.75 325.65 327.25 319 317.1 322.8 339.8 332.5 333.85 QTY 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TOTAL VALUE P/L

359350 356400 349000 353200 338500 339100 338450 349100 346650 343750 348500 344400 344450 340300 336050 333100 337750 325650 327250 319000 317100 322800 339800 332500 333850

0 -2950 -10350 -6150 -20850 -20250 -20900 -10250 -12700 -15600 -10850 -14950 -14900 -19050 -23300 -26250 -21600 -33700 -32100 -40350 -42250 -36550 -19550 -26850 -25500

61

ANALYSIS:

As on3rd MARCH the amount invested in the shares of BHARTIARTL was Rs . 359350 by purchasing the 1000 number of shares at close price of 359.35 (1000 x 359.35 = 359350) But on 7th Feb the price of the shares of the company fell down to Rs. 333.85 Loss on 1 share by selling the shares on 7th February 359.35 333.85 = 25.5 Hence, total loss by selling 1000 shares = 1000 x 25.5= 25500 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 25500 was observed.
a.SHORT FUTURE:
DATE Investment p/l EXP.DATE
SYMBOL
BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL

3rd Jan 2011

353000 -19250 24-Feb-11 Short future @353

HIGHPRICE
358.2 358.25 357.75 346.8 349 353.5 355.9 353.6 353.35 352.5 350 345 340 339.7 342.8 340.95 333.4 323.75 328.8 326.95 341.8 343.5 341.95

DATE
5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

LOWPRICE
352.1 354.9 338.4 338.05 336.75 338.1 347 344.3 340.6 346.4 344.8 339.95 334 335.4 335.8 326.95 323.75 313.1 309.35 305.15 321.55 330.05 332.2

CLOSEPRICE
353 356.35 341.05 342.25 341.35 352.4 348.45 345.4 350.2 347.3 346.3 342.8 338.8 336 338.6 328.1 328.3 320.15 315.55 322.7 339.55 331.75 333.75

QTY
1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000

TOTAL VALUE

P/L

353000 356350 341050 342250 341350 352400 348450 345400 350200 347300 346300 342800 338800 336000 338600 328100 328300 320150 315550 322700 339550 331750 333750

0 3350 -11950 -10750 -11650 -600 -4550 -7600 -2800 -5700 -6700 -10200 -14200 -17000 -14400 -24900 -24700 -32850 -37450 -30300 -13450 -21250 -19250

62

ANALYSIS: Enter into short future on 6th Jan at Rs.353 So, the amount of investment is (1000 x 353=35300) But on 7th February the share price fall down to 333.75 Loss on 1 share by selling the shares on 7th February 353 333.75 = 19.25 Hence, total loss by selling 1000 shares = 1000 x 19.25 = 19250 By holding it till 7TH Feb,we may reduce the loss Rs 25500 from to 19250

b..SHORT PUT:
DATE Investment p/l EXP.DATE 50000 10000 24-Feb-11 Short put @50 SYMBOL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL DATE 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 STK.PRICE 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 CLOSEPRICE 50 50 60 60 60 60 60 60 60 60 60 60 60 60 60 60 SETTLEPRICE 50 46.85 60 59.45 59.75 51.15 52.8 54.95 50.65 54.05 53.75 57.45 61.35 64.25 60.1 72.15 NO.OFCTRT 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 QTY 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TOT.VALUE 50000 50000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 60000 P/L 0 0 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 3rd Jan 2011

63

BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL BHARTIARTL

28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

400 400 400 400 400 400 400

60 60 60 60 60 60 60

70.65 78.95 80.9 75.3 59.2 66.15 64.9

0 0 0 0 0 0 0

1000 1000 1000 1000 1000 1000 1000

60000 60000 60000 60000 60000 60000 60000

10000 10000 10000 10000 10000 10000 10000

ANALYSIS: Enter into a short put on 6th Jan at Rs 50 So, the amount of investment is (1000 x 50 = 50000) But on 7th February, the share price goes up to 60 Profit on 1 share by selling the shares on 7th February 60 50 = 10 Hence, total loss by selling 1000 shares = 1000 x 10 = 10000 By holding it till 7th Feb ,we can earn the profit of Rs. 10000

ANNEXURE 6: 6.TATA STEEL:

DATE Investment p/l 352050 -31850 LOW PRICE 685.1 693.25 677.25 681.5 656.15 645 640.75 626.25 635 617.5 613.2 Buy Stock @704.1 CLOSE PRICE QTY 704.05 694.7 680.95 683.3 661.25 650.7 646.55 648.9 637.55 622.45 625.65 500 500 500 500 500 500 500 500 500 500 500 TOTAL VALUE 352025 347350 340475 341650 330625 325350 323275 324450 318775 311225 312825 3rd Jan 2011

SYMBOL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL

DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11

HIGHPRICE 707.5 713.9 696.65 690.85 687.95 665.7 660.4 658.6 656 636.6 628

P/L 0 -4675 -11550 -10375 -21400 -26675 -28750 -27575 -33250 -40800 -39200

64

TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL

18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

638.8 644.5 643.25 635 652.3 664.5 660.4 654.5 641.95 642.8 634.95 640.9 652 645.5

627 633.05 630.6 627 625 650.3 647.3 630.2 618 627.1 615.8 625.7 632 634.1

632.6 639.6 634.2 629.55 649.25 655.35 650.1 637.45 639.7 631.75 626.25 638.1 635.9 640.4

500 500 500 500 500 500 500 500 500 500 500 500 500 500

316300 319800 317100 314775 324625 327675 325050 318725 319850 315875 313125 319050 317950 320200

-35725 -32225 -34925 -37250 -27400 -24350 -26975 -33300 -32175 -36150 -38900 -32975 -34075 -31825

ANALYSIS: As on3rd MARCH the amount invested in the shares of TATASTEEL was Rs . 352050 by purchasing the 500 number of shares at close price of Rs.704.1 (500 x 704.1 = 352050) But on 7th Feb the price of the shares of the company fell down to Rs. 640.4 Loss on 1 share by selling the shares on 7th February 704.1 640.4 = 63.7 Hence, total loss by selling 500 shares = 500 x 63.7 = 31850 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 31850 was observed

a.SHORT FUTURE:
DATE
Investment p/l EXP.DATE 343500 -22700 24-Feb-11 LOW PRICE 683.2 686.3 659.05 Short future @687 CLOSE PRICE QTY 687 689 662.5 500 500 500 TOTAL VALUE 343500 344500 331250

3rd Jan 2011

SYMBOL TATASTEEL TATASTEEL TATASTEEL

DATE 5-Jan-11 6-Jan-11 7-Jan-11

HIGHPRICE 698.7 695.2 692.05

P/L 0 1000 -12250

65

TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL

10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

667.5 663 652.05 650 633.85 621.5 632.5 639.35 637.8 631.2 645.4 655.5 651 649.8 639.5 642.5 637.7 643.7 655.3 646.8

647.9 637.3 620.2 629.5 612 609.15 621.3 630.55 625.25 622.05 619.25 641.7 640.1 622.55 616 627.2 617.95 628.5 634.65 635.65

652.1 645.55 644.05 631.65 618 619.75 629.85 634.85 630.95 624.1 643.4 645.05 642.3 628.95 637.15 630.6 629.5 641.3 637.55 641.6

500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500

326050 322775 322025 315825 309000 309875 314925 317425 315475 312050 321700 322525 321150 314475 318575 315300 314750 320650 318775 320800

-17450 -20725 -21475 -27675 -34500 -33625 -28575 -26075 -28025 -31450 -21800 -20975 -22350 -29025 -24925 -28200 -28750 -22850 -24725 -22700

ANALYSIS:

Enter into short future on 6th Jan at Rs. 687 So, the amount of investment is (500 x 687 = 343500 ) But on 7th February, the share price fall down to 641.6 Loss on 1 share by selling the shares on 7th February 687 641.6 = 45.4 Hence, total loss by selling 500 shares = 500 x 45.4 = 22700 By holding it till 7TH Feb,we may reduce the loss Rs 31850 from to 22700

66

b.SHORT PUT:
DATE Investment 10125 p/l EXP.DATE 24-Feb-11
SYMBOL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL TATASTEEL DATE 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 STK.PRICE 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 660 CLOSE PRICE 20.25 20.25 27 29.2 30 36.85 44.85 47.95 56 56 35.8 40.5 43 31.7 29.2 29.25 39.25 33.75 38.5 38.8 30.25 30.95 28.35 Short put @20.25 SETTLE NO.OF PRICE CTRT 20.25 21.25 27 29.2 30 36.85 44.85 47.95 56 39.9 35.8 40.5 43 31.7 29.2 29.25 39.25 33.75 38.5 38.8 30.25 30.95 28.35 1 0 1 3 10 9 3 1 2 0 16 13 3 119 145 112 77 25 23 33 66 148 52 QTY 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 TOT.VALUE 10125 10125 13500 14600 15000 18425 22425 23975 28000 28000 17900 20250 21500 15850 14600 14625 19625 16875 19250 19400 15125 15475 14175 P/L 0 0 3375 4475 4875 8300 12300 13850 17875 17875 7775 10125 11375 5725 4475 4500 9500 6750 9125 9275 5000 5350 4050

3rd Jan 2011

67

ANALYSIS: Enter into a short put on 6th Jan at Rs 20.25 So, the amount of investment is (500 x 20.25 = 10125) But on 7th February, the share price goes up to 28.35 Profit on 1 share by selling the shares on 7th February 28.35 20.25 = 8.1 Hence, total loss by selling 500 shares = 500 x 8.1 = 4050 By holding it till 7th Feb ,we can earn the profit of Rs. 4050

ANNEXURE 7: 7.INFOSYS TECH:

DATE
Investment p/l 432293.75 -46363 Buy Stock @3458.4 SYMBOL INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 HIGHPRICE 3469.7 3499 3477 3493 3495 3443.15 3423.4 3390 3299 3277.9 3281.7 3335.7 3314 3307.4 3278 3290 3304.85 3269 3268.55 3138.5 3128.4 3164 LOW PRICE 3427.7 3457 3445.1 3444.1 3356.35 3352 3288.1 3318.2 3195 3185 3191.25 3250 3235.8 3218.1 3231 3227.3 3236.05 3185.5 3140.65 3086.2 3043.1 3065 CLOSE PRICE 3458.4 3481.5 3459.6 3478.2 3370.8 3395.8 3325.7 3377.3 3205.2 3204.3 3268.8 3323 3249.6 3295.9 3243.9 3284.7 3259.7 3196.9 3168.2 3117.7 3089.2 3089.3 QTY 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 125 TOTAL VALUE 432293.75 435181.25 432450 434768.75 421343.75 424468.75 415712.5 422162.5 400650 400537.5 408600 415375 406200 411987.5 405481.25 410581.25 407456.25 399612.5 396018.75 389712.5 386150 386156.25 P/L 0 2887.5 156.25 2475 -10950 -7825 -16581 -10131 -31644 -31756 -23694 -16919 -26094 -20306 -26813 -21713 -24838 -32681 -36275 -42581 -46144 -46138

3rd Jan 2011

68

INFOSYSTCH INFOSYSTCH INFOSYSTCH

3-Feb-11 4-Feb-11 7-Feb-11

3153 3123.7 3113.9

3086.2 3026.4 3061

3117.6 3047.9 3087.5

125 125 125

389700 380987.5 385931.25

-42594 -51306 -46363

ANALYSIS: As on3rd MARCH the amount invested in the shares INFOSYSTCH was Rs . 432293.75 by purchasing the 125 number of shares at close price of Rs. 3458.4 (125 x 3458.4 = 432293.75) But on 7th Feb the price of the shares of the company fell down to Rs3087.5 Loss on 1 share by selling the shares on 7th February 3458.4 3087.5 = 370.9 Hence, total loss by selling 125 shares = 125 x 370.9 = 46363 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 46363 was observed

a.SHORT FUTURE:
DATE Investment 425300
p/l EXP.DATE

3rd Jan 2011

-39519
24-Feb-11 Short future @3402.4 LOW PRICE 3390.9 3371.5 3315 3338.1 3222 3211.6 3218.15 3283.45 3250 3238.55 3242 3237 3250 TOTAL VALUE 125 125 125 125 125 125 125 125 125 125 125 125 125 425300 426225 419462.5 423725 403762.5 403875 410662.5 417262.5 407831.25 413193.75 407643.75 410912.5 407650

SYMBOL INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH

DATE 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11

HIGHPRICE 3520.35 3459 3436.85 3407.4 3320 3303.85 3294.95 3346.75 3337.05 3318.5 3289.35 3299 3308

CLOSE PRICE 3402.4 3409.8 3355.7 3389.8 3230.1 3231 3285.3 3338.1 3262.7 3305.6 3261.2 3287.3 3261.2

QTY

P/L 0 925 -5837.5 -1575 -21538 -21425 -14638 -8037.5 -17469 -12106 -17656 -14388 -17650

69

INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH

27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

3250 3271.7 3156.45 3141.4 3171.7 3163.5 3131.4 3114.95

3202 3152 3101.2 3056 3081.2 3097 3028 3064.9

3211.7 3187.4 3133.8 3102.4 3101.3 3127.7 3050.9 3086.3

125 125 125 125 125 125 125 125

401462.5 398418.75 391718.75 387800 387662.5 390956.25 381362.5 385781.25

-23838 -26881 -33581 -37500 -37638 -34344 -43938 -39519

ANALYSIS: Enter into short future on 6th Jan at Rs. 3402.4 So, the amount of investment is (125 x 3402.4 = 425300 ) But on 7th February, the share price fall down to 3086.3 Loss on 1 share by selling the shares on 7th February 3402.4 3086.3 = 316.1 Hence, total loss by selling 125 shares = 125 x 316.1 = 39519 By holding it till 7TH Feb,we may reduce the loss Rs 46363 from to 39519

b.SHORT PUT:
DATE
Investment p/l EXP.DATE 4687.5 22893.75 24-Feb-11 Short put @37.5 SYMBOL INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH DATE 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 STK.PRICE 3250 3250 3250 3250 3250 3250 3250 3250 3250 3250 CLOSEPRICE 37.5 64.95 81 53.4 105 105 105 54 75 75 SETTLE PRICE 51.2 64.95 81 53.4 105 149.45 117.05 54 75 101.95 NO.OF CTRT 0 4 1 4 2 0 0 1 1 0 QTY 125 125 125 125 125 125 125 125 125 125 TOT.VALUE 4687.5 8118.75 10125 6675 13125 13125 13125 6750 9375 9375 P/L 0 3431.25 5437.5 1987.5 8437.5 8437.5 8437.5 2062.5 4687.5 4687.5

3rd Jan 2011

70

INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH INFOSYSTCH

21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11

3250 3250 3250 3250 3250 3250 3250 3250 3250

82 62 74.6 92 115 115 190 190 190

82 62 74.6 92 115 170.75 190 182.95 160.35

1 8 44 11 25 0 3 0 0

125 125 125 125 125 125 125 125 125

10250 7750 9325 11500 14375 14375 23750 23750 23750

5562.5 3062.5 4637.5 6812.5 9687.5 9687.5 19062.5 19062.5 19062.5

INFOSYSTCH INFOSYSTCH

4-Feb-11 7-Feb-11

3250 3250

220.65 220.65

220.65 178.35

3 0

125 125

27581.25 27581.25

22893.75 22893.75

ANALYSIS: Enter into a short put on 6th Jan at Rs 37.5 So, the amount of investment is 125 x 37.5 = 4687.5 But on 7th February, the share price goes up to 220.65 Profit on 1 share by selling the shares on 7th February 220.65 37.5 = 183.15 Hence, total profit by selling 125 shares = 125 x 183.15 = 22893.75 By holding it till 7th Feb ,we can earn the profit of Rs. 22893.75

ANNEXURE 8.: 8.TATA MOTORS:

DATE Investment p/l
SYMBOL TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11

3rd Jan 2011

654225 -81050
Buy Stock @1308.45 HIGHPRICE 1335 1320.6 1309.9 1300.9 1263.35 LOW PRICE 1301.2 1285.05 1276 1248.35 1160 CLOSE PRICE 1308.45 1298.4 1282.8 1261 1190.2 QTY 500 500 500 500 500 TOTAL VALUE 654225 649200 641400 630500 595100 P/L 0 -5025 -12825 -23725 -59125

71

TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS

10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

1206.9 1198.9 1223.1 1246.95 1225 1188 1208.6 1207.9 1202 1204 1197.8 1198.8 1199.5 1189.9 1159 1151.45 1128.9 1164.5 1189.95 1159.85

1157.4 1140.55 1176 1212 1172 1155.5 1182 1183.3 1162.15 1172.35 1175.1 1159.9 1171 1122 1112.1 1063 1077.3 1094 1140 1110.8

1176.7 1158.05 1218 1236.7 1182.4 1178.85 1199.55 1192.75 1194.7 1187.4 1188.3 1166 1195.85 1150.3 1147.05 1069.05 1114.25 1156.8 1150.85 1146.35

500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500

588350 579025 609000 618350 591200 589425 599775 596375 597350 593700 594150 583000 597925 575150 573525 534525 557125 578400 575425 573175

-65875 -75200 -45225 -35875 -63025 -64800 -54450 -57850 -56875 -60525 -60075 -71225 -56300 -79075 -80700 -119700 -97100 -75825 -78800 -81050

ANALYSIS: As on3rd MARCH the amount invested in the shares TATAMOTORS was Rs 654225 by purchasing the 500 number of shares at close price of Rs. 1308.45 (500 x 1308.45 = 654225 ) But on 7th Feb the price of the shares of the company fell down to Rs 1146.35 Loss on 1 share by selling the shares on 7th February 1308.45 1146.35 = 162.1 Hence, total loss by selling 500 shares = 500 x 162.1 = 81050 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 81050 was observed

a.SHORT FUTURE:
72

DATE

3rd Jan 2011

Investment
p/l EXP.DATE

630550
-62775 24-Feb-11 Short future @1261.1 LOW PRICE 1241.15 1185.5 1160 1139.95 1172.75 1197 1166.15 1146.85 1176.25 1170.25 1154.1 1167.45 1169.5 1147 1163.5 1115 1106.7 1064.1 1077.35 1088.65 1128 1098.65 TOTAL VALUE 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 630550 598450 587950 578925 606575 610475 586225 584150 596850 589625 594900 592200 590375 576500 590025 569375 572900 534900 552075 576825 568425 567775

SYMBOL TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS

DATE 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

HIGHPRICE 1299.05 1262 1204.9 1198.75 1216.5 1232 1220 1177.05 1198 1205 1196 1197.1 1190 1215 1187.2 1179.6 1154.6 1146 1122.8 1161 1181.55 1151.85

CLOSE PRICE 1261.1 1196.9 1175.9 1157.85 1213.15 1220.95 1172.45 1168.3 1193.7 1179.25 1189.8 1184.4 1180.75 1153 1180.05 1138.75 1145.8 1069.8 1104.15 1153.65 1136.85 1135.55

QTY

P/L 0 -32100 -42600 -51625 -23975 -20075 -44325 -46400 -33700 -40925 -35650 -38350 -40175 -54050 -40525 -61175 -57650 -95650 -78475 -53725 -62125 -62775

ANALYSIS:
73

Enter into short future on 6th Jan at Rs. 1261.1 So, the amount of investment is (500 x 1261.1 = 630550 ) But on 7th February, the share price fall down to 1135.55 Loss on 1 share by selling the shares on 7th February 1261.1 1135.55 = 125.55 Hence, total loss by selling 500 shares = 500 x 125.55 =62775 By holding it till 7TH Feb,we may reduce the loss Rs 81050 from to 62775

b.SHORT PUT:
DATE Investment 9000
p/l EXP.DATE SYMBOL TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS DATE 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 24-Feb-11 Short put @18 STK.PRICE 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 1150 CLS PRICE 18 40 44.1 43.95 43.95 32.25 50 45.95 35 41.95 35.65 35.2 35.25 45.05 32.05 51.6 52.8 102.65 75.1 54.45 62.05 62.25 SET. PRICE 18 40 44.1 43.95 43.55 32.25 50 45.95 35 41.95 35.65 35.2 35.25 45.05 32.05 51.6 52.8 102.65 75.1 54.45 62.05 62.25 NO.OF CTRT 8 8 4 2 0 6 1 4 86 14 20 37 15 93 424 656 198 268 115 782 1363 553 QTY 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 TOT.VAL 9000 20000 22050 21975 21775 16125 25000 22975 17500 20975 17825 17600 17625 22525 16025 25800 26400 51325 37550 27225 31025 31125 P/L 0 11000 13050 12975 12775 7125 16000 13975 8500 11975 8825 8600 8625 13525 7025 16800 17400 42325 28550 18225 22025 22125

3rd Jan 2011

ANALYSIS:
74

Enter into a short put on 6th Jan at Rs 18 So the amount of investment is (500 x 18 = 9000) But on 7th February, the share price goes up to 62.25 Profit on 1 share by selling the shares on 7th February 62.25 18 = 44.25 Hence, total profit by selling 500 shares = 500 x 44.25 = 22125 By holding it till 7th Feb ,we can earn the profit of Rs. 22125

ANNEXURE 9: 9.RELIANCE CAPITAL:

DATE Investment 341250
p/l -94325 LOW PRICE 671.35 667 654.05 654.05 630 606.6 595 600.5 616.2 600.05 566.6 568.4 576 570 582 578.85 576.75 554.55 527.25 517.5 Buy Stock @682.5 CLOSE PRICE QTY 682.5 677.1 656.1 659.9 633.8 612.05 607.9 629.55 621.65 613.2 574.05 579.45 581.35 585.25 586.65 583.4 579.9 558.9 536.3 523.7 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 TOTAL VALUE 341250 338550 328050 329950 316900 306025 303950 314775 310825 306600 287025 289725 290675 292625 293325 291700 289950 279450 268150 261850

3rd Jan 2011

SYMBOL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL

DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11

HIGHPRICE 687.5 687 680.05 665 661.85 641.9 622.8 631.95 636.7 632.9 600 587.85 589 588.9 594.9 589.9 587.9 585.05 561 534

P/L 0 -2700 -13200 -11300 -24350 -35225 -37300 -26475 -30425 -34650 -54225 -51525 -50575 -48625 -47925 -49550 -51300 -61800 -73100 -79400

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RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL

1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

528.65 509.8 508.85 515.95 502.8

497.6 491 489.3 490 484.1

501.5 496.05 504.65 493.1 493.85

500 500 500 500 500

250750 248025 252325 246550 246925

-90500 -93225 -88925 -94700 -94325

ANALYSIS: As on3rd MARCH the amount invested in the shares RELCAPITAL was Rs 341250 by purchasing the 500 number of shares at close price of Rs. 682.5 (500 x 682.5 =341250) But on 7th Feb the price of the shares of the company fell down to Rs . 493.85 Loss on 1 share by selling the shares on 7th February 682.5 493.85 = 188.65 Hence, total loss by selling 500 shares = 500 x 188.65 = 94325 Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 94325 was observed

a.SHORT FUTURE:
DATE Investment 332825
p/l EXP.DATE -84825 24-Feb-11 Short future @665.65 SYMBOL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL DATE 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 HIGHPRICE 671.6 665.4 646 626.8 635.4 640 636.5 605 590 LOW PRICE 661.45 635.65 613.75 600 603.65 620.5 605.1 570 571.95 CLOSE PRICE 665.65 639.9 616.45 610.5 633.65 625.2 616.25 576.1 582.95 QTY 500 500 500 500 500 500 500 500 500 TOTAL VALUE 332825 319950 308225 305250 316825 312600 308125 288050 291475 P/L 1100 -11775 -23500 -26475 -14900 -19125 -23600 -43675 -40250

3rd Jan 2011

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RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL

19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

592.65 592 599.2 595.5 592 586.3 562.95 536.7 530.95 511.95 512 519.5 504.95

578.85 578.15 586.5 583.85 581.4 559.65 532 520.35 501.3 487.9 491.6 491.1 485.6

584.7 589.35 591.8 588.45 583.5 563.95 540.6 527.25 504.6 499.3 508 494.95 496

500 500 500 500 500 500 500 500 500 500 500 500 500

292350 294675 295900 294225 291750 281975 270300 263625 252300 249650 254000 247475 248000

-39375 -37050 -35825 -37500 -39975 -49750 -61425 -68100 -79425 -82075 -77725 -84250 -84825

ANALYSIS: Enter into short future on 6th Jan at Rs. 665.65 So, the amount of investment is (500 x 665.65 = 332825) But on 7th February the share price fall down to 496 Loss on 1 share by selling the shares on 7th February 665.65 496 = 169.65 Hence, total loss by selling 500 shares = 500 x 169.65 = 84825 By holding it till 7TH Feb,we may reduce the loss Rs 94325 from to 84825

b.SHORT PUT:
Investment p/l EXP.DATE 24-Feb-11 Short put @15 SYMBOL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL DATE 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 STK.PRICE 620 620 620 620 CLS PRICE 15 15 15 24.85 SET.PRICE 15 16.7 27.85 24.85 NO.OF CTRT 1 0 0 6 QTY 500 500 500 500 TOT.VALUE 7500 7500 7500 12425 P/L 0 0 0 4925 7500

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RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL RELCAPITAL

11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

620 620 620 620 620 620 620 620 620 620 620 620 620 620 620 620 620 620 620

24.85 24.85 24.85 31.9 31.9 31.9 31.9 31.9 40.55 45.5 45.35 51.5 51.5 51.5 51.5 51.5 51.5 51.5 51.5

38.5 30 32.2 31.9 62.5 57.85 55.2 51.5 40.55 45.5 45.35 51.5 85.55 95.95 116.85 121.85 113.6 124.7 124.1

0 0 0 1 0 0 0 0 6 1 1 5 0 0 0 0 0 0 0

500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500 500

12425 12425 12425 15950 15950 15950 15950 15950 20275 22750 22675 25750 25750 25750 25750 25750 25750 25750 25750

4925 4925 4925 8450 8450 8450 8450 8450 12775 15250 15175 18250 18250 18250 18250 18250 18250 18250 18250

ANALYSIS: Enter into a short put on 6th Jan at Rs 15 So, the amount of investment is (500 x 15 = 7500) But on 7th February, the share price goes up to 51.5 Profit on 1 share by selling the shares on 7th February 51.5 15 = 36.5 Hence, total profit by selling 500 shares = 500 x 36.5 = 18250 By holding it till 7th Feb ,we can earn the profit of Rs. 18250

ANNEXURE 10:

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10.HINDUSTAN UNILEVER:
DATE Investment p/l
SYMBOL HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR DATE 3-Jan-11 4-Jan-11 5-Jan-11 6-Jan-11 7-Jan-11 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

3rd Jan 2011

DDDDDDDDDDDDDDF

313150 38800
Buy Stock @313.15 HIGHPRICE 315.9 329.9 327.35 328.8 322.9 317.65 312.5 310.5 307.15 313.2 305.5 304.8 303.75 301 300.95 302 303 283 275 276.95 274 276.55 282.2 279.4 277 LOWPRICE 310 313.5 317.25 312.4 310.6 306.5 303.3 301.6 300.25 301.55 300 300.5 298.45 296.35 297 296 280.55 270 267 266.4 267 269.1 272.5 271.5 271.5 CLOSE PRICE 313.15 320.9 325.7 320.75 313.05 309 307.95 304.9 302.2 302.55 301.65 301.85 299.65 299.9 298.2 297.95 281.9 270.7 271.95 271.15 269.65 274.6 278.95 272.95 274.35 QTY 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TOTAL VALUE 313150 320900 325700 320750 313050 309000 307950 304900 302200 302550 301650 301850 299650 299900 298200 297950 281900 270700 271950 271150 269650 274600 278950 272950 274350 P/L 0 7750 12550 7600 -100 -4150 -5200 -8250 -10950 -10600 -11500 -11300 -13500 -13250 -14950 -15200 -31250 -42450 -41200 -42000 -43500 -38550 -34200 -40200 -38800

ANALYSIS: As on3rd MARCH the amount invested in the shares HINDUNILVR was Rs. 313150 by purchasing the 1000 number of shares at close price of Rs. 313.15 (1000 x 313.15 = 313150) But on 7th Feb the price of the shares of the company fell down to Rs . 274.35 Loss on 1 share by selling the shares on 7th February 313.15 274.35 = 38.8 Hence, total loss by selling 1000 shares = 1000 x 38.8 = 38800
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Thus by selling the shares after holding it till 7th Feb ,the total loss of Rs. 38800 was observed

a.SHORT FUTURE:
DATE 3rd Jan 2011 SSDSSSSSSSSSSSSSSSSS Investmnt p/l EXP.DATE 309000 -34650 24-Feb-11
Short future @309 SYMBOL HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR DATE 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11 1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11 HIGHPRICE 317.65 312.5 310.5 307.15 313.2 305.5 304.8 303.75 301 300.95 302 303 283 275 276.95 274 276.55 282.2 279.4 277 LOW PRICE 306.5 303.3 301.6 300.25 301.55 300 300.5 298.45 296.35 297 296 280.55 270 267 266.4 267 269.1 272.5 271.5 271.5 CLOSE PRICE 309 307.95 304.9 302.2 302.55 301.65 301.85 299.65 299.9 298.2 297.95 281.9 270.7 271.95 271.15 269.65 274.6 278.95 272.95 274.35 QTY 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TOTAL VALUE 309000 307950 304900 302200 302550 301650 301850 299650 299900 298200 297950 281900 270700 271950 271150 269650 274600 278950 272950 274350 P/L 0 -1050 -4100 -6800 -6450 -7350 -7150 -9350 -9100 -10800 -11050 -27100 -38300 -37050 -37850 -39350 -34400 -30050 -36050 -34650

ANALYSIS:
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Enter into short future on 6th Jan at Rs. 309 So, the amount of investment is (1000 x 309 = 309000) But on 7th February, the share price fall down to 274.35 Loss on 1 share by selling the shares on 7th February 309 274.35 = 34.65 Hence, total loss by selling 1000 shares = 1000 x 34.65 = 34650 By holding it till 7TH Feb,we may reduce the loss Rs 38800 from to 34650

b.SHORT PUT:
DATE Investment p/l EXP.DATE
SYMBOL HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR DATE 10-Jan-11 11-Jan-11 12-Jan-11 13-Jan-11 14-Jan-11 17-Jan-11 18-Jan-11 19-Jan-11 20-Jan-11 21-Jan-11 24-Jan-11 25-Jan-11 27-Jan-11 28-Jan-11 31-Jan-11

3rd Jan 2011

1100 9700 24-Feb-11

Short put @1.1 STK.PRICE 280 280 280 280 280 280 280 280 280 280 280 280 280 280 280 CLS. PRICE 1.1 1.1 1.1 1.1 1.95 2.45 2.35 2.8 2.65 2.65 2.1 8.45 13.1 11.4 14.1 SET.PRICE 2.25 2.1 2.35 2.6 1.95 2.45 2.35 2.8 2.65 1.7 2.1 8.45 13.1 11.4 14.1 NO.OF CTRT 0 0 0 0 2 2 8 4 4 0 3 109 177 51 22 QTY 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TOT.VAL 1100 1100 1100 1100 1950 2450 2350 2800 2650 2650 2100 8450 13100 11400 14100 P/L 0 0 0 0 850 1350 1250 1700 1550 1550 1000 7350 12000 10300 13000

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HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR HINDUNILVR

1-Feb-11 2-Feb-11 3-Feb-11 4-Feb-11 7-Feb-11

280 280 280 280 280

15 10.8 7.6 11.25 10.8

15 10.8 7.6 11.25 10.8

9 62 37 26 7

1000 1000 1000 1000 1000

15000 10800 7600 11250 10800

13900 9700 6500 10150 9700

ANALYSIS: Enter into a short put on 6th Jan at Rs 1.1 So, the amount of investment is (1000 x 1.1 = 1100) But on 7th February, the share price goes up to 10.8 Profit on 1 share by selling the shares on 7th February 10.8 1.1 = 9.7 Hence, total profit by selling 1000 shares = 1000 x 9.7 = 9700 By holding it till 7th Feb ,we can earn the profit of Rs. 9700

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CHAPTER-V Findings Suggestions Summary Conclusion Bibliography

FINDINGS:
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 The buyer of a put option will not exercise his option (to sell) if, on expiry, the price of the asset in the spot market is more than the strike price of the call. A trader who believes that a stock price will increase can buy the stock or instead sell a put. If the stock price at expiration is above the exercise price, the short put position will make a profit in the amount of the premium. If the stock price at expiration is below the exercise price by more than the amount of the premium, the trader will lose money, with the potential loss being up to the full value of the stock

SUGGESTIONS:
If it looks like the stock-price will remain above the strike-price then you should probably hold the short position until expiration, because the put will probably expire worthless and we will be able to keep the "premium" we got for selling the put in the first place. Sell a stock when the reasons you bought it dont hold true anymore. . If your stock is going down, and you realize its a crappy company, get rid of it. RBI should play a greater role in supporting options. Derivatives (options) market should be developed in order to keep it at par with other derivative markets in the world. Speculation should be discouraged. There must be more derivative instruments aimed at individual investors. SEBI should conduct seminars regarding the use of options to educate individual investors.

CONCLUSION:
Hedging can be used to reduce risks. Hedging is not speculation to get benefited from it and it does not work always.

BIBLIOGRAPHY:
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BOOKS
1. Mihir Dash, Kavitha V, Deepa K M, Sindhu S, November 2008, A Study of Optimal Stock & Options Strategies1 2.NATIONAL STOCK EXCHANGE, 2009. NSEs Certification in Financial Markets: Securities Market (Basic) Module. Mumbai: National Stock Exchange of India 3.Options, Futures and Other Derivatives, By John C Hull 4.Jianwei Zhu, August 15, 2000 Modular Pricing of Options 5.Bas J M Werker and Bertrand Melenberg, March 1997 On the Pricing of Options in Incomplete Markets

JOURNALS: Mihir Dash, Narendra Babu and Mahesh Kodagi, Indian Journal of Finance, Speculation Strategies Using Investment In Options2 Vol. 1, No. 4,November 2007.

WEBSITES: www.nseindia.com www.HedgeMyOptions.com http://www.optiontradingtips.com/options101/why-trade-options.html http://www.optionseducation.org/strategy/strategy_index.jsp www.ssrn.com

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