Use of Derivates in Stock Market

8/9/2019 Use of Derivates in Stock Market

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USE OF DERIVATES IN STOCK MARKET

SIP Project Report submitted in partial fulfillment of the requirements for the PGDM

program

By: - Vishal Chandak

Supervisors:- Mr. Chandan Taparia (Company Guide)

Prof. Pawan Jain (Faculty Guide)

INSTITUTE OF MANAGEMENT TECHNOLOGY, Nagpur

2009-2011


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ACKNOWLEDGEMENT

The Satisfaction and Euphoria that accompanies the successful completion of any task would

be incomplete without the mention of people who make it possible and whose constant

guidance and encouragement heads off all effects with success. Its a pleasure to have the

opportunity to extend my thanks to everyone who helped me in compiling the project.

I am in debt to my company project guide Mr. Chandan Taparia, Derivates & Technical

Analyst at Anand Rathi Financial Services for his expert guidance, constructive criticism,

patience and cooperation throughout the duration of the project.

I would also like to thank the entire team at Anand Rathi Financial Services, Research

Department for their constant support and help in the successful completion of my project.

Also, I am thankful to my faculty guide Prof. Pawan Jain of my institute, for continued

guidance and invaluable encouragement.


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Table of Content

1. Executive summary2. Introduction3. Objective of the study4. Brief description of the concepts/model introduced in the study5. Brief about the industry where the study was carried out6. Methodology followed7. Tabulation and findings8. Interpretation and conclusions9. Recommendation10.Limitation of the study11.Scope for future improvement12.Appendices13.Bibliography


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Introduction to AnandRathi Financial Services Ltd.

AnandRathi financial services ltd. is a leading full securities service providing firm. The

firm was founded in 1994 by Mr. Anand Rathi, today it has a presence across India as

well as an international presence through offices in Dubai and Bangkok. AanadRathi

provides a breadth of financial and advisory services including investment banking,

corporate advisory, brokerage & distribution of equities, commodities, mutual funds and

insurance, all of which are supported by powerful research teams.

The firm's philosophy is entirely client centric, with a clear focus on providing long term

value addition to clients, while maintaining the highest standards of excellence, ethics and

professionalism. The entire firm activities are divided across distinct client groups:

Individuals, Corporate and Institutions.

Vision statement: To be a shining example as a leader of innovation and first choice for

clients and employees .

Breadth of services

In line with its client-centric philosophy, the firm offers to its clients the entire spectrum

of financial services ranging from brokerage services in equities and commodities,

distribution of mutual funds, IPOs and insurance products, investment banking, merger

and acquisitions, corporate finance and corporate advisory.

Management Team

AnandRathi has a highly professional core management team that comprises of

individuals with extensive business as well as industry experience. Some of them are:

Mr. Anand Rathi, Founder & Chairman

Mr. Amit Rathi, Managing Director

Mr. Pradeep Gupta - Managing Director


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In-Depth Research

Anand Rathis research expertise is at the core of the value proposition that they offer to

there clients. Research teams across the firm continuously track various markets and

Products. The aim is however common - to go far deeper than others, to deliver incisive

Insights and ideas and be accountable for results.

Major Milestones


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Derivates Defined


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FACTORS DRIVING THE GROWTH OF DERIVATES


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DERIVATIVE PRODUCTS


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ECONOMIC FUNCTION OF DERIVATIVE MARKET


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FORWARD CONTRACTS

LIMITATION OF FORWARD CONTRACTS


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INTRODUCTION TO FUTURES

DISTINCTION BETWEEN FUTURE AND FORWARD


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INTRODUCTION TO OPTION


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Various Strategies to use Option effectively


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RECOMMENDATION

While derivates products are highly useful for hedging purpose, people dont use them

effectively. They use it as a medium for speculation. The new entrants in the stock market

should use it to limit his lose. The amateur investor should purchase long call and long put as

the risk is limited only to the amount of premium paid but the profit is unlimited. Future

contract should be purchased only as to hedge that particular equity share hold, they should

not be used for speculation purpose, as they are too risky to use without in depth study.


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Bibliography

Documents

Use of Derivates in Stock Market