CHAPTER-1

INTRODUCTION

1
1.1 INTRODUCTION:
The emergence of the marketplace for derivative products, most notably forwards, futures
and options, are often traced back to the willingness of risk-averse economic agents to guard
themselves against uncertainties arising out of fluctuations in asset prices. By their very
nature, the financial markets are marked by a high degree of volatility. Through the use of
derivative products, it's possible to partially or fully transfer price risks by locking-in asset
prices. As instruments of risk management, these generally don't influence the Fluctuations
within the underlying asset prices. However, by locking-in asset prices, Derivative products
minimize the impact of fluctuations in asset prices on the Profitability and income situation of
risk-averse investors.
While forward contracts and exchange-traded in futures has grown by leaps and bound,
Indian stock markets are largely slow to those global changes. However, within a previous
few years, these are substantial improvement within the functioning of the stock market .
Requirements of the adequate capitalization for market intermediaries, margining and
establishment of clearing corporations have reduced market and credit risks. However, there
are inadequate advanced risk management tools. And after the ICE (Information,
Communication, Entertainment) meltdown the market regulator felt that to deepen and
strength the cash market trading of derivatives like futures and options was imperative.

2
1.2 NEED OF THE STUDY:
The futures and options market is used by numerous investors of the company . Outside of
the country. the long run and options market plays pre vital role within the capital market in
India that is the rationale, i choose this subject because the quantity of trading is
tremendously increasing within the derivatives market, this might be of immense help to the
investors. The increasing investments in derivatives (domestic also as overseas) have
attracted my interest during this area. Though the use of derivatives products, it's possible
partially or fully transfer price risks by locking-in asset prices.

3
1.3 OBJECTIVES OF THE STUDY:

Following are the objectives of the study:-

1. to research the operations of futures and options.
2. to hunt out the profit/loss position of futures buyer and seller.
3. to review risk management with the help of derivatives.
4. to hunt out profit/loss position of the selection writer and option holder. to review various
trends within the derivatives market.
5. to review the role of derivatives in India financial market
6. to review intimately the role of futures and options
7. to seem at the advantages and thus the disadvantages of varied strategies along side side
situations.
8. to review the varied ways of buying and selling of Options.

4
1.4 SCOPE OF THE STUDY:

The study is regarded “Derivatives” with special reference to futures and option within the
Indian context and thus the Inter-Connected stock exchange has been taken as a
representative sample for the study. The study isn't supported the international perspective of
derivatives markets, which exists in NASDAQ, CBOT etc.
This study is that the canopy under the derivatives market research under ANGEL
BROKING LIMITED has been taken as a representative sample for the study period of
5years.

5
1.6 RESEARCH METHODOLOGY:

Data has been collected in two ways. These are:

Primary Method:
• Primary data are getting to be collected by a private discussion with the assistant manager
and from a couple of other employees.
Secondary Method: the secondary data are getting to be collected by
• Various portal
• www.nseindia.com
Financial newspapers, Economics times.

6
1.7 LIMITATIONS:

1) The study doesn't take any Nifty Index Futures and Options and International Markets into
consideration.
2) this might be a study conducted within a period of 45 days.
3) During this limited period of study, the study won't be an in-depth, Full-fledged and
utilitarian one altogether aspects.
4) The study doesn't provide any predictions or forecast of the chosen scripts.
5) The study was conducted in Hyderabad only.
6) As time was limited, the study was confined to the conceptual understanding of the
Derivatives market in India.

7
CHARACTERIZATION

CHAPTER-1
Introduction, the scope of the study, objectives of the study, hypothesis, methodology of the
study, Limitations of the study
CHAPTER-2
theoretical framework and review of literature provides basic information narrative
description and briefing of the concept
CHAPTER-3
Industry profile &company profile gives the insight of the company like origin, products and
shortly
CHAPTER-4
Data analysis and interpretation gives the summary and observation obtained during the
research
CHAPTER-5
Suggestion, findings and conclusion after the study describes, bibliography

8
 CHAPTER-2

THEORITICAL FRAMEWORK

&

REVIEW OF LITERATURE

INTRODUCTION:

9
“Early forward contracts within the US addressed merchants concerns about ensuring that
there are buyers and sellers for commodities. However “credit risk” remained a big problem.
To affect this problem, a gaggle of Chicago; businessmen formed theChicago Board of Trade
(CBOT) in 1848.
The primary intention of the CBOT was to provide a centralized location known beforehand
for buyers and sellers to barter forward contracts. In 1865, the CBOT went one stepfurther
and listed the first “exchange traded” derivatives accept the US; these contracts were called
“futures contracts”. In 1919, Chicago Butter and Egg Board, a spin-off CBOT was
reorganized to allow futures trading. Its name was changed to Chicago Mercantile Exchange
(CME). The CBOT and thus the CME remain the two largest organized futures exchanges,
indeed the two largest “financial” exchanges of any kind within the planet today.
the first stock exchange index derivative was traded at Kansas City Board of Trade.
Currently the foremost popular stock exchange index derivative within the planet is based on
S&P 500index, traded on Chicago Mercantile Exchange. During the Mid eighties, financial
futures became the foremost active derivative instruments Generating volumes repeatedly
quite the commodity futures. Index futures, futures on T-bills and Euro-Dollar futures are the
three hottest Futures contracts traded today. Other popular international exchanges that trade
derivatives are LIFFE in England, DTB in Germany, SGX in Singapore, TIFFE in Japan,
MATIF in France, Eurex etc.,

DERIVATIVES

10
Derivatives became vital within the sector of finance. they're vital financial instruments for
risk management as they allow risks to be separated and traded. Derivatives are used to shift
risk and act as a kind of insurance. This shift of risk means each party involved within the
contract should be able to identify all the risks involved before the contract is agreed. it is
also important to remember that derivatives are derived from an underlying asset. this means
that risks in trading derivatives may change relying on what happens to the underlying asset.
DEFINITION OF DERIVATIVES
“Derivative could also be a product whose value springs from the price of 1 or more basic
variables, called bases (underlying asset, index, or reference rate), during a contractual
manner. The underlying asset are often equity, forex, commodity or the opposite asset. as an
example , wheat formers might got to sell their harvest at a future date to eliminate the danger
of a change in prices by that date. Such a transaction is an example of a derivative. the price
of this derivative is driven by the spot price of wheat which is that the “underlying’’. within
the Indian context the Securities Contracts (Regulation) Act, 1956(SC(R) A) defines.
Derivatives include:
1. A security derived from a certificate of indebtedness , share, loan whether secured or
unsecured, risk instrument or contract for differences or the opposite kind of security.
2. A contract which derives its value from the prices , or index of costs , of underlying
securities
The following are the numerous kinds of derivatives. They are:
FORWARDS:
A forward contract could also be a customized contract between two entities, where
settlement takes place on a specific date within the longer term at today’s pre-agreed price.
FUTURES:
A derivative is an agreement between two parties to buy for or sell an asset at a specific time
within the longer term at a specific price. Futures contracts are special kinds of forward
contracts within the sense that the previous are standardized exchange-traded contracts.

OPTIONS:

11
Options are of two types-calls and puts. Calls give the customer the right but not the need to
buy for a given quantity of the underlying asset, at a given price on or before a given future
date. Puts give the customer the right , but not the need to sell a given quantity of the
underlying asset at a given price on or before a given date.
WARRANTS:
Options generally have lives of upto one year; the majority of options traded on options
exchanges having a maximum maturity of nine months. Longer-dated options are called
warrants and are generally traded Over-the-counter.
LEAPS:
The acronym LEAPS means Long-Term Equity Anticipation Securities. These are options
having a maturity of up to three years.
BASKETS:
Basket options are options on portfolio of underlying assets. The underlying asset is usually a
moving average of a basket of assets. Equity index options are a kind of basket options.
SWAPS:
Swaps are private agreement between two parties to exchange cash flows within the longer
term according to a prearranged formula. they're going to be considered portfolios of forward
contracts. the two commonly used swaps are:
1. rate of interest swaps:
The entail swapping only the interest related cash flows between the parties within an
equivalent currency.
2. Currency swaps:
These entail swapping both principal and interest between the parties, with the cash flows in
one direction being during a special currency than those within the opposite way .
SWAPTIONS:
Swaptions are options to buy for or sell a swap which can become operative at the expiry of
the alternatives . Thus a swaptions is an option on a forward swap. rather than have calls and
puts, the swaptions market has receiver swaptions and payer swaptions. A receiver swaptions
is an option to receive fixed and pay floating. A payer swaptions is an option to pay fixed and
received floating.

PARTICIPANTS within the DERIVATIVE MARKET

12
The following three broad categories of participants:
HEDGERS:
Hedgers face risk associated with the price of an asset. They use futures or options markets to
reduce or eliminate this risk.
SPECULATORS:
Speculators wish to back future movements within the worth of an asset. Futures and options
contracts can give them a further leverage; that's , they're going to increase both the potential
gains and potential losses during a speculative venture.
ARBITRAGEURS:
Arbitrageurs are in business to need advantage of a discrepancy between prices in two
different markets. If, as an example they see the futures prices of an asset getting out of line
with the cash price , they go to require offsetting positions within the 2 markets to lock during
a profit.

INTRODUCTION OF FUTURES
Futures markets were designed to unravel the problems that exist in forward markets. A
derivative is an agreement between two parties to buy for or sell an asset at a specific time
within the longer term at a specific price. But unlike forward contract, the futures contracts
are standardized and exchange traded. To facilitate liquidity within the derivative , the
exchange specifies certain standard features of the contract. it's standardized contract with
standard underlying instrument, a typical quantity and quality of the underlying instrument
which can be delivered,(Or which can be used for reference purpose in settlement) and a
typical timing of such settlement.

DEFINITON OF FUTURES
“A derivative is an agreement between two parties to buy for or sell an asset at a specific time
within the longer term at a specific price. Futures contracts are special kinds of forward
contracts within the sense that the previous are standardized exchange-traded contracts.”
Futures contracts are classified in to the next types:

1. Commodity futures:-

13
Futures contract is made between the 2 parties to buy for and sell the particular commodities
at a selected price & at a selected period of your time . Underlying assets for these contracts
are agricultural products, gold, silver, iron, bronze etc.
2. Financial futures:-
a. Stock futures:-These contracts are supported stock market indexes various agreements are
made on the thought of securities issued by different companies the varied indexes for
changes of stock values are given by various exchanges.
b.Interest rate futures:-
to protect the long run interest rates various contracts are made. They bare applicable for
bonds, debentures and other debt instruments.
c.Foreign exchange futures:-
These contracts are useful for the exports and imports to protect the appreciation and
depreciation of particular currency rates.
d. Cost of living index futures:-
they're also called inflation futures contracts supported a specified cost of living index.

FUTURES TERMINOLOGY
SPOT PRICE:
The price at which an asset trades within the commodities exchange .
FUTURES PRICE:
The price at which the derivative trades within the futures market .
CONTRACT CYCLE:
The period over which a contract trades. The index futures contracts on the NSE have one-
month and three-month expiry cycles which expire on the last Thursday of the month. Thus a
January expiration contract expires on the last Thursday of January and a February expiration
contract ceases trading on the last Thursday of February. On the Friday following the last
Thursday, a replacement contract having a three-month expiry is introduced for trading.
EXPIRY DATE:
Is the date laid call at the futures contract? this is often often the Judgment Day on which the
contract are getting to be traded, at the highest of which it'll cease to exist.
CONTRACT SIZE:
The amount of asset that possesses to be delivered under one contract. as an example , the
contract size on NSE’s futures markets is 200 Nifties.

14
BASIS:
In the context of monetary futures, basis are often defined because the futures price minus the
spot price . These are getting to be a special basis for each delivery month for each contract.
during a traditional market, basis are getting to be positive. This reflects that futures prices
normally exceed spot prices.
COST OF CARRY:
The relationship between futures prices and spot prices are often summarized in terms of
what is mentioned because the value of carry. This measures the storage cost plus the interest
that's paid to finance the asset less the income earned on the asset.
INITIAL MARGIN:
The amount that possesses to be deposited within the account at the time a derivative is first
entered into is known as initial margin.
MARKING-TO-MARKET:
In the futures market , at the highest of each trading day, the account is adjusted to reflect the
investor’s gain or loss depending upon the futures price . this is often often called marking-to-
market.

MAINTENANCE MARGIN:
This is somewhat but the initial margin. this is often often set to form sure that the balance
within the account never becomes negative. If the balance within the account falls below the
maintenance margin, the investor receives a call and is predicted to top up the account to the
initial margin level before trading commences on subsequent day.

INTRODUCTION TO OPTIONS
In this section, we glance at subsequent derivative product to be traded on the NSE, namely
options. Options are fundamentally different from forward and futures contracts. An option
gives the holder of the selection the right to undertake to to something. The holder doesn't got
to exercise this right. In contrast, during a forward or derivative , the two parties have
committed themselves to doing something. Whereas it costs nothing (except margin
requirement) to enter into a futures contracts, the acquisition of an option requires as up-front
payment.

15
 CHAPTER-III

COMPANY PROFILE

COMPANY PROFILE

16
ABOUT US
The Angel Broking Group is one of India’s premier Investment Advisory and Financial
Planning companies. We are also SEBI-approved Category I Merchant Bankers

We offer personalized Investment Advisory and Financial Planning services to individual

investors, corporate houses, institutional investors, Non-Resident Indians (NRIs) and High
Net worth Clients, among others.

As one of India€™s largest distributors of monetary products, we offer an honest range of

investment products like mutual funds, life and general insurance, bonds, post office
schemes, etc. offered by reputed public and private and government organizations.
Company Profile
Angel Broking is one of India’s leading Financial Services companies offering Free Advice
on Investments, Insurance, Tax Saving, Retirement Planning, Financial Planning, Children’s
Future Planning and other services. We even have an honest range of products and services
for Corporate, High Net worth Individuals, and NRIs all under one roof.
At Angel Broking, we believe dreaming big. Dreams inspire us to excel. They ignite hope
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Four decades of excellence
For over four decades, we've been helping people realise their aspirations by helping them
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Today, we are a 1 of the foremost important financial planning and investment advisory
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Wide range of services

We offer a comprehensive range of services including financial planning and investment
advice, and thus the whole gamut of monetary instruments and investment products of almost
all major companies, both public and private . additionally , we also provide investment

17
assistance by helping you complete all the formalities, and assist you retain regular track of
your investments.
These services and products are delivered through our network of 134 Angel Broking
Investment Centre’s located everywhere the country.
We are also aSEBI-approved Category I Merchant Banker. We raise resources for over 1,000
top institutions and company houses once a year , and offer specialized services to Non-
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What you'll expect from us
1. Sound, research-based advice
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Our Mission, Aims & Objectives
Angel Broking's Mission Statement
The focus of our organization is to be the foremost useful, reliable and efficient provider of
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Our Vision:
1. Build and retain a growing membership base of monetary professionals
2. Develop a bond within the community because the premier resource for financial
information
3. Increase awareness on Financial Planning, using the CFP mark because the cornerstone
4. Nurture and develop the careers of our members through outstanding educational programs
5. Make members aware of financial market-related issues and provide a forum to reply and
offer feedback.
Our Aims
1. To serve our clients with utmost dedication and integrity so as that we exceed their
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2. to provide unparalleled quality of service through complete knowledge of products,
constant innovation in services and use of the most recent technology.
3. To always give honest and unbiased financial advice and earn our clients' everlasting trust.

18
4. To serve the community by educating individuals on the merits of monetary Planning and
successively help shape a financially strong society.
5. to form value for all stake holders by ensuring profitable growth.
6. to make an amicable environment that accords regard to every individual and permits their
personal growth.
7. To utilize the power of teamwork to function as a family and build a seamless
organization.

Management:

Mr. K.K. Angel Broking

Chairman

A visionary par excellence, a pioneer and a pacesetter , Mr K.K. Angel Broking has been
instrumental in shaping Angel Broking’s emergence together of India’s largest Investment
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He is a highly respected figure within the sector of institutional and personal finance and
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Mr.Angel Broking is additionally a prolific writer and has written over 200 articles on diverse
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Mr. Rajiv Deep Angel Broking

Vice Chairman & director

A qualified Financial Planner; Mr. Rajiv Deep Angel Broking was the first to introduce the
concept of monetary Planning in India. In fact, he's the Founding Chairman of the
Association of monetary Planners (AFP). he's also amongst the first batch of 25 Certified
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A Post-graduate in Management and holder of a world Certificate for Financial Advisors
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pivotal role in expanding Angel Broking's reach across the country. He has recently pursued

19
an Executive MBA in International Wealth Management under an exchange program
between University of Geneva, Switzerland and Carnegie Mellon University, Pittsburgh,
USA.
His youthful energy, dynamic leadership, vision and 16 years strategic management
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Joint director
Mr. Sanjiv Angel Broking started his career in 1995 as managerial trainee, worked on various
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Mr. Sanjiv Angel Broking is flexible personality with diverse areas of interest. he's a Post-
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Thanks to him, Angel Broking is today the foremost important individual agent for LIC. Mr
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CEO & Director

Mr. Anil Chopra is that the Chief officer & Director of Angel Broking Limited, He joined the
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network of Angel Broking Ltd. everywhere India.

20
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21
 CHAPTER-4
ANALYSIS
&
INTERPRETATION

22
 DATA ANALYSIS

The Objective of this analysis is to evaluate the profit/loss position futures and options. This
analysis is based on sample data taken of BHEL&ONGC.Scrip. This analysis considered the
1st APRIL 2017 TO 30th APRIL 2017 contract of BHEL&ONGC. The lot Size of BHEL is
1000&ONGC is 1000. The time period in which this analysis done is from 01-04-2017 to 30-
04-2017.

The following table explains the DATE and FUTURE PRICES.

 The first column explains TRADING DATE.

 Second column explains the FUTURE MARKET PRICE in cash

segment on that date.

23
BHEL FUTURE PRICE OF 1ST APR 2019 TO 30TH APR 2019

Date FUTURE

1-Apr-19 182.1

6-Apr-19 184.2

7-Apr-19 181.75

8-Apr-19 177.75

9-Apr-19 177.85

10-Apr-19 182.75

17Apr-19 178

16-Apr-19 178.25

17-Apr-19 178.45

21-Apr-19 180.25

23-Apr-19 179

24-Apr-19 182.9

25-Apr-19 183.05

26-Apr-19 186.3

28-Apr-19 191.4

29-Apr-19 189

30-Apr-19 192.17

24
 GRAPH SHOWS MOVEMENT OF FUTURE PRICES

FUTURE
195

190

185
FUTURE
180

175

170
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A A A A A A A A A A A A A A A A
1- 6 - 7 - 8 - 9 - 1 0 - 1 7 - 1 6 - 17 - 21 - 23 - 24 - 2 5 - 2 6 - 28 - 2 9 - 30 -

INTERPRETATION:-

In the above analysis the future price curve shows An continuously fluctuating trend and at
the end of the month future prices closed at the price of Rs.192.17 with a Profit of Rs.10.05
(Rs.192.17-182.10).to the buyer(long)and the seller(short)will incurr a loss of Rs.10.05.

25
 FUTURE MARKET:-

SELLE
BUYER R
01/04/2017(BUYING) 182.1 182.1
30/04/2017(CLOSING PERIOD) 192.17 192.17
PROFIT 10.05 LOSS 10.05

PROFIT 10.05*1000= 10500/- LOSS 10.05*1000=10500/-

Because buyers Future Price increases so profits also increase. Seller future Price increases
so he will get loss. In case seller future price will decrease he will get profit.

The closing price of BHEL at the end of the contract period is192.17 and this is considered as
settlement price. The following table explains the DATE and MARKET PRICES.

The first column explains TRADING DATE

Second column explains the MARKET PRICE in cash segment on that date.

26
 BHEL SPOT PRICE 1ST APR 2019 TO 30TH APR2019

DATE SPOT
1-Apr-19 182.5
6-Apr-19 185.1
7-Apr-19 182.8
8-Apr-19 178.17
9-Apr-19 177.8
10-Apr-19 182.5
17Apr-19 178.75
16-Apr-19 177.9
17-Apr-19 178.25
21-Apr-19 179.6
23-Apr-19 178.35
24-Apr-19 182.3
25-Apr-19 183.35
26-Apr-19 185.85
28-Apr-19 191.35
29-Apr-19 188.7
30-Apr-19 192.55

GRAPH SHOWS MOVEMENT OF SPOT PRICES

27
 SPOT
195

190

185
SPOT
180

175

170
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A A A A A A A A A A A A A A A A
1- 6- 7 - 8 - 9 - 10 - 17 - 16 - 1 7 - 2 1 - 2 3 - 24 - 25 - 26 - 28 - 2 9 - 3 0 -

INTERPRETATION:-

In the above analysis the spot price curve shows an increasing trend and at the end of
the month Spot prices settled at the price of Rs.192.55 and buyer made a profit of Rs.10.05.

SPOT MARKET:-

28
 SELLE
BUYER R
01/04/2017(BUYING) 182.5 182.5
30/04/2017(CLOSING PERIOD) 192.55 192.55
LOSS 10.05 PROFIT 10.05

LOSS 10.5*1000= 10500/- PROFIT 10.5*1000=10500/-

The following table explains the DATE and MARKET PRICES.

1. The first column explains TRADING DATE.

2. Second column explains the FUTURE PRICE in cash segment on that date

3. Third column explains the MARKET PRICES in cash segment on that date

29
BHEL FUTURE PRICE & SPOT PRICE COMPARISION1ST APR 2019
TO 30TH APR2019

DATE FUTUR SPOT

1-Apr-19 E 182.1 182.5
6-Apr-19 184.2 185.1
7-Apr-19 181.75 182.8
8-Apr-19 177.75 178.17
9-Apr-19 177.85 177.8
10-Apr-19 182.75 182.5
17Apr-19 178 178.75
16-Apr-19 178.25 177.9
17-Apr-19 178.45 178.25
21-Apr-19 180.25 179.6
23-Apr-19 179 178.35
24-Apr-19 182.9 182.3
25-Apr-19 183.05 183.35
26-Apr-19 186.3 185.85
28-Apr-19 191.4 191.35
29-Apr-19 189 188.7
30-Apr-19 192.17 192.55

GRAPH SHOWS MOVEMENT OF FUTURE PRICE & SPOT PRICES

30
 195

190

185

180

175

170
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A A A A A A A A A A A A A A A A
1 - 6 - 7- 8- 9- 1 0 - 1 7 - 1 6 - 1 7 - 21 - 23 - 24 - 25 - 26 - 28 - 2 9 - 3 0 -

INTERPRETATION:-
The above analysis shows the price movements of futures and spot prices. The future prices
moves along with the spot prices as per the trend i.e, the opening prices of futures is Rs.182.1
and the spot price is Rs.182.5 and at the end of the month last Thursday the future price
closed or settled at the price or Rs.192.17 and the spot price settled at the price of Rs. 192.55
with a profit of Rs.10.05 and Rs.10.05 respectively on 30th APR 2019.

BHEL CALL PRICE FOR 180,185,190,195,200.

31
 PRICE PREMIUM

DATE FUTURE SPOT 180 185 190 195 200

1-Apr-19 182.1 182.5 8.1 5.75 4 2.8 1.95
6-Apr-19 184.2 185.1 8.9 6.25 4.3 3 2
7-Apr-19 181.75 182.8 7.25 5.17 3.5 2.1 1.65
8-Apr-19 177.75 178.17 5.55 3.8 2.5 1.65 1.17
9-Apr-19 177.85 177.8 5.5 3.45 2.45 1.55 1.1
10-Apr-19 182.75 182.5 7.65 5.2 3.55 2.17 1.4
17Apr-19 178 178.75 4.8 3.05 1.95 1.2 0.8
16-Apr-19 178.25 177.9 4.6 2.9 1.8 1.05 0.75
17-Apr-19 178.45 178.25 4.3 2.55 1.55 0.9 0.6
21-Apr-19 180.25 179.6 4.75 2.8 1.65 0.95 0.6
23-Apr-19 179 178.35 3.9 2.25 1.25 0.7 0.4
24-Apr-19 182.9 182.3 5.7 3.2 1.75 0.85 0.55
25-Apr-19 183.05 183.35 5.35 2.85 1.45 0.65 0.45
26-Apr-19 186.3 185.85 7.25 3.9 1.75 0.8 0.4
28-Apr-19 191.4 191.35 11.35 6.5 3.2 1.2 0.45
29-Apr-19 189 188.7 9.2 4.3 1.4 0.35 0.17
30-Apr-19 192.17 192.55 11 5.75 1.9 0.17 0.05

GRAPH SHOWS MOVEMENT AT PREMIUM OF 180,185,190,195,200.

32
 250 Strike price 180

Add:
200 Premium 8.1
BEP 188.10
150
Less Spot price 192.55 PRICE

PROFITS 4.45/- PREMIUM

100
PROFITS4.45*1000= 4450/-
50

0
TE -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19 -19
DA pr pr pr pr pr pr pr pr pr pr pr pr pr pr pr pr pr
A A A A A A A A A A A A A A A A A
1 - 6 - 7- 8 - 9 - 1 0 - 17 - 1 6 - 1 7 - 21 - 23 - 2 4 - 2 5 - 26 - 2 8 - 2 9 - 30 -

BUYERS PAY OFF:-

He bought 1(1000) lot of BHEL at the strike price of 180 with a premium of Rs: 8.1 per
share. Settlementprice is 192.55.

Because it is positive so buyer gets profit. In case decrease in market price the buyer of the
call will lose the premium only i.e. 4.45*1000= 4450/-

SELLERS PAY OFF:-

As it is out f the money for seller: hence his loss s.

33
 LOSS 4.45*1000=4450/-
Because it is negative, and the price in market continuously up so the seller will get loss.

BHEL PUT PRICE FOR 175,170,165,160,175.

PRICE PREMIUM
FUTUR
DATE E SPOT 175 170 165 160 175
1-Apr-19 182.1 182.5 3.7 2.5 1.45 0.85 0.35
6-Apr-19 184.2 185.1 3 1.9 1.1 0.85 0.35
7-Apr-19 181.75 182.8 4 2.25 0.85 0.75 0.35
8-Apr-19 177.75 178.17 5.2 3.35 2.2 1.25 0.35
9-Apr-19 177.85 177.8 5.17 3.4 1.85 1.25 0.35
10-Apr-19 182.75 182.5 3.1 1.95 1.17 0.7 0.35
17Apr-19 178 178.75 4.3 2.65 1.65 1.05 0.35
16-Apr-19 178.25 177.9 4 2.3 1.7 0.7 0.35
17-Apr-19 178.45 178.25 3.4 1.95 1.05 0.75 0.35
21-Apr-19 180.25 179.6 2.5 1.4 0.75 0.55 0.35
23-Apr-19 179 178.35 2.8 1.5 0.7 0.65 0.35
24-Apr-19 182.9 182.3 1.5 0.8 0.3 0.25 0.35
25-Apr-19 183.05 183.35 1.1 0.6 0.2 0.25 0.35
26-Apr-19 186.3 185.85 0.55 0.3 0.2 0.1 0.35
28-Apr-19 191.4 191.35 0.2 0.17 0.1 0.05 0.35
29-Apr-19 189 188.7 0.17 0.1 0.05 0.05 0.35
30-Apr-19 192.17 192.55 0.05 0.05 0.05 0.05 0.35

GRAPH SHOWS MOVEMENT AT PREMIUM OF 175,170,165,160,175.

34
 250

200

150 PRICE

100 PREMIUM

50

0
TE 9 9 9 9 9 9 9 9
DA p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
6-
A
8-
A -A -A -A -A -A -A
10 16 21 24 26 29

BUYERS PAY OFF:-

He bought 1(1000) lot of BHEL at the strike price of 175 with a premium of Rs:3.7per share.
Settlement price is 192.55

Strike price 175

LESS: Premium 3.7

BEP 171.30

Less Spot price 192.55

LOSS -21.25

LOSS 3.7*1000= 3700/-

Because it is positive so buyer gets profit. In case decrease in spot price the buyer of the put
will loss the premium only i.e. 3.7*1000= 3700/-

SELLERS PAY OFF:-

As it is in the money for seller: hence his loss is.

PROFIT:3.
7 *1000= 3700/-

35
Because it is negative, and the price in market continuously down so the seller will get loss.

The following table explains the DATE and MARKET PRICES.

 The first column explains TRADING DATE.
 Second column explains the FUTURE PRICE in cash segment on that date.
 Third column explains the MARKET PRICES in cash segment on that date.

ONGC FUTURE PRICE OF 1ST APR 2019 TO 30TH APR 2019

DATE FUTURE
1-Apr-19 309.95
6-Apr-19 318
7-Apr-19 311.05
8-Apr-19 308.5
9-Apr-19 314.9
10-Apr-19 313.55
17Apr-19 303.85
16-Apr-19 303.2
17-Apr-19 306.95
21-Apr-19 308.95
23-Apr-19 319.8
24-Apr-19 332.05
25-Apr-19 328.8
26-Apr-19 334.7
28-Apr-19 328.55
29-Apr-19 326.85
30-Apr-19 326.35

GRAPH SHOWS MOVEMENT ONGC FUTURE PRICE

36
 FUTURE
340

330

320

310
FUTURE
300

290

280
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A A A A A A A A A A A A A A A A
1- 6 - 7 - 8 - 9 - 1 0 - 1 7 - 1 6 - 17 - 21 - 23 - 24 - 2 5 - 2 6 - 28 - 2 9 - 30 -

INTERPRETATION:-

In the above analysis the future price curve shows an continuous fluctuations and at
the end of the month future prices is closed at the price of Rs.326.35 with a profit of
Rs.16.4(309.95-326.35).
FUTURE MARKET:-

BUYER SELLER
01/04/2017(BUYING) 309.95 309.95
30/04/2017(CLOSING PERIOD) 326.35 326.35
PROFIT 16.4 LOSS 16.4

PROFIT 16.4*1000= 16400/- LOSS 16.4*1000=16400/-

37
Because Buyers Future Price increase so profit also increase. Seller future Price also increase
so he will get loss. Incase seller future will decrease he will get profits.

The closing price of ONGC at the end of the contract period is 326.35 and this is considered
as settlement price.

The following table explains the DATE and MARKET PRICES.

The first column explains TRADING DATE

Second column explains the MARKET PRICE in cash segment on that date.ONGC SPOT
PRICE FROM 1ST APR 2019TO 30TH APR 2019

DATE SPOT
1-Apr-19 308.85
6-Apr-19 317.2
7-Apr-19 310.55
8-Apr-19 307.65
9-Apr-19 314.3
10-Apr-19 312.85
17Apr-19 303.8
16-Apr-19 302.9
17-Apr-19 307.25
21-Apr-19 308.8
23-Apr-19 319
24-Apr-19 331.9
25-Apr-19 328.85
26-Apr-19 334.35
28-Apr-19 328.05
29-Apr-19 326.45
30-Apr-19 326.5

GRAPH SHOWS MOVEMENT ONGC SPOT PRICE

38
 SPOT
340

330

320

310
SPOT
300

290

280
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A A A A A A A A A A A A A A A A
1- 6- 7 - 8 - 9 - 10 - 17 - 16 - 1 7 - 2 1 - 2 3 - 24 - 25 - 26 - 28 - 2 9 - 3 0 -

INTERPRETATION:-

In the above analysis the spot price curve shows an increasing trend and at the end
of the month Spot prices settled at the price of Rs.326.5 with a profit of Rs.17.6 (308.9-326.5)

SPOT MARKET:-
SELLE
BUYER R
01/04/2017(BUYING) 308.9 308.9
30/04/2017(CLOSING PERIOD) 326.5 326.5
39
 profit 17.6 loss 17.6

profit 17.6*1000=17600/- loss 17.6*1000=17600/-

The following table explains the DATE and MARKET PRICES.

1. The first column explains TRADING DATE.

2. Second column explains the FUTURE PRICE in cash segment on that date.

3. Third column explains the MARKET PRICES in cash segment on that date

ONGC FUTURE& SPOT PRICE FROM1STAPR 2019 TO 30TH APR 2019

DATE FUTURE SPOT

1-Apr-19 309.95 308.85
6-Apr-19 318 317.2
7-Apr-19 311.05 310.55
8-Apr-19 308.5 307.65
9-Apr-19 314.9 314.3
10-Apr-19 313.55 312.85
17Apr-19 303.85 303.8
16-Apr-19 303.2 302.9
17-Apr-19 306.95 307.25
21-Apr-19 308.95 308.8
23-Apr-19 319.8 319
24-Apr-19 332.05 331.9
25-Apr-19 328.8 328.85
26-Apr-19 334.7 334.35
28-Apr-19 328.55 328.05

40
 29-Apr-19 326.85 326.45
30-Apr-19 326.35 326.5

GRAPH SHOWS COMPARISION BETWEEN FUTURE PRICE &

SPOT PRICE

340

330

320

310
FUTURE
300 SPOT

290

280
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9
p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A A A A A A A A A A A A A A A A
1- 6 - 7 - 8 - 9 - 1 0 - 1 7 - 1 6 - 17 - 21 - 23 - 24 - 2 5 - 2 6 - 28 - 2 9 - 30 -

INTERPRETATION:-

The above analysis shows the price movements of futures and spot prices. The future prices
moves along with the spot prices in increasing trend i.e, the opening prices of futures is
Rs.309.95 and the spot price is Rs.308.9 and at the end of the month last Thursday the future
price closed at the price or Rs. 326.35 and the market price settled at the price of Rs.326.5
with a profit of Rs.16.4 and Rs. 17.6 profit respectively on 30THAPR 2017.

ONGC CALL PRICE FOR 300,310,320,330,340.

PRICE PREMIUM
FUTUR
DATE E SPOT 300 310 320 330 340
1-Apr-19 309.95 308.85 14.8 9.4 5.4 3 1.65

41
6-Apr-19 318 317.2 20.17 12.9 7.85 4.3 2.35
7-Apr-19 311.05 310.55 14.55 8.45 5.17 2.65 1.4
8-Apr-19 308.5 307.65 12.5 7.55 4 2 1.1
9-Apr-19 314.9 314.3 17.65 11.05 6.25 3.35 1.65
10-Apr-19 313.55 312.85 17.9 10.17 5.55 2.85 1.35
17Apr-19 303.85 303.8 10.45 5.75 3 1.55 0.8
16-Apr-19 303.2 302.9 9.45 5.05 2.55 1.17 0.75
17-Apr-19 306.95 307.25 10.9 5.8 2.85 1.35 0.7
21-Apr-19 308.95 308.8 11.8 6.17 3 1.2 0.6
23-Apr-19 319.8 319 20.05 12.95 6.8 3.3 1.45
24-Apr-19 332.05 331.9 32.2 22.5 14.45 7.85 3.7
25-Apr-19 328.8 328.85 30.1 21.95 12.55 5.85 2.25
26-Apr-19 334.7 334.35 34.05 24.75 17.55 8.05 3.17
28-Apr-19 328.55 328.05 28.4 22 9.4 3.17 0.9
29-Apr-19 326.85 326.45 22.5 13.2 7.2 1.7 0.17
30-Apr-19 326.35 326.5 22.5 17 5.9 0.17 0.05

GRAPH SHOWS MOVEMENT AT PREMIUM 300,310,320,330,340.

42
 400
350
300
250 PRICE
200
150 PREMIUM

100
50
0
TE 9 9 9 9 9 9 9 9
DA p r-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1 pr-1
A A -A -A -A -A -A -A
6- 8- 10 16 21 24 26 29

BUYERS PAY OFF:-

He bought 1(1000) lot of ONGC at the strike price of 300 with a premium of Rs:14.80 per
share. Settlement price is Rs. 326.50

Strike price 300

Add: Premium 14.80
BEP 314.80
Less Spot price 326.50
profit 11.70

Profit 11.70*1000= 11700/-

Because it is positive so buyer gets profit. In case decrease in market price the buyer of the
call will get the premium only i.e.. 11.70*1000= 11700/-

SELLERS PAY OFF:-

As it is out OF the money for seller: hence his loss

43
 is.
loss 11.70*1000=11700/-

Because it is negative, and the price in market continuously down so the seller will get loss.

ONGC PUT PRICE FOR 320,310,300,290,280.

PRICE PREMIUM

DATE FUTURE SPOT 320 310 300 290 280

1-Apr-19 309.95 308.85 17.5 9.05 5.05 2.6 1.2

6-Apr-19 318 317.2 9.8 5.45 2.65 1.55 0.65
7-Apr-19 311.05 310.55 13.55 7.85 3.65 1.85 0.85
8-Apr-19 308.5 307.65 17.65 9 4.8 2.25 1.05
9-Apr-19 314.9 314.3 11.7 6.4 3.2 1.4 0.65
10-Apr-19 313.55 312.85 11.85 6.6 3.25 1.55 0.7
17Apr-19 303.85 303.8 19.3 11.7 6.4 3.1 1.4
16-Apr-19 303.2 302.9 19.6 10.75 6.25 3 1.25
17-Apr-19 306.95 307.25 17.35 8.6 3.95 1.65 0.8
21-Apr-19 308.95 308.8 13.45 7.25 3.05 1.25 0.7
23-Apr-19 319.8 319 6.95 3.1 1.17 0.5 0.35
24-Apr-19 332.05 331.9 2.7 1.05 0.5 0.35 0.2
25-Apr-19 328.8 328.85 3.17 1.2 0.5 0.3 0.2
26-Apr-19 334.7 334.35 1.2 0.35 0.1 0.17 0.05

44
 28-Apr-19 328.55 328.05 1.25 0.2 0.17 0.17 0.05
29-Apr-19 326.85 326.45 0.6 0.1 0.05 0.05 0.05
30-Apr-19 326.35 326.5 0.17 0.05 0.05 0.05 0.05

GRAPH SHOWS MOVEMENT OF PUT PRICE AT PREMIUM OF

320,310,300,290,280.

400
350
300
250
PRICE
200
PREMIUM
150
100
50
0
TE -19 -19 -19 -19 -19 -19 -19 -19
DA pr r r r r r r r
-A -Ap -Ap -Ap -Ap -Ap -Ap -Ap
6 8 10 1 6 2 1 2 4 26 29

BUYERS PAY OFF:-

He bought 1(1000) lot of ONGC at the strike price of 320 with a premium of Rs: 17.50 per
share. Settlement price is Rs. 326.5

Strike price 320

Add: Premium 17.50
BEP 304.50

45
 Less Spot price 326.5

LOSS 22
LOSS17.50*1000=17500/-

Because it is positive so buyer gets profit. In case decrease in market price the buyer of the
call will get the premium only i.e. 17.50*1000= 17500/-

SELLERS PAY OFF:-

As it is out of the money for seller: hence his loss is.

PROFIT
17.50*1000=175
00/-

Because it is negative, and the price in market continuously down so the seller will get los

CHAPTER-5

FINDINGS, SUGGESTIONS, LIMITATIONS

&
46
 CONCLUSIONS

FINDINGS

1. the long run price of BHEL, ONGC is moving in conjunction with the market price
2. If the buying price of the long run may be a smaller amount than the settlement
price, than the customer of a future gets profit.
3. If the selling price of the long run may be a smaller amount than the settlement
price, than the seller incur losses.
4. As above BHEL,ONGC given losses ,given profits
5. Cost of carry model and rate of interest parity model are useful tools to hunt out out
standard future price and also useful for comparing standard with actual future price.
And it’s also a very help full in Arbitraging.
6. New concept of Exchange traded currency future trading is regulated by higher
authority and regulatory.

7. the whole function of Exchange traded currency future is regulated by SEBI/RBI,

which they established rules and regulation so there's very safe trading is emerged and

47
counter party risk is minimized in currency Future trading. And also time reduced in
Clearing and Settlement process up to T+1 day’s basis.
8. Larger exporter and importer has continued to deal within the OTC counter even
exchange traded currency future is out there in markets because,
9. there is a limit of USD 100 million on open interest applicable to trading member
who are banks. and thus the USD 25 million limit for other trading members so larger
exporter and importer might still deal within the OTC market where there is no limit
on hedges.
10. In India RBI and SEBI has restricted other currency derivatives except Currency
future, at now if an individual wants to use other instrument of currency derivatives
during this case he possesses to use OTC.
.

SUGGESTIONS

1. The derivative market is newly started in India and it isn't known by every investor,
so SEBI possesses to require steps to form awareness among the investors about the
derivative segment.
2. so on extend the derivatives market in India, SEBI should revise variety of their
regulations like contract size, participation of FII within the derivatives market.
3. Contract size should be minimized because small investors cannot afford this much
of giant premiums.
4. SEBI possesses to require further steps within the danger management mechanism.
5. SEBI possesses to require measures to use effectively the derivatives segment as a
tool of hedging.

48
CONCLUSION

1. In bullish market the choice option writer incurs more losses therefore the investor
is typically recommended to travel for a call option to hold, where because the put
option holder suffers during a bullish market, so he's suggested to write down down a
put option.

2. In bearish market the choice option holder will incur more losses therefore the
investor is typically recommended to travel for a call option to write, where because
the put option writer will get more losses, so he's suggested to hold a put option.

3. within the above analysis the market price of BHEL, ONGC has high volatility,
therefore the decision option writer enjoys more losses to holders.

49
BIBILOGRAPHY

BOOKS: - William.F.sharpe, Gordon j Alexander and Jeffery V Bailey: fundamental of

investments prentice hall,
2012.
2. ZVI Bodie, Alex Kane,alan J Marcus, investments,TMH
3.Donald.E Fischer,Ronald J Jordon: security analysis portfolio management,6th edition
,Pearson 
4. Charles P.Jones, investment analysis and management, 9e, Wiley, 2004.
5. Shalini Talwar, security analysis and portfolio management, engage learning, 2016.
6. Prasanna Chandra.. Investment analysis and portfolio management 4Edition, TMH, 2013.

NEWS PAPERS :-

1. Economic times

2. Times of India

50
3. Business Line

 MAGAZINES :-

1. Business Today

2. Business India

 WEBSITES :-

1. www.derivativesindia.com

2. www.nseindia.com

3. www.bseindia.com

4. www.sebi.gov.in

51