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- Thursday, November 21
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- Project
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- MBA-4SEM-08 question paper
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- Derivative Report 16 July 2014
- Derivative (finance) .pdf
- How Would You Explain to a Layman What a Derivative Instrument Is_ - Quora
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- Ch05HullOFOD9thEdition_-Edited.pptx
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PROJECT REPORT

ON

“AWARENESS, PREFERENCE AND POTENTIAL

GROWTH OF DERIVATIVE WITH SPECIAL

REFERENCE TO EQUITY ONLY.”

UNDERTAKEN AT

India Infoline Securities Pvt. Ltd., Surat.

Submitted By:

Miss Krishna Dhamecha

06MBA10

Guided By:

Mr. Govind Dhinaiya

MBA Programme

(Year 2006-08)

MANAGEMENT AND COMPUTER APPLICATION

DECLARATION

“AWARENESS, PREFERENCE AND POTENTIAL GROWTH OF

DERIVATIVE WITH SPECIAL REFERENCE TO EQUITY ONLY” is based

on original piece of work done by me for the fulfillment of degree of

Master of Business Administration and whatever information has been

taken from any sources had been duly acknowledge.

received from any respondent during survey has not been shared with

any one and is used for academic purpose only.

Place: (06MBA10)

ACKNOWLEDGEMENT

perfect and in order to gain some perfect ness in itself an individual surely

needs a helping hand. The same was with me with respect to the project

that I was undergoing during this session of 2 months. As I too was

illiterate with this research topic that I selected for my research at the

initial stages, I got acquainted with it slowly and steadily through efforts

and surely from various intelligent and helpful personalities. I would like

to extend my heartily thanks to all of them through this

acknowledgement.

head of India Infoline Pvt. Ltd., Surat, who have been source of constant

inspiration and encouragement to me who have from time to time offered

valuable suggestion and ideas.

Chopra and Mr. Dharmesh Chaudhary for giving me necessary

guidelines.

and my training coordinator Mr. Govind Dhinaiya, our Faculty for

assisting me throughout the project period, guiding me and assisting at

various stages and thus sharing his valuable knowledge with me to

enhance my knowledge and helping me in preparing a project.

I would also like to thanks all the Faculty members, who directly or

indirectly help me to successfully complete my project.

spared their valuable time and helped me in filling up the questionnaire

by providing the needed information. Lastly, I would like to thanks all of

those who have helped to furnish this project successfully.

EXECUTIVE SUMMARY

Days were gone when people only invest their money in post office

or in banks. Today people have several choices for the investment. One of

the most emerging choices is to invest in shares (equities). To get good

return on investment, people are ready to take risks. Law always says

that investors get higher return if they take high risk. For high risk there is

one avenue to invest and that is derivatives.

POTENTIAL GROWTH OF DERIVATIVE WITH SPECIAL REFERENCE TO

EQUITY ONLY”. Objectives behind this project are to know awareness level

among investors, to know their preference of investment in derivative and

to know whether potential growth of derivative is there or not.

the situation and used non-probability convenience sampling method.

Questionnaire is used for survey purpose and before going to actual

survey pilot testing was also done. Sample size is of 100 and respondent

were from India Infoline Securities Pvt. Ltd. I have used SPSS software for

analysis purpose and in that I have used T-test because data are interval

in nature.

Most of the customers are aware about derivative market. There are

certain customers who are not aware about derivative market but they

are investing only and again on the contrary investors have all knowledge

about derivative market, they are aware about derivative market but they

are not investing in derivatives. Reasons for not investing in derivative

market are high return and margin money. Investors are investing in

derivatives only due to earn high return and hedge the risk.

Index Option in proportion of 20% - 50% of their portfolio. Mostly service

men are investing in derivative market. When we talk about potential

growth, it can be known from past data only. It says that currently a

derivative is in booming stage but analysts says that it will decline in

2007-2008. We can see from graph given at last.

market as well as they are preferred to invest in derivative market also,

even currently growth of derivative market is booming but technical

analysts says that derivative market will turn in to decline stage in 2007-

2008.

users as there are many people who are aware about derivative market

but not at all investing in it so company should give more attention

towards those people. Another that is from survey we came to know that

only service people are investing in derivatives so company can focus on

students also because derivatives are risky and younger generation likes

to take risk so there is potential in students.

TABLE OF CONTENTS

1.0 INTRODUCTION

1.2 Theory Profile

1.3 Company profile

3.0 DATA ANALYSIS & INTERPRETATION

4.0 FINDINGS

5.0 RECOMMANDATIONS

BIBLIOGRAPHY

APPENDIX

SHARE BROKING SERVICE SECTOR PROFILE:

There are several national as well as local players in stock trading

services which are providing various services to their customers like

online trading, portfolio management system, stock them several national

level players.

KEY PLAYERS:

• Advani Share Brokers - Share broking and market research services

• Anand Rathi Securities - Portfolio management, corporate finance,

equity & fixed income brokerage services

• Brescon Group - Advisory and broking services

• CIL Securities - Stock broking & merchant banking services

• CRN India - Trends of stock market, trading tips, chat etc

• Churiwala Securities - Stock trading, quotes and market analysis

• DSP Merrill Lynch - Investment banking and brokerage services

• Dalmia Securities - Stock broking & depository services

• EquityTrade - Stock trading, company news & market research

• Gandhi Securities - Stock broking and investment services

• Gogia Capital Services - Stock broking and market analysis

• Hasmukh Lalbhai - Stock trading services

• Idafa Investments - Stock broking services

• India Market Access - Offers stock broking, portfolio management

and investment banking services

• Investsmart India - Personal finance advisory & online brokerage

services

• Kisan Ratilal Choksey Shares - Stock broking and e-trading services

• Kotak Securities - Brokerage services & retail distributor of financial

securities

• Manubhai Mangaldas Securities - Stock broking and market analysis

• Moneypore - Investment and broking services

• Motilal Oswal - Online trading, live BSE and NSE quotes

• Navia Markets - Stock broking, IPO and mutual funds services

• Parag Parikh - Stock broking and portfolio management

• Parsoli Corporation - Investment management & stock trading

services

• Pratibhuti Viniyog - Stock broking services

• Prudential - Investment management services

• Quantum Securities - Offers broking and portfolio management

services.

• Sivan Securities - offers services related investment banking &

stock broking with a focus on South India.

• Skindia Finance - Brokerage firm focusing on GDR arbitrage,

equities & debt

• Stock Holding Corporation of India - Custody management,

safekeeping & stock broking services

• StockMarkit.com - Stock quotes, news, market indicators etc

• Sunidhi Consultancy - Stock broking, portfolio management & equity

research

• Techno Shares - Stock broking and portfolio management

• Valia Consultancy - Stock investment and trading consultancy

INTRODUCTION OF TOPIC

History of derivative:

to protect themselves against fluctuations in the price of their crop. From

the time it was sown to the time it was ready for harvest, farmers would

face price uncertainty. Through the use of simple derivative products, it

was possible for the farmer to partially or fully transfer price risks by

locking-in asset prices. These were simple contracts developed to meet

the needs of farmers and were basically a means of reducing risk.

A farmer who sowed his crop in June faced uncertainty over the

price he would receive for his harvest in September. In years of scarcity,

he would probably obtain attractive prices. However, during times of

oversupply, he would have to dispose off his harvest at a very low price.

Clearly this meant that the farmer and his family were exposed to a high

risk of price uncertainty.

grains too would face a price risk - that of having to pay exorbitant prices

during dearth, although favorable prices could be obtained during periods

of oversupply. Under such circumstances, it clearly made sense for the

farmer and the merchant to come together and enter into a contract

whereby the price of the grain to be delivered in September could be

decided earlier. What they would then negotiate happened to be a

futures-type contract, which would enable both parties to eliminate the

price risk.

bring farmers and merchants together. A group of traders got together

and created the `to-arrive' contract that permitted farmers to lock in to

price upfront and deliver the grain later. These to-arrive contracts proved

useful as a device for hedging and speculation on price changes. These

were eventually standardized, and in 1925 the first futures clearing house

came into existence.

as corn, pepper, cotton, wheat, silver, etc. Besides commodities,

derivatives contracts also exist on a lot of financial underlying like stocks,

interest rate, exchange rate, etc.

WHAT IS DERIVATIVE?

one or more underlying variables or assets in a contractual manner. The

underlying asset can be equity, forex, commodity or any other asset. In

our earlier discussion, we saw that wheat farmers may wish to sell their

harvest at a future date to eliminate the risk of a change in prices by that

date. Such a transaction is an example of a derivative. The price of this

derivative is driven by the spot price of wheat, which is the underlying in

this case.

forward/ futures contracts in commodities all over India. As per this the

Forward Markets Commission (FMC) continues to have jurisdiction over

commodity forward/ futures contracts. However when derivatives trading

in securities were introduced in 2001, the term ‘security’ in the Securities

Contracts (Regulation) Act, 1956 (SCRA), was amended to include

derivative contracts in securities. Consequently, regulation of derivatives

came under the purview of Securities Exchange Board of India (SEBI). We

thus have separate regulatory authorities for securities and commodity

derivative markets.

Derivatives are securities under the SCRA and hence the regulatory

framework under the SCRA governs the trading of derivatives. The

Securities Contracts (Regulation) Act, 1956 (SC(R) A) defines ‘derivative’

to include –

secured or unsecured, risk instrument or contract for differences or any

other form of security.

prices, of underlying securities.

underlying asset. The underlying assets can be stock, bonds, currency,

commodities, metals even intangible, and pseudo assets like stock

indices.

floor, collars etc. The most popular derivative instruments are futures and

options.

There are newer derivatives that are becoming popular like weather

derivatives and natural calamity derivatives. These are used as a hedge

against any untoward harpings because of natural causes.

What the phrase means is that the derivative on its own doesn’t

have any value. It is considered important because of importance of

underlying. When we say an Infosys future or Infosys option, these carry a

value only because of the value of Infosys.

financial assets. These assets can be stock, bonds, currency etc. The

derivatives can be forward rate agreements, futures, options, swaps etc.

As stated earlier, the most traded instruments are futures and options.

you will the stock price of reliance is expected to go up to Rs. 400 in 1

month, one can buy 1-month future of reliance at Rs. 350 and make

profit.

Hedgers: People who buy or sell to minimize their losses. For

example, an importer has to pay US $ to buy goods and rupee is expected

to fall by Rs. 50/$ from Rs. 48/$, then the importer can minimize his

losses by buying a currency future at Rs. 49/$.

differential in different market. For example futures price is simply the

current price plus interest cost. If there is any change in interest, it

presents an arbitrage opportunity.

and derivatives are a very good option for him.

market participants about the future and lead the prices of

underlying to the perceived future level. The prices of derivatives

converge with the prices of the underlying at the expiration of the

derivative contract. Thus derivatives help in discovery of future as

well as current prices.

The derivatives market helps to transfer risks from those who have

them but may not like them to those who have an appetite for them.

cash markets. With the introduction of derivatives, the underlying

market witnesses higher trading volumes because of participation by

more players who would not otherwise participate for lack of an

arrangement to transfer risk.

Speculative traders shift to a more controlled environment of the

derivatives market. In the absence of an organized derivatives

market, speculators trade in the underlying cash markets. Margining,

monitoring and surveillance of the activities of various participants

become extremely difficult in these kinds of mixed markets.

that it acts as a catalyst for new entrepreneurial activity. Derivatives

have a history of attracting many bright, creative, well-educated

people with an entrepreneurial attitude. They often energize others

to create new businesses, new products and new employment

opportunities, the benefit of which are immense.

long run. The transfer of risk enables market participants to expand

their volume of activity.

markets. But there have been derivatives in commodities market also.

There is a cotton and oilseed future in Mumbai, Soya future in Bhopal,

pepper futures in Cochin, coffee futures in Bangalore etc. But the players

in this market are restricted to farmers and industries, which need these

as an input to protect themselves from the vagaries of agriculture sector.

Globally too, the first derivatives started with the commodities, way

back in 1984. Financial derivatives are relatively late development,

coming into existence only in the 1970’s. The first exchange where

derivatives were traded is the Chicago Board of Trade (CBOT).

derivatives in June 2000. The first derivatives were Index Future. The

index used was Nifty. Option trading was started in June 2001, for index

as well as stock. In November 2001, futures on stock were allowed.

Currently, there are 30 stocks on which derivative trading are allowed.

The trading is done on the exchange in the F&O (Future & Option)

segment. Index F&O is also traded in the market. The indices traded are

the Nifty and the Sensex.

Forward Contracts

specified date for a specified price. One of the parties to the contract

assumes a long position and agrees to buy the underlying asset on a

certain specified future date for a certain specified price. The other party

assumes a short position and agrees to sell the asset on the same date

for the same price. Other contract details like delivery date, the parties to

the contract negotiate price and quantity bilaterally. The forward

contracts are normally traded outside the exchanges.

They are bilateral contracts and hence exposed to counter party risk.

Each contract is custom designed, and hence is unique in terms of

contract size, expiration date and the asset type and quality.

The contract price is generally not available in public domain.

On the expiration date, the contract has to be settled by delivery of

the asset.

If the party wishes to reverse the contract, it has to compulsorily go

to the same counter-party, which often results in high prices being

charged.

standardized, as in the case of foreign exchange, thereby reducing

transaction costs and increasing transactions volume. This process of

standardization reaches its limit in the organized futures market.

Lack of centralization of trading

Iliquidity

Counterpart risk

Futures Contracts

forward markets. A futures contract is an agreement between two parties

to buy or sell an asset at a certain time in the future at a certain price. But

unlike forward contracts, the futures contracts are standardized and

exchange traded. To facilitate liquidity in the futures contracts, the

exchange specifies certain standard features of the contract. It is a

standardized contract with standard underlying instrument, a standard

quantity and quality of the underlying instrument that can be delivered,

(or which can be used for reference purposes in settlement) and a

standard timing of such settlement. A futures contract may be offset prior

to maturity by entering into an equal and opposite transaction. More than

99% of futures transactions are offset this way.

Quality of the underlying

Quantity of the underlying

The date and the month of delivery

The units of price quotation and minimum price change

Location of settlement

confusion is primarily because both serve essentially the same economic

functions of allocating risk in the presence of future price uncertainty.

However futures are a significant improvement over the forward contracts

as they eliminate counter party risk and offer more liquidity

Futures Forwards

Trade on an organized OTC in nature

exchange

Standardized contract terms Customized contract terms

More liquid Less liquid

Requires margin payments No margin payment

Follows daily settlement Settlement happens at end of

period.

What are index futures?

advance of harvest to lock in a good price or to raise funds a few months

before the crop was ready for market. The index futures we trade are

traded on the same exchanges where agricultural commodity futures are

still traded. The Chicago Mercantile exchange defines index futures as

"legally binding agreements to buy or sell the cash value of the

underlying Index at a specific future date." That's a big help, right? Let me

see if I can do any better with some bulleted facts which should answer

most questions:

with a value based on whatever stock index they represent. Today

there is no paper contract, just a book keeping entry, but the term

contract is still used.

• The cash value of an index futures contract is based on the

underlying stock index multiplied by a fixed number plus a

premium, which represents the income that the same money would

have earned if invested elsewhere.

• The value of the index futures contract fluctuates continuously

throughout the day as the underlying stock index changes. The

values of the stock indexes are recalculated every second.

• Index futures are traded on an exchange. Today this often means

an electronic exchange with no actual trading floor.

• The steps in a futures index transaction normally include

transmitting an order to a broker, from the broker to the exchange,

matching each buy order with a sell order, transmitting confirmation

of trade time and price back from the exchange to the broker and

from the broker to the trader.

• Index futures orders can be placed by phone or fax, but most orders

today are placed from a PC connected to the Internet.

• A transaction in the more heavily traded index futures on an

electronic exchange typically takes 2-10 seconds, including all the

steps from origination to confirmation.

• Unlike commodity futures, there is no physical product, so never a

phone call like, "Where do you want this 5,000 bushels of beans?"

The only thing that changes hands are bookkeeping entries on an

account statement.

• Index futures can be bought or sold (or sold short) by anyone who

has an account with a futures broker.

• The trader doesn't know the other party involved in the transaction,

only that the transaction was completed.

settlement, even on the delivery date, is in cash. The seller simply

delivers to the buyer the cash difference between the closing level of the

underlying index and the futures price. This cash settlement feature is

adopted because it is impractical to deliver all the stocks in the index in

their correct proportions. Indeed, for some contracts, cash delivery is not

just an alternative, but a necessity; for example, when the underlying

variable is not an asset at all but just a number, such as the CPI-W

(Consumer Price Index-Wage Earners, on which a now discontinued

contract was created in 1985 by the Coffee, Sugar and Cocoa Exchange)

or the Property Claims Services National Catastrophe Index.

Second, determination of its futures price depends on an estimate

of the remaining cash dividends on the underlying index through

delivery. Estimating cash dividends is not difficult over a one-year horizon

since cash dividends for individual stocks are largely predictable from a

firm’s past behavior, and because the law of large numbers tends to

cause errors in individual predictions to wash out. Examined over shorter

intervals, for US stocks, dividend payments are remarkably lumpy. In

particular, the ex-dividend dates of stocks tend to be concentrated in the

first two weeks of the mid-month of each calendar quarter (February,

May, August, November) — a fact that is worth careful consideration for

accurate futures price evaluation.

The S&P 500 Index traded on the Chicago Board Options Exchange

(CBOE) is an important example of index options. These are similar to

S&P 500 Index futures, except that the buyer has the right, but not the

obligation, to pay for and take delivery of 100 times the cash amount of

the future level of the Index on a preset future expiration date. The

option buyer will then choose not to take delivery, and no cash flow

would occur. However, the option buyer would net a loss (and the option

seller a corresponding profit) since the buyer would not recover the initial

price he paid the seller for the option.

them more complex. For example, S&P 100 Index options listed on the

CBOE can be used to buy the underlying asset by paying the strike price

at the market closing on any business day prior to and including the

expiration date. S&P 500 Index options, which can only be exercised on

the expiration date, are termed “European” options, while S&P 100 Index

options (like options on individual common stocks), which can be

exercised on any business day through and including the expiration date,

are termed “American” options.

underlying asset. Exercise of S&P Index options (on the 100 or the 500),

however, is settled in cash because it is impractical to deliver all the

stocks in the S&P 100 or 500 Index in their exact proportions. Cash

settlement upon exercise means that the call buyer receives in dollars

100 times the difference between the closing level of the S&P 100 or 500

Index and the strike price.

COMPANY PROFILE

by continuously striving to increase the efficiency of the operations as

well as the systems and processes for use of corporate resources in such

a way so as to maximize the value to the stakeholders. The Group aims at

achieving not only the highest possible standards of legal and regulatory

compliances, but also of efficient effective management.

company, now known as India Infoline Ltd. India Infoline Ltd Launched on

11 May 1999; www.indiainfoline.com is India’s leading and most

comprehensive business and financial information website.

www.5paisa.com is subsidiary company of India Infoline Ltd. Launched for

online trading in mid-2000. The 5paisa trading interface is one of the most

advanced platforms available to retail investor in India. The site made

available quality information and analysis - earlier restricted to a few

people - to the common man absolutely free.

Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of

investment products ranging from Equities and derivatives trading,

Commodities trading, Portfolio Management Services, Mutual Funds, Life

Insurance, Fixed deposits, Government bonds and other small savings

instruments. India Infoline also owns and manages the websites,

www.indiainfoline.com and www.5paisa.com. India Infoline Ltd is a

company listed on both the leading stock exchanges in India namely the

Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE).

The India Infoline group has a significant presence across the country

owing to its 125 offices across 45 cities across India. All these offices are

networked and are connected with the corporate office in Mumbai.

one of the first corporate agents to be licensed by IRDA and have tied up

with ICICI Prudential Life Insurance Company. ICICI Prudential Life

Insurance Company Ltd. is the leading private sector insurance player and

India Infoline ltd. is their leading corporate agent.

KEY MILESTONES

Launched Internet portal www.indiainfoline.com in May 1999

Commenced distribution of personal financial products like Mutual

Funds and RBI Bonds in April 2000

Launched online trading in shares and securities branded as

www.5paisa.com in July 2000

Started life insurance agency business in December 2000 as a

Corporate Agent

Launched stock messaging service in May 2003

Acquired commodities broking license in March 2004

Launched portfolio management services in August 2004

Listed on NSE and BSE on May 17, 2005

Acquired 75% stake holding in Money tree Consultancy services in

October 2005

Acquired 100% equity of Marchmont Capital Advisors Pvt. Ltd in

December 2005

DSP Merrill Lynch Capital subscribed to convertible bonds

aggregating Rs.80 crores in December 2005. Their current stake in

India Infoline is a little over 14% as on 31st March 2007.

Bennett Coleman & Co Ltd (BCCL) invested Rs.20 crores in India

Infoline by way of preferential allotment in December 2005.

Became a depository participant of CDSL in June 2006.

Merger of India Infoline Securities Private Limited with India Infoline

Limited in January 2007.

Entered into an alliance with Bank of Baroda for Baroda for Baroda e-

trading in February 2007.

IRDA license for insurance Broking in April 2007.

VISION:

• To be the premier provider of investment advisory and financial

planning services in India.

• To be a leading investment intermediary for transactions through

both online and offline medium.

Corporate Office:

India Infoline Ltd

Building No 75, Nirlon Complex,

Off Western Express Highway,

Goregaon (East), Mumbai - 400063

Tel : +91-22-56489000

Fax : +91-22-26850451

E Mail : apply@indiainfoline.com

Website : www.indiainfoline.com

India Infoline Group – Corporate Structure

• Depository services

• Portfolio Management Services

• Mutual Funds

• RBI Bonds

• Fixed Deposits Etc.

• Corporate agents for ICICI Prudential Life Insurance

Company Ltd.

• Commodities Broking

• Margin Funding & Financing

Infoline Ltd. And it’s wholly all subsidiaries offer the entire gamut of

investment products ranging from Equities and Derivatives trading,

Commodities trading, Portfolio management services, Mutual Funds, Life

Insurance, Fixed Deposit, GOI bonds and other small savings instruments.

It also owns & manages websites, www.indiainfoline.com &

www.5paisa.com

exchanges in India Stock Exchange Mumbai (BSE) and National Stock

Exchange (NSE) Delhi.

India Infoline is forerunner in the field of equity research. India

Infoline’s research is acknowledged by none other than Forbes as “Best of

the Web” a read for investors in ASIA. India Infoline’s research is available

not just over the internet but also on Inter National wire services like

Bloomberg.

owing to its 77 offices across 36 cities across India. All these offices are

networked and connected with the corporate office in Mumbai. The group

has invested significantly in technology and research, the result of which

are there for everyone to see the 5paisa trading interface is one of the

most advanced platform available to retail investor in India.

The group has membership on BSE and NSE for equities trading and on MCX and

NCDEX for commodities trading. It has a SEBI license for Portfolio Management under

which various schemes are offered which has been consistently beating the benchmark

indices since inception.

The TT(Advance) is the amazing software, which offers you all that

you could possibly want to trade in the Indian stock markets. With the TT

(Advance), you can trade in both, the stock Exchange, Mumbai (BSE) and

the National stock Exchange (NSE) on the same screen and also in the

segment, cash as well as Derivatives. It offers real-time streaming quotes

and Intra-day charts.

You can keep a watch on as many scripts as you want to with the

Market watch feature. You have online access to your DP account, your

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tie-up with the leading Internet - enabled banks in the country. Our world

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Delivery 0.25%

F&O 0.05%

Odin Diet:

The Odin Diet terminal provides you with the facility to trade not

just in the Stock Exchange, Mumbai (BSE) and the National Stock

Exchange (NSE) and in the cash as well as the Derivatives segment but

also in the commodities segment in the Multi – Commodity Exchange

(MCX) and the National Commodity & Derivatives Exchange (NCDEX); all

on the same screen. Though it doesn’t provide charting features, it

provides a cleaner interface for faster order execution, a facer well

appreciated by the true – blue trader of today.

Strengths That Set Us Apart:

years and have assiduously built the data and skill sets necessary

for the business.

which is synonymous with high quality and credible information on

business and finance.

exclusive but collectively exhaustive.

innovate and reinvent itself.

RESEARCH METHODOLOGY

Research Problem:

with special reference to equity only. This statement focuses on the

awareness of derivatives, whether people prefer to invest in derivatives or

not and along with that it also focuses on potential growth of derivatives

in future.

Objectives:

The sole effort behind carrying out this study was to find out what is

the growth of derivatives, awareness among people, and preference of

investors who are investing in derivatives.

2. To know preference of investors for investment in derivative

market.

3. To know potential growth of derivative market.

Research Design:

As we are trying to study awareness, preference and potential growth of

derivative market, it shows how many people are aware about derivatives

and from them how many do actual investment in them and from them

we came to know the potential growth of derivatives market.

through questionnaire. With the help of this model we can come to know

actually what customers known and how they invest in derivatives.

and about which help to plan to generalize. For my study the universe is

people who came to Bank of Baroda for opening demat a/c and investors

of India Infoline. I have used non probability convenience descriptive

sampling design.

because the population surveyed is according to the convenience and

looking to the time and cost factors.

Data Analysis:

Package for Social Science). This will be used because it gives us

accurate and fast result. Also multiple features of SPSS will help in

applying various tests to reach to accurate conclusions.

Mean is used when data the types of data are interval, median is

used when data are ordinal and mode is used when data are Nominal

type.

The One-Sample T Test is used to test whether the mean of a single

variable differs from a specified constant. The average difference

between each data value and the hypothesized test value, at test that

tests that this difference is 0, and a confidence level for this test may

either 95% or 90%. One sample T-test is used when the type of data are

INTERVAL in nature.

( ) Yes ( ) no

PARTICULAR FREQUENCY PERCENTAGE

YES 75 75.00

NO 25 25.00

TOTAL 100 100.0

AWARENESS

YES

NO

Inference: From the graph it can be infer that out of 100 investors 75%

are aware about derivative and 25% are not aware about derivative.

Unmarked 96 96.0

Marked 4 4.0

Total 100 100.0

lack of knowledge

unmarked

marked

respondent denied that lack of knowledge is not a reason of non-

awareness.

Unmarked 82 82.0

Marked 18 18.0

Total 100 100.0

high risk

unmarked

marked

Inference: from the above graph it can be inferred that high risk is

one of the reason for not investing in derivative market.

Unmarked 78 78.0

Marked 22 22.0

Total 100 100.0

huge investment

unmarked

marked

Inference: From the graph it can be inferred that are also take

huge investment as their reason for non-awareness.

( ) Yes ( ) No

YES 77 77.00

NO 23 23.00

TOTAL 100 100.0

investm ent

YES

NO

Inference: from the graph it can be inferred that out of 100, 77%

are investing in derivative.

1. High risk

Agree 3 3.0

Strongly agree 20 20.0

high risk

Agree

Strongly agr ee

Inference: from the graph, you can see that 20% people are saying

that reason for non-investment in derivative is high risk.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

4.HIGH

100 1.12 2.066 .207

RISK

calculated mean and hypothesized mean (1). In other words, we

hypothesize that reason for not investing in derivative market is

high risk.

i.e. Ho : x = µ = 1

between calculated mean and hypothesized mean. In other words

we hypothesize that reason for not investing in derivative market is

not high risk.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 1

Statistical Test: one sample t-test is chosen because the

measurement of data is interval in nature.

Test Value = 1

95% Confidence

Sig. (2- Mean Interval of the

Particular t df tailed) Difference Difference

Lower Upper Lower Upper Lower Upper

4.HIGH

.581 99 .563 .120 -.29 .53

RISK

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .563 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that high risk is the reason for not

investing in derivative market.

2. Margin Money:

Neutral 5 5.0

Agree 5 5.0

Strongly agree 12 12.0

margin money

Neutral

Agree

Strongly agree

Inference: from the graph, you can see that 12% people are saying

that reason for non-investment in derivative is margin money.

T – Test

One-Sample Statistics

Std.

Std. Error

N Mean Deviation Mean

4.MARGIN

100 .88 1.707 .171

MONEY

calculated mean and hypothesized mean (1). In other words, we

hypothesize that reason for not investing in derivative market is

Margin money.

i.e. Ho : x = µ = 1

Alternative Hypothesis (H1): There is significant difference

between calculated mean and hypothesized mean. In other words

we hypothesize that reason for not investing in derivative market is

not margin money..

i.e. H1: x ≠ µ, i.e. H1: x ≠ 1

measurement of data is interval in nature.

Significance level: 0.05

Test Value = 1

95% Confidence

Sig. (2- Mean Interval of the

Particular t df tailed) Difference Difference

Lower Upper Lower Upper Lower Upper

4.MARGIN

-.703 99 .484 -.120 -.46 .22

MONEY

Inference:

value comes out as .484 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that margin money is the reason for

not investing in derivative market.

3. Tax:

Strongly

9 9.0

disagree

Disagree 3 3.0

Neutral 11 11.0

tax

Strongly disagree

Disagree

Neutral

Inference: from the graph, you can see that 11% people are saying

that they are neutral stage.

T – Test

One-Sample Statistics

Std.

Deviatio Std. Error

Particular N Mean n Mean

4.TAX 100 .48 .990 .099

One-Sample Test

calculated mean and hypothesized mean (1). In other words, we

hypothesize that reason for not investing in derivative market is tax.

i.e. Ho : x = µ = 1

between calculated mean and hypothesized mean. In other words

we hypothesize that reason for not investing in derivative market is

not margin money.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 1

Statistical Test: one sample t-test is chosen because the

measurement of data is interval in nature.

Test Value = 1

95% Confidence

Particul Sig. (2- Mean Interval of the

ar t df tailed) Difference Difference

Lower Upper Lower Upper Lower Upper

4.TAX -

99 .000 -.520 -.72 -.32

5.254

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected and alternative hypothesis is

accepted.

4. Lot Size:

ency tage

Strongly

7 7.0

disagree

Disagree 3 3.0

Neutral 5 5.0

Agree 2 2.0

Strongly

6 6.0

agree

lot size

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Inference: from the graph, you can see that most of the people are

saying that reason for non-investment in derivative is not lot size.

T – Test

One-Sample Statistics

Std. Std.

Deviatio Error

Particular N Mean n Mean

4.LOTSIZE 100 .66 1.430 .143

One-Sample Test

calculated mean and hypothesized mean (1). In other words, we

hypothesize that reason for not investing in derivative market is Lot

size.

i.e. Ho : x = µ = 1

between calculated mean and hypothesized mean. In other words

we hypothesize that reason for not investing in derivative market is

not Lot size.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 1

Statistical Test: one sample t-test is chosen because the

measurement of data is interval in nature.

Significance level: 0.05

Test Value = 1

95% Confidence

Sig. (2- Mean Interval of the

Particular t df tailed) Difference Difference

Lower Upper Lower Upper Lower Upper

4.LOTSIZE -

99 .019 -.340 -.62 -.06

2.378

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .019 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that lot size is the reason for not

investing in derivative market.

market?

1. High return

Particular Frequenc Percent

y

Some what not 2 2.0

preferred

Neutral 11 11.0

Some what preferred 23 23.0

Most preferred 64 64.0

Total 100 100.0

high return

preferred

Neutral

Some w hat

preferred

Most preferred

consider high return as their objective of investing in derivative.

Particular Value

Mean 4.49

Median 5.00

Mode 5

Inference:

Mean value is 4.49 that mean most of investors take high return as

their objective of investing in derivative.

Median is 5.00 that mean investors consider high return as their

objective of investing in derivative.

Mode is 5.00 that mean investors take high return as their

objective of investing in derivative.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

5.HIGH

100 4.49 .772 .077

RETURN

calculated mean and hypothesized mean (5). In other words, we

hypothesize that high return is one of the objective of investing in

derivatives.

i.e. Ho : x = µ = 5

between calculated mean and hypothesized mean. In other words

high return is not one of the objectives of investing in derivatives.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 5

measurement of data is interval in nature.

Test Value = 5

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular t df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

5.HIGH -

99 .000 -.510 -.66 -.36

RETURN 6.607

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected.

Frequenc Percent

Particulars y

Some what not 4 4.0

preferred

Neutral 26 26.0

Some what preferred 49 49.0

Most preferred 21 21.0

Total 100 100.0

preferred

neutral

most preferred

some w hat

preferred

Inference:

From the graph it can be inferred that they are investing in

derivative because it hedge the risk.

Particular Value

Mean 4.15

Median 4.00

Mode 4

Inference:

because it hedges the risk.

Median is 4.00 that mean investors investing in derivative because

it hedges the risk.

Mode is 4.00 that mean investors investing in derivative because

it hedges the risk.

T – Test

One-Sample Statistics

Std. Std.

Deviatio Error

Particular N Mean n Mean

5. HEDGE

100 4.15 .947 .095

RISK

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that hedge the risk is one of the objective of investing

in derivative.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words

hedge the risk is not one of the objectives of investing in derivative.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Test Value = 4

95%

Mean Confidence

Sig. (2- Differenc Interval of the

Particular T df tailed) e Difference

Lowe

r Upper Lower Upper Lower Upper

5. HEDGE

1.584 99 .116 .150 -.04 .34

RISK

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .116 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that investors investing in derivative

because it hedge the risk.

3. More reliable:

Frequency Percentage

Particular

Least Preferred 4 4.00

Some what not preferred 6 6.00

Neutral 43 43.00

Some what preferred 35 35.00

Most preferred 12 12.00

Total 100 100.0

MORE RELIABLE

Least Preferred

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

stage when we say that more reliable is one of the objective for

investing in derivative.

Measurement of Central tendency

Particular Value

Mean 3.45

Median 3.00

Mode 3

Inference:

Mean value is 3.45 that mean investors are at neutral when we say

that investing in derivative is more reliable.

Median is 3.00 that mean investors are at neutral when we say

that investing in derivative is more reliable.

Mode is 3.00 that mean investors are at neutral when we say that

investing in derivative is more reliable.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

5.MORE

100 3.45 .925 .093

RELIABLE

One-Sample Test

calculated mean and hypothesized mean (3). In other words, we

hypothesize that investors are agree that they are investing

because derivative are more reliable.

i.e. Ho : x = µ = 3

Alternative Hypothesis (H1): There is significant difference

between calculated mean and hypothesized mean. In other words,

we hypothesize that investors are not agree that they are investing

because derivative are more reliable.

measurement of data is interval in nature.

Test Value = 3

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular T df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

5.MORE

4.864 99 .000 .450 .27 .63

RELIABLE

Inference:

Here the test is performed at 95% significance level and

the t-value comes out as .000 that is less than 0.05, it means that

the null hypothesis H0 is rejected.

T – Test

One-Sample Statistics

Particular N Mean Std. Std.

Deviation Error

Mean

5.MORE

100 3.45 .925 .093

RELIABLE

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors are agree that they are investing

because derivative are more reliable.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words,

we hypothesize that investors are not agree that they are investing

because derivative are more reliable.

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular T df tailed) ce Difference

Lower Upper Lower Upper Lower Upper

5.MORE

-5.944 99 .000 -.550 -.73 -.37

RELIABLE

Inference:

Here the test is performed at 95% significance level and

the t-value comes out as .000 that is less than 0.05, it means that

the null hypothesis H0 is rejected.

4. Safe to invest:

Frequency Percentage

Particular

Least Preferred 8 8.00

Some what not preferred 27 27.00

Neutral 38 38.00

Some what preferred 15 15.00

Most preferred 12 12.00

Total 100 100.0

SAFE TO INVEST

Least Preferred

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the graph it can be inferred that investors are at neutral

stage when we say that derivative are safe to invest.

Particular Value

Mean 2.96

Median 3.00

Mode 3

Inference:

Mean value is 2.96 that mean investors are at neutral stage when

we say that derivatives are safe to invest.

Median is 3.00 that mean investors are at neutral stage when we

say that derivatives are safe to invest.

Mode is 3.00 that mean investors are at neutral stage when we say

that derivatives are safe to invest.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

5.SAFE INV. 100 2.96 1.109 .111

One-Sample Test

calculated mean and hypothesized mean (3). In other words, we

hypothesize that investors are investing because derivatives are

safe to invest.

i.e. Ho : x = µ = 3

between calculated mean and hypothesized mean. In other words

they are not believe that derivative are safe to invest.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 3

measurement of data is interval in nature.

Test Value = 3

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular t df tailed) ce Difference

Lower Upper

5.SAFE

-.361 99 .719 -.040 -.26 .18

INV.

Inference:

value comes out as .719 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that investors are at neutral stage

when we say that derivative is safe to invest.

5. More liquid:

Frequency Percentage

Particular

Least Preferred 20 20.00

Some what not preferred 12 12.00

Neutral 39 39.00

Some what preferred 12 12.00

Most preferred 17 17.00

Total 100 100.0

MORE LIQUID

Particular

Least Preferred

preferred

Neutral

M ost preferred

Inference:

From the graph it can be inferred that investors are at neutral

stage in considering ‘more liquid’ as an objective of investing in

derivatives.

Particular Value

Mean 2.94

Median 3.00

Mode 3

Inference:

Mean value is 2.94 that mean investors are at neutral stage when

we say that derivatives are more liquid.

Median is 3.00 that mean investors are at neutral stage when we

say that derivatives are more liquid.

Mode is 3.00 that mean investors are at neutral stage when we say

that derivatives are more liquid.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

5.MORE

100 2.94 1.317 .132

LIQUID

One-Sample Test

calculated mean and hypothesized mean (3). In other words, we

hypothesize that investors are investing in derivative due to its

liquidity.

i.e. Ho : x = µ = 3

Alternative Hypothesis (H1): There is significant difference

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are investing in derivative are not

liquid.

measurement of data is interval in nature.

Test Value = 3

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular t df tailed) ce Difference

Lower Upper

5.MORE

-.456 99 .650 -.060 -.32 .20

LIQUID

Inference:

value comes out as .650 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that investors are at neutral stage

when we say that derivative is more liquid.

Q – 6 give your preference of investment in derivative

instrument.

Frequency Percentage

Particular

Some what not preferred 3 3.00

Neutral 14 14.00

Some what preferred 21 21.00

Most preferred 62 62.00

Total 100 100.0

INDEX FUTURE

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the graph it can be inferred that most of the investors

are prefer to invest in Index future.

Particular Value

Mean 4.42

Median 5.00

Mode 5

Inference:

Mean value is 4.42 that mean investors are most preferred to

invest in Index future.

Median is 5.00 that mean investors are most preferred to invest in

Index future.

Mode is 5.00 that mean investors are most preferred to invest in

Index future.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

6.INDEX

100 4.42 .843 .084

FUTURE

One-Sample Test

calculated mean and hypothesized mean (5). In other words, we

hypothesize that investors prefer to invest in Index future.

i.e. Ho : x = µ = 5

between calculated mean and hypothesized mean. In other words,

investors will not prefer to invest in Index future.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 5

Statistical Test: one sample t-test is chosen because the

measurement of data is interval in nature.

Test Value = 5

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular T df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

6.INDEX -

99 .000 -.580 -.75 -.41

FUTURE 6.880

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

6.INDEX

100 4.42 .843 .084

FUTURE

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors prefer to invest in Index future.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words,

investors will not prefer to invest in Index future.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular T df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

6.INDEX

4.982 99 .000 .420 .25 .59

FUTURE

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

1. Stock future:

Frequency Percentage

Particular

Least Preferred 5 5.00

Some what not preferred 13 13.00

Neutral 25 39.00

Some what preferred 43 43.00

Most preferred 14 14.00

Total 100 100.0

STOCK FUTURE

Least Preferred

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the above graph it can be inferred that Stock future is

some what preferred by the investors.

Particular Value

Mean 3.48

Median 4.00

Mode 4

Inference:

invest in stock future.

Median is 4.00 that mean investors are somewhat preferred to

invest in stock future.

Mode is 4.00 that mean investors are somewhat preferred to

invest in stock future.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

6.STOCK

100 3.48 1.049 .105

FUTURE

One-Sample Test

Null Hypothesis (HO): There is no significant difference between

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors prefer to invest in stock future.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words,

investors will not prefer to invest in stock future.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular t df tailed) ce Difference

Lower Upper

6.STOCK -

99 .000 -.520 -.73 -.31

FUTURE 4.957

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

6.STOCK

100 3.48 1.049 .105

FUTURE

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors prefer to invest in stock future.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words,

investors will not prefer to invest in stock future.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Test Value = 4

Sig. Mean 95% Confidence

Particul (2- Differen Interval of the

ar T df tailed) ce Difference

Lower Upper Lower Upper Lower Upper

6.STOCK

-4.957 99 .000 -.520 -.73 -.31

FUTURE

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

2. Index option:

Frequency Percentage

Particular

Least Preferred 1 1.00

Some what not preferred 3 1.00

Neutral 22 22.00

Some what preferred 48 48.00

Most preferred 26 26.00

Total 100 100.0

INDEX OPTION

Least Preferred

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the above graph it can be inferred that most of the

investors some what preferred to invest in Index option.

Particular Value

Mean 4.17

Median 4.00

Inference:

invest in stock future.

Median is 4.00 that mean investors are somewhat preferred to

invest in stock future.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

6.INDEX 100 4.17 .943 .094

OPTION

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors are somewhat preferred to invest in

Index option.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not somewhat preferred to invest

in Index option.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular T df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

6.INDEX

1.802 99 .075 .170 -.02 .36

OPTION

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .075 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that investors are some what

preferred to invest in Index option.

3. Stock option:

Frequency Percentage

Particular

Least Preferred 7 7.00

Some what not preferred 15 15.00

Neutral 25 25.00

Some what preferred 28 28.00

Most preferred 25 25.00

Total 100 100.0

STOCK OPTION

Least Preferred

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the graph it can be inferred that investors are somewhat

preferred to invest in stock option.

Particular Value

Mean 3.49

Median 4.00

Mode 4

Inference:

Mean value is 3.49 that mean investors are somewhat preferred to

invest in stock option.

Median is 4.00 that mean investors are somewhat preferred to

invest in stock option.

Mode is 4.00 that mean investors are somewhat preferred to

invest in stock option.

T – Test

One-Sample Statistics

Error

Deviation Mean

6.STOCK

100 3.49 1.219 .122

OPTION

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize those investors prefer to invest in Stock option.

I.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not prefer to invest in Stock

option.

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Sig. (2- Differen Interval of the

Particular T df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

6.STOCK -

99 .000 -.510 -.75 -.27

OPTION 4.185

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

6.STOCK

100 3.49 1.219 .122

OPTION

One-Sample Test

calculated mean and hypothesized mean (3). In other words, we

hypothesize that investors prefer to invest in Stock option.

I.e. Ho : x = µ = 3

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not prefer to invest in Stock

option.

Statistical Test: one sample t-test is chosen because the

measurement of data is interval in nature.

Test Value = 3

Mean 95% Confidence

Sig. (2- Differ Interval of the

Particular T df tailed) ence Difference

Uppe

Lower Upper Lower r Lower Upper

6.STOCK

4.021 99 .000 .490 .25 .73

OPTION

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

derivative market.

1. Short term:

Particular Frequenc Percentage

y

Least preferred 6 6.0

Some what not 5 5.0

preferred

Neutral 18 18.0

Some what preferred 12 12.0

Most preferred 59 59.0

Total 100 100.0

short term

Least preferred

preferred

Neutral

Most preferred

Inference:

From the graph it can be inferred that people prefer to invest

for short period of time.

Particular Value

Mean 4.13

Median 5.00

Mode 5

Inference:

invest for short time.

Median is 5.00 that mean investors are most preferred to invest

for short time.

Mode is 5.00 that mean investors are most preferred to invest for

short time.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

7.SHORT

100 4.13 1.228 .123

TERM

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors are somewhat preferred to invest for

short time.

I.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not somewhat preferred to invest

for short time.

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Sig. (2- Differe Interval of the

Particular T df tailed) nce Difference

Lowe

r Upper Lower Upper Lower Upper

7.SHORT

1.059 99 .292 .130 -.11 .37

TERM

Inference:

value comes out as .292 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that investors are somewhat

preferred to invest for short time.

2. Medium term:

Frequency Percentage

Particular

Least Preferred 7 7.00

Some what not preferred 3 3.00

Neutral 49 49.00

Some what preferred 38 38.00

Most preferred 3 3.00

Total 100 100.0

MEDIUM TERM

Least Preferred

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the above graph it can be inferred that most of the investors

are neutral stage to invest for short time.

Particular Value

Mean 3.27

Median 3.00

Mode 3

Inference:

invest for medium term.

Median is 3.00 that mean investors are at neutral stage to invest

for medium term.

Mode is 3.00 that mean investors are at neutral stage to invest for

medium term.

T – Test

One-Sample Statistics

Std. Std.

Deviatio Error

Particular N Mean n Mean

7.MEDIUM

100 3.27 .863 .086

TERM

One-Sample Test

calculated mean and hypothesized mean (3). In other words, we

hypothesize that investors are at neutral stage to invest for medium

term.

I.e. Ho : x = µ = 3

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not at neutral stage to invest for

medium term.

measurement of data is interval in nature.

Test Value = 3

Mean 95% Confidence

Sig. (2- Differ Interval of the

Particular T df tailed) ence Difference

Lowe Uppe

r Upper Lower r Lower Upper

7.MEDIUM

3.129 99 .002 .270 .10 .44

TERM

Inference:

p-value comes out as .002 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean. It

means that investors are not at neutral stage to invest for medium

term.

3. Long Term:

least preferred 11 11.0

some what not preferred 4 4.0

Neutral 29 29.0

some what preferred 23 23.0

most preferred 33 33.0

Total 100 100.0

long term

least preferred

preferred

neutral

some w hat

preferred

most preferred

Inference:

From the graph it can be inferred that investors prefer to

invest for long period of time.

Particular Value

Mean 3.63

Median 4.00

Inference:

invest for long term.

Median is 4.00 that mean investors are at some what not prefer

stage to invest for medium term.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

7.LONG 100 3.63 1.284 .128

TERM

One-Sample Test

calculated mean and hypothesized mean (3). In other words, we

hypothesize that investors are at neutral stage to invest for long

term.

I.e. Ho : x = µ = 3

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not at neutral stage to invest for

long term.

measurement of data is interval in nature.

Test Value = 3

Mean 95% Confidence

Partic Sig. (2- Differen Interval of the

ular t df tailed) ce Difference

Lower Upper Lower Upper Lower Upper

7.LON 4.905 99 .000 .630 .38 .88

G

TERM

Inference:

p-value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean. It

means that investors are not at neutral stage to invest for long

term.

T – Test

One-Sample Statistics

Std.

Std. Error

Particular N Mean Deviation Mean

7.LONG

100 3.63 1.284 .128

TERM

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors are at neutral stage to invest for long

term.

I.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words

we hypothesize that investors are not at neutral stage to invest for

long term.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Test Value = 4

Mean 95% Confidence

Particul Sig. (2- Differen Interval of the

ar t df tailed) ce Difference

Lowe

r Upper Lower Upper Lower Upper

7.LONG -

99 .005 -.370 -.62 -.12

TERM 2.881

Inference:

value comes out as .005 which is equal to 0.05, it means that the

null hypothesis H0 is accepted and it can be said that there is no

significant difference between calculated mean and hypothesized

mean. It means that investors are somewhat preferred to invest for

long time.

invested in derivative?

y

less than 37 37.0

20%

20% to50% 55 55.0

50% to 70% 8 8.0

Total 100 100.0

20% to50%

50% to 70%

Inference:

From the graph it can be infer that investors invest 20% to

50% of their portfolio in derivative.

y

0 to 1 yr 28 28.0

1 to 2 yr 42 42.0

2 to 3 yr 29 29.0

3 to 4 yr 1 1.0

Total 100 100.0

engage duration

0 to 1 yr

1 to 2 yr

2 to 3 yr

3 to 4 yr

Inference:

From the graph it can be infer that most of the people are

engaged in derivative trading from 1 to 2 years.

y

Yes 85 85.0

No 15 15.0

Total 100 100.0

invest in future

Yes

No

Inference:

From the graph it can be inferred that most of the respondent

like to invest in future.

market.

( ) Strongly disagree ( ) Disagree

( ) Neutral ( ) Agree

( ) Strongly agree

Neutral 3 3.0

Agree 31 31.0

Strongly

66 66.0

agree

Total 100 100.0

recommendation

Neutral

Agree

Strongly agree

Inference:

From the graph it can be inferred that most of the respondent

likes to invest in future as they are strongly agree with the

statement.

Particular Value

Mean 4.57

Median 5.00

Mode 5

Inference:

Mean value is 4.57 that mean investors are agreeing that they

recommend others to invest in derivatives.

Median is 5.00 that mean investors are strongly agreed that they

recommend others to invest in derivatives.

Mode is 5.00 that mean investors are strongly agreed that they

recommend others to invest in derivatives.

T – Test

One-Sample Statistics

Std.

Deviatio Std. Error

Particular N Mean n Mean

11.

RECOMMAN 100 4.57 .820 .082

DATION

One-Sample Test

calculated mean and hypothesized mean (4). In other words, we

hypothesize that investors recommend others to invest in

derivative.

i.e. Ho : x = µ = 4

between calculated mean and hypothesized mean. In other words,

investors will not recommend others to invest in derivative.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 4

measurement of data is interval in nature.

Significance level: 0.05

Test Value = 4

95% Confidence

Sig. (2- Mean Interval of the

Particular T df tailed) Difference Difference

Lower Upper Lower Upper Lower Upper

11.

RECOMMA 6.954 99 .000 .570 .41 .73

NDATION

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

T – Test

One-Sample Statistics

Std.

Deviatio Std. Error

Particular N Mean n Mean

11.

RECOMMAN 100 4.57 .820 .082

DATION

One-Sample Test

calculated mean and hypothesized mean (5). In other words, we

hypothesize that investors recommend others to invest in

derivative.

i.e. Ho : x = µ = 5

between calculated mean and hypothesized mean. In other words,

investors will not recommend others to invest in derivative.

i.e. H1: x ≠ µ, i.e. H1: x ≠ 5

measurement of data is interval in nature.

Test Value = 5

Sig.

(2- Mean 95% Confidence

tailed Differenc Interval of the

Particular T df ) e Difference

Lower Upper Lower Upper Lower Upper

11.

RECOMMA -5.246 99 .000 -.430 -.59 -.27

NDATION

Inference:

value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

Demographic profile

1. Age group:

y

up to 20 8 8.0

yrs

21 to 30 75 75.0

yrs

31 to 40 14 14.0

yrs

41 to 50 3 3.0

yrs

Total 100 100.0

age

up to 20 yrs

21 to 30 yrs

31 to 40 yrs

41 to 50 yrs

Inference:

From the graph it can be inferred that most of the investors

are ranging from 21 to 30 years.

2. Occupation:

Percen

Particular Frequenc t

Student 8 8.0

Business 25 25.0

Profession 29 29.0

Service 36 36.0

house 2 2.0

wife

Total 100 100.0

occupation

Student

Business

Profession

Service

house w ife

Inference:

From the graph it can be inferred that most of the respondent

are of service category.

3. Income group

Frequenc Percen

Particular y t

Up to 1,00,000 24 24.0

1,00,001 to 64 64.0

1,50,000

1,50,001 to 10 10.0

2,00,000

2,00,001 and more 2 2.0

Total 100 100.0

income group

Up to 1,00,000

1,00,001to 1,50,000

1,50,001to 2,00,000

2,00,001and more

Inference:

From the graph it can be inferred that most of the respondent

having income group ranging from Rs.1, 00,000 to Rs. 1,50,000.

POTENTIAL GROWTH:

Stock Future

4500000

4000000

3500000

turnover (Rs.Cr)

3000000

2500000

2000000

1500000

1000000

500000

0

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

year

Stock Options

250000

200000

turnover Rs.cr)

150000

100000

50000

0

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

year

Index Futures

3000000

2500000

2000000

turnover(Rs. cr)

1500000

1000000

500000

0

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

year

Index Options

900000

800000

700000

600000

turnover(Rs. cr)

500000

400000

300000

200000

100000

0

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

year

INFERENCE:

In all above four graphs, turnover up to 2006-07 is actual and

after that data are estimated. From the graph it can be said that

currently derivative market is booming but in next year there will be

decline stage as shown in graph with orange line. This data is taken

from www.nseindia.com

FINDINGS:

Most of respondents are aware about derivative market.

25%of the respondents are not aware about derivative market.

There are certain people who are not aware about derivative term but

they are investing in derivative market.

And in other case there are people who are aware about derivative

market but don’t want to invest.

HIGH RETURN AND MARGIN MONEY is two reasons for not investing in

derivative market.

Objectives of investment in derivative market are to earn High Return and

Hedge the Risk.

Investors preferred to invest in Index future and Index Option. .

Investors invest 20% - 50% of their portfolio in derivative market.

Awareness among respondents doing SERVICE is more.

10. Derivative market is in booming stage in 2006-2007 but as

analysts says that market decline in 2007-2008.

RECOMMENDATION:

aware about this but not investing.

3. Company should have to focus on those people who currently

know everything about derivative but not investing single rupee.

3. From the survey we come to know that only service people are

investing in derivatives so company can focus on students also

because derivatives are risk and the younger generation likes to take

risk.

BIBLIOGRAPHY

www.nseindia.com

www.888options.com (PDF file named as understanding Index

option)

www.indiainfoline.com

REFERENCE BOOK:

8TH editions, Tata McGraw-Hill Publishing Company Limited, New Delhi.

Pvt. Ltd., New Delhi.

Services (P.) Ltd., New Delhi.

Hill Publishing Company Limited, New Delhi.

Exchange of India Limited, Mumbai.

APPENDIX:

QUESTIONNAIRE:

( ) Yes ( ) No

( ) Lack of knowledge

( ) High risk

( ) Huge amount of investment.

( ) Yes ( ) No

4. If no, then which of the following are the most important factor for

it?

1 = Strongly disagree

2 = Disagree

3 = Neutral

4 = Agree

5 = strongly agree

( ) High risk 1 2 3 4 5

( ) Margin money 1 2 3 4 5

( ) Tax 1 2 3 4 5

( ) Lot size 1 2 3 4 5

5. What are the objectives of investment in derivative market?

5 for most preferred to 1 for least preferred.

SCALE 5 4 3 2 1

MOST SOME NEUTRAL SOME LEAST

PREF WHATPREF. WHAT PREF.

NOT PREF

High

returns

Hedge

the risk

More

reliable

More

liquid

SCALE 5 4 3 2 1

MOST SOME NEUTRAL SOME LEAST

PREF. WHAT WHAT PREF.

PREF. NOT

PREF.

Index

future

Stock

future

Index

option

Stock

option

SCALE 5 4 3 2 1

MOST SOME NEUTRAL SOME LEAST

PREF. WHAT WHAT PREF.

PREF. NOT

PREF.

Short

time

Medium

time

Long time

derivative?

( ) less than 20% ( ) 20% to 50%

( ) 50% to 70% ( ) more than 70%

( ) 0 to 1 year ( ) 1 to 2 year

( ) 2 to 3 year ( ) 3 to 4 year

( ) Yes ( ) No

( ) Strongly disagree ( ) Disagree

( ) Neutral ( ) Agree

( ) Strongly agree

SECTION: B

1. Name:_____________________________________

2. Address:___________________________________

___________________________________________

___________________________________________

Contact No. (M):____________________________

3. Age group:

( ) up to 20 years ( ) 21 to 30 years

( ) 31 to 40 years ( ) 41 to 50 years

( ) more than 50 years

4. Your Occupation:

( ) Student ( ) Business

( ) Profession ( ) Service

( ) House wife ( ) other then please specify________

( ) up to 1, 00,000 ( ) 1, 00,001 to 1, 50,000

( ) 1, 50,001 to 2, 00,000 ( ) 2, 00,001 and more

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