ACKNOWLEDGEMENT

To complete a Project, sincere efforts by self and valuable guidance of experienced people are needed. This project was made possible through the direct and indirect co-operation of various persons for whom I wish to express my appreciation and gratitude. My deepest thanks to Professor Mr.R.D.Chaudhari the Guide of the project for guiding & correcting various documents of mine with attention & care. He has taken pain to go through the project and make necessary correction as and when needed. I express my thanks to Director Dr. P.D.Nare, for extending his support. My deep sense of gratitude to Mr.Hrishikesh Nimbalkar of Sharekhan Pvt Ltd for support and guidance. Thanks and appreciation to the helpful people at Sharekhan Pvt Ltd for their support. I would also thank my Institution and my faculty members without whom this project would have been distant reality. I also extend my heartfelt thanks to my family and well wishers. I owe my great many thanks to great many people who helped and supported me during doing this project.

Signature

(Abhijit Jaywant Bhosale)

DECLARATION
I hereby declare that the work done by me in the report titled as STUDY OF TRADING PROCEDURE AND IMPLEMENTATION OF FUTURES DERIVATIVES contain the primary work done by me and no part of the report has been imitated or copied from any previous report .The report has been prepared on the basis of the findings and the data collected during the survey that was carried out for the purpose of completing the project. This report which is to be presented to the University of Pune is true and genuine to the best of my knowledge and belief.

Date :-

/ 2010

Signature

Place :- PUNE

( Abhijit Jaywant Bhosale )

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CONTENTS
SR.NO. CHAPTERS
ACKNOWLEDGEMENT DECLARATION EXECUTIVE SUMMARY INTRODUCTION REVIEW OF LITERATURE COMPANY PROFILE RESEARCH METHODOLOGY TRADING PROCEDURE IMPLEMENTATION OF INDEX FUTURES DATA ANALYSIS & DATA INTERPRETATION 8 9 10 11 FINDINGS CONCLUSIONS SUGGESTION BIBLOGRAPHY & WEBLIOGRAPHY 54 55 56 57

PAGE NO.
I II

1. 2. 3. 4.
5 6

V 1-2 3-12 13-16 17-18

19-28 29-41

42-53

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Table No. 2.1 7.1 7.2 7.3

List of Tables Table Name Distinction Between Futures Options Business growth in futures derivatives segment Number of contracts Turnover

Page No 10 42 52 53

List of Diagram Diagram No. 2.1 6.1 6.2 6.3 Name of Diagram Types of Derivatives Payoff for a Buyer of Nifty futures Payoff for a Seller of Nifty futures Variation Of basis over time Page No 3 35 36 37

Chart No. 7.1 7.2 7.3-7.13 7.14 7.15

List of Charts Chart Name Turnover of Index Futures(2001-2010) No. of contracts in Index Futures(20012010) Weekly Performance of Nifty futures Number of Contracts of Future Derivative Turnover of Future Derivatives

Page No 4243 44-51 52 53

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EXECUTIVE SUMMARY:

SHAREKHAN LTD operates in various financial products and services like, Stock Broking, Mutual Funds, Depository Participant Services, financial products distribution like investments and loan products, corporate advisory services, insurance etc. The project is important as it helps to understand basic terminologies related to futures derivatives market and future derivatives trading system. Also the project covers all the aspects related to futures index derivatives and its implementation. Since derivatives trading is not as popular as equity shares trading the project makes an attempt to familiarize the derivatives market with reference to index futures derivatives. The main objective is to study the trading procedure of futures derivatives, to study the detail procedure of trading of Index Futures, to get practical knowledge about the trading system which is carried out in the brokers firm. The objective also includes understanding the basics of derivatives & to get acquainted with the current happenings of the future index derivatives. The project is undertaken with the secondary source of research methodology. The information is collected from the brokers firm. It is collected by learning the complete procedure of trading of index futures through online display of various software. It is collected through various reference books, journals and websites. The outcomes were found to be that trading in futures derivatives is relatively difficult to understand as compared to equity, trading in futures derivatives is highly risky since there can be unlimited profit or unlimited loss, trading in Futures derivatives market is growing.

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