Case Study On Investor Guidance in Option Market YOHA SECURITIES PRIVATE LIMITED Submitted by ANANDHASANKER. B (Reg.

No:MBAF1001)

DEPARTMENT OF COMMERCE AND FINANCIAL STUDIES BHARATHIDASAN UNIVERSITY Trichirappalli 620 024 FEBRUARY 2012 IV Semester

Content :

S. No.
01. 02. 03. 04. 05.

Particulars
COMPANY PROFILE
PROBLEM

Page No.
01 07 08 13 14

SOLUTION SUGGESTION CONCLUSION

PROFILE OF THE COMPANY

Yoha Securities Limited was founded and promoted by a team of three Non Resident Indians: Mr. K.V. Aiyappan, Mr. Teckchand Vaswani and Mrs.Abiraami Arunachalam with the vision of providing integrated top class financial services sustained by mutual trust and confidence. In translating its vision, the Yoha Group provides various financial services that include equity trading, derivatives trading, retail debt market operations, selling of insurance and mutual fund, IPO distribution, DEMAT services, research and advisory services. We are members of National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange (BSE), Depository participant (DP) of NSDL. Yoha Group not only executes the trade for the clients but also provides them critical and timely investment advice. Yoha is a truly professional financial services company managed by a team of highly skilled professionals who have proven track record in their respective domains. Yoha has the widest reach through its Regional, Zonal and Branch Offices spread across the length and breadth of the country. Management: Yoha is led by individuals who are professionals and leaders in their respective domains and committed to become a new icon of the financial services industry in India. A dynamic chairman ably assisted by an experienced team of Board of Directors provides policy guidance and motivate the professionals to

deliver top class service.

Board of Directors: Chairman Director Finance Director Director Director Director Director K.V.Aiyappan Muthulakshmi Ganesh R.Sridharan Teckchand Vaswani P Sankaran N Vellayan L V Anantram

Director - Coordination Chitra Sivaramakrishnan

Mission: "Client is Supreme" To disseminate vital information on time to enable the client to take well informed decision. Vision: We are passionately commited to help every customer to fulfill his/her financial objectives. Our Goal: To provide comprehensive services under one roof. Products & Services: Yoha Securities is committed to make trading an enjoyable experience. We comprehend your level of expertise in trading and equip you with solutions that fit your requirements. You can be a Beginner or an experienced Investor or a Professional Trader.

We take into account your investment needs, risk profile and investment objectives be it for building assets; ensuring your children's future; planning for retirement.

Equity Markets- Quick appreciation of your capital Derivatives Markets- Plan your risk and invest for higher returns Mutual Funds-Steady Growth of Capital Insurance-Protection against Risk Institutional Brokerage Services Advisory- Fundamental Research and Technical Research Demat Services

Head Office Contact Details: Department F&O Accounts Back Office Contact Person Mr.J.Kumar Mr.G.Dayalan Mr.S.Bharat Contact Number 24330535 24330545 24355268

LINKS We may provide links NATIONAL STOCK EXCHANGE OF INDIA. We are not responsible for those other sites, their privacy policies or how they treat information about their users, and we advise you to check their privacy policies. PRIVACY POLICY CHANGES

We reserve the right to modify, alter or otherwise update this Privacy Policy at any time, so we encourage you to review this policy from time to time. Changes to this privacy policy are effective at the time they are posted and your continued use of our sites after posting will constitute acceptance of, and agreement to be bound by, those changes. BRANCHES: State/City/Place Address Annamalai Vilas A-16, Colony Main Tamil Nadu / Trichy Road, Thillai Nagar, Trichy-620018. First Floor, Shop Tamil Nadu / Vellore No.10&11 No.26/A Office Line, Vellore-632001. No.14, Sree Vatsa Tamil Nadu / Coimbatore / Thudiyalur Square, Mettupalayam Road, Thudiyalur (P.O) Coimbatore-641034. Unique Arcade, Tamil Nadu / Chennai / Tambaram West No: 146, Gandhi Road, Tambaram (West), Chennai-600045. Shop No.14 Appusali Street, Mr.M.Jayapal m Mr.N.Vellayan Contact Person Phone Number 04312741200 / 04312741400 0416Mr.M.Yogananda 2224908 04162224909 0422Mr.K.Krishnamurt 3294623 hy 04222646019 04422417686 04452034740 Mrs.U.Muthulaksh 044mi Mr.P.Sethu Madhavan 45542106 04424312112

Tamil Nadu / Chennai / Saligramam

Saligramam 600092. Tamil Nadu / Chennai / NO.27A,East Jones Saidapet Road, Saidapet,

Chennai-600015. No.5, Chokkalingam Tamil Nadu / Chennai / Street, Mandaveli Mandaveli, Chennai 600028. 94-H, Lakshmi Priya Tamil Nadu / Trichy / Thoraiyur Complex, Trichy Road, Thoraiyur-621010. Prashanthi Illam, No.1,SambandhamGar dens, Taramani Link Road, Velachery, Chennai 600 042. Tamil Nadu / Kumbakonam 85-A, Sarangapani East Street, Kumbakonam-621001 3/720, Tulip Building, Maharashtra / Mumbai / Dadar (East) Tilak Road, Parsi Colony, Dadar (East), Mumbai-400014. 1st Floor, Door No: Kerala / Palghat / Kalpathy 1/706, 2,Thyagaraja Swamigal Road, Kalpathy, Palghat-678003. I-1-5, Steamer Road, 1st Floor, Beside SBI Main Branch, Mr.Bappi Raju Mr.E.S. Anand Narayan Mrs.Chitra Sivaramakrishna n Mr.S.Ramesh Mrs.Vasanthi Mr.K.R.Jayaraman Tamil Nadu / Velachery (Behind Indian Bank), Srivatsan / Mrs.V.Sudha Mr.R. Ramesh

04443536767 04443536747 04327255553

04443036613 / 04443036891

04352433794 04352433795

02224121563

04913091917 04912578565 08814274224

Andhra Pradesh / Narasapur

Narasapur-534275.

PRIVACY POLICY REGISTRATION Our sites give you the opportunity to register with us, and sometimes registration is required before certain site features can be used. Our registration forms may request your contact information (such as your name, email address, mailing address, etc.), demographic information (such as your country, gender, etc.), and profile data (such as your music preferences, entertainment practices, etc). For our internal purposes, we use this information to communicate with you and provide the services you have requested, and to provide a more personalized experience on our sites. DISCLOSURE OF INFORMATION We will hold your personal information confidentially and will preserve it. We will not sell or rent the information to anyone. In case of a compulsion to share your information, we shall obtain your prior consent and the information shall be shared with only those people or companies who are authorized by you to do so. All personal information, which is gathered and stored through this site, shall be governed by these terms laid out by YOHA Securities Pvt Ltd. COMMUNICATION WITH US:

We have features where you can submit information to us (such as when contacting us with a question or feedback). We may retain your emails and other information you submit to us for our internal purposes, and to help us to serve you better. SECURITY Security for all personally identifiable information is extremely important to us. We store your personal information securely, and use special procedures designed to protect the information we collect from loss, misuse, unauthorized access or disclosure, alteration or destruction.

PROBLEM OF THE STUDY

An investor has approached Yoha securities for buying Option contract for one month from November to December 2011 of three companies namely TATA MOTORS, RELIANCE and STATE BANK of INDIA at a price of
171.8, 774.55, and 1650.00 respectively. The investor is new to derivative

market, so investor has asked Broking Company for security advice. The investor motive is to earn profit not acting as hedger. He has also advised the broking agency to make profit by making short selling and it is not necessary to hold the stock till the maturity period when there is profit making opportunity. Provide suggestion to investors to earn profit.

SOLUTION:
TATA MOTORS OPTION CONTRACT FROM NOVEMBER TO DECEMBER 2011

Symbol TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS TATAMOTORS

Date 25-Nov-11 28-Nov-11 29-Nov-11 30-Nov-11 01-Dec-11 02-Dec-11 05-Dec-11 07-Dec-11 08-Dec-11 09-Dec-11 12-Dec-11 13-Dec-11 14-Dec-11 15-Dec-11 16-Dec-11 19-Dec-11 20-Dec-11 21-Dec-11 22-Dec-11 23-Dec-11 26-Dec-11 27-Dec-11 28-Dec-11 29-Dec-11

Expiry 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11

Open 171.8 174.45 179.9 174 180.9 182.5 190.9 191.1 190 184 187 174.8 177 174.7 175.5 170.15 179.5 180.1 176.1 185.85 186.4 185.9 180.85 178.55

High 179.35 181.75 180.9 176.2 185.8 192.5 193.9 195 191 186.3 187.7 182.85 182.1 176.5 179.95 179.65 180.3 182.3 184.75 187.8 188.7 186.45 183.15 182.5

Low 170.1 173.5 174.5 169.5 180.55 182.5 188.55 189.75 185.4 180.5 176.9 174.8 176.5 167.85 170.25 169.35 174 175.1 174 182.8 185.25 180.85 178.9 178.3

Close 171.15 181.15 176.85 173 183.45 191.6 191.1 191.05 188.2 183.65 178.05 179.55 177.25 173.4 172.1 179.15 175 177.85 184.1 185.3 186.8 182.2 180.5 179.45

RELIANCE OPTION CONTRACT FROM NOVEMBER TO DECEMBER 2011

Symbol RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E

Date 25-Nov-11 28-Nov-11 29-Nov-11 30-Nov-11 01-Dec-11 02-Dec-11 05-Dec-11 07-Dec-11 08-Dec-11 09-Dec-11 12-Dec-11 13-Dec-11 14-Dec-11 15-Dec-11 16-Dec-11 19-Dec-11 20-Dec-11 21-Dec-11

Expiry 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11

Open 774.55 768.7 785 758.4 802 798.4 809.4 817 805.8 772 764.95 725.7 741.95 735 753 724 743.05 729

High 776.2 789.15 785 785.65 815.8 819 816 825 812.25 772.95 765.9 749 756 757.5 765.7 743 743.05 757.4

Low 755 767 763.1 756.3 798.75 791 803.65 808.1 777.6 758.8 728.05 724.55 737.55 724.5 720 715.1 712.55 725.5

Close 757.55 787.5 769.2 781.6 804.45 817.05 812.95 815.1 783.4 761.4 731.5 745.8 743.65 751.2 724.4 738.7 716.5 752.05

RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E RELIANC E 22-Dec-11 23-Dec-11 26-Dec-11 27-Dec-11 28-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 745.5 763.2 750.25 770 757.35 738 763.9 772.6 767.5 770.8 759.8 740.05 736.2 745 746.95 746.65 736.6 711.5 759.1 748.85 763.6 754.35 740.05 713.55

SBI OPTION CONTRACT FROM NOVEMBER TO DECEMBER 2011

SBI Symbol SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN SBIN Date 25-Nov-11 28-Nov-11 29-Nov-11 30-Nov-11 01-Dec-11 02-Dec-11 05-Dec-11 07-Dec-11 08-Dec-11 09-Dec-11 12-Dec-11 13-Dec-11 14-Dec-11 15-Dec-11 16-Dec-11 19-Dec-11 20-Dec-11 21-Dec-11 22-Dec-11 23-Dec-11 26-Dec-11 27-Dec-11 28-Dec-11 29-Dec-11 Expiry 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 29-Dec-11 Open High Low Close 1,650.0 1,684.0 1,628.6 1,672.9 0 1,686.0 0 1,781.9 0 1,730.0 0 1,805.3 0 1,814.0 0 1,870.0 0 1,905.0 0 1,916.1 0 1,830.0 0 1,882.0 0 1,753.0 0 1,780.1 0 1,664.0 0 1,749.7 0 1,650.0 0 1,632.8 5 1,586.0 0 1,609.7 0 1,678.4 0 1,640.0 0 1,675.0 0 1,634.9 0 1,595.3 5 0 1,777.7 0 1,785.0 0 1,769.0 0 1,835.6 5 1,884.0 0 1,906.3 5 1,942.0 0 1,921.4 0 1,880.0 0 1,886.9 5 1,801.0 0 1,829.3 5 1,767.0 0 1,773.9 0 1,661.7 5 1,644.9 5 1,646.0 0 1,682.4 0 1,694.4 5 1,678.4 0 1,675.0 0 1,634.9 5 1,635.0 0 5 1,686.0 0 1,725.3 0 1,708.6 0 1,790.2 5 1,795.2 5 1,861.0 0 1,905.0 0 1,851.5 5 1,815.0 0 1,761.0 0 1,736.2 0 1,760.7 5 1,664.0 0 1,655.5 5 1,596.2 5 1,566.8 5 1,586.0 0 1,589.6 5 1,635.4 0 1,639.9 5 1,633.0 0 1,602.1 0 1,590.1 0 5 1,769.8 5 1,743.8 5 1,747.5 5 1,815.9 5 1,878.6 0 1,900.5 5 1,925.0 5 1,860.4 5 1,858.8 5 1,769.5 5 1,782.2 5 1,769.9 0 1,734.9 5 1,669.9 0 1,628.8 5 1,575.8 5 1,628.8 5 1,674.6 0 1,646.5 0 1,669.7 0 1,643.4 5 1,609.9 5 1,628.6 0

CHARTS OF COMPANY OPTION MARKET:

CHART 1 TATA MOTORS OPTION CONTRACT FROM NOVEMBER TO DECEMBER 2011

CHART 2 RELIANCE OPTION CONTRACT FROM NOVEMBER TO DECEMBER 2011

CHART 3 SBI OPTION CONTRACT FROM NOVEMBER TO DECEMBER 2011

Suggestion:

The option market tends to fall during maturity so holding stock till maturity date doesnt yield profit.

When a market go bullish make call option and when market goes bearish make put option.

Market movement in option market is based on futures market and spot market, as option market lag futures market and spot market.

The chart clearly suggest that when a market reaches stock high it goes down next day, so with profit motive it is better sell when it reaches high.

The chart also suggest when a market reaches stock low it is goes up next day, so it is better to buy when it reaches low.

A margin have to be fixed when it fall above it the investor have to go for call and when it reaches below margin investor have to go for put option.

Conclusion:
An option trading is a unique and easy way of profiting from the Indian Stock Markets. This has not been exploited by the small investor. The suggested strategies and trades keep in check the risks associated with options trading. While at the same time being rewarding in terms of capital employed. Options can be used for hedging, taking a view on the future direction of the market, for arbitrage or for implementing strategies which can help in generating income for investors under various market conditions. it means that the losses for the buyer of an option are limited, however the profits are potentially unlimited and vice versa for seller. In option market advantage of intra-day volatility, short term explosive moves and strong trends to help any futures trader extract the maximum amount of profits in the shortest amount of time.