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SUMMER TRAINING PRESENTATION

ON

WORKING OF DERIVATIVES AND

INVESTORS PERSPECTIVE

Presented byVivek Singla

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LUDHIANA STOCK EXCHANGELTD

LOCATION- FEROZE GANDHIMARKET, LUDHIANA, PUNJAB.

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The Ludhiana stock exchange limited was establishedin 1981, by sh. S.P. Oswal of Vardhman group and sh.B.M. Lal Munjal of hero group.Further, the exchange has 295 members out of which162 are registered with NSE as sub-brokers and 121

with BSE as sub-brokers.

Introduction

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Securities Contract (Regulation) Act,1956 definesDerivative to include-

A security derived from debt instruments, shares,secured / unsecured loan, risk instruments or contractsfor differences, or any other form of security.

A contract that derives its value from the prices / indexof prices of underlying securities.

DERIVATIVES DEFINED

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DATE EVENT25th May, 2000. SEBI gave permission to NSE andBSE to do index futures trading.

12th June, 2000. Trading of Nifty futures commencedat NSE.

4 th June, 2001 Trading of index option commencedat NSE.

2nd july,2001 Trading of options on individualsecurities commenced at NSE.

9 th novemeber,2001 Individual stock futures werelaunched.

History Of Derivative trading at NSE

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Futures Options Forwards

Swaps

Types Of Derivative Contracts

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RISK MANAGEMENTPRICE DISCOVERYOPERATIONAL ADVANTAGES

MARKET EFFICIENCYEASE OF SPECULATIONECONOMIC FUNCTIONS

BENEFITS OF DERIVATIVES

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To understand the Working of the Derivatives On NSE.

To know the investors perception towardsinvestment in derivative market.

Objectives Of Study

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Trading system - NEAT-F&O trading system.

Basis of trading- Supports an order drivenmarket.

Trading of derivatives on NSE

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Method of data collection:-Collection of primary data using Questionnaires.The questionnaire was filled by around 50 people whowere mainly from Ludhiana Region.It consist of people dealing in derivative market.

RESARCH METHODOLOGY

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Most of the investors who invest in derivativesmarket are post graduate.

Investors who invest in derivative market have aincome of above 5,00,000 .

Investors generally perceive slump in stock marketkind of risk while investing in derivative market.

People are generally not investing in derivativemarket due to lack of knowledge and difficulty inunderstanding and it is very risky also .

Interpretation & Findings

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Most of investor purpose of investing in derivative market isto hedge their fund.

People generally participate in derivative market as ainvestor or hedger.

People generally prefer to take advice from news networkbefore investing in derivative market.

Most of investors participate in stock index futures.

Most of investors make a contract of 3 month maturityperiod.

Investors invest regularly in derivative market.

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A knowledge need to be spread concerning the riskand return of the derivative market.

More variation in stock index future need to be madelooking a demand side of investors.

RBI should play a greater role in supportingderivatives

There must be more derivative instruments aimed at

individual investors.

SUGGESTIONS & RECOMENDATIONS

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LIMITED TIME LIMITED RESOURCESVOLATALITYASPECTS COVERAGE

LIMITATIONS OF STUDY

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THANK YOU