Naga manai project

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CHAPTER-1

INTRODUCTION

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INTRODUCTION

A derivative is a security whose value depends on the value of more basic

underlying variable. These are also known as contingent claims. Derivative

securities have been very successful innovation in capital market.

The emergence of the market for derivative products, most notably

forwards, futures and options, can be traced back to the willingness of risk

averse economic agents to guard themselves against uncertainties arising out of

fluctuations in asset prices. By their very nature, financial markets are marked by

a very high degree of volatility. Through the use of derivative products, is

possible to partially or fully transfer price risks by a locking - in asset prices. As

instruments of risk management, these generally do not influence the fluctuation

in the underlying asset prices.

However, by locking-in asset prices, derivative products minimize the

impact of fluctuations in asset prices on the profitability and cash flow situation of

risk-averse investor.

Derivatives are risk management instruments, which drive their value form

underlying asset. Underlying asset can be bullion, index, share, bonds, currency,

interest etc.

MAIN TOPICS OF STUDY

1. INTRODUCTION TO DERIVATIVE

The origin of derivatives can be traced back to the need of farmers 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

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3. TYPES OF DERIVATIVES MARKET

Exchange Traded Derivatives Over The Counter Derivatives

National Stock Bombay Stock National Commodity &

Exchange Exchange Derivative Exchange

Index Future Index option Stock option Stock future

Figure.1 Types of Derivatives Market

4. TYPES OF DERIVATIVES

Figure.2 Types of Derivatives

(i) FORWARD CONTRACTS

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A forward contract is an agreement to buy or sell an asset on a 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, price and quantity are negotiated bilaterally

by the parties to the contract. The forward contracts are n o r m a l l y traded

outside the exchanges.

BASIC FEATURES OF FORWARD CONTRACT

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.

However forward contracts in certain markets have become very

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. Forward

contracts are often confused with futures contracts. The 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 counterparty risk and offer more liquidity.

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(ii) FUTURE CONTRACT

In finance, a futures contract is a standardized contract, traded on a futures

exchange, to buy or sell a certain underlying instrument at a certain date in the

future, at a pre-set price. The future date is called the delivery date or final

settlement date. The pre-set price is called the futures price. The price of the

underlying asset on the delivery date is called the settlement price. The

settlement price, normally, converges towards the futures price on the delivery

date.

A futures contract gives the holder the right and the obligation to buy or sell,

which differs from an options contract, which gives the buyer the right, but not the

obligation, and the option writer (seller) the obligation, but not the right. To exit

the commitment, the holder of a futures position has to sell his long position or

buy back his short position, effectively closing out the futures position and its

contract obligations. Futures contracts are exchange traded derivatives. The

exchange acts as counterparty on all contracts, sets margin requirements, etc.

BASIC FEATURES OF FUTURE CONTRACT

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1. Standardization:

Futures contracts ensure their liquidity by being highly standardized, usually by

specifying:

The underlying. This can be anything from a barrel of sweet crude oil to a

short term interest rate.

The type of settlement, either cash settlement or physical settlement.

The amountand units of the underlying asset per contract. This can be the

notional amount of bonds, a fixed number of barrels of oil, units of foreign

currency, the notional amount of the deposit over which the short term

interest rate is traded, etc.

The currency in which the futures contract is quoted.

The grade of the deliverable. In case of bonds, this specifies which bonds

can be delivered. In case of physical commodities, this specifies not only

the quality of the underlying goods but also the manner and location of

delivery. The delivery month.

The last trading date.

Other details such as the tick, the minimum permissible price fluctuation.

2. Margin:

Although the value of a contract at time of trading should be zero, its price

constantly fluctuates. This renders the owner liable to adverse changes in value,

and creates a credit risk to the exchange, who always acts as counterparty. To

minimize this risk, the exchange demands that contract owners post a form of

collateral, commonly known as Margin requirements are waived or reduced in

some cases for hedgers who have physical ownership of the covered commodity

or spread traders who have offsetting contracts balancing the position.

Initial Margin: is paid by both buyer and seller. It represents the loss on that

contract, as determined by historical price changes, which is not likely to be

exceeded on a usual day's trading. It may be 5% or 10% of total contract price.

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Mark to market Margin: Because a series of adverse price changes may

exhaust the initial margin, a further margin, usually called variation or

maintenance margin, is required by the exchange. This is calculated by the

futures contract, i.e. agreeing on a price at the end of each day, called the

"settlement" or mark-to-market price of the contract.

To understand the original practice, consider that a futures trader, when taking a

position, deposits money with the exchange, called a "margin". This is intended

to protect the exchange against loss. At the end of every trading day, the contract

is marked to its present market value. If the trader is on the winning side of a

deal, his contract has increased in value that day, and the exchange pays this

profit into his account. On the other hand, if he is on the losing side, the

exchange will debit his account. If he cannot pay, then the margin is used as the

collateral from which the loss is paid.

3. Settlement

Settlement is the act of consummating the contract, and can be done in one of

two ways, as specified per type of futures contract:

Physical delivery - the amount specified of the underlying asset of the

contract is delivered by the seller of the contract to the exchange, and by the

exchange to the buyers of the contract. In practice, it occurs only on a

minority of contracts. Most are cancelled out by purchasing a covering

position - that is, buying a contract to cancel out an earlier sale (covering a

short), or selling a contract to liquidate an earlier purchase (covering a long).

Cash settlement - a cash payment is made based on the underlying

reference rate, such as a short term interest rate index such as Euribor, or

the closing value of a stock market index. A futures contract might also opt to

settle against an index based on trade in a related spot market.Expiry is the time when the final prices of the future are determined. For many

equity index and interest rate futures contracts, this happens on the Last

Thursday of certain trading month. On this day the t+2 futures contract becomes

the t forward contract.

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PRICING OF FUTURE CONTRACT

In a futures contract, for no arbitrage to be possible, the price paid on delivery

(the forward price) must be the same as the cost (including interest) of buying

and storing the asset. In other words, the rational forward price represents the

expected future value of the underlying discounted at the risk free rate. Thus, for

a simple, non-dividend paying asset, the value of the future/forward, , will

be found by discounting the present value at time to maturity by the rate

of risk-free return .

This relationship may be modified for storage costs, dividends, dividend

yields, and convenience yields. Any deviation from this equality allows for

arbitrage as follows.

In the case where the forward price is higher:

1. The arbitrageur sells the futures contract and buys the underlying today

(on the spot market) with borrowed money.

2. On the delivery date, the arbitrageur hands over the underlying, and

receives the agreed forward price.

3. He then repays the lender the borrowed amount plus interest.

4. The difference between the two amounts is the arbitrage profit.

In the case where the forward price is lower:

1. The arbitrageur buys the futures contract and sells the underlying today

(on the spot market); he invests the proceeds.

2. On the delivery date, he cashes in the matured investment, which has

appreciated at the risk free rate.

3. He then receives the underlying and pays the agreed forward price using

the matured investment. [If he was short the underlying, he returns it now.]

4. The difference between the two amounts is the arbitrage profit.

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FUNCTIONS OF DERIVATIVES MARKETS:

The following are various functions that are performed by the derivatives

markets. They are

1) Prices in an organized derivatives market reflect the perception of market

participants about the future and lead the prices of underlying to the

perceived future level.

2) Derivatives market helps to transfer risks from those who have them but may

not like them to those who have appetite for them.

3) Derivatives, due to their inherent nature, are linked to the underlying 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.

4) Speculative trades shift to a more controlled environment of derivatives

market.

5) Derivatives trading acts as a catalyst for new entrepreneurial activity.

6) They often energize others to create new businesses, new products and new

employment opportunities.

7) Derivatives markets help increase savings and investment in the long run.

Transfer of risk enables market participants to expand their volume of activity.

Derivatives thus promote economic development.

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METHODOLOGY

The following steps are involved in the study

Selection of scrip: Selection of scrip is done on a random basis and the scrip

selected is NIFTY 50. The lot is of 50 size, profitability position of futures, buyers

and sellers & also the option holders and option writers is studied.

Data Collection: The data of the NIFTY 50 has been collected from the news

paper & internet.

The data consist of one month contract & period of data collection is from 27 th

Feb. 2009 to 28th may 2009.

Analysis: The analysis consist of the tabulation of the data assessing the

profitability position of the fure buyers & sellers and also the option holder & the

option writer representing the data with graphs and making interpretation using

data.

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SCOPE OF THE STUDY

The study is limited to Derivatives with special references to futures and

options in the Indian context & the NIFTY 50 has been taken as a representative

sample for the study. The study cant be said as totally perfect. Any alteration

may occur. The study has only made humble attempt at evaluating derivatives

only in India markets. The study is not based on the international perspective of

derivatives which exists in DOW JONES and NASDAQ.

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OBJECTIVES OF STUDY

To study various trends in derivative market.

1. Comparison of the profits/losses in cash market and derivative market.

2. To find out profit/losses position of the option writer and option holder.

3. To study in detail the role of the forwards, future and options.

4. To study the role of derivatives in Indian financial market.

5. To find out the risk and returns with live trading values.

6. To know how to minimize risk by using STRATEGIES.

7. To give some live examples on options.

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LIMITATIONS

The following are the limitations of the study

The Scrip chosen for analysis is Nifty50 and the contract taken in

February 2009 is a one month contract ending in March.

The data collected is completely restricted to the NIFTY 50 hence this

analysis cannot be taken universally.

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CHAPTER -2

LITERATURE REVIEW

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DEFINITION

Derivatives is a product whose value is derived from the one or more

basic Variables, called base (underlying asset, index, or value of reference rate),in a Contractual manner. The underlying asset can be equity, forex, commodity

or any other asset.

In the Indian context the securities contrasts (regulation) act, 1956 (SCR Act)

Defines derivative as

1) A security derived from an instrument, share, loan whether secured or

unsecured, risk instrument or contract for differences or any other form of

security.

2) A contract, which derives its value from the prices, or index of prices, or

Underlying securities.

Futures contracts, forward contracts, options and swaps are the most

common types of derivatives. Because derivatives are just contracts, just about

based on weather data, such as the amount of rain or the number of anything

can be used as an underlying asset. There are even derivatives sunny days in a

particular region. Derivatives are generally used to hedge risk, but can also be

used for speculative purposes

EVALUTION OF DERIVATIVES:

Derivatives can be found throughout the history of mankind. In the Middle

Ages, engaging in contracts at predetermined prices for future delivery of farming

products. The new era for the derivative markets was ushered with the

introduction of financial derivatives, and it continues to last to this day. Although

commodity derivatives are still quite active, particularly oil and precious metals,financial derivatives dominate trading in the current derivative markets.

Although the derivatives markets slowed down considerably by the end of

the 20th century, that did not mean that there were not a steady offering of

existing, as well as new derivative products. Derivatives exchanges also went

through a period of change; some consolidated, some merged, some became

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for-profit institutions. Regardless, they all had something in commonthe need

for less regulation.

Aside from structural changes, some derivative exchanges also changed the way

they conducted trading. Old systems of face-to-face trading on trading floors

have been replaced with electronic trading, and telephone and computer

networks. With the advent of Internet, electronic trading evolved into e-trading.

And although trading floors still dominate derivative markets in the U.S., it is

obvious that to stay competitive, the U.S. will have to eventually embrace

electronic trading.

The following factors have contributed to the growth of financial

derivatives

1) Increased volatility in asset prices in financial markets.

2) Increased integration of national financial markets with the international

markets.

3) Marked improvement in communication facilities and sharp decline in their

costs.

4) Development of more sophisticated risk management tools, providing

economic agents a wider choice of risk management strategies

5) Innovations in the derivatives markets, which optimally combine the risks

and returns over a large number of financial assets leading to higher

returns, reduced risk as well as transactions costs as compared to

individual financial assets.

6) Technology facilitates the ability to track the payoffs and risk exposures

associated with a portfolio of derivative positions.

7) An important factor in the growth of derivatives market has been a variety

of intellectual advances. The development of economic models for valuing

derivative instruments and assessing their risking and the increasing

sophistication of such models have played a crucial role in the growth of

the market.

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arbitrageurs take advantage and demand-supply forces drive the markets back to

normal.

TYPES OF DERIVATIVES:

The most commonly used derivatives contracts are forwards, futures and

options. Here are various derivatives contacts that have come to be used given

briefly:

FORWARDS

FUTURES

OPTIONS

WARRANTS

LEAPS

SWAPS

SWAPTIONS

FORWARDS: forward contract is a customized contract between two entities,

where settlement takes place on a specific date in the future at today's pre-

agreed price.

Futures: 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. Futures contracts are

special types of forward contracts in the sense that the former are standardized

exchange-traded contracts.

Options: Options are of two types - calls and puts

Calls option gives the buyer the right but not the obligation to buy a given

quantity of the underlying asset, at a given price on or before a given future date.

Put option give the buyer the right, but not the obligation to sell a given

quantity of the underlying asset at a given price on or before a given date.

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FUTURES

DEFINITION:

A future is a contract between two parties whereby the one party (the buyer)

agrees to buy an underlying asset from the other party to the contract on aspecific future date, and at a price determined at the close of the contract. A

future is a derivative that is used to transfer the price risk of the underlying

instrument from one party to another.

The underlying asset can be a financial asset such as a bond, a currency

such as US dollars, a commodity, etc.

A future is normally classified according to the underlying instrument.

Where, for instance, two parties agree to buy and sell a specific quantity of rice

(of a certain quality) at a certain price on a future date, the contract will be a

commodity futures contract. Where two parties agree to buy and sell bonds,

this will be known as a financial futures contract, and where two parties agree

to buy and sell a certain amount of foreign currency, this is a currency futures

contract.

FEATURES OF FUTURES:

Futures are highly standardized.

The contracting parties need not pay any down payments.

Hedging of price risks.

They have secondary markets to.

A futures contract is thus

an agreement between two parties

to buy and sell

a standardized type and quantity

of a specified underlying asset

with a certain quality

at a price determined at the closing of the contract

on a specified date

Through a central exchange.

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TYPES OF FUTURES:

On the basis of the underlying asset they derive, the futures are divided in to

two types:

1) Stock futures:

The stock futures are the futures that have the underlying asset as the individual

securities. The settlement of the stock futures is of cash settlement and the

settlement price of the future is the closing price of the underlying security.

2) Index futures:Index futures are the futures, which have the underlying asset as an

index. The index futures are also cash settled. The settlement price of the index

futures shall be the closing value of the underlying index on the expiry date of the

contract.

PARTIES IN FUTURES CONTRACT:

There are two parties in a future contract, the buyer and seller. The buyer of

the futures contract is one who LONG on the futures contract and the seller of

the futures contract is who is SHORT on the futures contract.

In a futures contract, both parties have an obligation, one to buy the underlying instrument

The other to sell the underlying instrument.

Both the buyer and the seller can make a profit or suffer a loss, due to the fact

that the contract price (at which the underlying instrument is bought and sold) is

determined at closing of the contract. If the market price at the delivery date is

lower than the futures contract price, the buyer suffers a loss because he could

have bought the instrument in the market at a lower price. He is now obliged,

according to the contract, to buy the underlying instrument at the higher price

specified in the contract. The opposite applies when the market value of the

underlying instrument is above the futures contract price. The buyer can now

buy the underlying instrument at the lower contract price, and sell the instrument

immediately at the higher market price, thus making an immediate profit.

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The pay off for the buyer and the seller of the futures of the contracts are as

follows:

PAY-OFF FOR A BUYER OF FUTURES

F- FUTURES PRICEE1, E2 SETTLEMENT PRICE

CASE 1:- The buyer bought the futures contract at (F); if the futures price goes toE1 then the buyer gets the profit of (FP).

CASE 2:- The buyer gets loss when the future price goes less then (F), ifthe future price goes to E2 then the buyer gets the loss of (FL)

.

F

LOSS

PROFIT

E2

P

LE1

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PAY- OFF FOR A SELLER OF FUTURES

F- FUTURES PRICE

E1, E2 SETTLEMENT PRICE

CASE 1:- The seller sold the future contract at (f); if the future goes to E1 then

the seller gets the profit of (FP).

CASE 2: - The seller gets loss when the future price goes greater than (F), if the

future price goes to E2 then the seller gets the loss of (FL).

E2

PROFIT

LOSS

E1

P

L

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FUTURES TERMINOLOGY

Spot price:It is the price at which an asset is traded in the current market.

Futures price:It is the price at which the futures contract trades in the futures market.

Contract cycle:It is the period over which the contract trades. The index futures contracts

on the NSE have one-month; two-month and three month expiry cycle which

expire on the last Thursday of the month. Thus a January expiration contract

expires on the last Thursday of January and February expiration contract ceases

trading on the last Thursday of February. On the Friday following the last

Thursday, a new contract having a three- month expiry is introduced for trading.

Expiry date:

It is the date specifies in the futures contract. This is the last day on

which the contract will be traded, at the end of which it will cease to exist.

Contract size:

The amount of asset that has to be delivered under one contract. For

instance, the contract size on NSEs futures market is 50 nifties.

Basis:

In the context of financial futures, basis can be defined as the futures price

minus the spot price. There will be a different basis for each delivery month for

contract. In a normal market, basis will be positive. This reflects that futures

prices normally exceed spot prices.

Cost carry:

The relationship between futures prices and spot prices can be

summarized in terms of what is known as the cost of carry. This measures the

storage cost plus the interest that is paid to finance the asset less income earned

on the asset.

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Open Interest:

Total outstanding long or short position in the market at any specific time.

As total long positions in the market would be equal to short position, for

calculation of open interest, only one side of the contract is counter.

OPTIONS

DEFINITION:

Option is a type of contract between two persons where one grants the

other the right to buy a specific asset at a specific price within a specific time

period. Alternatively the contract may grant the other person the right to sell a

specific asset at a specific price within a specific time period. In order to have this

right, the option buyer has to pay the seller or the option premium.

The assets on which option can be derived are stocks, commodities,

indexes etc. If the underlying asset is the financial asset, then the option are

financial option like stock options, currency options, index options etc, and if

options like commodity option.

Options contracts are instruments that give the holder of the instrument the

right to buy or sell the underlying asset at a predetermined price.

PROPERTIES OF OPTIONS:

Options have several unique properties that set them apart from other securities.

The following are the properties of options:

Limited Loss

High Leverage Potential

Limited Life

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TYPES OF OPTIONS:

The options are classified into various types on the basis of various variables.

The following are the various types of options:

I).On the basis of the Underlying asset:

On the basis of the underlying asset the options are divided into two types:

INDEX OPTIONS: The Index options have the underlying asset as the

index.

STOCK OPTIONS: A stock option gives the buyer of the option the right

to buy/sell stock at a specified price. Stock options are options on the

individual stocks, there are currently more than 50 stocks are trading in

this segment.

II). On the basis of the market movement:

On the basis of the market movement the options are divided into two types.

CALL OPTION:

A call options is bought by an investor when he seems that the stock price moves

upwards. A call option gives the holder of the option the right but not the

obligation to buy an asset by a certain date for a certain price.

PUT OPTION:

A put option is bought by an investor when he seems that the stock price

moves downwards. A put option gives the holder of the option right but not theobligation to sell an asset by a certain date for a certain price.

III). On the basis of exercise of option:

On the basis of the exercising of the option, the options are classified into two

categories.

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AMERICAN OPTION:

American options are options that can be exercised at any time up to

the expiration date; most exchange-traded options are American.

EUROPEAN OPTION:

European options are options that can be exercised only on the

expiration date itself. European options are easier to analyze than American

option.

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CALL OPTION

The following example would clarify the basics on Call Options.

Illustration 1:

An investor buys one European Call option on one share of Reliance Petroleum

at a premium of Rs. 2 per share on 31 July. The strike price is Rs.60 and the

contract matures on 30 September. The payoffs for the investor on the basis of

fluctuating spot prices at any time are shown by the payoff table (Table 1). It may

be clear form the graph that even in the worst case scenario, the investor would

only lose a maximum of Rs.2 per share which he/she had paid for the premium.

The upside to it has an unlimited profits opportunity.

On the other hand the seller of the call option has a payoff chart

completely reverse of the call options buyer. The maximum loss that he can have

is unlimited though a profit of Rs.2 per share would be made on the premium

payment by the buyer.

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A European call option gives the following payoff to the investor:

Max (S - Xt, 0).

The seller gets a payoff of:-max (S - Xt, 0) or min (Xt - S, 0).

Notes:

S - Stock Price

Xt - Exercise Price at time 't1

C - European Call Option Premium

Payoff - Max (S - Xt, O)

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exchange the underlying assets then as the investor gets out of the contract just

before its expiry.

Put Options:

The European Put Option is the reverse of the call option deal. Here, there is a

contract to sell a particular number of underlying assets on a particular date at a

specific price. An example would help understand the situation a little better:

Illustration 2:

An investor buys one European Put Option on one share of Reliance Petroleum

at a premium of Rs. 2 per share on 31 July. The strike price is Rs.60 and the

contract matures on 30 September. The payoff table shows the fluctuations of

net profit with a change in the spot price.

The payofffor the put buyer is: max(Xt - S, 0)The payoff fora put writer is: -max (Xt - S, 0) or min(S - Xt, 0)

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These are the two basic options that form the whole gamut of transactions in the

options trading. These in combination with other derivatives create a whole world

of instruments to choose form depending on the kind of requirement and the kind

of market expectations.

Exotic Options are often mistaken to be another kind of option. They are nothing

but non-standard derivatives and are not a third type of option.

Options Classifications: Options are often classified as

In the money - These result in a positive cash flow towards the investor

At the money - These result in a zero-cash flow to the investor

Out of money - These result in a negative cash flow for the investor

Example:

Calls

Reliance 350 Stock Series

Naked Options: These are options which are not combined with an offsetting

contract to cover the existing positions.Covered Options: These are option contracts in which the shares are already

owned by an investor (in case of covered call options) and in case the option is

exercised then the offsetting of the deal can be done by selling these shares

held.

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OPTIONS PRICING

Prices of options are commonly depending upon six factors. Option's

prices are far more complex. These are the two basic options that form the whole

gamut of transactions in the options trading. These in combination with other

derivatives create a whole world of instruments to choose form depending on the

kind of requirement and the kind of market expectations. Exotic Options are often

mistaken to be another kind of option. They are nothing but non-standard

derivatives and are not a third type of option.

Options undertakings:

Stocks

Foreign Currencies

Stock Indices

Commodities

Others - Futures Options, are options on the futures contracts or Underlying

assets are futures contracts. The futures contract generally matures shortly after

the options expiration.

OPTIONS PRICINGPrices of options are commonly depending upon six factors. Option's prices are

far more complex. The table below helps understand the affect of each of these

factors and gives a broad picture of option pricing keeping all other factors

constant. The table presents the case of European as well as American Options.

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VOLATILITY: More the volatility, higher is the probability of the option generating

higher returns to the buyer. The downside in both the cases of Call and put is

fixed but the gains can be unlimited. If the price falls heavily in case of a call

buyer then the maximum that he loses is the premium paid and nothing more

than that. More so he/ she can buy the same shares form the spot market at a

lower price.

Similar is the case of the put option buyer. The table shows all effects on the

buyer side of the contract.

RISK FREE RATE OF INTEREST: In reality the r and the stock market is

inversely related. But theoretically speaking, when all other variables are fixed

and interest rate increases this leads to a double effect: Increase in expected

growth rate of stock prices discounting factor increases making the price fall.

In case of the put option both these factors increase and lead to a decline in the

put value. A higher expected growth leads to a higher price taking the buyer to

the position of loss in the payoff chart. The discounting factor increases and the

future value become lesser.

In case of a call option these effects work in the opposite direction/The first effect

is positive as at a higher value in the future the call option would be exercised

and would give a profit. The second affect is negative as is that of discounting.

The first effect is far more dominant than the second one, and he overall effect is

favorable on the call option.

DIVIDENDS: When dividends are announced then the stock prices on ex-

dividend are reduced. This is favorable for the put option and unfavorable for the

call option.

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CALL OPTION:

C = SN (dl)-Xe"rtN(d2)

PUT OPTION:

p = xe^NC-oa-SNC-oa)

Where

C - VALUE OF CALL OPTION

S - SPOT PRICE OF STOCK

X - STRIKE PRICE

r - ANNUAL RISK FREE RETURN

t - CONTRACT CYCLE

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CHAPTER-3COMPANY PROFILE

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Incorporated in 1993, Net worth Stock Broking Limited (NSBL) has been a listed

company at Bombay Stock Exchange (BSE), Mumbai since 1995.

A Member, at the National Stock Exchange of India (NSE) and Bombay Stock

Exchange, Mumbai (BSE) on the Capital Market and Derivatives (Futures &

Options) segment, NSBL has been traditionally servicing Institutional clients and

in the recent past has forayed into retail broking, establishing branches across

the country. Presence is being marked in the Middle East, Europe and the UnitedStates too, as part of our attempts to cater to global markets. We are a

Depository participant at Central Depository Services India (CDSL) with plans to

become one at National Securities Depository (NSDL) by the end of this quarter.

We have our customers participating in the booming commodities markets with

our membership at the Multi Commodity Exchange of India (MCX) and National

Commodity & Derivatives Exchange (NCDEX), through Networth Stock.Com Ltd.

With its strong support and business units of research, distribution & advisory,

NSBL aims to become a one-stop solution to the broking and investment needs

of its clients, globally.

Strong team of professionals experienced and qualified pool of human

resources drawn from top financial service & broking houses form the backbone

of our sizeable infrastructure. Highly technology oriented, the companys

scalability of operations and the highest level of service standards has ensured

rapid growth in the number of locations & the clients serviced in a very short span

of time. Networthians, as each one of our 400 plus and ever growing teammembers are addressed, is a dedicated team motivated to continuously progress

by imbibing the best of global practices, Indian sing such practices, and to

constantly evolve a comprehensive suite of products & services trying to meet

every financial / investment need of the clients.

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NSE CM and Derivatives Segment SEBI Regn. 1NB230638639 &

1NF230638639

BSE CM and Derivatives Segment SEBI Regn. 1NB010638634 &

PMS SEBI Regn. 1NP000001371 CDSL DP SEBI Regn. IN-DP-CDSL 251-2004

Commodities Trading: MCX -10585 and NCDEX - 00011 (through Networth

Stock.Com

Hyderabad (Somajiguda)

401, Dega Towers, 4th Floor, Raj Bhavan Road, Somajiguda Hyderabad - 500

082

Andhra Pradesh. Phone Nos.: 040-55560708, 55562256, and 30994985

Mumbai (MF Division)

49, Au Chambers, 4th Floor, Tamarind Lane, Fort Mumbai - 400 001

Maharashtra.

Phone Nos.: 022- 22650253

Mumbai (Registered Office)

5, Church gate House, 2nd Floor, 32/ 34 Veer Nariman Road, Fort

Mumbai - 400 001

Products and services portfolioWith greater choices comes greater value. Networth offers you more choices by

providing a wide array of products and personalized services, so you can take

charge of your financial future with confidence. So whether you are a new

investor or a seasoned one, we have the resources and advice you would need

to make smart, well-researched investments and help you grow your Networth.

1. Retail and institutional broking

2. Research for institutional and retail clients

3. Distribution of financial products

Mutual funds

Insurance

NBFC Loans

4. PMS

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5. Corporate finance

6. Net trading

7. Depository services

8. Commodities Broking

Infrastructure

1 A corporate office and 3 divisional offices in CBD of Mumbai which houses

state-of-the-art dealing room, research wing & management and back

offices.2 All of 107 branches and franchisees are fully wired and connected to hub

at corporate office at Mumbai. Add on branches also will be wired and

connected to central hub

3 Web enabled connectivity and software in place for net trading.

4 60 operative IDs for dealing room

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5 In house technology back up team to ensure un-interrupted connectivity.

1993: Networth Started with 300 Sq.ft. of office space & 10 employees

2006: Spread over 42 cities (around 70,000 Sq.ft of office space) with over 107

branches & employee strength over 400

Market & research

Focusing on your needs

Every investor has different needs, different preferences, and different

viewpoints. Whether investor prefer to make own investment decisions or desire

more in-depth assistance, company committed to providing the advice and

research to help you succeed.

Networth providing following services to their customers,

Daily Morning Notes Market Musing Company Reports

Theme Based Reports Weekly Notes IPOs

Sector Reports Stock Stance Pre-guarter/Updates

Bullion Tracker F&O Tracker.

Key Personnel:

Mr. S P Jain CMD Networth Stock Broking Ltd.

Mr. Deepak Mehta Head PMS

Mr. Viral Doshi Equity Strategist

1 Mr. Vinesh Jain Asst. Fund Manager

OUR GROUP COMPANIES

Networth Stock Broking Ltd. [NSBL]

NSBL is a member of the National Stock Exchange of India Ltd (NSE) and the

Bombay Stock Exchange Ltd (BSE) in the Capital Market and Derivatives(Futures & Options) segment. NSBL has also acquired membership of the

currency derivatives segment with NSE, BSE & MCX-SX. It is Depository

participants with Central Depository Services India (CDSL) and National

Securities Depository (India) Limited (NSDL). With a client base of over 1L loyal

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customers, NSBL is spread across the country though its over 300+ branches.

NSBL is listed on the BSE since 1994.

Net worth Wealth Solutions Ltd. [NWSL]

Net worth Commodities & Investments Limited [NCIL]

Net worth Soft Tech Ltd. [NSL]

Ravisha Financial Services Pvt. Ltd. [RFSL]

Principles & Values

At Net worth Stock Broking Ltd. success is built on teamwork, partnership and

the diversity of the people.

At the heart of our values lie diversity and inclusion. They are a fundamental part

of our culture, and constitute a long-term priority in our aim to become the world's

best international bank.

Values

Responsive

Trustworthy

Creative

Courageous

Approach

Participation:- Focusing on attractive, growing markets where we can

leverage our relationships and expertise

Competitive positioning:- Combining global capability, deep local

knowledge and creativity to outperform our competitors

Management Discipline:- Continuously improving the way we work,

balancing the pursuit of growth with firm control of costs and risks

Commitment to stakeholders

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Customers:- Passionate about our customers' success, delighting them

with the quality of our service

Our People:- Helping our people to grow, enabling individuals to make a

difference and teams to win

Communities:- Trusted and caring, dedicated to making a difference

Investors:- A distinctive investment delivering outstanding performance

and superior returns

Regulators: - Exemplary governance and ethics wherever we are.

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MARKET PROFILE

NATIONAL STOCK EXCHANGE

The National Stock Exchange of India (NSE) situated in Mumbai - is the

largest and most advanced exchange with 1016 companies listed and 726

trading members. Capital market reforms in India and the launch of the Securities

and Exchange Board of India (SEBI) accelerated the incorporation of the second

Indian stock exchange called the National Stock Exchange (NSE) in 1992. After

a few years of operations, the NSE has become the largest stock exchange in

India.

Three segments of the NSE trading platform were established one after another.

The Wholesale Debt Market (WDM) commenced operations in June 1994 and

the Capital Market (CM) segment was opened at the end of 1994. Finally, the

Futures and Options segment began operating in 2000. Today the NSE takes the

14th position in the top 40 futures exchanges in the world.

In 1996, the National Stock Exchange of India launched S&P CNX Nifty andCNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a

diversified index of 50 stocks from 25 different economy sectors. The Indices are

owned and managed by India Index Services and Products Ltd (IISL) that has a

consulting and licensing agreement with Standard & Poor's.

In 1998, the National Stock Exchange of India launched its web-site and was the

first exchange in India that started trading stock on the Internet in 2000. The NSE

has also proved its leadership in the Indian financial market by gaining many

awards such as 'Best IT Usage Award' by Computer Society in India (in 1996 and

1997) and CHIP Web Award by CHIP magazine (1999).

The NSE is owned by the group of leading financial institutions such as Indian

Bank or Life Insurance Corporation of India. However, in the totally de-

mutualized Exchange, the ownership as well as the management does not have

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a right to trade on the Exchange. Only qualified traders can be involved in the

securities trading.

The NSE is one of the few exchanges in the world trading all types of securities

on a single platform, which is divided into three segments: Wholesale Debt

Market (WDM), Capital Market (CM), and Futures & Options (F&O) Market.

Each segment has experienced a significant growth throughout a few years of

their launch. While the WDM segment has accumulated the annual growth of

over 36% since its opening in 1994, the CM segment has increased by even 61%

during the same period. The National Stock Exchange of India has stringent

requirements and criteria for the companies listed on the Exchange. Minimum

capital requirements, project appraisal, and company's track record are just a few

of the criteria. In addition, listed companies pay variable listing fees based on

their corporate capital size.

The National Stock Exchange of India Ltd. provides its clients with a single, fully

electronic trading platform that is operated through a VSAT network. Unlike most

world exchanges, the NSE uses the satellite communication system that

connects traders from 345 Indian cities. The advanced technologies enable up to

6 million trades to be operated daily on the NSE trading platform.

NSE Nifty:

The S&P CNX Nifty (nicknamed Nifty 50 or simply Nifty), is the leading index for

large companies on the National Stock Exchange of India. S&P CNX Nifty is a

well diversified 50 stock index accounting for 22 sectors of the economy. It is

used for a variety of purposes such as benchmarking fund portfolios, index based

derivatives and index funds.

Nifty was developed by the economists Ajay Shah and Susan Thomas, then at

IGIDR. Later on, it came to be owned and managed by India Index Services and

Products Ltd. (IISL), which is a joint venture between NSE and CRISIL. IISL is

India's first specialized company focused upon the index as a core product. IISL

have a consulting and licensing agreement with Standard & Poor's (S&P), who

are world leaders in index services.

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CNX stands for CRISIL NSE Indices. CNX ensures common branding of indices,

to reflect the identities of both the promoters, i.e. NSE and CRISIL. Thus, 'C'

stands for CRISIL, 'N' stands for NSE and X stands for Exchange or Index. The

S&P prefix belongs to the US-based Standard & Poor's Financial Information

Services.

NSE other indices:

S&P CNX Nifty

CNX Nifty Junior

CNX 100

S&P CNX 500

CNX Midcap

S&P CNX Defty

CNX Midcap 200

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BOMBAY STOCK EXCHANGE:

The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai;

popularly called The Bombay Stock Exchange, or BSE) is the oldest stock

exchange in Asia. It is located at Dalal Street, Mumbai, India.

Bombay Stock Exchange was established in 1875. There are around 5,600

Indian companies listed with the stock exchange, and has a significant trading

volume. As of October2006, the market capitalization of the BSE was about Rs.

33.4 trillion (US $ 730 billion). The BSE SENSEX (Sensitive index), also calledthe BSE 30, is a widely used market index in India and Asia. As of 2005, it is

among the 5 biggest stock exchanges in the world in terms of transactions

volume.

History:

An informal group of 22 stockbrokers began trading under a banyan tree

opposite the Town Hall of Bombay from the mid-1850s, 1875, was formally

organized as the Bombay Stock Exchange (BSE).In January 1899, the stock

exchange moved into the Brokers Hall after it was inaugurated by James M

MacLean. After the First World War, the BSE was shifted to an old building near

the Town Hall. In 1956, the Government of India recognized the Bombay Stock

Exchange as the first stock exchange in the country under the Securities

Contracts (Regulation) Act.1995, when it was replaced by an electronic

(e.trading) system named BOLT, or the BSE Online Trading system. In 2005, the

status of the exchange changed from an Association of Persons (AoP) to a fully

fledged corporation under the BSE (Corporatization and Demutualization)

Scheme, 2005 (and its name was changed to The Bombay Stock Exchange

Limited).

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http://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/1875http://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/Market_capitalizationhttp://en.wikipedia.org/wiki/Indian_Rupeehttp://en.wikipedia.org/wiki/Trillionhttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Stockbrokerhttp://en.wikipedia.org/wiki/Banyanhttp://en.wikipedia.org/wiki/Town_Hall_(Bombay)http://en.wikipedia.org/wiki/1850http://en.wikipedia.org/wiki/1875http://en.wikipedia.org/wiki/1899http://en.wikipedia.org/w/index.php?title=James_M_Maclean&action=edithttp://en.wikipedia.org/w/index.php?title=James_M_Maclean&action=edithttp://en.wikipedia.org/wiki/First_World_Warhttp://en.wikipedia.org/wiki/1956http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act&action=edithttp://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act&action=edithttp://en.wikipedia.org/wiki/1995http://en.wikipedia.org/wiki/ETradinghttp://en.wikipedia.org/w/index.php?title=BOLT&action=edithttp://en.wikipedia.org/w/index.php?title=BSE_OnLine_Trading&action=edithttp://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/w/index.php?title=BSE_(Corporatization_and_Demutualization)_Scheme&action=edithttp://en.wikipedia.org/w/index.php?title=BSE_(Corporatization_and_Demutualization)_Scheme&action=edithttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/1875http://en.wikipedia.org/wiki/2006http://en.wikipedia.org/wiki/Market_capitalizationhttp://en.wikipedia.org/wiki/Indian_Rupeehttp://en.wikipedia.org/wiki/Trillionhttp://en.wikipedia.org/wiki/Asiahttp://en.wikipedia.org/wiki/Stockbrokerhttp://en.wikipedia.org/wiki/Banyanhttp://en.wikipedia.org/wiki/Town_Hall_(Bombay)http://en.wikipedia.org/wiki/1850http://en.wikipedia.org/wiki/1875http://en.wikipedia.org/wiki/1899http://en.wikipedia.org/w/index.php?title=James_M_Maclean&action=edithttp://en.wikipedia.org/w/index.php?title=James_M_Maclean&action=edithttp://en.wikipedia.org/wiki/First_World_Warhttp://en.wikipedia.org/wiki/1956http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act&action=edithttp://en.wikipedia.org/w/index.php?title=Securities_Contracts_(Regulation)_Act&action=edithttp://en.wikipedia.org/wiki/1995http://en.wikipedia.org/wiki/ETradinghttp://en.wikipedia.org/w/index.php?title=BOLT&action=edithttp://en.wikipedia.org/w/index.php?title=BSE_OnLine_Trading&action=edithttp://en.wikipedia.org/wiki/2005http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/w/index.php?title=BSE_(Corporatization_and_Demutualization)_Scheme&action=edithttp://en.wikipedia.org/w/index.php?title=BSE_(Corporatization_and_Demutualization)_Scheme&action=edit


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BSE Sensex:

The BSE SENSEX (also known as the BSE 30) is a value-weighted index

composed of 30 scrips, with the base April 1979 = 100. The set of companies

which make up the index has been changed only a few times in the last 20 years.

These companies account for around one-fifth of the market capitalization of the

BSE.

SENSEX, first compiled in 1986 was calculated on a "Market Capitalization-

Weighted" methodology of 30 component stocks representing a sample of large,

well-established and financially sound companies. The base year of SENSEX is

1978-79. The index is widely reported in both domestic and international markets

through print as well as electronic media. SENSEX is not only scientifically

designed but also based on globally accepted construction and review

methodology. From September 2003, the SENSEX is calculated on a free-float

market capitalization methodology. The "free-float Market Capitalization-

Weighted" methodology is a widely followed index construction methodology on

which majority of global equity benchmarks are based.

The growth of equity markets in India has been phenomenal in the decade gone

by. Right from early nineties the stock market witnessed heightened activity in

terms of various bull and bear runs. More recently, the bourses in India

witnessed a similar frenzy in the 'TMT' sectors. The SENSEX captured all these

happenings in the most judicial manner. One can identify the booms and bust of

the Indian equity market through SENSEX.

The values of all BSE indices are updated every 15 seconds during the market

hours and displayed through the BOLT system, BSE website and news wi wire

agencies.

SENSEX calculation: SENSEX is calculated using a "Market Capitalization-

Weighted" methodology. As per this methodology, the level of index at any point

of time reflects the total market value of 30 component stocks relative to a base

period. (The market capitalization of a company is determined by multiplying the

price of its stock by the number of shares issued by the company). An index of a

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set of combined variables (such as price and number of shares) is commonly

referred as a 'Composite Index' by statisticians. A single indexed number is used

to represent the results of this calculation in order to make the value easier to

work with and track over time. It is much easier to graph a chart based on

indexed values than one based on actual values.

The base period of SENSEX is 1978-79. The actual total market value

of the stocks in the Index during the base period has been set equal to an

indexed value of 100. This is often indicated by the notation 1978-79=100. The

formula used to calculate the Index is fairly straightforward. However, the

calculation of the adjustments to the Index (commonly called Index maintenance)

is more complex.

The calculation of SENSEX involves dividing the total market capitalization of 30

companies in the Index by a number called the Index Divisor. The Divisor is the

only link to the original base period value of the SENSEX. It keeps the Index

comparable over time and is the adjustment point for all Index maintenance

adjustments. During market hours, prices of the index scrips, at which latest

trades are executed, are used by the trading system to calculate SENSEX every

15 seconds and disseminated in real time. During market hours, prices of the

index scrips, at which trades are executed, are automatically used by the trading

computer to calculate the SENSEX every 15 seconds and continuously updated

on all trading workstations connected to the BSE trading computer in real time.

BSE - other Indices:

Apart from BSE SENSEX, which is the most popular stock index in India, BSE

uses other stock indices as well:

BSE 500

BSE PSU

BSE MIDCAP

BSE SMLCAP

BSE BANKEX

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BSE SENSEX 2009 is calculated based on the 30scrips. Those thirty scrips are

as

follows:

Code Name Sector

500410 ACC Ltd. Housing Related

500103 Bharat Heavy Electricals Ltd. Capital Goods

Code Name Sector

532454 Bharti Airtel Ltd. Telecom

532868 DLF Ltd. Housing Related

500300 Grasim Industries Ltd. Diversified

500010 HDFC Finance

500180 HDFC Bank Ltd. Finance

500440 Hindalco Industries Ltd. Metal,Metal Products & Mining

500696 Hindustan Unilever Ltd. FMCG

532174 ICICI Bank Ltd. Finance

500209 Infosys Technologies Ltd. Information Technology

500875 ITC Ltd. FMCG

532532 Jaiprakash Associates Ltd. Housing Related

500510 Larsen & Toubro Limited Capital Goods

500520 Mahindra & Mahindra Ltd. Transport Equipments

532500 Maruti Suzuki India Ltd. Transport Equipments

532555 NTPC Ltd. Power

500312 ONGC Ltd. Oil & Gas

500359 Ranbaxy Laboratories Ltd. Healthcare

532712 Reliance Communications Limited Telecom

500325 Reliance Industries Ltd. Oil & Gas

500390 Reliance Infrastructure Ltd. Power

500376 Satyam Computer Services Ltd. Information Technology

500112 State Bank of India Finance

500900 Sterlite Industries (India) Ltd. Metal,Metal Products & Mining

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532540 Tata Consultancy Services Limited Information Technology

500570 Tata Motors Ltd. Transport Equipments

500400 Tata Power Company Ltd. Power

500470 Tata Steel Ltd. Metal,Metal Products & Mining

507685 Wipro Ltd. Information Technology

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CHAPTER-4

DATA ANALYSIS

&

INTERPRETATION

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ANALYSIS AND INTERPRETATION

APRIL 2010 NIFTY FUURE CONTRACT

Symbol Date Expiry Open High Low Close

NIFTY 26-Mar-10 29-Apr-10 5276 5309.9 5272.6 5296.95

NIFTY 29-Mar-10 29-Apr-10 5291.5 5344 5279.4 5318.8

NIFTY 30-Mar-10 29-Apr-10 5324.9 5331 5263.25 5273.9

NIFTY 31-Mar-10 29-Apr-10 5279 5296.1 5245 5261.6

NIFTY 1-Apr-10 29-Apr-10 5286.1 5319.75 5276.05 5306.8

NIFTY 5-Apr-10 29-Apr-10 5329.8 5371.6 5322.5 5365.9

NIFTY 6-Apr-10 29-Apr-10 5376 5387 5352.25 5367.1

NIFTY 7-Apr-10 29-Apr-10 5380 5398 5343.3 5378.95

NIFTY 8-Apr-10 29-Apr-10 5368 5370 5290.1 5301.6

NIFTY 9-Apr-10 29-Apr-10 5307.1 5388.9 5307.1 5364.9NIFTY 12-Apr-10 29-Apr-10 5363.8 5377.8 5322.45 5343.8

NIFTY 13-Apr-10 29-Apr-10 5328.75 5338 5308 5329.6

NIFTY 15-Apr-10 29-Apr-10 5372.25 5377.5 5268.15 5277.3

NIFTY 16-Apr-10 29-Apr-10 5264.9 5294.8 5246 5263.05

NIFTY 19-Apr-10 29-Apr-10 5200 5226 5162.3 5207.4

NIFTY 20-Apr-10 29-Apr-10 5217 5255.5 5207.95 5226.65

NIFTY 21-Apr-10 29-Apr-10 5245 5265 5230.1 5245.15

NIFTY 22-Apr-10 29-Apr-10 5220 5341.7 5217.05 5265.4

NIFTY 23-Apr-10 29-Apr-10 5269 5315 5265.25 5305

NIFTY 26-Apr-10 29-Apr-10 5346.8 5346.8 5310 5319.9

NIFTY 27-Apr-10 29-Apr-10 5304.8 5333.9 5298.9 5309.05

NIFTY 28-Apr-10 29-Apr-10 5252.25 5276.95 5198 5216.7

NIFTY 29-Apr-10 29-Apr-10 5233.3 5257.45 5225.15 5254.1

5400 CALL OPTION FOR APRIL 2010

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Symbol Date Expiry Strike Price Open High Low Close

NIFTY 26-Mar-10

29-Apr-10 5400 46 58.9 43 55.25

NIFTY 29-Mar-10

29-Apr-10 5400 54 73.75 50 65.35

NIFTY 30-Mar-10

29-Apr-10 5400 67 69 46 49.15

NIFTY 31-Mar-10

29-Apr-10 5400 48.9 55 41.7 45.2

NIFTY 1-Apr-10 29-Apr-10 5400 49 51.8 44.25 48.35

NIFTY 5-Apr-10 29-Apr-10 5400 50.35 62.8 48.8 61.05

NIFTY 6-Apr-10 29-Apr-10 5400 65 68.3 55.25 59.25

NIFTY 7-Apr-10 29-Apr-10 5400 63 73 50.6 64.5

NIFTY 8-Apr-10 29-Apr-10 5400 60 60.8 40 43.1

NIFTY 9-Apr-10 29-Apr-10 5400 45 69.3 43.65 58.3

NIFTY 12-Apr-10 29-Apr-10 5400 60.5 61.95 47.25 51.65NIFTY 13-Apr-10 29-Apr-10 5400 49 52 39.05 42.65

NIFTY 15-Apr-10 29-Apr-10 5400 67.7 67.7 26.8 28.6

NIFTY 16-Apr-10 29-Apr-10 5400 25 27.4 18.5 20.55

NIFTY 19-Apr-10 29-Apr-10 5400 10 14 5.6 9.8

NIFTY 20-Apr-10 29-Apr-10 5400 10.5 11.7 6 6.6

NIFTY 21-Apr-10 29-Apr-10 5400 7.5 9.25 5.15 5.75

NIFTY 22-Apr-10 29-Apr-10 5400 4.35 23 3.4 7.4

NIFTY 23-Apr-10 29-Apr-10 5400 6.45 11.9 5.4 8.1

NIFTY 26-Apr-10 29-Apr-10 5400 12.2 14 5.9 7.05

NIFTY 27-Apr-10 29-Apr-10 5400 4.95 9.5 2.6 3.15

NIFTY 28-Apr-10 29-Apr-10 5400 1.4 2 0.35 0.55

NIFTY 29-Apr-10 29-Apr-10 5400 0.2 0.2 0.05 0.05

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5400 PUT OPTION FOR APRIL 2010


NIFTY 26-Mar-

10

29-Apr-10 5400 171.65 175 149.95 157.95

NIFTY 29-Mar-10

29-Apr-10 5400 141.2 169.5 128.05 145.55

NIFTY 30-Mar-10

29-Apr-10 5400 143.7 181 138 172.2

NIFTY 31-Mar-10

29-Apr-10 5400 178.8 195 157 181

NIFTY 1-Apr-10 29-Apr-10 5400 161.05 170.45 131.9 140.5

NIFTY 5-Apr-10 29-Apr-10 5400 126 129.9 92 96

NIFTY 6-Apr-10 29-Apr-10 5400 92.55 103.5 82.65 93.7

NIFTY 7-Apr-10 29-Apr-10 5400 81.15 106.55 75.9 86.6

NIFTY 8-Apr-10 29-Apr-10 5400 97.9 149.65 90.25 138.85

NIFTY 9-Apr-10 29-Apr-10 5400 133.5 133.5 79.7 93.5

NIFTY 12-Apr-10 29-Apr-10 5400 91 126.5 83.3 110.45

NIFTY 13-Apr-10 29-Apr-10 5400 111.1 131 109.8 114.45

NIFTY 15-Apr-10 29-Apr-10 5400 84.95 159 82 150.4

NIFTY 16-Apr-10 29-Apr-10 5400 160 172 132 156.45

NIFTY 19-Apr-10 29-Apr-10 5400 207.5 239.7 182.55 199.15

NIFTY 20-Apr-10 29-Apr-10 5400 176.3 194 151.8 178.4

NIFTY 21-Apr-10 29-Apr-10 5400 160 171.45 141 157.3

NIFTY 22-Apr-10 29-Apr-10 5400 175 182 78 139.65

NIFTY 23-Apr-10 29-Apr-10 5400 125.35 135 93.3 101.05

NIFTY 26-Apr-10 29-Apr-10 5400 74.9 92.35 61 84.8

NIFTY 27-Apr-10 29-Apr-10 5400 90 98 73 90.55

NIFTY 28-Apr-10 29-Apr-10 5400 125 198.65 121.05 180.35

NIFTY 29-Apr-10 29-Apr-10 5400 171 185 135.6 140

INTERPRETATION: In the above graph I calculated BEP.

BREAKEVEN POINT (BEP) = HIGH VALUE+LOW VALUE/2=4620+3532/2= 8152/2

= 4076In the above table I observed fluctuations in the period of (04-05-2009 to

28-05-2009) in this graph I found as BEP was 4076 share value.

Here with the above values, I have not found any major fluctuations towards upsand downs, so , here I am not calculating marginal of safety.

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Margin

Margin amount is security to the Broking firms In derivatives market trading

happens on basis of margin amount, here Margin amount is investment of

customers, sometimes margin may becomes zero, sometimes it may go negative

values.

Ex: if a Nifty contract worth is 2 lakhs, broking companies will not take total

amount, normally they used to collect 15% on actual worth it means they collect

only 30k. if nifty looses 600 points , margin amount becomes zero, if nifty looses

more than 600 points, it comes in negative

Hedging is the safeguarding the position

When coming to may contract, there is lot of positive fluctuations (Never happen

in stock market). Because of Old Govt. formation on 16 th May 2009.

Here , in a situation, a investor expects correction on may 13th and he had

short sell nifty future on same day @ 3700 ( keep in mind elections results on

16th) and Paid margin amount of 30k. and he knows that if Nifty crosses 4250 his

margin becomes Zero.

In above situation, to give the security to his margin amount, I am

suggesting 3900 call option .on 15 th may 2009 for the investment of 3500

Calculations as on 19th May 2009

Nifty future hits 4600 it means he was in loss of 900 points

900*50 = 45000

Margin amount = 30000

It means on 19th may his margin amount gone into negative of 15000

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Nifty option hits 680 it means is he was in gain of 600 points

600*50 = 30000

It means after deducting the margin amount he has still 15000 positive balance

with the company.

Here Rs 3500 worth call option given the 30k worth security

On 19th may if he sold the call option he gains 610 points and he hold the

position short sell of 3700.

On 22nd may he covers the nifty (3700 short) @4200, here the loss was

500 points.

On 2 positions he got 110 points gain. It means here hedging given

security and returns also.

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27-MAY-2010 FUTURES INDEX NIFTY-50

Symbol Date Expiry Open High Low Close

NIFTY 30-Apr-10 27-May-10 5263.8 5290 5252 5262.8

NIFTY 3-May-10 27-May-10 5235 5245 5202.35 5218.45

NIFTY 4-May-10 27-May-10 5224 5238 5128.15 5141.85

NIFTY 5-May-10 27-May-10 5071.55 5133 5053 5120.15NIFTY 6-May-10 27-May-10 5112.35 5114.5 5025 5087.15

NIFTY 7-May-10 27-May-10 5016 5043 4976.1 5019.8

NIFTY 10-May-10 27-May-10 5080 5208.3 5080 5200.25

NIFTY 11-May-10 27-May-10 5191.25 5191.25 5122 5132.95

NIFTY 12-May-10 27-May-10 5131.3 5174.4 5088.25 5150.2

NIFTY 13-May-10 27-May-10 5185.5 5218 5165.4 5178.15

NIFTY 14-May-10 27-May-10 5163.2 5202 5058.2 5083.65

NIFTY 17-May-10 27-May-10 5017.7 5074.8 4962.2 5058.05

NIFTY 18-May-10 27-May-10 5055.55 5107.6 5017.95 5063.4NIFTY 19-May-10 27-May-10 5006.35 5019.7 4901 4922.9

NIFTY 20-May-10 27-May-10 4946.25 4976.9 4915.25 4941.05

NIFTY 21-May-10 27-May-10 4851 4943.7 4851 4928.4

NIFTY 24-May-10 27-May-10 4990 5023 4910.55 4931.05

NIFTY 25-May-10 27-May-10 4862.7 4875 4786.45 4809.35

NIFTY 26-May-10 27-May-10 4855.3 4925 4854.85 4917.05

NIFTY 27-May-10 27-May-10 4916 5004.45 4900.6 5004

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NIFTY5000 CALL OPTION TABLE FOR 27-MAY-2010


NIFTY30-Apr-10

27-May-10 5000 296 315.85 283.7 291.9

NIFTY3-May-10

27-May-10 5000 268.1 277 244.25 255.05

NIFTY4-May-10

27-May-10 5000 265 270 188.35 196.95

NIFTY5-May-10

27-May-10 5000 135 193 135 186.05

NIFTY6-May-10

27-May-10 5000 171 177.65 130.1 160.25

NIFTY7-May-10

27-May-10 5000 122.4 141.5 110 129.1

NIFTY

10-May-10

27-May-10 5000 161 238.5 153.55 230.6

NIFTY11-May-10

27-May-10 5000 225 225 176 185.6

NIFTY12-May-10

27-May-10 5000 174 214 155.5 195.65

NIFTY13-May-10

27-May-10 5000 230.8 239.95 198 209.1

NIFTY14-May-10

27-May-10 5000 193.15 222.85 123.1 135.2

NIFTY17-May-10

27-May-10 5000 99 127.9 73 117.4

NIFTY

18-May-10

27-May-10 5000 110 142.2 92 112.2

NIFTY19-May-10

27-May-10 5000 81 87.85 40.5 46.7

NIFTY20-May-10

27-May-10 5000 50 58.9 38 43.2

NIFTY21-May-10

27-May-10 5000 15.35 38.8 15 34.2

NIFTY24-May-10

27-May-10 5000 49 57.7 16.2 21.35

NIFTY25-May-10

27-May-10 5000 9.45 12.8 1.5 2

NIFTY

26-May-10

27-May-10 5000 2.8 4.9 1.4 3.85

NIFTY27-May-10

27-May-10 5000 2.5 8.8 0.45 3

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NIFTY 5000 PUT OPTION TABLE FOR 26-MARCH-2009

Symbol Date Expiry StrikePrice

Open High Low Close

NIFTY 30-Apr-10 27-May-10

5000 35 38 29.55 33.9

NIFTY3-May-10 27-May-

105000 39.9 47 36.55 43


105000 40 66.6 37.25 61.95


105000 84.95 98.7 63 70.05


105000 69.9 109.7 68 77.65


105000 103.5 137.9 103.2 112.5

NIFTY

10-May-

10

27-May-

10

5000 70 78.8 35.6 37.2

NIFTY11-May-

1027-May-

105000 38 59.7 38 57

NIFTY12-May-

1027-May-

105000 55 72.2 43.4 51.05

NIFTY13-May-

1027-May-

105000 40 40 27.75 36.8

NIFTY14-May-

1027-May-

105000 38 69.9 26.8 60.5

NIFTY17-May-

1027-May-

105000 83.7 113.25 55.65 62.65

NIFTY

18-May-

10

27-May-

10

5000 68.35 76.9 40.7 52.3

NIFTY19-May-

1027-May-

105000 73.9 142 70.3 127.3

NIFTY20-May-

1027-May-

105000 110 123 83.35 104.1

NIFTY21-May-

1027-May-

105000 165 167 96 104.65

NIFTY24-May-

1027-May-

105000 65 106.9 36.6 89.35

NIFTY25-May-

1027-May-

105000 119 212 119 191.1

NIFTY

26-May-

10

27-May-

10

5000 155 155 76 84.15

NIFTY27-May-

1027-May-

105000 85 97.9 0.05 0.05

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NIFTY 5100 PUT OPTION TABLE FOR 27-MAY-2010


NIFTY30-Apr-10 27-May-10 5100 59 59 47.55 53.75

NIFTY 3-May-10 27-May-10 5100 52.2 72.5 52.2 66.85

NIFTY4-May-10 27-May-10 5100 60.1 100 59 93.3

NIFTY5-May-10 27-May-10 5100 131.25 142 95 103.35

NIFTY6-May-10 27-May-10 5100 105.25 158 102.35 117.4

NIFTY7-May-10 27-May-10 5100 150.3 195.1 148.35 160.9

NIFTY10-May-10 27-May-10 5100 113.85 115.5 56.05 58.45

NIFTY 11-May-10 27-May-10 5100 62.05 90.45 61.2 86.9

NIFTY12-May-10 27-May-10 5100 84.25 107.4 68.6 78

NIFTY13-May-10 27-May-10 5100 60.9 63.4 45.1 59.1

NIFTY14-May-10 27-May-10 5100 59.85 110 45.3 95.3

NIFTY17-May-10 27-May-10 5100 111.1 173 93.25 102.45

NIFTY18-May-10 27-May-10 5100 110 127.45 72.6 92.75

NIFTY19-May-10 27-May-10 5100 125.5 215 121 196.2

NIFTY20-May-10 27-May-10 5100 176 195 144.5 171.45

NIFTY21-May-10 27-May-10 5100 255 255.75 164.9 177.05

NIFTY24-May-10 27-May-10 5100 124.15 188 90 169.05

NIFTY25-May-10 27-May-10 5100 230.3 310.2 222.2 291.2

NIFTY26-May-10 27-May-10 5100 258.05 258.05 170 178.45

NIFTY27-May-10 27-May-10 5100 193.4 196 94.05 95.7

OPEN = 5263.8HIGH = 5290LOW = 4786.45CLOSE = 5004

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BREAKEVEN POINT (BEP) = HIGH VALUE+LOW VALUE/2=5290+4786.45/2= 10076.45/2

= 5038.225In this graph I observed fluctuations in the period of (30-04-2010 to 27-05-2010) in this graph I found as BEP was 5038.225 share value .

Here I observed as a value share is high rate so Nifty-50 value was (5038.225 -

5290.00=251.775) so here share value is decreased so in this period of so here

investors gets more losses, when goes for more longs .if investor enter for longs

on 7th of May, with in short span of time investor get good profits. So this is good

signal of the investors. So here I again observed nifty-50 losses of the period so

here Nifty-50 share value is (5038.225-4786.45=251.775) so share value is

increased so here investor gets more profits, when attempts for more shorts. So

this is unexpected changes in market and politics and lack of experts of

investors.

So here investor in the contract 2nd Thursday was more losses. So May

contract was started 5263.8 and ending of the contract 5004 so here investor

gets more losses in longs and more profits in shorts.

When an investor goes for shorts in 3 levels, when compare to BEP

Explaining the actual position of investor

(1)Margin of Safety (M.o.S) =opening share value BEP

. =5263.8-5038.225

=-225.575

So here margin of safety is less than to the BEP share value. So here investor

gets some profits in shorts.

(2) Margin of Safety (M.o.S) =high share value BEP

=5290.00-5038.225

=251.775

So here margin of safety is more than to the BEP share value. So here investor

gets more profits and longs.

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(3) Margin of Safety (M.o.S) =low share value BEP

= 4786.45 5038.225

= 251.775

So, in the above situation , after low recorded price 4786.45, nifty maximum

reached 5004, so the max loss in the current contract is 217.55 here margin of

safety is less than to the BEP so here investor gets more losses when investor

goes for more shorts.

Hedging

Hedging does not remove losses. The best that can be achieved using hedging

is the removal of unwanted exposure, i.e. unnecessary risk. The hedged position

will make less profit than the un-hedged position, half the time. One should not

enter into a hedging strategy hoping to make excess profits for sure; all that can

come out of hedging is reduced risk

Example for Hedging

In stock market terminology Hedging means Risk Minimizing

1. A customer buys the 10 lots nifty May Future @5280 in first day of May. till end

of the May he has not covered the position.

In last week of May nifty has closed @5004. So the loss per lot is Approx

13800. So which instrument gives the best HEDGING for him?

According to analyst words on 30th April 2010, market performance for the

current contract will be based on these factors.

If nifty crosses 5301, next level will be 5381 and 5450. If nifty breaks 5220 next

levels will be continue in down trend, like 5150, 5080,5020,4950,4880. Where

continuous down trend also not possible, there will be some ups and downs.

Above I have mentioned call option table for 5000 and put option table for 5000

and 5100 for May 2010, if you observe on 3rd May 5100 put option recorded

Rs55.00, assume that customer entered in this level and exits at this level.

Rs310 on 25th may 2010.

Here, nifty unable to break its next resistance level 4780 on the 25th May 2010.

So and recorded huge volume in open interest for 5100 puts.

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According to market sentiment, when a product records high volumes in open

interest, probability is very less to increase.

Based on above information first, customer has to exit put option from the market

on 25th and has to maintain his future long position in the market.

Gain on May put option

310-55 = 255 is profit on single unit, nifty lot contains 50 units

So 255*50 = 12750 is profit

For the above mentioned customer May 5100 put option gives the best hedging.

Because, in May future he occurred 13800 losses and in same month call option

given 17600 profits.

End of the month still he is in loss of Rs1000 per lot, it proves that in

volatility market options will give the hedging to the investors

Conclusion: options will give hedging to the investment and minimizes the

risk but, will not give profits.

Options always give the positive returns

No, sometimes, investors prefer options for investment purpose only. But

investment amount becomes zero in some situations.

Ex. In the above table assume that customer enter the nifty 5100put in first week,

last week of the contract it became zero. So, options also fail to give positive

returns.

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NIFTY June 2010 CONTRACT

Symbol Date Expiry Open High Low Close LTP

NIFTY28-May-10 24-Jun-10 5025 5054.65 4996 5041 5037

NIFTY 31-May-10 24-Jun-10 5035.15 5071.7 5015.3 5056.2 5056.05

NIFTY1-Jun-10 24-Jun-10 5045 5049.75 4933.5 4944.05 4940

NIFTY2-Jun-10 24-Jun-10 4955 5019.9 4941.1 5004.35 5014

NIFTY3-Jun-10 24-Jun-10 5070 5108.8 5061.55 5095.95 5097.25

NIFTY4-Jun-10 24-Jun-10 5090.6 5134.9 5070.6 5119.95 5117.25

NIFTY7-Jun-10 24-Jun-10 5011.35 5032 4985.2 5020.2 5028.7

NIFTY 8-Jun-10 24-Jun-10 5030.1 5054.5 4937.65 4960.7 4965.15

NIFTY9-Jun-10 24-Jun-10 5053.1 5053.1 4953.1 4990.4 5008.05

NIFTY10-Jun-10 24-Jun-10 5008.2 5093.5 5005 5086.1 5090.5

NIFTY11-Jun-10 24-Jun-10 5129 5138 5092.1 5116.85 5113.65

NIFTY14-Jun-10 24-Jun-10 5138.25 5209 5138.25 5204.8 5205

NIFTY15-Jun-10 24-Jun-10 5201.25 5245.25 5173 5234.3 5226.5

NIFTY16-Jun-10 24-Jun-10 5239.8 5249.45 5211 5226.45 5223.5

NIFTY17-Jun-10 24-Jun-10 5232 5297 5206 5284.8 5286

NIFTY18-Jun-10 24-Jun-10 5275 5296.8 5248.2 5261.15 5258.6

NIFTY21-Jun-10 24-Jun-10 5325 5377.55 5316.3 5357.65 5354.15

NIFTY22-Jun-10 24-Jun-10 5342.75 5358.95 5311.25 5320.3 5325.5

NIFTY23-Jun-10 24-Jun-10 5303.4 5344 5296.1 5333.6 5343

NIFTY24-Jun-10 24-Jun-10 5331.3 5353.2 5287.2 5320.55 5320.55

OPEN 5025 HIGH 5377.55LOW 4933.5 CLOSE 5320.55BEP For above contract 5155.525

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5100 CALL OPTION FOR JUNE 2010 CONTRACT


NIFTY28-May-10 24-Jun-10 5100 109.8 119.9 84.7 94.05

NIFTY 31-May-10 24-Jun-10 5100 92 104.95 84 98.65

NIFTY1-Jun-10 24-Jun-10 5100 94.9 94.9 56.6 59.2

NIFTY2-Jun-10 24-Jun-10 5100 63.25 80 58.25 74.75

NIFTY3-Jun-10 24-Jun-10 5100 89.5 111.25 89.5 102.15

NIFTY4-Jun-10 24-Jun-10 5100 94 116.25 88.25 107.85

NIFTY7-Jun-10 24-Jun-10 5100 61.1 74.8 50 70.05

NIFTY 8-Jun-10 24-Jun-10 5100 69.9 77.95 45 48.45

NIFTY9-Jun-10 24-Jun-10 5100 48 72.35 45.25 53.6

NIFTY10-Jun-10 24-Jun-10 5100 55 86.5 52.2 82.45

NIFTY11-Jun-10 24-Jun-10 5100 91.25 99.8 75.85 88.75

NIFTY14-Jun-10 24-Jun-10 5100 97.2 138.45 93.35 134.65

NIFTY15-Jun-10 24-Jun-10 5100 131.55 161.4 110.5 153.7

NIFTY16-Jun-10 24-Jun-10 5100 155 162.5 135.85 144.85

NIFTY17-Jun-10 24-Jun-10 5100 145 201.7 126.3 192.6

NIFTY18-Jun-10 24-Jun-10 5100 180 199.95 156.1 166.2

NIFTY21-Jun-10 24-Jun-10 5100 212.3 275.3 211.05 261.75

NIFTY22-Jun-10 24-Jun-10 5100 238.2 259 212.3 220.55

NIFTY23-Jun-10 24-Jun-10 5100 200 241.8 196 230.8

NIFTY24-Jun-10 24-Jun-10 5100 234.75 251.7 187.5 221.7

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5100 PUT OPTION FOR JUNE 2010 CONTRACT


NIFTY28-May-10 24-Jun-10 5100 176 190.8 149 155.25

NIFTY 31-May-10 24-Jun-10 5100 147 171.05 135.6 142.1

NIFTY1-Jun-10 24-Jun-10 5100 158 223.1 150 215.5

NIFTY2-Jun-10 24-Jun-10 5100 201 218 160.15 171.5

NIFTY3-Jun-10 24-Jun-10 5100 139.45 143.7 105 107.7

NIFTY4-Jun-10 24-Jun-10 5100 106 119 82.4 88.75

NIFTY7-Jun-10 24-Jun-10 5100 132 173.85 110.25 149.2

NIFTY 8-Jun-10 24-Jun-10 5100 149.9 207.25 123.1 187.35

NIFTY9-Jun-10 24-Jun-10 5100 181.2 182.8 126.5 163.4

NIFTY10-Jun-10 24-Jun-10 5100 152.7 152.7 92.65 96.75

NIFTY11-Jun-10 24-Jun-10 5100 76 86.7 65.4 73.85

NIFTY14-Jun-10 24-Jun-10 5100 63.85 63.85 32.1 33.5

NIFTY15-Jun-10 24-Jun-10 5100 31.5 40.2 20.5 22.25

NIFTY16-Jun-10 24-Jun-10 5100 22.8 30.25 18.15 23.15

NIFTY17-Jun-10 24-Jun-10 5100 22 23.85 8.4 9.9

NIFTY18-Jun-10 24-Jun-10 5100 10 10.95 5.55 7.2

NIFTY21-Jun-10 24-Jun-10 5100 3.45 3.45 1.1 2.45

NIFTY22-Jun-10 24-Jun-10 5100 2.25 2.35 1.2 1.65

NIFTY23-Jun-10 24-Jun-10 5100 1.25 1.25 0.45 0.55

NIFTY24-Jun-10 24-Jun-10 5100 0.2 0.2 0.05 0.05


BREAKEVEN POINT (BEP) = HIGH VALUE+LOW VALUE/2=5377.55 + 4933.5/2= 10311.05/2

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= 5155.525

In this graph I observed fluctuations in the period of (28-05-2010 to 24-06-

2010) in this graph I found as BEP was 5155.525 share value .

Here I observed as a value share is high rate so Nifty-50 value was (5377.55 5155.525=222.025) so here share value is increased so in this period of so here

investors gets more profits and more longs .so this is JUNE month last week

Monday investor get good profits. So this is good signal of the investors. So here

I again observed nifty-50 losses of the period so here Nifty-50 share value is

(4933.5-5155.525=-222.025) so share value is decreased so here investor gets

more losses and more shorts. So this is unexpected change in market and

politics and lack of expertness in investors.

Then a investor goes for shorts in 3 levels, when compare to BEP.

Explaining the actual position of investor with margin of safety

(1) Margin of Safety (M.o.S) =opening share value BEP

. =5025 5155.525

=-130.525

So here margin of safety is less than to the BEP share value . so here investor

gets some losses in shorts.

(2) Margin of Safety (M.o.S) high share value BEP

=5377.55-5155.525

=222.025

So here margin of safety is more than to the BEP share value. So here investorgets more profits and longs.

(3) Margin of Safety (M.o.S) = low share value BEP

=4933.5-5155.525= 222.025

So here margin of safety is less than to the BEP so here investor gets more

losses and more shorts.

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How Premiums works on Options

In derivatives market, customers can invest in only options also. But here the

maximum risk is Premium amount paid by the investor.

The options will give buying or selling right, not an obligation.

Call option premium increases when market is in bullish or Positive

Put option premium increases when market is in bearish or negative.

The reason investors shown more interest on options: less risk with high returns.

In equities investor needs to pay the total amount towards investment

Ex: Ramesh buys 300 equity shares of RIL @1000 on 1st January 2010, for a

target price of Rs.1200 by 28 th January2010. According to his expectation target

reaches to 1200, what are the returns generated by ramesh

A; investment amount is 3 00 000 (1000 * 300)

Sell value 3 60 000 (1200*300)

Rs.60000 generated on investment, 60k is 20% on investment.

In futures long / short investor no need to pay complete contract amount. Here

investor has to pay 25% as margin amount.

In the above example, 300 RIL shares contain one lot. Total contract value is300000. But the margin amount is only 75000.

Returns on Investment: Rs.200 growth on 300 units it means 60k profit on

investment, here 60k is 80% on investment.

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An equity customer can invest with his investment 4 times in future, this is the

one reason people shown interest on futures investment.

In options investor has to pay only premiums. Here premium amount is

investment. Here investor gets right towards investment.

Ex: in the above example, on 1000 RIL strike price investor paid Rs.25 as

premium on each unit. Contract size is 300 units. Investment value is 7500. Here

7500 giving the right on 300000 contract. Here assumption of buy price is 1025,

because Rs.25 premium is added in the contract.

End of the contract price appreciation on RIL is 200. But here we have to take

Rs.175 into consideration.

Returns on investment are 175*300 = 52500, means 7 times on investment

700% profit for the given contract.

In the above example if the stock price falls to Rs.500 also, the maximum loss

would be only the premium. He no need to bare any extra loses.

This is the only one reason, I have found in the study people shown more interest

towards futures and options.

Some live examples on options investment: during my study, I got an opportunity

to observe some clients derivatives positions: in those NIFTY, LT, Are best

examples.

73

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