CHAPTER - I

INTRODUCTION

INTRODUCTION
Every modern economy is based on a sound financial system .A financial system is a set
of institutional arrangements through which financial surpluses are mobilized from the units
generating surplus income and transferring them to the others in need of them. The activities
include production, distribution, exchange and holding of financial assets/instruments of
different kinds by financial institutions, banks and other intermediaries of the market. The
financial markets have two major components; they are money market and capital market
A derivative is a financial instrument whose value depends on other, more basic, underlying
variables. The valuable underlying could be prices of traded securities and stocks, prices of gold
or copper. Derivatives have increasingly important field of finance, options and futures are
traded actively on many exchanges, Forward contacts, Swap and different types of options are
regularly traded outside exchanges by financial institutions, Banks and their corporate clients in
what are termed as over the counter markets. In other words, there no single market place
organized exchanges
A derivative security is a security whose value depends on the value of together more basic
underlying variable. These are also known as contingent claims. Derivatives securities have been
very successful in innovation in capital markets.
The emergence of the market for derivative products most notably forwards, futures and options
can be traced back to the willingness of risk adverse economic agents to guard themselves
against uncertainties arising out of fluctuations in asset prices. By their very nature, financial
markets are market by a very high degree of volatility. Though the use of derivative products, it
2

is possible to partially or fully transfer price risks by locking in asset prices. As instrument of
risk management these generally dont influence the fluctuations 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 derives their value from an underlying asset.
Underlying asset can be Bullion, Index, Share, Currency, Bonds, Interest, etc.

Stock exchanges
Stock Exchange-traded derivatives are divided into those traded on a futures exchange such as
(options and futures) and securities exchanges like warrants, structured products.

Over the counter market

Derivatives traded OTC is not regulated in terms of their features and contractual provisions.
3

1.2 Need for the study

The study has been done to know the futures of derivatives and also to know the derivative
market in India. This study also covers the recent developments in the derivative market taking
into account the trading of BHEL, ITC, ONGC, REL Capital, and TATA Steel. Through this
study I came to know the trading done in derivative and their use in the stock market

1.3 Objectives of the study

To study the Derivative trading

To study the performance of future trading since February 2014 to April 2014 of
BHEL,ITC,ONGC,REL Capital, TATA Steel

To compare the prices of BHEL, ITC, ONGC, REL Capital, TATA Steel from February to
April.

To understand the concept of the Financial Derivatives and derivative trading such as
Futures

To study the different ways of buying and selling of futures

1.4 Scope of the study

The study is limited to Derivatives With special reference to Futures in the Indian context and the India
Info line has been taken as representative sample for the study. The study cannot be said as totally perfect,
any alteration may come. The study has only made humble attempt at evaluating Derivatives Markets
only in Indian Context. The study is not based on the International perspective of the Derivatives Markets.

1.5 Sources of data

4

The data is collected from secondary data

Secondary data
The secondary data are the data, which the investigator borrows from other who have
collected it for various other purposes. Therefore it may not entirely be reliable. It is less
expensive and involves less expensive and involves less time and labor than the collection of
primary data.

The Sources of collecting Data

Company records, brochures and other documents.

Books, Newspapers, magazines, Websites

1.6 Limitations of the study

5

Every work has its own limitation. Limitations are extent to which process should not be
exceeded. Limitation of this analysis is

The study is based on only in Indian Context of the Derivatives Markets. The study is not based
on the International perspective of the Derivatives Markets.

Collected all the datas by questioning directly to the customers or to the employee of the

brokerage firms, so they may provide wrong information

The project survey is carried out only in Hyderabad

As the time was limited, study was confined to conceptual understanding of Derivatives
market in India. During this limited period of study, the study may not be a detailed, Full
fledged and utilitarian one in all aspects

CHAPTER II
REVIEW OF LITERATURE

REVIEW OF LITERATURE
Derivatives
7

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, the financial markets
are marked by a very high degree of volatility. Through of derivatives of products, it is possible
to partially or fully transfer price risks by locking in asset prices. As instruments of risk
management, these generally do not influence the fluctuations underlying prices. However, by
locking in asset prices, derivatives products minimize the impact of fluctuations in asset prices
on the profitability and cash flow situation of riskaverse investors.

Definition
The term Derivative has been defined in Securities Contracts (Regulation) Act 1956, as

A security derived from a debt instrument, share, loan whether secure or unsecured, risk
instrument or contract for differences or any other form of security.

A contract, which derives its value from the prices, or index of prices, of underlying
securities.

History of Derivatives

Derivative trading began in 1865 when the Chicago board of trade (CBOT) listed the first
exchange traded derivatives contract in the USA. These contracts were called future
contract.

In 1919 the Chicago Butter and Egg board a spin-off of CBOT was recognized to allow
future trading. Its name was changed to Chicago mercantile exchange (CME).

The first stock index futures contract was traded at Kansas city board of trade.

Indian Derivative market

Starting from a controlled economy, India has moved towards a world where a price fluctuates
every day. Derivatives are integral part of liberalization process to manage risk. In July 1999,
Derivatives trading commenced in India.

Chronology of instruments
1991

Liberalization process initiated

14th December 1995

NSE asked SEBI for permission to trade index

futures

18th November 1996

SEBI setup L.C Gupta committee to draft a

policy framework for index futures

11th may 1998

L.C.Gupta committee submitted report

25th may 2000

SEBI gave permission to NSE and BSE to do

index futures trading

9th July 2000

Trading of BSE Sensex futures commenced at

BSE

12th June 2000

Trading of Nifty futures commenced at NSE

25th septmber 2000

NIFTY Futures trading commenced at SGX

9

Need for derivative in India today

In less than 3 decades of their coming into vogue, derivative market have become most important
market in the world .Today derivatives have become part and parcel of the day-to-day life for
ordinary people in major part of the world.
Until the advent of NSE the Indian capital market had no access to the latest trading methods and
was using traditional out-dated methods of trading.

Uses of Derivative market

Derivative markets serve for risk

Hedges use derivative to reduce risk exposure.

Speculator use derivatives to increase risk exposure in the anticipation of making profit.

Derivative market facilitates the shifting of risk from those who bear it at a high cost, to
those who bear it at a low cost.

Speculators perform a valuable service by absorbing risk from hedgers.in return they
receive a risk premium.

Date of introduction of derivative

Derivative products

Date of introduction

Underlying IND

INDEX FUTURES

June 2000

SENSEX, S&P, NIFTY

STOCK FUTURES

December 2001

SENSEX, S&P, NIFTY

10

Participants
The following three broad categories of participants in the derivatives market.

Hedgers
Hedgers face risk associated with the price of an asset. They use futures or options markets to
reduce or eliminate this risk.

Speculators
Speculators wish to bet on future movements in the price of an asset. Futures and options
contracts can give them an extra leverage; that is, they can increase both the potential gains and
potential losses in a speculative venture.

11

Arbitrageurs
Arbitrageurs are in business to take advantage of a discrepancy between prices in two different
markets. If, for example, they see the futures price of an asset getting out of line with the cash
price, they will take offsetting positions in the two markets to lock in a profit.

Functions of Derivative Market

The following are the various functions that are performed by the derivatives markets. They are:

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.

Derivatives market helps to transfer risks from those who have them but may not like them to
those who have an appetite for them.

Derivative trading acts as a catalyst for new entrepreneurial activity.

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

Types of Derivative Market

The following are the various types of derivatives. They are

Forward:

A forward contract is a customized contract between two entities, where

settlement takes place on a specific date in the future at todays 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.

12

 Options: Options are of two types - calls and puts. Calls give 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. Puts 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.

Warrants: Options generally have lives of up to one year; the majority of options traded
on options exchanges having a maximum maturity of nine months. Longer-dated options are
called warrants and are generally traded over-the-counter.

Leaps: The acronym LEAPS means Long-Term Equity Anticipation Securities. These are
options having a maturity of up to three years.

Baskets:

Basket options are options on portfolios of underlying assets. The underlying

asset is usually a moving average of a basket of assets. Equity index options are a form of
basket options.

Swaps: Swaps are private agreements between two parties to exchange cash flows in the
future according to a prearranged formula. They can be regarded as portfolios of forward
contracts.

13

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. The standardized items on a futures contract are

Quantity of the underlying

Quality of the underlying

The date and the month of delivery

The units of price quotations and minimum price change

Locations of settlement

Features of future contract

Lot size: Lot size means that we cannot buy single share as in equity market we can
only buy bundle of shares of a particular script.

Margin: when anyone executes future trades, then initial margin has to be paid which
is may be 10% of the value of the contract, it is fixed by the exchange. while future
contract are settled on market to market on periodic basis.

Settlement: settlement done in two ways:

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 buyer
of the contract.

Cash settlement: A cash payment is made based on the underlying reference rate

Expiry: expiry is the time when the final prices of the future are determined
14

Types of futures
On the basis of the underlying asset they derive, the futures are divided into two methods

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.

Contracts
Year

Number of contracts

2004-2005

2005-2006

1957856

2006-2007

10676843

2007-2008

32368842

2008-2009

47043066

2009-2010

80905493

2010-2011

104955401

2011-2012

203587952

2012-2013

221577980

2013-2014

19386820

15

Graphical representation number of contracts per year in the stock future

Index futures: Index futures are the futures, which have the underlying asset as an Index.
The Index futures are also cash settled.

Contracts
Year

Number of contracts

2004-2005

2365

2005-2006

21483

2006-2007

43952

2007-2008

554446

2008-2009

772147

2009-2010

1513755

2010-2011

2539574

2011-2012

3020667.27

2012-2013

3570111.40

2013-2014

619179.23

16

Graphical representation number of contracts per year in the Index

FUTURE

Parties in the future contract

There are two parties in a future contract, the Buyer and the Seller. The buyer of the futures
contract is one who is long on the futures contract and the seller of the futures contract is one
who is SHORT on the futures contract.

17

The pay off for the buyer and the seller of the futures contract are as
follows
Payoff for a buyer of future

LOSS

PROFIT

Case 1: The buyer bought the future contract at (F);

if the futures price goes to E1 then

the buyer gets the profit of (FP).

Case 2: The buyer gets loss when the future price goes less than (F), if the futures price goes to
E2 then the buyer gets the loss of (FL)

18

Payoff for a seller of future

P
PROFIT

E
E

LOSS
L

F Future Price
E1, E2 Settlement Price

Case 1: The Seller sold the future contract at (f); if the futures price 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 futures price
goes to E2 then the Seller gets the loss of (FL).

19

Margins
Margins are the deposits, which reduce counter party risk, arise in a futures contract. These
margins are collected in order to eliminate the counter party risk. There are three types of
margins

Initial Margin: Whenever a futures contract is signed, both buyer and seller are required to
post initial margin. Both buyer and seller are required to make security deposits that are
intended to guarantee that they will infact be able to fulfill their obligation. These deposits
are Initial margins and they are often referred as performance margins. The amount of
margin is roughly 5% to 15% of total purchase price of futures contract.

Marking to market margin: The process of adjusting the equity in an investors account in
order to reflect the change in the settlement price of futures contract is known as MTM
Margin.

Maintenance margin: The investor must keep the futures account equity equal to or greater
than certain percentage of the amount deposited as Initial Margin. If the equity goes less
than that percentage of Initial margin, then the investor receives a call for an additional
deposit of cash known as Maintenance Margin to bring the equity up to the Initial margin.

Cost of Carry Model

F=S (1+r-q) t

20

Trading introduction
The futures trading system of NSE, called NEAT-Futures trading system, provides a fully
automated screen-based trading for Nifty futures and stock futures on a nationwide basis as well
as an online monitoringa&surveillance mechanism. It supports an order driven market and
provides complete transparency of trading operations. It is similar to that of trading of equities in
the cash market segment.
On starting NEAT (National Exchange for Automatic Trading) Application, the log on (Pass
Word) Screen Appears with the Following Details.

User ID

Trading Member ID

Password NEAT CM (default Pass word)

New Pass Word

Note: - 1) User ID is a Unique

2) Trading Member ID is Unique & Function; it is Common for all user of the Trading Member
3) New password Minimum 6 Characteristic, Maximum 8 characteristics only 3 attempts are
Accepted by the user to enter the password to open the Screen
4) If password is forgotten the User required informing the Exchange in writing to reset the
Password.

21

Trading system
Nationwide-online-fully Automated Screen Based Trading System (SBTS)

Price priority

Time Priority

Note: 1) NEAT system provides open electronic consolidated limit orders book (OECLOB)
2) Limit order means: Stated Quantity and stated price

Before Opening the market: User allowed setting up

1) Market Watch Screen
2) Inquiry Screens Only

Market closing period: User Allowed only for inquiries

Surcon period :( Surveillance & Control period) The System process the Date, for making
the system, for the Next Trading day.

Log of the Screen (Before Surcon Period)

The screen shows :-

1) Permanent sign off

Not allowed inquiry

2) Temporary sign off

and

3) Exit

Order Placing

Permanent sign off - market not updates.

22

Temporary sign off - market up date (temporary sign off, after 5 minutes Automatically
Activate)

Exit - the user comes out sign off Screen.

Local Database:

Local Database is used for all inquiries made by the user for Own

Order/Trades Information. It is used for corporate manger/ Branch Manager Makes inquiries for
orders/ trades of any branch manager /dealer of the trading firm, and then the inquiry is Serviced
By the host. The local database also includes message of security information.

Ticker Window:

The ticker window displays information of All Trades in the system. The

user has the option of Selecting the Security, which should be appearing in

the ticker window.

Market watch Window: Title Bar: Title Bar Shows: NEAT, Date & Time.
Market watch window felicitate to set only 500 Scrips, But the User set up a Maximum of 30
Securities in one Page.

MBP (Market by Price):

MBP (F6) Screen shows Total Outstanding Orders of a

particular security, in the Market, Aggregate at each price in order of Best 5 prices.

Report Selection Window:

It facilitates to print each copy of report at any time. These

Reports are

Open order report :- For details of outstanding orders

Order log report:-For details of orders placed, modified & cancelled

Trade Done-today report :- For details of orders traded

23

 Market Statistics report: - For details of all securities traded

Information in a Day

Internet Broking

NSE introduced internet trading system from February 2000

Client place the order through brokers on order routing system

WAP (Wireless Application Protocol)

NSE.IT Launches the from November 2000

1st Step-getting the permission from exchange for WAP

2nd step-Approved by the SEBI(SEBI Approved only for SEBI registered Members)

FTP (File Transfer protocol)

NSE Provide for each member a separate directory (File) to know their trading DATA, clear
DATA, bill trade Report.

NSE Provide in Addition a Common directory also, to know circulars, NCFM & Bhava
Copy information.

FTP is connected to each member through VSAT, leased line and internet.

VSAT (FROM 4:15PM to 9:30AM), Internet (24 Hours)

Snap Shot Data Base:

Snap shot data base provides Snap shot of the limit order book at

many time points in a day

Index Data Base: Index Data Base provides information about stock market indexes.
24

Trade Data Base: Trade Data Base provides a data base of every single traded order,
take place in exchange.

Basket trading system: Taking advantage for easy arbitration between future market
and & cash market difference, NSE introduce basket trading system by off setting positions
through off line-order-entry facility. Orders are created for a selected portfolio to the ratio of
their market Capitalization from 1 lake to

30 corers. Offline-order-entry facility generate

order file in as specified format outside the system & up load the order file in to the system
by invoking this facility in Basket trading system

25

Trading network
HUB ANTENNA

SATELLITE

NSE MAIN FRAME

BROKERS PREMISES

26

Holding of Shares (Voting Right) disclosing obligation

Any person or Director or officer or the company

More than 5% share or voting Right

Within 4th day inform to company is necessary

Company inform with in 5th day to stock exchange is compulsory

Broker (Trading Member)

Means a member in recognized stock exchange
Eligibility: 21 tears, graduation, 2 years experience in stock market relative Affairs and

30 Lakhs paid up capital

100 lakhs net worth

125 lakhs interest free security deposit

25 lakhs collatery security deposit

1 lakh annual business subscription

Broker & client relationship

Fill the client Registration Application form (for all details of clients).

Agreement on non-judicial form (Specified by SEBI that form)

PAN, Pass Port, Driving License or voter Identity card (SEBI Registration Number in case
of FIIs) - Pan Cards is must to future and option trading.

And than Allot-Unique client code

27

Take copy of instruction in writing before placing order, cancellation & modification.

If order values exceed 1 lakh maintain the client record for 7 years.

On conformation any order, issue contract note within 24 hours.

Collect margin of 50,000 & multiple with 10,000.

NOTE: - PAN is compulsory if the transaction cost exceed Rs.1 lakh.

Issuing the know your client form is must.

Sub broker

Eligibility: - 21 years, 10+2 qualification and paid up capital 5 lakhs.

Not convicted involving fraud and dishonesty.

Not debarred by SEBI previously.

51% of shares as dominant promoters his/her and his/her spouse.

First application to stock exchange-Stock exchange send his application to SEBI-SEBI

satisfied issued Certificate Registration.

A registered sub-broker, holding registration, granted by SEBI on the Recommendations of

a trading member, can transact through the member (broker) who had recommend his
application for registration.

Maximum Brokerage Commission 2%.

Purchase note and sales note issued by the sub broker with 24 hours.

Main Objectives of Demat Trading

Freely transferability
28

Dematerialized in depository mode

CHAPTER-III
COMPANY PROFILE

29

COMPANY PROFILE

SMC Group, founded in 1990, is Indias best Equity Broking House and the
Largest Distribution Network, providing a wide range of financial services and
investment solutions. A blend of extensive experience, diverse talent and client
focus has made us achieve this landmark.
Over the years, SMC has expanded its operations domestically as well as
internationally. Existing network includes regional offices at Mumbai, Kolkata,
Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network
of 2300+ offices spread across 425 cities/towns in India.
We offer a diverse range of financial services which includes institutional and
retail brokerage of equity, currency, commodities, derivatives, online trading,
depository services, fixed Deposits, IPOs and mutual funds distribution, dedicated
desk for NRI and institutional clients, insurance broking, clearing services, margin
funding, investment banking, portfolio management, wealth advisory & research.
We have a highly efficient workforce of over 6000 employees and over 7500
financial advisors serving the financial needs of more than 6,00,000 satisfied
investors
We are also amongst the first financial firms in India to expand operations in
the lucrative gulf market, by acquiring license for broking and clearing member
with Dubai Gold and Commodities exchange (DGCX).

30

The SMC Advantages :

Large avenues of investment solutions and financial services under one roof
Personalized solution and attention offered to each investors
Research support and timely advice by our high-tech research wing
An extensive network of branch offices
A perfect blend of latest technology and rich experience of over 20 years
Honesty, transparency and fairness imbibed in all our dealings
Providers of one of the best trading platforms in terms of speed, convenience and
risk management to trade in NSE, BSE, F&O, NCDEX, MCX,, MCX-SX, NMCE,
ICEX, ACE & DGCX

Subhash C. Aggarwal (Chairman & Managing Director: SMC Global Securities

Ltd)
Mr. Aggarwal is co-founder and promoter of SMC Group. He has vast experience,
in-depth knowledge and strong understanding of various intricacies of the Securities
Market and Financial Services. He has exhaustive and rich experience of securities
business of more than 20 years. His exceptional leadership skills and outstanding
commitment have made this group one of the leading brokerage and distribution
houses of the country. Under his leadership, SMC has diversified its business from
stock broking and arbitrage to Commodities Broking, Distribution of Mutual Funds,
IPOs, Insurance products, Wealth Management and Advisory Services. Mr.
Aggarwal is a fellow member of ICAI.
Mahesh C. Gupta (Vice-Chairman & Managing Director: SMC Global Securities
Ltd.)
Mr. Gupta has co-founded and promoted the SMC Group. He has rich experience of
more than 20 years in the securities market. His exceptional leadership skills and
31

outstanding commitment has made SMC as one of the leading investment solutions
and services provider. He possesses expertise in managing and controlling the
finance needs, risk management and surveillance. His disciplined style of working
is an inspiration to the workforce of SMC. Mr. Mahesh C. Gupta is a fellow member
of ICAI
Our Vision
To be a global major in providing complete investment solutions, with relentless
focus on investor care, through superior efficiency and complete transparency.
Core Values

Ethical deals :

Honesty is the only policy.

Experience and trust:

Over 20 years of experience has made SMC earn the trust of more

than 6,00,000 Investors.

Expertise :

Know-how

Personalised Solutions:

and

skills

to

provide

investors

an

edge.

Every investor is unique. Every solution is unique.

Our Approach

Personalized attention:

has

been

The most valued asset is our relationship with the clients, which

built

Network which works:

over

years

by

giving

personalized

attention.

SMC has a vast network extending to 425+cities and towns

ensuring easy accessibility, convenience and hassle free trading experience.

Research based advisory services:

SMC offers proactive and timely world class research

based advice and guidance to its clients to enable them to take informed decisions.
Our Credentials
32

Best Equity Broking House (Source: BSE-Dun and Bradstreet, 2012)

Largest distribution network in the country (Source: BSE-Dun and Bradstreet, 2012)
Awarded the Fastest Growing Retail Distribution Network in financial services
(Source: Business Sphere, 2012)
Received Major Volume Driver award from BSE for 3 years consecutively(2004-05,
2005-06 and 2006-07)
Nominated amongst the top 3, in the CNBC Optimix Financial Services Award 2008
under "National Level Retail Category"
Amongst the First Financial Firms in India to expand operations in the lucrative
gulf market, by acquiring license for broking and clearing member with Dubai Gold
and Commodities exchange (DGCX)
One of the largest proprietary desk for doing near risk-free arbitrage in equities and
commodities
Institute of Economic Studies (IES) has honored our Chairman with the Pride of
India and Udyog Rattan awards. Also, IIFS has conferred him with Glory of
India award recently

Memberships & Registrations

Trading Member of NSE, BSE, NCDEX, MCX, DGCX, NMCE, ICEX, ACE,
MCX-SX, National Spot Exchange Ltd. (NSEL) & NCDEX Spot Exchange Ltd.
( NSPOT).
Clearing

Member

in

NSE

(F&O,

Currency),

BSE

(F&O,

Currency),

MCX (Commodities), NCDEX, MCX-SX, ICEX, ACE & DGCX

Depository Participant with CDSL & NSDL
Category 1 Merchant banker
Corporate

Insurance

Broker

for

(Registered with IRDA)

33

Life

&

General

Insurance

Distributor of IPOs & Mutual Funds (Registered with AMFI)

Portfolio Management Services (PMS) registered with SEBI
Non Banking Financial Company (NBFC) registered with RBI
ACE Derivatives and commodities Exchange (ACE)
Register
With more than 2300 offices across 425 cities and a substantial client base of over
6,00,000 satisfied investors, SMC is known for its life-long and steady relationships
with all its Business Partners/Associates. We believe in long-term commitment and
association that plays a vital role in the growth of any business.
SMC believes in growing with its Business Partners/Associates. Our dedicated
efforts and continuous improvement in our services has made us one of the most
respected

and

largest

broking

houses

with

huge

network

of

Business

Partners/Associates across India. SMC provides its sub-broker with the right tools
and support. Association with SMC means a strong bond with one of the largest
broking firms of India. SMC invites you to become a Business Partners/Associates
Offerings:
SMC facilitates trading activities in all the major market segments including;
equity, derivatives, commodities, interest derivatives and currency futures. Its
robust and user-friendly trading platform enables to execute trades simultaneously
across all Segments. We also have whole bucket of other services like online
trading, depository, IPO, mutual funds, insurance broking, institution broking,
margin funding, NRI services, clearing services, investment banking, PMS
A broking house having perfect blend of latest technology and rich experience of
over 20 years. Technological tools include VPN network of HCL, HECL, Aircel &
Tulip.
Best Equity Broking House (Source: BSE-Dun and Bradstreet, 2012)
Largest distribution network in the country (Source: BSE-Dun and Bradstreet, 2012)
34

Received Major Volume Driver award from BSE for 3years consecutively
Awarded fastest growing Retail Distribution Network in financial services (source:
Business sphere, 2012)
Large avenues of investment solutions and financial services under one roof.
Overall support in start-up, training, marketing, advertising, client acquisition and
recruiting etc.
Perfect back office support which helps you to make their dealing with company as
well as clients in very efficient manner
Strong research support backed by high end technology
One of the best trading platforms in terms of speed, convenience and risk
management
Marketing

support

though

TV,

Newspapers,

Website,

Brochures,

Posters,

Personalized solution and attention offered to each investor

Clearing Services:
Overview
SMC is one of the leading clearing members, which currently manages the clearing
services for more than 134 trading members in different segments of different
exchanges.
Our offerings
We are Clearing Member of NSE (F&O, Currency), BSE (F&O, Currency), MCX
(Commodities), MCX-SX, NCDEX, ICEX, ACE & DGCX
Our edges:
Trusted name in Broking Industry
One of the leading Clearing member of NSE
Incredible track record of timely delivery of Commitments
Concern about timely need of Trading Members being, in the same fraternity
Attitude to follow the best practices in the Industry
35

Committed approach to business

Technologically sound to cope with the growing needs of Trading Members
Senior Professional personnel for every service need
Currency Overview:
Currently in India, there are 3 major exchanges offering Currency future trading
NSE, BSE & MCX-SX. SMC Global Securities is a trading cum clearing member of
all these exchanges for the currency segment. We believe in the tremendous
potential of currency future to become a dominant force of the Indian financial
market with a turnover which can outperform even equity and commodity segment.
We firmly believe that wider market participation will bring more strength to the
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36

Commodities Overview
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37

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39

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for the AIM segment of the LSE.
40

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Widest possible product range
41

A team of passionate professionals with strong Domain knowledge and expertise

Flexibility to choose product of any insurance company

42

CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPRETATION

(Lot size of selected companies for analysis)
CODE

COMPANY NAME

BHEL

Bharath Heavy Electrical

Ltd.

ITC

ITC Ltd

ONGC

Oil& Natural Gas

43

Corporation
REL Capital

Reliance Capital Ltd

TATA Steel

TATA Company Ltd.

The following tables explain about the trades that took place in futures between February 2014 to
April 2014. The table has various columns, which explain various factors involved in Derivations
trading.

Date the day on which trading took place

Closing Premium Premium for that day

Open interest No. Options that did not get exercised

Traded quantity No of F&O traded on bourses on that day.

N.O.C No of Contracts traded on that day

Closing Price The price of the Futures at the end of the trading day.

44

Futures of BHEL
On February 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

2-2-2014

2387.5

2425

2378

2386

3-2-2014

2394.7

2403

2352

2365

2378.85

4-2-2014

2385

2400.8

2864

2384.85

2370.21

5-2-2014

2385

2388

2352.5

2360.1

2344.28

6-2-2014

2299

2350

2277.55

2287.9

2324.61

9-2-2014

2288

2337

2258

2325.85

2317.13

10-2-2014

2320.85

2355

2311.35

2337.65

2321.45

11-2-2014

2352

2357

2290

2300.25

2321.16

12-2-2014

2308

2344.95

2308

2325

2325.2

16-2-2014

2340

2368.5

2334

2349.75

2353.9

17-2-2014

2359.7

2397.2

2352.25

2386.95

1951.51

18-2-2014

2417.5

2378.1

2388.95

1117.85

1959.88

19-2-2014

2385

2387

2365.3

2374.85

1946.58

23-2-2014

2389

2393.4

2311.35

2347.05

2367.16

24-2-2014

2345.05

2388.7

2343.65

2379.6

2361.38

25-2-2014

2370

2383.4

2346

2357.5

2371.7

26-2-2014

2359

2386.2

2330

2378

45

Close
Rs.

Moving
averages

Interpretation

Open value of BHEL explains that the market, the players showed a bearish attitude for
the next day where the price fell to 2387.5 and immediately rise to 2394.7. Later being
the last trading day of the month again the players became bears as to keep a negative for
the next month which surge the price to 2359 for the last day of the trading month

Closing values explains that in the trading week most of the players closed up their
contracts to make profit. As the price was low, the open interest was low and the no. of
contracts traded declined to 2386 to 2378

There always exists an impact of price movements on open value. Moving averages price
rise from 2378.85 on first day to

2nd

February, where it stood at 2378.85 as high. As the

players in the market with an intention to short or correct

Futures of BHEL
46

On March 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

3-3-2014

2897.5

2467.5

2397.5

2433.5

4-3-2014

2390.35

2475

2349.7

2462.75

2449.96

5-3-2014

2432

2460

2430

2453.65

2451.01

6-3-2014

2461.2

2477.95

2427

2436.65

2441.71

9-3-2014

2452.55

2461.5

2427

2434.85

2432.76

10-3-2014

2428

2453.8

2421

2426.8

2432.36

11-3-2014

2430

2463

2415

2435.45

2431.53

12-3-2014

2434

2442.9

2416

2432.35

2451.95

13-3-2014

2435

2443

2377.25

2388.05

2463.58

16-3-2014

2386.95

2395

2360.1

2389.85

2482.75

17-3-2014

2387.8

2395

2360.1

2389.85

2415.91

18-3-2014

2399

2412.5

2383.45

2387.55

2388.66

19-3-2014

2388.45

2395.8

2381

2388.6

2387

20-3-2014

2385.2

2406

2375

2384.85

2372.18

23-3-2014

2375

2380

2335

2343.1

2364.9

24-3-2014

2355.05

2372

2350.05

2366.75

2342.8

26-2-2014

2315.35

2402

2325.1

2318.55

2362.31

30-3-2014

2375

2411

2370

2401.65

2377.06

31-3-2014

2402

2419

2383

2411

47

Close
Rs.

Moving
averages

Interpretation

From the data of open values above there is low business growth in the futures of BHEL
on March. On 3rd the price was 2897.5 and it is high open value

From the data of close values there is high turnover in the values. On the first day the
value is 2433.5 where as a huge increase of 2462.75 in the second day are observed

From the data and bar diagram of moving averages explains that on 3 rd march the value is
2449.96.Next day the value predominantly increased to 2451 and it is the high value.

48

Futures of BHEL
On April 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

1-4-2014

2418.8

24329.8

2375.1

2394.1

2-4-2014

2399.7

2434.7

2386

2426.5

2427.78

6-4-2014

2415

2469

2414

2462.75

2302.36

7-4-2014

2100

2112

2011.25

2017.85

2339.39

8-4-2014

2526.3

2566.55

2522.3

2537.45

2351.4

9-4-2014

2529

2534.95

2492

2498.9

2533.68

10-4-2014

2502.6

2576

2501.35

2564.7

2532.28

13-4-2014

2570

2575.7

2521.1

2533.25

2554.5

14-4-2014

2529.9

2574

2529.9

2565.55

2543.85

16-4-2014

2581

2585.95

2521.3

2532.75

2533.35

17-4-2014

2532.95

2533.8

2497.05

2501.75

2504.26

20-4-2014

2479

2495.4

2443.6

2478.3

2492.1

21-4-2014

2499

2518.85

2480.15

2496.25

2479.63

22-4-2014

2501

2522.95

2457.15

2496.25

2476.4

23-4-2014

2455.2

2483

2425.6

2468.6

2470.63

24-4-2014

2462

2496.9

2446

2478.95

2485.26

27-4-2014

2494.3

2518

2482.05

2508.25

2487.63

28-4-2014

2511.55

2527

2469

2475.7

2494.68

30-4-2014

2499

2578

2460.95

2500.1

49

Close
Rs.

Moving
averages

Interpretation

The market showed a positive upward movement opens values segment and cash market
during the first day of the week. High open value is 2581

The future of BHEL had shown a high growth way on close values till 30 th day of the
month whose impact shown on the close values. Starting close value is 2394.1 where it
ends at 2500.1 and 2565.55 is the high value

The moving averages of BHEL on the day of the trading month showed an increase in the
price when compare with the staring day of the month. The value closed at 2494.68 with
highest 2533.35 is the high value.

Comparison of moving average of BHEL for 3 months

50

Monthd

Total Moving averages

Percentages

February

36309.06

30%

March

41048.43

34%

April

42009.2

35%

Interpretation
To compare with February and March Month in April Month values of Moving Averages are
very high. April is the profitable Month of BHEL to compare with February and March.

51

Futures of ITC Ltd

On February 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

2-2-2014

250.5

251.7

246.7

247.4

3-2-2014

247.8

248.5

243.5

244.7

248.06

4-2-2014

245.5

253.65

244

252.1

249.71

5-2-2014

251.3

254.05

249.05

252.35

250.83

6-2-2014

248.5

253.9

246.8

248.05

248.8

9-2-2014

248

248

240.5

246

246.15

10-2-2014

246

247.35

243.6

244.4

244.66

11-2-2014

245.5

245.9

242.1

243.6

244.96

12-2-2014

245.15

248.25

244.9

246.9

246.38

16-2-2014

247.3

249.7

244.8

248.65

248.7

17-2-2014

250.7

251.9

248.4

250.55

250.11

18-2-2014

252

252.5

249.5

251.25

249.43

19-2-2014

251.9

252.5

246.75

248.55

249.45

23-2-2014

247.15

250.45

246.25

248.55

248.71

24-2-2014

247.7

249.6

246.15

249.05

248.61

25-2-2014

248.1

250.3

247.8

248.25

248.3

26-2-2014

248.3

249.3

245.5

247.6

52

Close
Rs.

Moving
averages

Interpretation

From the data above open values are fluctuating. On 2 February open value of ITC Ltd is
250.5 and at the end of the month it is decreased to 248.3.And 252 is the high value.

Close value of ITC Ltd explains that, close value started at 247.4 later it predominantly
increased to 252.1.on the last day 26th Feb. 2014 with a considerable decline of 247.6

From the data and bar diagram there was huge decrease in the value of moving averages.
On 3rd the value is 248.06. It slowly started increasing for the next days in the
month.250.83 is the high value and 244.66 is the low value.

53

Futures of ITC Ltd

On March 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

3-3-2014

235.5

243.65

235.1

241.75

4-3-2014

242

245.9

238.5

243.95

243.81

5-3-2014

246.1

246.65

242.8

245.75

244.68

6-3-2014

246.2

246.2

243.5

244.35

246.95

9-3-2014

245.95

251.4

245.45

250.75

248.56

10-3-2014

251.45

253.5

249.6

250.6

251.91

11-3-2014

251.6

255

251.6

254.4

253.78

12-3-2014

254.1

257.25

251.5

256.35

256.25

13-3-2014

256.55

259.7

255.45

258

257.9

16-3-2014

259

260

258.2

259.35

259.1

17-3-2014

259.85

261.9

254.8

260.2

260.98

18-3-2014

260.15

264.7

259.15

263.4

261.7

19-3-2014

261.4

264.75

259.3

261.5

262.05

20-3-2014

260.4

263.5

259.5

261.25

261.53

23-3-2014

259.35

262.35

258.1

261.25

261.66

24-3-2014

261.25

262.25

258.85

261.9

262.85

26-2-2014

260.4

265.4

260.35

264.8

265.76

30-3-2014

265.05

272.4

263.55

270.6

268.3

31-3-2014

270.45

273

268.5

269.6

54

Close
Rs.

Moving
averages

Interpretation

Open value of ITC Ltd on March starts at 235.5 and consistent increased to 246.2 in 6 th
March was observed. After that the value slowly decreasing.242 is the low value and at
the end of the month it is reached to 270.45 and it is the high value for that month

Close value of ITC Ltd explains that value started at 241.75.Later there was a huge
increase in the value. The value increased to 263.4 on 18 th march.270.6 is the high value
and 241.75 is the low value.

Moving averages of ITC Ltd started at 243.81 and after the first day there is continues
growth in the value.268.3 is the high value and 243.81 is the low value

Futures of ITC Ltd

55

On April 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

1-4-2014

269

269.45

263.2

264.8

2-4-2014

266

268.2

263.95

265.5

265.16

6-4-2014

265.4

268.9

264.5

265.2

265.73

7-4-2014

264.5

267.4

263.25

266.5

267.01

8-4-2014

267

269.9

264.1

269.35

267.75

9-4-2014

269.4

269.4

266.15

267.4

268.63

10-4-2014

267

270.9

266.1

269.15

269.43

13-4-2014

269.8

272.6

267.25

271.75

261.81

14-4-2014

271.15

271.7

268.15

268.55

268.03

16-4-2014

270.5

270.5

262.4

263.8

267.01

17-4-2014

263

269.85

262.1

268.7

265.78

20-4-2014

268.25

268.5

262.7

264.85

265.46

21-4-2014

264.9

266.5

260.7

262.85

263.41

22-4-2014

263.7

264.2

261.8

262.55

263.16

23-4-2014

262.4

267.8

260.15

264.1

264.4

24-4-2014

264.5

267.5

261.95

266.55

265.86

27-4-2014

268.4

270.95

265

266.95

267.53

28-4-2014

266

270.3

266

269.1

267.7

30-4-2014

269.6

269.6

265.75

267.05

56

Interpretation

From the above data shows pictorial view of open values of ITC Ltd for the month of
April. From the above data we can say that 269 is the starting value 262.4 is the low
value and 271.15 is the high value

The future of ITC Ltd had shown a high growth way on close values till 13 th day of the
month whose impact shown on the close values. Starting close value is 264.8 where it
ends at 267.05 and 271.75 is the high value

The moving averages of ITC Ltd on the day of the trading month showed fluctuations in
the price when compare with the staring day of the month. The value closed at 267.7 with
highest 267.53 is the high value.

57

Comparison of moving average of ITC Ltd for 3 months

Monthd

Total Moving averages

Percentages

February

3722.86

29%

March

4367.77

34%

April

4523.86

35%

Interpretation
From the pie chart we can see the consistent increase in the Moving averages of ITC Ltd. To
compare with February and March, in the Month of April Moving averages are high. Values are
continuously increasing

58

Futures of ONGC
On February 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

2-2-2014

1094

1109

1093

1105.15

3-2-2014

1110

1111.8

1092.9

1104.85

1115.11

4-2-2014

1109.6

1143.9

1105

1135.35

1468.35

5-2-2014

2206

2287

2136

2164.85

1462.21

6-2-2014

1110.3

1129

1081.1

1086.45

1455.98

9-2-2014

1086

1120.8

1071.35

1116.65

1103.68

10-2-2014

1112.55

1128

1103.8

1107.95

1104.3

11-2-2014

1116

1116

1085

1088.3

1099.06

12-2-2014

1091.1

1111.95

1091.1

1100.95

1093.21

16-2-2014

1098

1104.85

1080

1090.4

1099.08

17-2-2014

1093

1112.05

1083.15

1105.9

1098.36

18-2-2014

1117.85

1119.3

1094

1098.8

1102.38

19-2-2014

1094

1108.55

1091

1102.45

1103.53

23-2-2014

1116

1122.55

1104.3

1109.35

1105.28

24-2-2014

1103.65

1108.5

1094

1104.05

1105

25-2-2014

1098

1105

1088.65

1101.6

1104.98

26-2-2014

1107

1111.9

1090.25

1109.3

59

Interpretation

The trading month showed a high and low strike prices or exercising prices for the
ONGC futures Open value. The open interests shown bears market because of the huge
correction done by the FII (Foreign Institutional investors) in flows. The number of
contracts traded high at 2206 and low at 1086

Closing values explains that prices of ONGC on February fluctuating up and down. value
starts from 1105.15 and 2164.85 is the high value and 1109.3 is the last day value.

moving averages of ONGC on march is explains that 1115.11 is the starting moving
average and 1468.35 is the high value and 1104.98 is the last day moving average

60

Futures of ONGC
On March 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

3-3-2014

1125

1136.4

1107.9

1111.1

4-3-2014

1110

1110.25

1092

1102.4

1104.1

5-3-2014

1104

1107.45

1033.05

1098.8

1098.5

6-3-2014

1114.8

1109.95

1091.35

1094.5

1098.1

9-3-2014

1103

1106.8

1098.35

1101.25

1098.05

10-3-2014

1100

1104.85

1094

1098.4

1097.21

11-3-2014

1096

1100.55

1086.5

1092

1093.18

12-3-2014

1090.2

1092.7

1080.5

1088.7

1089.95

13-3-2014

1087

1093.9

1085.1

1089.15

1083.81

16-3-2014

1082.7

1088.95

1069.2

1073.6

1079.26

17-3-2014

1076

1088.6

1071

1075.5

1075.88

18-3-2014

1077.8

1088.35

1075.1

1078.55

1071

19-3-2014

1075.7

1078.85

1054.2

1058.95

1066.13

20-3-2014

1060

1064.8

1050.1

1060.9

1060.56

23-3-2014

1052.8

1072

1050.35

1061.85

1064.3

24-3-2014

1070

1075.35

1058.75

1070.85

1062.85

26-2-2014

1068

1071

1053

1056.55

1075.01

30-3-2014

1083.85

1103.95

1078.45

1098.35

1085.51

31-3-2014

1100.95

1115.5

1095.43

1101.65

61

Interpretation

The open price gradually rises from 1125 on 3rd march, where it stood at 1125 as high. As
the players in the market with an intention to short or correct the market, the players
showed a bearish attitude for the next day the price decrease to 1110

Closing values explains that the market was recovered faster from the bear market to bear
market for the next day in the month of March. The total price is decrease from 1111.1 to
1102.1

The moving averages interest of the ONGC was stood decline where the total month of
interest is ups and down where from 1104.1 to 1085.1

62

Futures of ONGC
On April 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

1-4-2014

2301

2307

2286.55

2399.5

2-4-2014

1100.9

1109.4

1085.55

1090.75

1475..71

6-4-2014

1092.35

1099.1

1086.4

1096.45

1090.95

7-4-2014

1099

1099

1081.25

1085.65

1089.78

8-4-2014

1088

1091.8

1082.65

1087.75

1079.55

9-4-2014

1086.8

1089.45

1062.5

1065.75

1073.83

10-4-2014

1067

1076.3

1065.25

1068.5

1063.91

13-4-2014

1073.5

1073.5

1052.5

1057.5

1056.9

14-4-2014

1060

1062.35

1042

1044.7

1047.85

16-4-2014

1048

1059.9

1040

1041.32

1039.6

17-4-2014

1041.85

1041.85

1030.75

1032.75

1026.65

20-4-2014

1025.9

1028.35

1001.1

1005.85

1013.93

21-4-2014

1009

1021.5

1000.05

1003.2

1006.25

22-4-2014

1006.6

1014.4

1001.8

1009.7

1008.68

23-4-2014

1006.55

1029.7

998.3

1013.15

1013.83

24-4-2014

1015.6

1024.5

1008.15

1018.65

1016.55

27-4-2014

1024

1029.6

1015.1

1017.85

1027.1

28-4-2014

1011.05

1049

1010.6

1044.8

1036.33

30-4-2014

1038.2

1048.3

1033.35

1046.35

63

Interpretation

The trading month of open values showed a high and low strike prices or exercising
prices for the ONGC April futures.2301 is the April 1st value and high value and 1006.6 is
the low value in the month of April

The close interests shown bears market because of the huge correction done by the FII
(Foreign Institutional investors) in flows.2399.5 is the high value and 1003.2 is the low
value in the month of April

Moving averages of ONGC in the month of April explains that the number of contracts
traded high at 1475 and low at 1008.68.

64

Comparison of moving average of ONGC for 3 months

Months

Total Moving averages

Percentages

February

17620.51

32%

March

18403.4

33%

April

18167.4

33%

Interpretation
The pie chart of ONGC for 3 months explains that the values of Moving averages for 3 months
are fluctuating. To compare with February and April Moving averages, March Moving averages
are high.

Futures of Rel Capital

65

On February 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

2-2-2014

786.6

799.5

780.2

790.05

3-2-2014

798.4

803

762.15

765.15

779.03

4-2-2014

775.15

790

768.7

781.1

772.31

5-2-2014

780

793.8

766.45

769.9

769.16

6-2-2014

737.2

769.85

737.2

756.5

760.16

9-2-2014

768

779.45

740

754.1

835.71

10-2-2014

966.15

1001.9

985.3

996.55

833.61

11-2-2014

768.2

772.5

746.85

750.2

838.51

12-2-2014

755.5

774.55

755.5

768.8

756.56

16-2-2014

768.85

771.3

748

750.7

761.05

17-2-2014

755.5

767

748.9

763.65

758.65

18-2-2014

770.3

776.5

753.15

761.6

759.86

19-2-2014

763

768.4

752.15

754.35

750.31

23-2-2014

756

758.45

732

735

742.18

24-2-2014

728.15

764

726.2

737.2

736.5

25-2-2014

731.5

743.8

731.5

737.4

734

26-2-2014

738.65

740.9

725.15

727.4

66

Close
Rs.

Moving
averages

Interpretation

From the data and Bar diagram above open values are fluctuating. On 2 February open
value of Rel capital is 786.6 and at the end of the month it is decreased to 738.65.And
966.15 is the high value.

Close value of Rel Capital explains that, close value started at 790.05 later it
predominantly increased to 966.55.on the last day 26 th Feb. 2014 with a considerable
decline of 727.4

From the data and bar diagram there was huge decrease in the value of moving averages.
On 3rd the value is very high. It slowly started decreasing for the next days in the
month.779.03 are the starting value.838.51 is the high value and 734 is the low value.

67

Futures of Rel Capital

On March 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

3-3-2014

798

804.1

778.8

787.55

4-3-2014

792

809.5

787.55

796.55

784.98

5-3-2014

794

804.6

791.25

797.85

800.61

6-3-2014

801.1

804.7

797.15

807.45

803.13

9-3-2014

817

817

800.2

804.1

805.2

10-3-2014

802.1

813.45

795.25

804.05

805.68

11-3-2014

804.5

818

801.25

808.9

803.2

12-3-2014

810.1

814.7

797.5

803.7

803.08

13-3-2014

805.5

809.9

792.05

796.65

794.18

16-3-2014

790.15

794

780.3

782.2

795.48

17-3-2014

784.8

702.9

781.4

800.55

792.65

18-3-2014

805.65

810.85

793.6

795.2

799.15

19-3-2014

795.15

804.8

791.4

801.7

798.11

20-3-2014

803.13

806.8

790.2

797.45

793.3

23-3-2014

783.9

793.8

778

780.75

786.35

24-3-2014

787.8

787.8

775.6

780.85

778.21

26-2-2014

777.9

783.55

772

773.05

775.91

30-3-2014

770

783

770

773.85

770.26

31-3-2014

799

799

762.6

763.9

68

Interpretation

Open value of Rel Capital on March starts at 798 and consistent increased to 810.1 in 12 th
March was observed. After that the value slowly decreasing.770 is the low value and at
the end of the month it is reached to 799

Close value of Rel Capital explains that value started at 787.55.Later there was a huge
increase in the value.808.9 is the high value and 763.9 is the low value.

Moving averages of Rel Capital started at 784.98 and after the first day there was growth
in the value.805.68 is the high value and 770.26 is the low value

69

Futures of Rel Capital

On April 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

1-4-2014

767.8

768.7

755.5

758.15

2-4-2014

761.9

772.55

760.2

765.8

769.56

6-4-2014

771

786.65

768.45

784.75

780.91

7-4-2014

786.4

797.85

780.15

792.2

790.26

8-4-2014

795.9

806

787.5

793.85

790.3

9-4-2014

789

807.2

783.85

784.85

790.78

10-4-2014

789

799.95

788.5

793.05

784.68

13-4-2014

796

796

772.6

775.55

782.31

14-4-2014

775.05

784.2

773

777.75

773.53

16-4-2014

782.75

790.65

765.5

767.3

765.61

17-4-2014

766

766.95

749.95

751.8

749.91

20-4-2014

742

742

727.14

730.65

739.91

21-4-2014

735.2

746.8

733

737.3

735.5

22-4-2014

741.25

746.7

734.4

738.55

738.68

23-4-2014

736.65

758.25

733.7

743.2

746.71

24-4-2014

744.8

748.8

734

758.4

746.43

27-4-2014

742.7

744.85

735.05

737.7

744.8

28-4-2014

738

746.6

735.5

738.3

735.11

30-4-2014

736

38.35

726.9

729.35

70

Close
Rs.

Moving
averages

Interpretation

From the above data shows pictorial view of open values of Rel capital for the month of
April. From the above data we can say that 767 is the starting value 736 is the low value
and 795.9 is the high value

The future of Rel Capital had shown a high growth way on close values till 13th day of the
month whose impact shown on the close values. Starting close value is 758.15 where it
ends at 729.35 and 793.85 is the high value

The moving averages of Rel Capital on the day of the trading month showed fluctuations
in the price when compare with the staring day of the month. The value closed at 735.11
with highest 790.26 is the high value.

71

Comparison of moving average of Rel Capital for 3 months

Monthd

Total Moving averages

Percentages

February

11587.6

30%

March

13489.48

35%

April

12964.99

34%

Interpretation
From the above data and chart shows, to compare with February in the Month of March Moving
averages are high and after that in the month of April values are decreased. So March month is
the profitable month to the investor.

Futures of TATA Steel

72

On February 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

2-2-2014

562.5

581.7

556

575.3

3-2-2014

581.1

589.7

564.05

667.15

612.23

4-2-2014

573.8

598

573.8

594.25

611.2

5-2-2014

592.65

592.65

570

572.25

569.96

6-2-2014

556

558

537.6

543.4

549.73

9-2-2014

552

561

525.25

533.55

536.7

10-2-2014

524.9

541

524.9

533.15

528.9

11-2-2014

537.2

542.95

517

520

528.65

12-2-2014

525

537.8

524

532.8

529.9

16-2-2014

536.45

541.7

528.4

536.9

539.51

17-2-2014

539.9

550.4

537.05

548.85

556.2

18-2-2014

561

584.55

552

582.85

570.06

19-2-2014

582

582

568.7

578.5

576.98

23-2-2014

566.8

579

564.2

569.6

573.73

24-2-2014

566.5

578.5

563.5

573.1

570.01

25-2-2014

565.65

573.8

563.3

567.35

569.91

26-2-2014

569

572

559.8

569.3

73

Close
Rs.

Moving
averages

Interpretation

The market showed a positive upward movement opens values segment and cash market
during the first day of the month. High open value is 592.65.low open value is 525

The future of TATA Steel had shown a high growth way on close values till 5 th February
of the month whose impact shown on the close values. Starting close value is 575.3
where it ends at 569.3 and 667.15 is the high value

The moving averages of TATA Steel on the day of the trading month showed a increase in
the price when compare with the staring day of the month. The value closed at 569.91
with highest 612.23 is the high value.

74

Futures of TATA Steel

On March 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

3-3-2014

578

610.4

578

618.55

4-3-2014

610

615

601.65

606.4

613.9

5-3-2014

604

619.7

601.5

616.75

612.8

6-3-2014

619.3

625.4

613

615.25

616.85

9-3-2014

622.5

626

612.9

618.55

614.73

10-3-2014

618

620

608.1

610.4

613.01

11-3-2014

611.8

617.45

600.1

610.1

619.16

12-3-2014

606.6

611.9

603.1

607

608.43

13-3-2014

607.25

610.5

600.65

608.2

608.31

16-3-2014

604.5

615.9

607

609.75

615.01

17-3-2014

611

629.45

608

627.1

623.01

18-3-2014

633.7

642.7

629.45

632.2

632.65

19-3-2014

635

640.4

629.1

638.65

638.2

20-3-2014

639.9

645

636.2

643.75

637.05

23-3-2014

634.8

642.95

626.1

628.75

636.7

24-3-2014

631.15

639.7

629.3

637.6

634.81

26-2-2014

632.4

639.4

626.9

638.1

638.96

30-3-2014

644

648.3

638.85

641.2

637.61

31-3-2014

642.3

648.7

631

633.55

75

Interpretation

From the data of open values above there is high business growth in the futures of TATA
Steel on March. On 19th the price was 638.65 and it is high open value

From the data of close values there is high turnover in the values. On the first day the
value is 618.55 where as a huge increase of 643.75 on the 20th day is observed

From the data and bar diagram of moving averages explains that on 4 th march the value is
613.9.Next day the value predominantly decreased to 612.8.And 638.96 is the high value.

76

Futures of TATA Steel

On April 2014
Date

Open

High

Low

dd\mm\yy

Rs.

Rs.

Rs.

Close
Rs.

Moving
averages

1-4-2014

633

636.9

624.35

631.85

2-4-2014

638.35

654.8

635.15

652.6

653.33

6-4-2014

625

677.2

655

675.55

670.35

7-4-2014

679.7

690.4

669.2

682.9

679.68

8-4-2014

685

688.1

672.6

680.6

676.36

9-4-2014

680.95

632.8

663.3

665.6

673.7

10-4-2014

666.85

683.25

666.85

674.9

673.2

13-4-2014

677.9

684.4

666.65

679.1

679.95

14-4-2014

677

687.3

671.25

685.85

681.71

16-4-2014

689

695.35

678.65

680.2

685.26

17-4-2014

677

692.8

671.7

689.75

679.83

20-4-2014

681

681

661

669.55

676.55

21-4-2014

673.4

675.35

664

670.35

668.85

22-4-2014

673.4

678

663.5

666.65

667.71

23-4-2014

664

673.85

650.85

666.15

660.91

24-4-2014

656.7

662

644

649.95

657.95

27-4-2014

652.6

665.1

652.4

657.75

651.71

28-4-2014

654.51

658.2

646.1

647.45

645.96

30-4-2014

628.2

641.1

627

632.7

77

Interpretation

Open value of TATA Steel explains that the market, the players showed a bearish attitude
for the next day where the price rice to 633 to 638.35 and immediately fell to 625. Later
being the last trading day of the month again the players became bears as to keep a
negative for the next month which surge the price to 628.2 for the last day of the trading
month

Closing values explains that in the trading month most of the players closed up their
contracts to make profit. As the price was low, the close interest was low and the no. of
contracts traded declined to 631.85 to 632.7

Moving averages price rise from 653.33 on 1 st April, where it stood at 685.26 as high. As
the players in the market with an intention to short or correct

78

Comparison of moving average of TATA Steel for 3 months

Months

Total Moving averages

Percentages

February

8423.67

27%

March

10601.19

34%

April

11383.01

37%

Interpretation
TATA Steel Moving averages are continuously increasing from February to April. To compare
with February and March in the month of April values of Moving averages are very high

79

CHAPTER V
FINDINGS, SUGGESTIONS AND
CONCLUSION

80

FINDINGS

Futures of B.H.E.L, for 3 months had shown Fluctuations in the values. On February it is
36309.06 and March it is 41048.43 and April it is 42009.2.The futures market of BHEL
is also influenced by cash market, NIFTY index future, FIIS involvement, national and
international affairs etc

ITC Ltd had shown consistent increase in the values. From February to April values are
continuously increasing. February to April values is increased to 3722.86-4523.86.

As the players in the market with an intention to short or correct the market, the players
showed a bearish attitude for the ONGC. The ONGC was stood decline in the value from
February to April. Where the February month to April month values is ups and down
from 17620.51 to 18403.4 to 18167.4.

The values of Rel Capital on the trading months showed fluctuations in the price when
compare with the February to the April month.

Futures of TATA Steel for 3 months had shown a positive upward movement since
February to April. Values are continuously increasing from February to April.

To compare with all the five companies BHEL Price values are very high and ITC Ltd
and TATA Steel, Rel Capital, ONGC price values are maintaining low price.

81

SUGGESTIONS

A future of BHEL explains that to compare all 3 months, in April values are very high. So
in bearish market it is suggested to invest in options in order to maximize profit.

It is suggested to the investor that in cash market the profit/loss is limited but where in
FUTURE an investor can enjoy unlimited profits/loss. So investor can invest in ITC Ltd
to maintain the profitable situation.

It is suggested to an investor to keep in mind the time or expiry duration of Future

contract before trading of ONGC, Rel capital. The lengthy the time, the risk is low and
profit making. The fewer time may be high risk and chances of loss making.

It is suggested to an investor that future values of TATA Steel are continuously increasing
from February to April. So investors can invest in TATA Steel.

It is suggested to an investor that BHEL is profitable to invest to compare with other

companies.ITC Ltd, TATA Steel, Rel Capital, ONGC need to improve their performance
to increase the number of investors. It is recommended that SEBI should take measures in
improving awareness about the Futures market

82

CONCLUSION
This report shows that derivatives markets are large and growing rapidly, and that they are
playing an increasingly important role in the economies of India. At present scenario the
Derivatives market is increased to a great position. Its daily turnover teaches to the equal stage of
cash market. The derivatives are mainly used for hedging purpose. In derivative segment the
profit/loss of the option holder/option writer is purely depended on the fluctuations of the
underlying asset. Derivatives allow firms and individuals to hedge risk and take risk efficiently.
For the economy as a whole, a collapse of a large derivatives user or dealer may create
systematic risk. On balance, derivatives help make the economy more efficient. The report
focuses futures.

83

BIBLOGRAPHY
www.smcglobal.com
www.nsdl.com
www.cdsl.com
www.moneycontrol.com
www.nseindia.com
www.bseindia.com
www.google.com
www.sebi.com
www.moneycontrol.com
www.economictimes.com

BOOKS
Investment management by v.k.bhalla
Security Analysis And Portfolio Management -V.A.Avadhani
Marketing of Financial Services -V.A.Avadhani
Indian Financial System -M.Y.Kh

84