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CHAPTER 1
INTRODUCTION
1.1 INTRODUCTION

Option market data contain valuable information on market participants' views

regarding future price evolution of a particular security. Most of this information is
complementary to the underlying security's current price and price history. In the
current project we focus on stock options data.

The difficulty of accessing this quantitative information originates in the

complicated structure of option data quotes. At any given time more than 100
option contracts are quoted on a typical heavily traded stock symbol. These are put
and call contracts corresponding to at least three different expiration dates and
approximately 10 different strike prices. Apart from the most recently transacted
option price, the quotes contain bid and ask prices, daily volumes and open interest
data. Not all contracts are actively traded, consequently "most recent" prices may
be stale and not related to the current stock price.

Option prices expressed in dollars are difficult to compare due to the changing
price of the underlying security vs. the fixed grid of strike prices. For this reason
traders are not evaluating options in terms of their quoted dollar prices but in terms
of their implied volatilities. Implied volatilities expressed as function of the
moneyness ratio (strike price/ current stock price) of their contact exhibit the well-
known "smile curve" pattern. Far out-of-the-money contracts sell at a premium as
compared to their in-themoney siblings. This is a consequence of the fact that stock

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returns and prices have heavier tailed probability distributions than the normal
distribution, on which the Black-Scholes option pricing theory is based.

The primary objective of the present project is to reorganize daily option market
price data in such a format that is more amenable to quantitative analysis and
which is based on implied volatilities. We organize data according to stock
symbols and option expiration dates. This means that each single file contains all
prior dates and strike prices corresponding to the same expiration date and stock
symbol.

Hence each file contains a sequence of daily smile curves for each day prior to the
expiration date for the 4 4 given stock symbol. We also preserve trading volume
and bid-ask spread data in similarly structured but separate parallel files. We use
our own fully documented algorithm to convert option prices into implied
volatilities. The algorithm assures that the implied volatilities of at-the-money put
and call options coincide and hence the resulting smile curves have no
discontinuities at moneyness = 1.

The data reorganization and conversion is implemented in two stages, first by a

compiled C program for speed and then an R script for the probabilistic-financial
details. We explicitly construct all smile curve files for all stock symbols in the
current S&P 100 index. Our programs are capable to produce similar files for
arbitrary user-defined symbol and expiration date sets. In the final section we
demonstrate a variety of possible analysis of the information contained in the

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option market data that can be easily performed using our refactored implied
volatility database

In this section, we look at the next derivative product to be traded on the NSE,
namely options. Options are fundamentally different from forward and futures
contracts. An option gives the holder of the option the right to do something. The
holder does not have to exercise this right. In contrast, in a forward or futures
contract, the two parties have committed themselves to doing something. Whereas
it costs nothing (except margin requirement) to enter into a futures contracts, the
purchase of an option requires as up-front payment.

An option is a contract conveying the right but not the obligation to buy or sell
specified financial instruments at a fixed price before or at a certain fixed date.
There are two parties in options in which the buyer receives a right for which he
pays a fee called premiums and the seller undertakes an obligation. Buyer of the
option pays the premium to the option writer to compensate him for renouncing his
right and incurring his obligation. The premium is the price fixed and negotiated
when the option is bought or sold. The buyer has every discretion to exercise his
option in future. Options are used when either the amount or timing of exposure is
not known with certainty. A person who buys the option is said to be long in the
option and the other who sells is said to be short.

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1.2 REVIEW OF LITRATURE

1. (Krishnan & G, January 2018) in this article named "Performance Analysis of

Volatile Strategy under Indian Options Market" explains, Option trading
strategy are used to minimize our risk and maximize profits option strategy are
both combination of call and put. The trader should thoroughly analyze the
market to identify the appropriate strategy which can face the high volatile
market. Volatility is the reason for the generation of strategies. Option
strategies are used to reduce the risk during high fluctuations in the market.
Extreme movements in markets leads to high payoff on these strategies, due to
which an effort is taken to generalize the concepts of strangle and straddle in
National Stock Exchange (NSE) in India. According to option market experts
straddle and strangle is the most suitable volatility strategy. Hence, a question
arises, which strategy generates higher returns. Therefore the analysis is
undertaken using Sharpe, Treynor and Jensen"s alpha ratios. The findings
indicate that, when the uncertainty in the market is more, it is better to adopt
strangle strategy. Hence, trader should analyse the market and then decide

2. Meziani (2016) studied the variation in equity markets for the quarter ending
September 2015. He found that exchange traded funds grown in popularity and
several of them have become optionable thereby positioning themselves as
another fast and cost efficient way of controlling portfolio risk in the markets
where volatility is very high

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3. Sonmezer (2016) questioned the way prominent option strategies are priced
and exoticoptions and applied and addressed behavioral approaches for the
same. He also discussed the speculative nature of exotic options and financial
instability relationship between them.

4. Malpani (2013) studied how options work in investments. His findings

suggested that Option trading is truly the favorite financial instrument of small
retail investors over the past few decades all over the world. Options trading
allow investors with very small funds to gain disproportionately big profits and
to control stocks that would otherwise be too expensive to own. Options
trading are so powerful, it also extremely complex and dangerous if it is not
handled carefully. Options traders need a very firm knowledge of the basics of
options trading before even thinking of ways to makethe money out of it.

5.Chirag Babulal Shah (July 2013 ) studied Bull Call Debit spread strategy on•
Nifty Index Option. He back test the Bull Call debit spread strategy for a time
period long enough to cover the various practical scenarios of the capital market. A
period of 6years is taken into consideration and a algorithmic method of back
testing is used. The study does not look at any other factors such as market
sentiments, the global scenarios, macro or micro economics, etc. The Bull call
debit spread
strategy is a very basic and easy to understand This strategy has proved to yield
profits inland implement options strategy. the long run. The reason for the profits is
the extent of loss when one goes wrong compared to the profit when one goes
right.

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6. E.V.P.A.S.Pallavil, Dr. K. S. S. Rama Raju2 and Dr. T. Kama Raju3 (2013)

studied Operational strategies and performance of options trading in India and
found that Options can be used to create portfolio with unique features, capable of
achieving investment objectives. Options are used world over to hedge not only the
portfolio risk but also to maximize the return on investments.

7. Patnaik and shah (2008) has analyzed on the preferences of foreign and
domestic institutional investors in Indian stock markets. Foreign and domestic
institutional investors both prefer larger, widely dispersed firms and do not chase
returns. However, we and evidence of strong differences in the behavior of foreign
and domestic institutional investor

8. Shrotriya (2003) conducted a survey on investor preferences in which he

depicted the linkage of investment with the factor so considered while making
investment. He says "There are various factors and their linkage also. These factors
help us how to ensure safety, liquidity, capital appreciation and tax benefits along
with returns.

9. ( Tversky, A and Kahenaman, D.) Other research has shown that psychological
factors may result in exaggerated stock price movements. Psychological research
has demonstrated that people are predisposed to seeing patterns and often will
perceive a pattern in what is , in fact, just noise. In the present context this mean
that a succession of good news items about a company may lead investors to
overreact positively. A period of
good returns also boost the investor's self-confidence , reducing his risk.

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10. Calderon-Rossell (1991) was the first to develop a partial equilibrium model of
stock market growth. To date, this model represents the most "serious" attempt to
lay the foundations of a financial theory of stock market development. However, as
a partial equilibrium model, it fails to take into account, for instance, the potential
effects of government policies and institutional factors.

11. Henry (2000) finds a strong relationship between the growth rate of investment
and changes in stock market valuation measured by returns on the stock market,
the turnover ratio, and the traded value as a share of GDP. On the other hand,

12. McCauley and Remolona (2000) and Shah and Thomas (2001) find that the
size of the economy is an important factor in the development of liquid and well
functioning securities markets.

13. Mishkin (2001) argues that financial liberalization promotes transparency and
accountability, which reduces adverse selection and moral hazard. It thus tends to
reduce the cost of borrowing in stock markets, which eventually increases their
liquidity and size. A large pool of studies has investigated the impact of inflation
on capital markets. An important finding of these studies has been that high level
of inflation are associated

14. Bhardwaj (2003) has stated the literature on globalization, He found the
pervasiveness of the west's perception of the world affect on Indian investors that
affects the trends in investor's choice. They are hugely affected by the west's views
and so changes in Indian trends occur.

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15. Ranganathan (2003), has stated the investor behavior from the marketing work
and financial economics has brought together to the surface an exciting area for
study and research: behavioral finance. The realization that this is a serious subject
is, however, barely dawning. Analysts seem to treat financial markets as an
aggregate of statistical observations, technical and fundamental analysis. A rich
view of research waits this sophisticated understanding of how financial markets
are alo affected by the 'financialbehavior' of investors. With the reforms of
industrial policy, public sector, financial sector and the many developments in the
Indian money market and capital market,

1.3 OBJECTIVE OF THE STUDY

1. To study the concept of option chain analysis by observing market patterns

and statistics.
2. To study when to enter and exit a market, especially when it starts to shift, and
to not let emotions influence trading decisions.
3. To calculate the risk and return of investment in futures and investment in
options.

4. To analyze the preferences of the investors among the options market.

1.4 SCOPE OF STUDY

The scope of the study is divided into the following factors

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A) Geographical Scope-
The scope of the study is limited to Safe cap tradlink llp

B) Conceptual Scope-
Conceptual Scope includes concept of option chain .

C) Analytical Scope-
Analytical scope of the study is limited to option chain analysis.

1.5 IMPORTANCE OF THE STUDY

1. Used as a hedging device, options contracts can provide investors with risk-

reduction strategies. ... Options also give traders and investors more flexible
andcomplex strategies such as spread and combinations that can be
potentially profitable under any market scenario.

2. They may provide increased cost-efficiency. They may be less risky than

equities. They have the potential to deliver higher percentage returns. They
offer a number of strategic alternatives.

3. he derivatives play vital functions like risk reduction through hedging,

ensuring market efficiency, deal price discovery of the underlying asset, etc.
The risk reduction is possible by ways of risk transfer, risk diversification,
risk allocation, and risk neutralizing.

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1.6 RESERCH AND METHODLOGY

The research methodology defines what the activity of research is, how to proceed,
how to measure progress, and what constitutes success. It provides us an
advancement of wealth of human knowledge, tools of the trade to carry out
research, tools to look at things in life objectively; develops a critical and scientific
attitude, disciplined thinking to observe objectively (scientific deduction and
inductive thinking); skills of research particularly in the 'age of information'. Also
it defines the way in which the data are collected in a research project. In this paper
it presents one components of the research methodology from a real project; the
theoretical design and framework respectively.

Sources of Data:- facts ,figures, other relevant material of past and present and
surveying are the basis for study and analysis. Without an analysis of factual data
no inferences can be drawn on the questions under study. Inferences based on
imagination or guesses cannot provide correct answer to research questions.
The relevance adequacy and reliability of data determine the quality of the findings
of a study.

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For the purpose of the present study, data from two sources has been collected,
namely primary data and secondary data.

PRIMARY DATA: Primary data is source from which the researcher collects the
data. It is a firsthand data, which is used directly for the analysis purposes.
Primary data always gives a researcher a fairer picture. In the present study
primary data has been collected using questionnaires. For the purpose
of collecting the same, 50 respondents have been randomly selected. Even
theresponse of the respondents was taken into consideration. In this study, primary
data plays a vital role for analysis, interpretation, conclusion and suggestions.

SECONDARY DATA:
Secondary data is data which is collected and compiled for other purposes.
Secondary data also plays a key factor in providing more information which will
influence the analysis. Few of the main sources secondary data include
newspapers, magazines, business journals and internet

Research Design: Exploratory research design is been taken.

Exploratory research design: Exploratory research is research conducted for a

problem that has not been clearly defined. It often occurs before we know enough
to make conceptual distinctions or posit an exploratory relationship. Exploratory
research helps determine the best research design, data collection method and
selection of subjects.

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Sample Area: Noida city is being taken as a sample area for study. Technique that
is, Convenience Sampling.

Sample Size: The research made use of primary data, which was collected by the
50 respondents but out of which only 40 has responded to the questions that's why
the research has been carried on 40 respondents.

Data Collection Instrument: Structured Questionnaire

Sampling Procedure: We have used a Non Probabilistic Sampling

1.7 LIMITATIONS OF STUDY

2. LIMITED RESOURCES:
Limited resources are available to collect the information about the
commodity trading.

3. VOLATALITY:
Share market is so much volatile and it is difficult to forecast anything about
it whether you trade through online or offline

3.ASPECTS COVERAGE:
Some of the aspects may not be covered in my study

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CHAPTER 2
THEROTICAL BACKGROUND

2.1 BASIC CONCEPT- MEANING DEFINATION

DEFINATION
An options chain, also known as an option matrix, is a listing of all
available option contracts for a given security. It shows all listed puts, calls, their
expiration, strike prices, and volume and pricing information for a single
underlying asset within a given maturity period. The chain will typically be
categorized by expiration date and segmented by calls vs. puts.

The term option refers to a financial instrument that is based on the value of

underlying securities such as stocks. An options contract offers the buyer the
opportunity to buy or sell—depending on the type of contract they hold—the
underlying asset.

Options are of two types- calls and puts. Calls give the buyer the right but not the
obligationto buy a given quantity of the underlying asset, at a given price on or
before a given future date. Putsgive the buyers the right, but not the obligation to

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

INTRODUCTION

Discussions with people of various age groups, with different educational

backgrounds, engaged in different types of activities, belonging to different income
groups often reveals a general perception that stock market investing is risky, akin to
gambling, always loss-making, highly speculative and can have severe adverse
financial implications. This chapter intends to update the participants about the nature
of the stock market, introduce them to the established tools and techniques of stock
market investing, hand hold them for informed decision making, at the same time
highlighting the riskiness of random decision making on the basis of hearsay. It is an
awareness exercise aimed at dispelling certain myths associated with this market, at
the same time providing readers with the tools for trading in this market. Many of us
may not be aware that even if we directly stay away from the stock market, our
savings are deployed in this market by insurance companies and mutual funds. Yes, it
is true, that these financial institutions are manned by experts in this area. However, it
is our savings that they are using and it is our responsibility to understand the basics
of this market.

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Stock markets are dynamic in nature. This dynamism stems from changing
fundamentals of companies, changes in the macro-economy – both domestic and
international, and changes in market sentiment, something that cannot be explained
and which at times has no rational basis. The stock market, like any other market,
has buyers and sellers and there are goods (shares of companies) that are
exchanged for a price. However, the goods are not demanded for their own sake,
but are a means to increase wealth to enhance future consumption. It has attracted
hordes of individuals, across all sections of society, with various degrees of
knowledge and education, whose only objective is to make money, quickly and
lots of it. There is an inherent greed factor in this market, and overall it makes it
very difficult to predict market movements. In spite of this, academicians and
market analysts have tried to make sense of this market, and they have provided
some analytical structures of analysis. It is only that very few market players have
paid serious attention to this literature, or are unable to understand it, that has
created a certain perception of this market as unpredictable and volatile.

There are various magazines, journals, websites and television channels that make
an honest attempt in providing an understanding of the market, even on a daily
basis. They, however provide short term, at times instantaneous, views on market
movements, lacking analytical clarity. Brokers of repute provide valuable insight
into market movements and also warn investors of market pitfalls and the dangers.
But they also probably have failed to provide education that is so badly needed. It
is possible that the frenzy of money making in the stock market does not require
education. People like to look at it as a gamble, the outcome of which is known
with a certain probability, and which cannot be reduced with education.

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The Indian stock market has attracted the attention of domestic players and
international players and is considered to be one of the active markets in the world.
The growth rate of the economy is one of the highest in the world and its future
potential has made it an attractive destination for foreign investors. However, it is
also true that the varied domestic clientele in this market neither has the inclination
nor the ability to understand the various facets of this market, they being guided
singularly by the motive of making money, fast. The purpose of this chapter is to
weave together movements in the Indian stock market with the existing techniques
available in the literature. It will show that there is logic to price movements in this
market, and one should be aware of these elements. This, I hope, will act as a guide
to those who believe in informed investing.

There are four sets of players in the stock market: investors who have a medium to
long-run perspective, day traders, arbitrageurs and speculators. However hard we
try, we will not be able to wish any of them away. For a household who is
contemplating entry into this market, it is important to understand in which
segment he or she belongs and the risk-return trade-off.

Bombay Stock Exchange (BSE)

The Bombay Stock Exchange (BSE) is the first and largest securities market in
India and was established in 1875 as the Native Share and Stock Brokers'
Association. Based in Mumbai, India, the BSE lists close to 6,000 companies and
is one of the largest exchanges in the world, along with the New York Stock
Exchange (NYSE), Nasdaq, London Stock Exchange Group, Japan Exchange
Group, and Shanghai Stock Exchange.

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The BSE has helped develop India's capital markets, including the retail debt
market, and has helped grow the Indian corporate sector. The BSE is Asia's first
stock exchange and also includes an equities trading platform for small-and-
medium enterprises (SME). BSE has diversified into providing other capital
market services including clearing, settlement, and risk management.

National Stock Exchange of India

Since its inception in 1992, National Stock Exchange of India has been at the
vanguard of change in the Indian securities market. This period has seen
remarkable changes in markets, from how capital is raised and traded, to how
transactions are cleared and settled. The market has grown in scope and scale in a
way that could not have been imagined at the time. Average daily trading volumes
have jumped from Rs. 17 crore in 1994-95 when NSE started its Cash Market
segment to Rs.11,325 crore in 2008-09. Similarly, market capitalization of listed
Indian firms went up from Rs.363,350 crore at the end of March 1995 to
Rs.2,896,194 crore at end March 2009. Indian equity markets are today among the
most deep and vibrant markets in the world. This transformation was the result of a
number of initiatives led by the Government, market regulators and infrastructure
providers like exchanges and depositories. NSE’s efforts in this area have included
the creation of the first clearing corporation in the country in the form of the
National Securities Clearing Corporation Limited (NSCCL). NSCCL today
provides central counterparty services and manages settlement risk for multiple
products, and is a major factor in the confidence market participants have in the

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ability of Indian markets to handle extreme shocks without causing any defaults.
NSCCL is also the first clearing corporation in the country to receive.

NSE has many other firsts to its name, including the first systematic process of
member inspections, a sophisticated market surveillance system, and a country
wide high capacity data network supporting close to 200,000 dealer terminals. The
year 2008-09 was an eventful year for NSE, as it saw the launch of new and
important products for the securities market. Introduction of Mini Nifty Futures
and Options contracts on S&P CNX Nifty during the year has given retail investors
an increased ability to participate in index futures and options trading. NSE also
started publishing the first volatility index in the country India VIX. Market
participants now have an important tool to assess volatility and create trading
strategies to exploit volatility movements. In May 2008, NSE developed a new
trading application, NOW, or ‘NEAT on Web’. The now platform allows trading
members to connect to the exchange through the internet, and has resulted in a
significant reduction in both the access cost and turnaround time for providing
access. This year also saw a watershed in the Indian currency market in the form of
a currency futures contract. NSE was the first stock exchange in the country to
launch the contract on August 29, 2008 in USDINR pair.
The contract was an instant success, and currently has daily trading volumes in
excess of Rs. 2,000 crore and open interest in excess of Rs. 1,000 crore. Other
significant developments include Long term Options Contracts on S&P CNX
Nifty, Short selling * “VIX” is a trademark of Chicago Board Options Exchange,
Incorporated ("CBOE") and Standard & Poor’s has granted a license to NSE, with
permission from CBOE, to use such mark in the name of the India VIX and for
purposes relating to the India VIX. 4 and Securities Lending and Borrowing

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Scheme, Direct Market Access (DMA), Futures and Options contracts on S&P
CNX Defty index and the NSE E-Bids for Debt Segment.

Further NSE also ventured into a new segment by promoting a Power Exchange
(Power Exchange India Ltd -PXIL) along with NCDEX. Today, NSE offers a wide
range of products for multiple markets, including equity shares, Exchange Traded
Funds (ETF) , Mutual Funds, Debt instruments, Index futures and Options, Stock
Futures and Options and Currency futures. Our Exchange has more than 1,400
companies listed in the Capital Market and more than 95% of these companies are
actively traded. The debt market has more than 3,954 securities available for
trading. Index futures and options trade on seven different indices and on more
than 230 stocks in stock futures and options. In currency futures contracts are
currently traded in the USDINR pair. Globally, NSE is ranked first in single stock
futures in terms of number of contracts traded, and third in stock index futures and
stock index options. We also rank third in terms of number of equity shares traded
and are the eighth largest derivatives exchange in the world

PRIMARY MARKET

The primary market provides the channel for sale of new securities. Primary
market provides opportunity to issuers of securities; government as well as
corporates, to raise resources to meet their requirements of investment and/or
discharge some obligation. They may issue the securities at face value, or at a
discount/premium and these securities 15 may take a variety of forms such as

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equity, debt etc. They may issue the securities in domestic market and/or
international market. The primary market issuance is done either through public
issues or private placement. A public issue does not limit any entity in investing
while in private placement, the issuance is done to select people. In terms of the
Companies Act, 1956, an issue becomes public if it results in allotment to more
than 50 persons. This means an issue resulting in allotment to less than 50 persons
is private placement. There are two major types of issuers who issue securities. The
corporate entities issue mainly debt and equity instruments (shares, debentures,
etc.), while the governments (central and state governments) issue debt securities
(dated securities, treasury bills). The price signals, which subsume all information
about the issuer and his business including associated risk, generated in the
secondary market, help the primary market in allocation of funds.

SECONDARY MARKET

Secondary market refers to a market where securities are traded after being
initially offered to the public in the primary market and/or listed on the Stock
Exchange. Majority of the trading is done in the secondary market. Secondary
market comprises of equity markets and the debt markets. The secondary market
enables participants who hold securities to adjust their holdings in response to
changes in their assessment of risk and return. They also sell securities for cash to
meet their liquidity needs. The secondary market has further two components,
namely the over-the-counter (OTC) market and the exchange-traded market. OTC
is different from the market place provided by the Over The Counter Exchange of
India Limited. OTC markets are essentially informal markets where trades are
negotiated.

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Most of the trades in government securities are in the OTC market. All the spot
trades where securities are traded for immediate delivery and payment take place
in the OTC market. The exchanges do not provide facility for spot trades in a strict
sense. Closest to spot market is the cash market where settlement takes place after
some time. Trades taking place over a trading cycle, i.e. a day under rolling
settlement, are settled together after a certain time (currently 2 working days).
Trades executed on the National Stock Exchange of India Limited (NSE) are
cleared and settled by a clearing corporation which provides novation and
settlement guarantee. Nearly 100% of the trades settled by delivery are settled in d
mat form. NSE also provides a formal trading platform for trading of a wide range
of debt securities including government securities.

A variant of secondary market is the forward market, where securities are traded
for future delivery and payment. Pure forward is outside the formal market. The
versions of forward in formal market are futures and options. In futures market,
standardized securities are traded for future delivery and settlement. These futures
can be on a basket of securities like an 16 index or an individual security. In case
of options, securities are traded for conditional future delivery. There are two types
of options–a put option permits the owner to sell a security to the writer of options
at a predetermined price while a call option permits the owner to purchase a
security from the writer of the option at a predetermined price. These options can
also be on individual stocks or basket of stocks like index.

Two exchanges, namely NSE and the Bombay Stock Exchange, (BSE) provide
trading of derivatives of securities. The past few years in many ways have been
remarkable for securities market in India. It has grown exponentially as measured

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in terms of amount raised from the market, number of stock exchanges and other
intermediaries, the number of listed stocks, market capitalisation, trading volumes
and turnover on stock exchanges, and investor population. Along with this growth,
the profiles of the investors, issuers and intermediaries have changed significantly.
The market has witnessed fundamental institutional changes resulting in drastic
reduction in transaction costs and significant improvements in efficiency,
transparency and safety. Reforms in the securities market, particularly the
establishment and empowerment of SEBI, market determined allocation of
resources, screen based nation-wide trading, dematerialization and electronic
transfer of securities, rolling settlement and ban on deferral products, sophisticated
risk management and derivatives trading, have greatly improved the regulatory
framework and efficiency of trading and settlement. Indian market is now
comparable to many developed markets in terms of a number of qualitative
parameters.

DERIVATIVES MARKET

Trading in derivatives of securities commenced in June 2000 with the enactment

of enabling legislation in early 2000. Derivatives are formally defined to include:
(a) a security derived from a debt instrument, share, loan whether secured or
unsecured, risk instrument or contract for differences or any other form of security,
and (b) a contract which derives its value from 17 the prices, or index of prices, or
underlying securities. Derivatives trading in India are legal and valid only if such
contracts are traded on a recognized stock exchange, thus precluding OTC
derivatives. Derivatives trading commenced in India in June 2000 after SEBI
granted the approval to this effect in May 2000. SEBI permitted the derivative

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segment of two stock exchanges, i.e. NSE and BSE, and their clearing
house/corporation to commence trading and settlement in approved derivative
contracts. To begin with, SEBI approved trading in index futures contracts based
on S&P CNX Nifty Index and BSE-30 (Sensex) Index. This was followed by
approval for trading in options based on these two indices and options on
individual securities. The derivatives trading on the NSE commenced with S&P
CNX Nifty Index futures on June 12, 2000. The trading in S&P CNX Nifty Index
options commenced on June 4, 2001 and trading in options on individual securities
commenced on July 2, 2001. Single stock futures were launched on November 9,
2001. In June 2003, SEBI-RBI approved the trading on interest rate derivative
instruments. The Mini derivative Futures & Options contract on S&P CNX Nifty
was introduced for trading on January 1, 2008 while the long term option contracts
on S&P CNX Nifty were introduced for trading on March 3, 2008.

FUTURES

A futures contract is the obligation to sell or buy an asset at a later date at an

agreed-upon price. Futures contracts are a true hedge investment and are most
understandable when considered in terms of commodities like corn or oil. For
instance, a farmer may want to lock in an acceptable price upfront in case market
prices fall before the crop can be delivered. The buyer also wants to lock in a price
upfront, too, if prices soar by the time the crop is delivered.

OPTIONS

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Options are based on the value of an underlying security such as a stock. As noted

above, an options contract gives an investor the opportunity, but not the
obligation, to buy or sell the asset at a specific price while the contract is still in
effect. Investors don't have to buy or sell the asset if they decide not to do so.

Options are a derivative form of investment. They may be offers to buy or to sell
shares but don't represent actual ownership of the underlying investments until the
agreement is finalized.

Buyers typically pay a premium for options contracts, which reflect 100 shares of
the underlying asset. Premiums generally represent the asset's strike pricethe rate
to buy or sell it until the contract's expiration date. This date indicates the day by
which the contract must be used

CONCEPT
Options are versatile financial products. These contracts involve a buyer and
seller, where the buyer pays a premium for the rights granted by the contract. Call
options allow the holder to buy the asset at a stated price within a specific
timeframe. Put options, on the other hand, allow the holder to sell the asset at a
stated price within a specific timeframe. Each call option has a bullish buyer and a
bearish seller while put options have a bearish buyer and a bullish seller.

Traders and investors buy and sell options for several reasons. Options

speculation allows a trader to hold a leveraged position in an asset at a lower cost
than buying shares of the asset. Investors use options to hedge or reduce the risk
exposure of their portfolios.

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An Option' is a type of security that can be bought or sold at a specified price

within aspecified period of time, in exchange for a non-refundable upfront deposit.
An optionscontract offers the buyer the right to buy, not the obligation to buy at the
specified price ordate. Options are a type of derivative product.

The right to sell a security is called a 'Put Option', while the right to buy is called
the 'CallOption'

They can be used as:

Leverage: Options help you profit from changes in share prices without putting
down the fullprice of the share. You get control over the shares without buying
them outright.

Hedging: They can also be used to protect yourself from fluctuations in the price
of a shareand letting you buy or sell the shares at a pre-determined price for a
specified period of time.Though they have their advantages, trading in options is
more complex than trading in regular shares.It calls for a good understanding of
trading and investment practices as well as constant monitoring ofmarket
fluctuations to protect against losses.

Just as futures contracts minimize risks for buyers by setting a pre-determined

future price foran underlying asset, options contracts do the same however, without
the obligation to buy thatexists in a futures contract.

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The seller of an options contract is called the 'options writer'. Unlike the buyer in
an optionscontract, the seller has no rights and must sell the assets at the agreed
price if the buyerchooses to execute the options contract on or before the agreed
date, in exchange for anupfront payment from the buyer.There is no physical
exchange of documents at the time of entering into an options contract.The
transactions are merely recorded in the stock exchange through which they are
routed.

2.2 CHARACTRISTICS
1. The last price column displays the latest trade price captured and reported. 

2. Information in the net change column reflects the direction (up, down, or

flat) for the underlying asset, as well as the amount of price variance from the
previous trade. 

3. The review of the bid column shows information about how much a trader

could expect to receive on the sale of that option at that time-frame. 

4. Information about how much the trader can expect to pay to purchase that
option at that time appears in the ask column.

2.3 SCOPE
Dividend Income

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Some stocks provide income in the form of a dividend. While not all stocks offer
dividends, those that do deliver annual payments to investors. These payments
arrive
even if the stock has lost value and represents income on top of any profits that
come
from eventually selling the stock. Dividend income can help fund a retirement or
pay foreven more investing as you grow your investment portfolio over time.

Gain in Investment

One of the primary benefits of investing in the stock market is the chance to grow
yourmoney. Over time, the stock market tends to rise in value, though the prices of
individualstocks rise and fall daily. Investments in stable companies that are able to
grow tend tomake profits for investors. Likewise, investing in many different
stocks will help buildyour wealth by leveraging growth in different sectors of the
economy, resulting in aprofit even if some of your individual stocks lose value.

Diversification
For investors who put money into different types of investment products, a stock
marketinvestment has the benefit of providing diversification. Stock market
investments changevalue independently of other types of investments, such as
bonds and real estate.Holding stock can help you weather losses to other
investment products. The stock alsoadds risk to a portfolio, as well as the potential
for large, rapid gains, helping investors avoid risk-averse or overly conservative
investment strategies.

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Ownership
Buying shares of stock means taking on an ownership stake in the company you
purchase stock in. This means that investing in the stock market also brings
benefits thatare part of being one of the business owners. Shareholders vote on
corporate boardmembers and certain business decisions. They also receive annual
reports to learn moreabout the company. Owning stock in the company you work
for can be a way to expressloyalty and tie your personal finances to the success of
the business as a whole.

2.4 TYPES OF OPTION

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

On the basis of the underlying asset:

On the basis of the underlying asset the option are divided in to two types:

Index options:
These options have the index as the underlying. Some options are European while
others are American. Like index futures contracts, index options contracts are also
cash settled.

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Stock options:
Stock Options are options on individual stocks. Options currently trade on over
500 stocks in the United States. A contract gives the holder the right to buy or sell
shares at the specified price.

On the basis of the market movements: On the basis of the market movements
the option are divided into two types. They are:

Call Option:

A call Option gives the holder the right but not the obligation to buy an asset by a
certain date for a certain price. It is brought by an investor when he seems that the
stock price moves upwards a call option contract, in simple terms, is a “right to
buy”. It gives the owner of this contract the right to buy a stock at an agreed-upon
price, also known as the strike price, at any time before or on the expiration date.
This Options type is bought when the investor expects the market price of the stock
to rise in the future (i.e. a bullish market). When the market price goes up, the
contract-holder can exercise their option and buy the stock at the strike price,
which is below market price at the time, thereby making a profit.

Put Option:

put option gives the holder the right but not the obligation to sell an asset by a
certain date for a certain price. It is bought by an investor when he seems that the
stock price moves downwards.Conversely, a Put option gives the owner a “right to
sell”. A Put holder can sell as stock at a strike price within the expiration period.
When an investor expects the market price to fall in the future (i.e. a bearish
market), that’s when they place a Put Option. As the market price of the underlying

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asset falls, the Put holder can exercise their right to sell it at the strike price, which
is higher than the market price at the time. Thus, the investor makes a profit

On the basis of exercise of option: On the basis of the exercise of the Option, the
options are classified into two Categories.

American Option:
American options are options that can be exercised at any time up to the expiration
date. Most exchange -traded options are AmericanAn American option, aka an
American-style option, is a version of an options contract that allows holders to
exercise the option rights at any time before and including the day of expiration. It
contrasts with another type of option, called the European option that only allows
execution on the day of expiration.

An American-style option allows investors to capture profit as soon as the stock

price moves favorably, and to take advantage of dividend announcements as well.

European Option:

European options are options that can be exercised only on the expiration date
itself. European options are easier to analyse than American options, and properties
of an American option are frequently deduced from those of its European
counterpart.A European option is a version of an options contract that limits
execution to its expiration date. In other words, if the underlying security such as a
stock has moved in price, an investor would not be able to exercise the option early

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and take delivery of or sell the shares. Instead, the call or put action will only take
place on the date of option maturity.

Another version of the options contract is the American option, which can be

exercised any time up to and including the date of expiration. The names of these
two versions should not be confused with the geographic location as the name only
signifies the right of execution.

2.5 ADVANTAGES OF OPTION

There are many advantages of trading options over the future and cash. There are
several advantages are given below-

Cost Efficient:

Options come up with huge leveraging power. A trader or investor can get options
position equal to a stock position at a much lower margin. For example, in order to
purchase 200 shares of a stock at price 80, an investor requires paying Rs. 16000.
However, if he was to purchase call options of equal weightage, the premium
required would be around Rs 4000. So we can have a fair idea of options cost
efficiency.

High Return Potential:

The returns on options trading would be much higher than buying shares on cash.
As such, the option pays equal profit as the simple stock buying if had chosen the

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right strike. As we are getting options on lower margin and getting the same
profitability the percentage return would be much higher comparatively.

Lower Risk:

Options are riskier than owning equities however; there are also times when
options are used to avoid risk. Options are used widely to hedge the positions. The
risk in options is predefined as the maximum loss can be the premium paid to buy
the option.

More Strategy Available:

There are more strategies available in the options market to trade options. The
trades can be combined to create a strategic position with the help of a call and put
options of different expiries and strike prices.

DISADVANTAGES OF OPTIONS:

As we have seen above that options can be highly rewarding however, there are
some drawbacks of options trading. These are some key drawbacks of options
explained below-

Less Liquidity:

Some stock options have lower liquidity which makes it very difficult for a trader
to make entry and exit from the trade.

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High Commissions:

Option trading is more expensive as compared to future or stock trading. However,

there are some discount brokers that give the opportunity to traders to trade on
lower commissions. But most of the full-service brokers charge higher fees for
trading in options.

Time Decay:

Time decay is a worse thing while trading options. The value of your option
premium decreases by some percentages each day irrespective of movement in the
underlying.

Non Availability of All Stock Options:

All the stocks registered with exchanges do not have options contracts. This makes
it difficult for a trader to hedge his position with options strategies.

Conclusion:

Options can be bought and sold each situation has its own advantages and
drawbacks. Time is a key thing in trading the options as time decay runs against
the buyer of the option. Trading cost is also a critical thing to consider while
trading options. Options trading is more difficult to understand for a layman so you
need to be careful while trading options.

2.6 FUNCTION

Some of the major function of the option chain are as follows:

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Contract name: It is the unique name given to the contract for the purpose of
identification.

Last trade date: It precisely specifies the date and time of the last trade of the
given security.

Strike price: It is one of the most important information about an option contract.
Strike price refers to the agreed price at which the buyer of the option will buy or
sell the security on an agreed future date.

Last traded price: It is the price at which the given security (of the option
contract) was last traded, mostly the closing price of the stock at the end of the day.

Bid price: It captures the highest bid for the option contract in the market. In other
words, it is the best price that a trader is ready to pay to purchase the option
contract.

Ask price: It captures the highest ask placed by the seller in the market for the
option contract. In other words, it is the best price at which a trader is ready to sell
the option contract.

Change in last traded price: It shows the difference between the latest last traded
price and the previous last traded price of the option contract. The change in
considered to be positive if the latest last traded price is higher than the previous
last traded price and vice versa.

Volume: It indicates the number of contracts of the given option contract that have
been traded in the market during a particular period of time. Higher volume
indicates better liquidity of the option contract in the market.

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Open Interest: It represents the number of open positions for a given option
contract. Open position means that it is yet to be closed out, exercised, or expired.

CHAPTER 3

3.1 INTRODUCTION TO THE ORGANIZATION

SAFECAP TRADELINK was born with a single vision & objective, of enabling
wealth creation for our clients through good quality & conflict free investment
management. To meet the organization business goal, SAFECAP TRADELINK
give importance to long relationship with our clients by maintaining high level of
ethical standard, transparency & veracity.

They provide & organize workshop for clients to know their need for knowledge
about investment & upgrade them with necessary tools.

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They strongly believe clients have rights to know about their trades on periodic
basis, which they provide them transparently through different mode of
communication channels with free of cost.

They are engaged in spreading awareness of Share market, Commodity Market,

Currency Market & Provide premium education of Share market, Commodity
Market, Mutual Fund, IPO’s, Bonds, Fixed Deposit from Beginning to Advance.

They use multiple strategies for clients to capitalize on profit from investment &
trading after thoroughly understanding their financial objectives & needs enabling
them to achieve their goals.

They are working in F&O, Commodity market with Hedging which had developed
proper system to Trade Entry & Exit in Bullish & Bearish market.

They do not believe in a one-size-fits-all approach. they collaborate closely with

clients to develop tailored, flexible solutions designed to suit specific needs &
goals of the customer to ensure maximizing results. The solutions we develop are
also scalable and continuously evolving to meet changing dynamics of the market.

3.2BRIF HISTORY OF THE ORGANIZATION AND CURRENT

POSITION

Safe Cap Tradelink Llp is a Limited Liability Partnership firm incorporated on 13

August 2018. It is registered at Registrar of Companies, Pune. Its total obligation
of contribution is Rs. 150,000.

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Designated Partners of Safe Cap Tradelink Llp are Rahul Prabhakar Aitavadekar,
Vinod Vilas Kurle and Rahul Shrirang Mahekar.

In addition, we run a number of popular open online educational & community

initiatives to empower retail traders & investors.

Rainmatter, our fintech fund & incubator, has invested in several fintech startups
with the goal of growing the Indian capital markets.

And yet we are always up to something new every day. Catch up on the latest
updates on our blog or see what the media is saying about us.

3.3ORAGANIZATIONAL STRUCTURE

Public
relation

3.5 PRODUCTS AND SERVICES IN THE ORGANIZATIN

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Equity

Also known as shares or stocks are inarguably the investment with the highest
form of returns. But, such high returns come at a high risk. Hence, such
investments should be considered only after a thorough research by oneself or on
the advice of someone who can do such research. But always remember, there is
no guarantee and hence the statement “high returns at high risk”.

 Derivative F&O

Trading, a highly lucrative segment that provides investors on paying a nominal

amount as margin, a missing risk opportunity to earn profits or make losses. This
segment includes Future Contracts and Option Contracts.

Commodity

Relatively new entry in the investment segment, Commodity trading has evolved
to be the next best option after stocks and bonds as part of a diversified portfolio.
One can trade in commodities like how he would deal in any stock or share.

Currency

Fluctuations in currency values across the globe has led to an interesting

investment proposal, whereby one can have profitable trades through using these
fluctuations in values in any market. Currency trading has a huge market
throughout the globe which can be utilized by one to have profitable returns.

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 Mutual Funds

Don’t you think your funds are better maintained and secure if you pool your funds
with a bunch of investors and create something useful out of it which is
professionally managed and more convenient? The money collected by you can be
invested in different ways and is safe .These range from shares to debentures and
money market instruments, depending upon the scheme and its objectives. Thus,
the income received through such investments and the appreciated capital is
realized and is distributed to your unit holders. If this proves easy and helpful to
you, you must approach us by the nearest day possible!

 IPO

Initial public offering (IPO) or stock market launch is a type of public offering in
which shares of stock in a company usually are sold to institutional investors (that
price the company receives from the institutional investors is the IPO price) that in
turn sell to the general public, on a securities exchange, for the first time.

Deposits

We offer a range of Fixed Deposits varying in tenures, interest rates & institutions
to suit your investment needs.

3.11 FUTURE PLANS OF ORGANIZATION

Vision

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Our vision is to redefine the current convention of Indian Stock market by

championing excellence in craftsmanship, planning and service. Our aim is to
deliver the thought in the area of expertise, everyday.

Mission

Our mission is to ensure every Indian is financially stable and independent along
with the feeling of financial security amongst every Indian family. We wish for a
country that does not need a financial advisor in due time but be their own
financial adviso

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

1. The table shows the age groups of investors

OPTIONS RESPONSES %

15-20 7 53.8%
20-25 5 38.5%
25 above 1 7.7%
TOTAL 13 100%

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INTERPRETATION:

As per above Pie chart we can see the responses from different age groups and  the
age group between 20-25 is 53.8% and it seems more active in option market then
others even teenagers are have good amount of involvement in it as we can se it’s
38.5% and rest of the respondents are above 25 also having Interest in options
market

2) The table shows that investors educational qualification.

OPTIONS RESPONSES %

Under Graduate 7 53.8%

Graduate 5 30.8%
Post Graduate 0 0%
Other 2 15.4%
TOTAL 14 100%

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INTERPRETATION:

I chose this question to see that how much educated persons are having Interest in
stock and option market it clearly shows that most of persons are under graduates
almost 53.8%  then there are some graduates and other educational backgrounds
persons also who keeps the same Interest as well it’s about half remaining
percentage.
3)Table shows thatIs option chain really helps to understand the options
market
OPTIONS RESPONSES %

Strongly Disagree 0 0
Disagree 0 0
Neutral 7 46.2
Agree 5 38.5
Strongly agree 2 15.4
TOTAL 14 100

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INTERPRETATION:
Through this question we able to know is actually option chain really helps to
understand the market condition and gives some ideas to investors. As we see in
chart it shows most persons thinks in neutral way means it maybe helping some
times but not every time it’s about 46.2% peoples opinion. Also we have 38.5%
peoples who says that it’s works for them and rest of the persons are exactly thinks
apposite of that.

4)The table shows that how people think about lack of knowledge of stock
market in today’s generation.
OPTIONS RESPONSES %

Needs to spread 6 38.5%

knowledge
It should be involved in 7 53.8%
education
Self awareness 1 7.7%
TOTAL 14 100%

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INTERPRETATION:
From this question we come to know the exact which things are affecting the lack
of knowledge about options market and here we get the main reasons according to
responses is that the we are not getting that knowledge in our education system
53.8% peoples says it’s should be involved in our education system. Rather then
38.5% people thinks that the knowledge should be spread in between and few says
that we self have to know about the market and grab all the knowledge.

5)Table shows If people wanted to invest in market then which way they
prefer
OPTIONS RESPONSES %

Self investment 10 69.2%

Through Broker 1 7.7%
Through investment 3 23.1%
TOTAL 14 100%

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INTERPRETATION:
Through this question we know about investment methods people preferring in
these days as we see they are going for self-investments like FD Equity Bonds etc.
And it’s about 69.2% peoples hence there are people who go for brokers and
investors in respect to 7.7 and 23.1%.

6)Table showsif people are going invest money in market then how much
period they prefer.

OPTIONS RESPONSES %

Short term 2 7.7

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Long term 7 53.8

Medium term 5 38.5
TOTAL 14 100

INTERPRETATION:
From this question and the pie chart shown above states that the people are more
interested in investing for long period then medium and short periods its has huge
difference about 53.8% and other time periods are having just opinions of only

38.5% and 7.7% from this we came to know that peoples are investing in market
in different time periods.

7) The table shows the different Income groups.

OPTIONS RESPONSES %

50k-100k 10 75
100k-500k 2 16.7

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500k above 1 8.3

TOTAL 13 100

INTERPRETATION:

This Question is about to know the which group of income level invest in option

market and we see that the most of the investors are youngsters so the group of
75% is about earning 50k to100k are showing more interest in market then other
income groups even after the group of 100k to 500k is also seems to be interested
in options market and rest are just having 8.3% of interest in market

8)Table shows that which of the following instruments people use for investing

OPTIONS RESPONSES %

Mutual Funds 3 25%

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Equity Market 5 33.3%

Future And Option 5 33.3%
Market
Trading 1 8.3%
TOTAL 14 100%

INTERPRETATION:
From this question we can see that the same numbers of person having their
interest in Options market and the Equity market as well as they are interested in
mutual funds here we see in pie chart that percentage of options market and equity
market is about same 33.3% and the rest of remaining are in mutual funds is about
25%, at last intraday trading is taking place with 8.3%

9) Table shows that how people came to know about option market.
OPTIONS RESPONSES %

Via Internet 6 46.2%

Friends 5 30.8%

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Via Marketing Classes 2 15.4%

Other 1 7.7%
TOTAL 14 100%

INTERPRETATION:

I used this question to know about that how the people came to know about options
market means from which source they learned or studied the market and I observed

that many of persons found out to be known from internet and there 46.2% peoples
who came across the market via internet . Also many of those 30.8% heard from
their friends and rest of people learned from classes and other sources.

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10)Table shows the reasons for not investing in market

OPTIONS RESPONSES %

Lack of knowledge 6 41.7%

Lack of awareness 6 41.7%
Very Risky 1 8.3%
Huge amount of 1 8.3%
investment
TOTAL 14 100%

INTERPRETATION:
From this question I actually asked why people are not invest in market and here
are the results we can see the respondents says that lacks of knowledge and
awareness is stopping them from investing in market both have the same
percentage about 41.7% and others have another fears those are the huge amount
of investment andthe risk in the market and that’s why they are not investing in
market. 8.3% people thinks in this way.

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11)The table shows that percentage of people about how the Option market
works
OPTIONS RESPONSES %

Yes 6 38.5%
No 6 38.5%
Maybe 2 23.1%
TOTAL 14 100%

INTERPRETATION:
I observed that the people who invest in options market are more have  knowledge
about market as we see in above figure that 38.5% people know how the market
works and same amount of percentage people don’t know how it works. It’s proves
that not all peoples of surrounding have such a good knowledge about market
because 23.1% people given maybe as answer and that I consider as no .

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12) Tables shows that how many people know about Option chain.
OPTIONS RESPONSES %

Yes 8 53.8%
No 5 38.5%
Maybe 1 7.7%
TOTAL 14 100%

INTERPRETATION:

From this Pie chart I learned that people knows about the option market but there
not aware of option chain that indicates everything about option market as we
notice the chart there is 53.8% of people don’t know about option chain.

Only those who knows the option chain who studies the chain for their investing
strategies in option market and there percentage is just about 38.5% .

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13) Table shows that the perceptions of people towards the option market.

OPTIONS RESPONSES %

Its complicated 3 15.4%

Source of high Returns 8 61.5%
Difficult to understand 2 15.4%
Don’t know about option 1 7.7%
market
TOTAL 14 100%

INTERPRETATION:
This is one the important details that what I wanted to know from the people and
that is there perception about the option market as I thought most of people means
nearly 61.5% people thinks that it’s a source of high returns. In other hands we can
see those people who says it’s complicated and difficult to understand those are
about total of 30.8% people and rest who only invest in equity market 

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14)Table shows that how many peoples are investing in option market.
 
OPTIONS RESPONSES %

Yes 10 69.2%
No 4 30.8%
TOTAL 14 100%

INTERPRETATION:

This question is to know about just how many of people invest in option market
and most of the people are not investing in market and few are investing in
respective of 69.2% peoples are not invest and just 30.8% are investing 

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15)Table shows the percentage of how many peoples have seen option chain.

OPTIONS RESPONSES %

Yes 2 15.4%
No 10 69.8%
Maybe 2 15.4%
TOTAL 14 100%

INTERPRETATION:

From this question I came to know that nearly 69.2% people are not even seen the
option chain just few 15.4% are seen the chain and remaining of people are not
even know about option and the it’s a 15.4%.

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16)Table shows the persons who can invest in market those whom learned
the market and those who are not learned.

OPTIONS RESPONSES %

Yes 3 15.4
No 5 38.5
Maybe 6 46.2
TOTAL 14 100

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INTERPRETATION:

As per the results of analysis I can say that not much people know who can invest
in option market they answered maybe in percentage of 46.2% and the percentage
of yes is just about 15.4% 
It’s shows that the knowledge about who can invest in options is not clear yet.

17)Table shows that strategies used by investors in Market.

OPTIONS RESPONSES %

Yes 4 33.3
No 8 50
Maybe 2 16.7
TOTAL 14 100

INTERPRETATION:

This question is about to know how many percentage of people uses strategies in
options and that’s the result shown in figure is about just 32% of people uses
strategies to invest and other people are not using any kinda of strategies to invest
and those are 50% in count 

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CHAPTER 5

FINDINGS

1. The investment decision of investors is influenced by their own decision and

Through friends & relatives.

2. Majority of investors invest only up to 10% of their annual income in share

market.
3. Safe cap trade link llp has a great competition with other broking agencies.

4. The number of players is increasing at a steady rate and today there are over
adozens of brokerage houses who have opted to offer net trading to their
customerAnd prominent among them.

5. Investor’s perception changes with the fluctuations in share market.

6. On applying correlation analysis on the primary data collected, itHas been

found that there exists a positive relationship between the two factorsviz. the
satisfaction level of services provided by safe cap and its success.

7. Different age groups are now investing in share market especially in options.

8. Peoples are not investing has many reasons but main reason is the lack of
knowledge they have.

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9. Mostly investors prefers to invest in mutual funds and equity market.

10.The number of investorsstates that they consider option market is high

income source.

11.Many of the investors are not using options chain as source of information.

12.Use of Strategies for investment is seems much rare in investors.

13. The number of peoples think that only people who possess the knowledge
of options market can only enter and invest in market.

14. The influence of market is spreading among the peoples mostly through the
internet.

15.Now a days investors are investing by themselves besides through the

brokers or banks.

16.NSE she should spread the knowledge throughout the educations system.

17.Use of a options chain to ignored by the investors and that should be

overcome soon.

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Suggestions

1. The derivatives market is newly started in India and it is not known by

every
investor, so SEBI has to take steps to create awareness among the investors
about the derivative segment.

2. In order to increase the derivatives market in India, SEBI should revise

some of their regulations like contract size, participation of FII in the
derivatives market. Contract size should be minimized because small
investors cannot afford this much of huge premiums.

3. Safe cap should be aware of the knowledge of their investors towards the
option market and provide them specific guidance for investments, to make
them sure that market is totally best way to create passive as well as
primary income source.

4. Safe cap regularly provide the new information to the investors about their
investment progress of derivative market, also keep them aware of current
market conditions and risks.

5. Along with all the invertors perceptions and different kinds of thoughts
about the market to be considered while making them enter in the market
also keeping all the policies clearto the investors.

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Conclusion
In bullish market the call option writer incurs more losses so the investor is
suggested to go for a call option to hold, whereas the put option holder suffers in a
bullish market. So he is suggested to write a put option. In bearish market the call
option holder will incur more losses so the investor is suggested to go for a call
option to write, whereas the put option writer will get more losses, so he is
suggested to hold a put option. In the above analysis the market price of J&K bank
is having low volatility, so the call option writer enjoys more profits to holders.

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BIBLOGRAPHY

WBSITES
https://www.analyticsvidhya.com/blog/2021/03/stock-options-chain-analysis-using-excel/

https://web.wpi.edu/Pubs/ETD/Available/etd-010811-204936/unrestricted/
Financial_Option_Trading_Data_Analysis.pdf

https://www.investopedia.com/options-basics-tutorial-4583012

https://www.nseindia.com/

https://www.nseindia.com/option-chain

BOOKS
1. Stocks To Riches By-Paragh Parigh

2. How To Avoid Losses And Earn Consistently In The Stock Market By-
Prasenjit Paul

3. Option Market Making By-Allen Jan Baird

Questionnaire

1. How old are you? 

A. 15-20
B. 20-25

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C. 25 above

2. Education Qualification?

A. Under Graduate
B. Graduate
C. Post Graduate
D. Other

3. Annual Income?

A. 50k-100k
B. 100k-500k
C. 500k above

4. Which of the following instruments do you use for investing?

A. Mutual Funds
B. Equity Market
C. Future And Option Market

5. Where did you learn about Option market?

A. Via Internet
B. Friends
C. Via Marketing Classes

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D. Other

6. Reasons for not investing in market

A. Lack of knowledge
B. Lack of awareness
C. Very Risky
D. Huge amount of investment

7. Do you know how the Option market works? 

A. Yes
B. No
C. Maybe

8. Did you know about Option chain?

 
A. Yes
B. No
C. Maybe

9. What is your perception towards option market? 

A. It’scomplicated
B. Source of high Returns
C. Difficult to understand

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10.Did you Invested in option market? 

A. Yes
B. No

11.Have you seen option chain of NSE? 

A. Yes
B. No
C. Maybe

12.Do you think only investors who had undergone some training in
derivatives should be allowed in the option derivatives market? 

A. Yes
B. No
C. Maybe

13.Do you use any strategies to invest in option market?

A. Yes
B. No
C. Maybe

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14.Is option chain really helps to understand the options market?

A. Strongly disagree
B. Disagree
C. Neutral
D. Agree
E. Strongly agree

15.What do you think about lack of knowledge of stock market in todays

generation. 

A. Needs to spread knowledge

B. It should be involved in all education systems
C. Self-awareness

16.If you wanted to invest in market then which way you prefer? 

A. Self-investment
B. Through Broker
C. Through Investor

17.If you’re going invest money in market then how much period you prefer? 

A. Short term
B. Long term

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C. Medium term

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