SYNOPSIS

B N BAHADUR INSTITUTE OF MANAGEMENT SCIENCES

UNIVERSITY OF MYSORE

DEPARTMENT OF STUDIES IN BUSINESS ADMINISTRATION

MANASA GANGOTRI, MYSORE – 570006

PROJECT TOPIC

“KNOW YOUR FUTURE BETTER…!!”

SUBMITTED TO

MAHESH M.R.
FACULTY MEMBER
BIMS
MYSORE

SUBMITTED BY

GURUPRASAD G.L.
IV SEMESTER
SECTION ‘A’
MBA (FINANCE)
BIMS
 CONTENTS

 Introduction
 Problem statement
 Objectives of the study
 Scope of the study

 Research methodology

 Limitations of the study

 Company profile of Sharekhan Ltd

Chapter 1: Review of Literature

Chapter 2: Findings and Analysis

Chapter 3: Summary of Findings

Chapter 4: Suggestions and Conclusion

Bibliography
General Introduction

Derivatives are products whose values are derived from one or more basic
variables called bases. These bases can be underlying assets such as foreign currency,
stocks or commodity bases or reference rates such as LIBOR or US Treasury Rate etc.
Derivatives thus have no value of their own but derive it from the asset that is being dealt
with under the derivative contract.

The primary purpose of a derivative contract is to transfer "risk" from one party to
another i.e., risk in a financial sense is transferred from one party that wants to get rid o f
it to another party that is wiling to take it on. Here, the risk that is being dealt with is that
of price risk. The transfer of such a risk can therefore be speculative in nature or act a
hedge against price movement in a current or anticipated physical position.

A Futures contact is a standardized contract between two parties where one of the
parties commits to sell, and the other to buy, a stipulated quantity (and quality, where
applicable) of a commodity, currency, security, index or some other specified item at an
agreed price on a given date in the future.

To keep pace with the inevitable and persistent uncertainty, today's finance
professionals must understand the basics of derivatives. Derivatives tools and concepts
permeate modern finance practice. Corporations routinely hedge and insure using
derivatives, finance there activities with structured products and use derivatives models in
capital budgeting.

In the past several years, a derivatives market has attracted many new and
inexperienced entrants. The speculator growth of the new futures markets in interest rates
and stock market indexes has generated a demand for a unified economic theory of the
effects of futures market- In financial commodities, stock market indexes and foreign
exchange-upon the inter-temporal allocation of resources.
Problem Statement:

The Futures market is very volatile. Also, the risk and return in Futures is very
high compared to equities. Only few people are engaged in Futures trading in India. And
the people involved are of less knowledge about it. At the same time understanding
Futures requires a good analytical ability.

To make the investors well educated about Derivatives trading, Futures in

particular, the SEBI and NSE – India has taken a number of steps which is not sufficient
enough. An attempt should be made to provide sufficient information about Futures so
that it reaches every nook and corner of the investors cluster.

Objectives of the study:

1. To study derivative marketing in India with respect to future

2. To know the investor perception regarding the use of future
3. To know the wariness and response of market participants towards futures.
4. To provide a clear picture about future trading/ contracts.
5. To analyze how futures are used as an effective risk management tools by the
investors
6. To recommend appropriate suggestion.

Scope of the study:

Knowledge of the Futures and the technicals involved in it, provides an assistance
to a range of investors like, Hedgers, Speculators, Arbitrageurs, be it Corporate
management, Government, Investment analysts, Individual investors etc.
Research methodology:
Methodology means a specific method or body of method fallowed by a
researcher. It is indispensable in any field of social research therefore methodology
should form an important part of the study. The study involves descriptive research. It
requires primary and secondary information. The primary information is extracted from
investors in various stock broking agencies and secondary information is extracted from
the available sources such as websites, documents, textbooks, magazines and articles
etc...

Limitations of the study:

 The study is constrained by limited time.
 The survey is limited to a sample size.
 The study is purely for academic purpose only.
 Inference drawn will be based on perception of the majority in the sample
size.