Preview

Awareness Of Derivatives And Its Comparison With Equity And Commodity

Good Essays
Open Document
Open Document
9477 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Awareness Of Derivatives And Its Comparison With Equity And Commodity
A
PROJECT REPORT ON
“Awareness Of Derivatives And Its Comparison With Equity And Commodity.”

BY
POOJA JAYASWAL

UNDER THE GUIDANCE OF
VIJAY SONAJE
(INDIRA GLOBAL BUSINESS SCHOOL)

FOR THE PARTIAL FULFILLMENT OF COURSE
MBA (FINANCE)

INDIRA GLOBAL BUSINESS SCHOOL
2011-2013

Acknowledgement

In my summer training at Edelweiss Financial Advisors Ltd., I got a very pleasant experience of practically working in an organization. First and foremost, I would like to thank my Director Dr. Shreeram Nerlekar, for giving me a platform through which I got the opportunity of a knowledgeable training experience.
This acknowledgement would remain incomplete without mentioning the role of my guide Mr.Vijay Sonaje. He gave me an in-depth knowledge of the working of the derivative system and enhanced my understanding on its various aspects. His invaluable and significant guidelines improved my outlook and contributed in making my project a real learning experience. He also encouraged me to put in my best efforts and bring out the best of my abilities.

I would also like to thank the senior relationship manager , Mr. Dheeraj Singh who helped me t at each stage of my project. Moreover I am also grateful to the entire staff of Edelweiss advisors Ltd. for their co-operation and support.

(Pooja Jayaswal) (11037)

EXECUTIVE SUMMARY

One of the interesting developments in financial market over the last 15 to 20 years have been the growing popularity of derivatives. The structured derivative market in India is relatively new . However derivatives have caught the fancy of the market and exchange traded equity and commodity derivatives are vibrant.

In this report I have included introduction and history of derivatives. Then I have included risks associated with derivatives and its types. In this report I have taken a first look at forward, futures and options as risk

You May Also Find These Documents Helpful

  • Powerful Essays

    Derivatives have become popular in response to the increasing volatility and complexity of financial markets. A diverse range of new financial products have been created to enable market participants to handle the risks arising from trade in securities and to speculate on future expected movements in securities prices, without direct trade in the assets themselves. Derivative contract creates a promise to deliver or trade an underlying product at some time in the future. The contract gives one party a claim on an underlying asset or cash value of the asset, at a fixed date in the future. The other party is contractually bound to meet the corresponding liabilities. Financial derivatives are traded on organized market such as LIFFE (London International Financial Futures Exchange) and through the intermediation of the clearing house system, there is more flexibility of exchange, and the risk of credit default is reduced. The two parties need not know each other they only have to satisfy the exchange that they are creditworthy to transact.…

    • 2782 Words
    • 12 Pages
    Powerful Essays
  • Best Essays

    Introduction This essay explains the pitfalls associated with derivatives instruments by making reference to the 2007 Global Financial Crisis. Derivatives are financial securities that are linked to a specific instrument or indicator or commodities called underlying instruments (Hull, 2009). There are as many derivatives as they are underlying instruments. Derivatives are essentially financial contracts which are entered into between two parties with respect to some other underlying instruments. Since they are contracts entered into with respect to underlying assets they do not have value on their own standing but derive it from that of instruments upon which they are entered into. According to the IMF (2010), even though it’s true that derivatives are linked to the value of underlying instruments, transactions in derivatives are separate transactions from those of underlying instruments upon which derivatives are based. This means that derivatives are financial securities with own roles, advantages and disadvantages which are distinct from those of underlying instruments.…

    • 2199 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    FBE 459 – Financial Derivatives Spring 2013 Scott Joslin University of Southern California Marshall School of Business Course Description This course intends to be an introduction to financial derivatives, namely options, futures and swaps. Our main goal will be to focus on the uses of derivatives for hedging and speculation and to understand risk neutral pricing of derivatives.…

    • 1136 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Introduction 1 Introduction to derivatives 2 Introduction to forwards and options vii 1 7 29 79 129 141…

    • 2670 Words
    • 11 Pages
    Satisfactory Essays
  • Powerful Essays

    Derivatives Market

    • 2540 Words
    • 11 Pages

    Cecchetti, S. G., Cumby, R. E., & Figlewski, S. (November, 1988). Estimation of the Optimal Futures Hedge. Review of Economics & Statistics, MIT Press:70:4 , pp. 623-630.…

    • 2540 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Derivatives have been traded for centuries, with early examples including tulip bulb options in Holland and rice futures in Japan during the 17th century. But futures markets were relatively small until the 1970s when developments in pricing methodology spurred spectacular growth. The derivatives market has grown 100-fold over the past 30 years, with estimates of the current size of the market at more than $200 trillion, based on the notional value of contracts outstanding. (Andrew Balls 2014)…

    • 2734 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Online Trading in Karvy

    • 9461 Words
    • 38 Pages

    Futures and options represent two of the most common form of “Derivatives”. Derivatives are financial instruments that derive their value from an ‘underlying’. The underlying can be a stock issued by a company, a currency, Gold etc., The derivative instrument can be traded independently of the underlying asset. The value of the derivative instrument changes according to the changes in the value of the underlying.…

    • 9461 Words
    • 38 Pages
    Powerful Essays
  • Best Essays

    Hull, J.C., (2009). Options, Futures, and other Derivatives. 7th edition. New Jersey: Pearson Prentice Hall.…

    • 4547 Words
    • 19 Pages
    Best Essays
  • Satisfactory Essays

    Derivatives in India — An Overview * DERIVATIVE INSTRUMENTS * forward contracts UNIT 8 derivative…

    • 26370 Words
    • 106 Pages
    Satisfactory Essays
  • Good Essays

    FINANCIAL DERIVATIVES

    • 2875 Words
    • 11 Pages

    ­ to overcome or at least minimize the high financial risk arising out of the…

    • 2875 Words
    • 11 Pages
    Good Essays
  • Satisfactory Essays

    I, ohiduzzaman, a student of MBA (Final year) of J.E.T.G.I want to take this opportunity to thank these persons concerned who whole-heartedly co-operated with me to make this project a success.…

    • 16279 Words
    • 66 Pages
    Satisfactory Essays
  • Satisfactory Essays

    shall be legal and valid only if such contracts are traded on a recognized stock exchange,…

    • 257 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Privilege is what I feel expressing my sincere respect to my guide, adviser and well-wisher Prof. ………. faculty of CIMR , Indore. Apart from his technical guidance , his caring attitude and morel , encouragement has been very much crucial for me . During this project . He has inspired me through out the project period and has extended support at all possible juncture.…

    • 12710 Words
    • 51 Pages
    Powerful Essays
  • Satisfactory Essays

    8. How effective would be the following factors to improve Currency derivative market of India? (Rate 1 for least effective, 5 for highly effective) • • • Improving investors knowledge Opportunity to trade in non-US currency futures…

    • 364 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Quality india

    • 1971 Words
    • 8 Pages

    By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.....These instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it.....a process that has undoubtedly improved national productively…

    • 1971 Words
    • 8 Pages
    Powerful Essays

Related Topics