Derivatives of Indian Market

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RESEARCH PROJECT REPORT

On

Types of Derivatives Traded on NSE and its Impact

Towards partial fulfillment of

Master of Business Administration (MBA)
School of Management, Babu Banarasi Das University, Lucknow

Guided by Submitted by
Mrs. Shachi Kacker Prabhat Mishra

Session 2012-2013

School of Management

[pic]

Babu Banarasi Das University
Sector I, Dr. Akhilesh Das Nagar, Faizabad Road, Lucknow (U.P.) India

A C K N O W L E D G E M E N T

Without a proper combination of inspection and perspiration, it’s not easy to achieve anything. There is always a sense of gratitude, which we express to others for the help and the needy services they render during the different phases of our lives. I too would like to do it as I really wish to express my gratitude toward all those who have been helpful to me directly or indirectly during the development of this project.

I would like to thank Mrs. Shachi Kacker (Faculty of management, BBDU) who was always there to help and guide me when I needed help. Her perceptive criticism kept me working to make this project more full proof. I am thankful to her for her encouraging and valuable support. Working under her was an extremely knowledgeable and enriching experience for me. I am very thankful to her for all the value addition and enhancement done to me. No words can adequately express my overriding debt of gratitude to my parents whose support helps me in all the way. Above all I shall thank my friends who constantly encouraged and blessed me so as to enable me to do this work successfully.

P R E F A C E

My research project report entitled “TYPES OF DERIVATIVES TRADED ON NSE AND ITS IMPACT” submitted for the degree of Master of Business Administration, is my original work.

I believe that my research report will have been very helpful to the organization for the practical knowledge in the field of Finance.

Place : LUCKNOW
Date : 1 May 2013 PRABHAT MISHRA

EXECUTIVE SUMMARY

With over 25 million shareholders, India has the third largest investor base in the world after USA and Japan. Over 7500 companies are listed on the Indian stock exchanges (more than the number of companies listed in developed markets of Japan, UK, Germany, France, Australia, Switzerland, Canada and Hong Kong.). The Indian capital market is significant in terms of the degree of development, volume of trading, transparency and its tremendous growth potential. India’s market capitalization was the highest among the emerging markets. Total market capitalization of The Bombay Stock Exchange (BSE), which, as on July 31, 1997, was US$ 175 billion has grown by 37.5% percent every twelve months and was over US$ 834 billion as of January, 2007. Bombay Stock Exchanges (BSE), one of the oldest in the world, accounts for the largest number of listed companies transacting their shares on a nationwide online trading system. The two major exchanges namely the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) ranked no. 3 & 5 in the world, calculated by the number of daily transactions done on the exchanges. The Total Turnover of Indian Financial Markets crossed US$ 2256 billion in 2006 – An increase of 82% from US $ 1237 billion in 2004 in a short span of 2 years only. Turnover in the Spot and Derivatives segment both in NSE & BSE was higher by 45% into 2006 as compared to 2005. With daily average volume of US $ 9.4 billion, the Sensex has posted excellent returns in the recent years. Currently the market cap of the Sensex as on July 4th, 2009 was Rs 48.4 Lakh Crore with a P/E of more than 20.

Derivatives trading in the stock market have been a subject of enthusiasm of research in the...
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