Project on Future Hedging

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A STUDY ON
DERIVATIVES MARKET“OPERATIONS AND APPLICATION OF HEDGING STRATEGIES FOR FUTUER”
FROM
INDIABULLS
HYDERABAD
A PROJECT REPORT SUBMITTED TO

HYDERABAD
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
AWARD OF DEGREE IN
MASTER OF BUSINESS ADMINISTRATION
SUBMITED
PRASHANT MAHESHWARI
ICBM-SBE
(HYDERABAD)
2011-2013

DECLARATION

I PRASHANT MAHESHWARI student of ICBM-SBE COLLEGE
have completed the project on “DERIVATIVES MARKET OPERATIONS AND APPLICATION OF HEDGING STRATEGIES FOR FUTUER” with reference to INDIABULLS for the Academic year 2012-2013.

The information given in this project is true to the best of my knowledge

(PRASHANT MAHESHWAWRI)

ACKNOWLEDGEMENT

I take this opportunity to express my sincere Thanks to God and everyone who directly and indirectly help me in completing my project work successfully. I would like to thank MR.ATISH GUPTA OF INDIABULLS, HYDERABAD for his kind help in completion of the project.

I am thankful to my guide and HOD Mrs. Sai Rani mam for giving their support and guidance. I take this opportunity to thank other faculty members of MBA dept. for their kind Co-operation.
I am also thankful to my parents and all my friends who co-operated me to complete this project.

ABSTRACT
One of the most significant events in the securities markets has been the development and expansion of financial derivatives. The term “derivatives” is used to refer to financial instruments which derive their value from some underlying assets. The underlying assets could be equities (shares), debt (bonds, T-bills, and notes), currencies, and even indices of these various assets, such as the Nifty 50 Index. In India, derivatives markets have been functioning since the nineteenth century, with organized trading in cotton through the establishment of the Cotton Trade Association in 1875.Derivatives, as exchange traded financial instruments were introduced in India in June 2000.The National Stock Exchange (NSE) is the largest exchange in India in derivatives, trading in various derivatives contracts. The first contract to be launched on NSE was the Nifty 50 index futures contract. In a span of one and a half years after the introduction of index futures, index options, stock options and stock futures were also introduced in the derivatives segment for trading. NSE’s equity derivatives segment is called the Futures & Options Segment or F&O Segment. NSE also trades in Currency and Interest Rate Futures contracts under a separate segment. The main focus of the project is to study in detail the role of futures. A futures contract is an agreement between two parties in which the buyer agrees to buy an underlying asset from the seller, at a future date at a price that is agreed upon today. A futures contract is standardized by the exchange. All the terms, other than the price, are set by the stock exchange. The conclusion of the project is to know the risk and return characteristics and derivative performance against profit and policies of the company and to know the hedgers position to reduce or eliminate the risk.

S.NO| CONTENTS| PG.NO|
1.2,3.4.5.6.7.| INTODUCTIONOBJECTIVENEEDSCOPELIMITATIONSREVIEW OF LITERATURESTOCK MARKETNATIONAL STOCK EXCHANGEBOMBAY STOCK EXCHANGECAPITAL MARKETDERIVATIVESFUTURESHEDGERSCOMPANY PROFILEDATA ANALYSIS AND INTERPRETATIONFINDINGS AND CONCLUSIONSSUGGESTIONS AND RECOMMENDATIONSBIBLOGRAPHY| |

Introduction
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...
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