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FINDINGS, SUGGESTIONS & CONCLUSION

Findings:

Some of the findings are:

 At present scenario the derivatives are increased to a great position.


 Approximately its daily turnover reaches to the equal stage of cash market.
 The daily turnover of the NSE in derivatives is Rs.6 lakhs.
 Presently there are 55 scripts are available in futures & options segment.
 In cash market, the profit/loss of the investor may be unlimited, but in the
derivatives market, the investor enjoys unlimited profits and minimizes the losses.
 In derivatives market, the investor enjoys the privilege of paying less amount in
case of options.
 Derivatives are mostly used for hedging purpose.
 In the above analysis, we can observe that the scripts are having normal volatility
market situations, so the option holders & option writers will enjoy more profits.
Suggestions:

Some of the suggestions according to the analysis are:

 The derivatives market is newly started in India, and everyone does not know it.
So SEBI should take necessary actions to create awareness among investors.
 In order to create the derivatives in India, the SEBI should revise some of their
regulations like contract size, participation of FII in the derivatives market.
 Contract size should be minimized, because small investor cannot afford huge
premiums.
 In bearish market, the investor is suggested to opt for put options in order to
minimize his losses.
 So the investor should opt for put options in order to minimize his losses.
 So the investor should opt for call options in order to maximize his profits.
 In bullish market, the investor is suggested to opt for call options in order to
maximize the profits.
Conclusion:

Derivative securities markets play an important role by allowing investors who do


not want the risks associated with holding an asset to transfer it to those who do.

However, because they are markets for risk as opposed to physical assets,
derivatives markets can be very dangerous places for unsophisticated investors.

People who reduce their risk by entering a derivative market are called hedgers,
and those who increase their risk are called speculators.

The derivative securities markets play a vital role in the modern financial systems,
and without them many common business transactions would be rendered much riskier or
practically impossible.

Financial derivatives have grown rapidly in recent years due to improvements in


computer technology, innovations in financial theory, and the need to manage risks
arising from volatility in the interest and currency exchange rates.

Derivatives are increasingly being used to manage various kinds of risk exposure,
to obtain desirable financing, and to enhance investment and speculative opportunities.

The complexities of the derivatives markets are increasing every day, and it is
important for the policy makers and regulators to understand these markets before hastily
adopting any major legislative or regulatory changes.

There are many unresolved policy issues relating to the derivatives markets that
can only be answered by more data on these transactions.
Bibliography:

Websites:

 www.derivativesindia.com
 www.indiainfoline.com
 www.nseindia.com
 www.hseindia.org
 www.bseindia.com
 www.sebi.gov.in

Referred books:

Financial Management – PRASANNA CHANDRA

Derivatives Core Module – NCFM MATERIAL

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