ABSTRACT: COMPANY PROFILE Back ground Karvy Consultants Limited was established in 1982 at Hyderabad.

It was established by group of Hyderabad-based practicing Chartered Accountants. At initial stage it was very small in size. It was started with a capital of Rs. 1, 50,000. In starting it was only offering auditing and taxation services. Later, it acts into the Registrar and Share transfer activities and subsequently into financial services and other services like Financial Product Distribution, Investment Advisory Services, Demat Services, Corporate Finance, Insurance etc. All along, Kravis strong work ethics and professional background leveraged with Information Technology enabled it to deliver quality to the individual. A decade of commitment, professional integrity and vision helped Karvy achieving a leadership positioning its field when it handled largest number of corporate and retail that proved to be a sound business synergy. Today, Karvy has access to millions of Indian shareholders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and half decades, Karvy has evolved as a veritable link between industry, finance and people. In January 1998, Karvy became first Depository Participant in Andhra Pradesh. An ISO 9002Company, Karvy commitment to quality and retail reach has made it an Integrated Financial Services Company. Today, company has 230 branch offices in 164 cities all over the India. The company adds 5new offices every month to the companys ever growing national network in every nook and corner of the country. The company service over 16 million individual investors, 180corporate and handle corporate disbursements that exceed Rs.2500 Cores. WHERE KARVY STAND IN THE MARKET? KARVY is a legendary name in financial services, Karvy credit is defined by its mission to succeed, passion for professionalism, excellent work ethics and customer centric values. Today KARVY is well known as a premier financial services enterprise, offering a broad-spectrum of customized services to its clients, both corporate and retail. Services thatKARVY constantly upgrade and improve are because of companys skill in leveraging technology. Being one of the most techno-savvy organizations around helps company to deliver even more cost effective financial solutions in the shortest possible time. What bears ample testimony to Karvy success is the faith reposed in company by valued investors and customers, all across the country. Indeed, with Karvy wide network touching every corner of the country, even the most remote investor can easily access Karvy services and benefit from companys expert advice. Parthasarathy C Yugandhar Ramakrishna M Prasad V PotluriRobert GibsonSanjay Kumar Dhir R Shyamsunder Karvy Investor Services LimitedParthasarathy CYugandhar Ramakrishna M S Karvy Securities LimitedParthasarathy CYugandhar MRamakrishna M SAjay Kumar K William SamuelNicholas TullyKarvy Stock Broking LimitedParthasarathy CYugandhar MRamakrishna M SAjay Kumar K Kutumba Rao William Samuel Nicholas Tully Mission Statement of Karvy An organization exists to accomplish something or achieve something. The mission statement indicates what an

organization wants to achieve. The mission statement may be changed periodically to take advantage of new opportunities or respond to new market conditions.Karvys mission statement is To Bring Industry, Finance and People together.Karvy is work as intermediary between industry and people. Karvy work as investment advisor and helps people to invest their money same way Karvy helps industry in achieving finance from people by issuing shares, debentures, bonds, mutual funds, fixed deposits etc.Company mission statement is clear and thoughtful which guide geographically dispersed employees to work independently yet collectively towards achieving the organizations goals. Vision of KarvyCompanys vision is crystal clear and mind frame very directed. To be pioneering financial services company. And continue to grow at a healthy pace, year after year, decade after decade. Companys foray into IT-enabled services and internet business has provided inopportunity to explore new frontiers and business solutions. To build a corporate that set

INDUSTRY PROFILE:
Inter-connected stock exchange of India limited [ISE] has been promoted by 14 Regional stock exchanges to provide cost-effective trading linkage/connectivity to all the members of the participating Exchanges, with the objective of widening the market for the securities listed on these Exchanges. ISE aims to address the needs of small companies and retail investors with the guiding principle of optimizing the existing infrastructure and harnessing the potential of regional markets, so as to transform these into a liquid and vibrant market through the use of state-of-the-art technology and networking. The participating Exchanges of ISE in all about 4500 stock brokers, out of which more than 200 have been currently registered as traders on ISE. In order to leverage its infrastructure and to expand its nationwide reach, ISE has also appointed around 450 Dealers across 70 cities other than the participating Exchange centers. These dealers are administratively supported through the regional offices of ISE at Delhi [north], Kolkata [east], Coimbatore, Hyderabad [south] and Nagpur [central], besides Mumbai. ISE has also floated a wholly-owned subsidiary, ISE securities and services limited [ISS], which has taken up corporate membership of the National Stock Exchange of India Ltd. [NSE] in both the Capital Market and Futures and Options segments and The Stock Exchange, Mumbai In the Equities segment, so that the traders and dealers of ISE can access other markets in addition to the ISE markets and their local market. ISE thus provides the investors in smaller cities a one-stop solution for cost-effective and efficient trading and settlement in securities.

HISTORY OF STOCK EXCHANGE: The only stock exchange operating in the 19th century were those of set up in 1875 and in Ahmadabad set up in 1894.These were organized as voluntary non-profit making organization of brokers to regulate and protect their interest. Before the control on securities trading becomes a central subject under the constitution in 1950,it was a state subject and the Bombay securities contract (CONTROL) act of 1952 used to regulate trading in securities. Under this act, the Bombay stock exchange in 1927 and Ahmadabad in.1937. During the war boom, a number of stock exchanges were organized in Bombay, Ahmadabad and other centers, but they were not recognized. Soon after it became a central subject, central legislation was proposed and a committee headed by AD Gorwala went into the bill for securities regulation. On the basis of committees recommendations and public discussions the securities contracts (regulation) act became law in1956.

INTRODUCTION TO DERIVATIVES With the approval of the derivatives bill in union cabinet, the investors are now in the position to trade through futures and options, which provides the investors a greater hedging facility. Derivatives product initially emerged as hedging devices against fluctuations in commodity prices, and commodity linked derivatives offer organization the opportunity to break financial risks into smaller components and then to buy and sell those components to best meet specific risk management objectives. Financial derivatives came into spotlight in the year 1970 period due to growing instability in the financial markets. However since their emergence, these accounted for about two-third of total transactions in derivatives products. In recent years, the market for financial derivatives has grown tremendously in terms of variety of instruments available, their complexity & also turns over. In the class of equity derivatives. Futures & options on stock also turn over. In the class of equity derivatives, futures & options on stock indicates gained more popularity than individual stocks, especially among institutional investors, who are major users of index-linked derivatives.

NEED AND IMPORTANCE An individual or a firm may have to face a large amount of risk in the international markets. Hence it becomes necessary to look for other sources whereby this need can be met. Different types of derivatives have really proved to be given a sharp focus as of late. Different types of derivatives have come into existence to cater the needs of variety of

individuals in the global markets. A few prominent ones being varied categories, different types of derivatives suitable for various trades and firms. This study of derivatives is utmost important in recent days.

OBJECTIVES

To study the role of derivatives in Indian financial markets. To analyze the present situation of derivatives in India and other emerging markets. To study in detail the role of futures and options. To find out profit/loss of option holder/writer. To study the cause for fluctuations in the futures and options market.

METHODOLOGY

To achieve the objective of studying the stock market, data has been collected. Research and methodology carried for the studying is of two types. 1. Primary 2. Secondary PRIMARY The data, which is being collected for the first time and it, is original data. In the project the primary data has been taken from ISE staff and the guide of the project. SECONDARY The secondary data has been collected from the Inter-Connected Stock exchange and the internet. The scope of the study is limited to DERIVATIVES with the special reference to Indian context and the Inter-Connected Stock Exchange Limited has been taken as a representative sample for the study. The study includes forwards, futures and options.