Synopsis For Final project


Derivatives (finance)

Submitted to: Mrs. Jasdeep kaur dhami

submitted by: Gagan deep Bansal MBA-4th/B/622221524

Lovely institute of management

money instruments for example loan & deposits. O. b) A contract. In Indian context. The price of these derivatives is driven from spot price of wheat. As a tool of risk management we can define it as. which drives its value from prices or index of prices of underlying security. "a financial contract whose value is derived from the value of an underlying asset/derivative security ". and companies etc.C. 1956[SC(R) A] defines “derivatives” to includea) A security derived from a debt instrument.Introduction Derivatives are financial instruments whose value is derived from the value of something else. share. b.T. the Securities Contract (regulation) act. and loan whether secured or unsecured. c. They generally take the form of contracts under which the parties agree to payments between them based upon the value of an underlying asset or other data at a particular point in time. e. risk instrument or contract for difference or any other from of security. . All derivatives are based on some cash product. d. The underlying assets can be: a. Any type of agriculture product of grain (not prevailing in India) Price of precious and metals gold Foreign exchange rates Short term as well as long-term bond of securities of different type issued by govt. Example: Wheat farmers may wish to sell their harvest at a future date to eliminate the risk of change in price by that date.

interest rates. Derivatives can be based on different types of assets such as commodities. bonds. or other derivatives). consumer price index (CPI) or even an index of weather conditions. equities (stocks). exchange rates. The diverse range of potential underlying assets and payoff alternatives leads to a huge range of derivatives contracts available to be traded in the market. or indexes (such as a stock market index. . Their performance can determine both the amount and the timing of the payoffs.The main use of derivatives is to reduce risk for one party while offering the potential for a high return (at increased risk) to another.

 To know in which derivative segment investors trade more.  To know that which segment is exposed to more risk.OBJECTIVEs OF THE STUDY Whenever a study is conducted. it is done on the basis of certain objective(s) in mind. A successful completion of a project is based on the objective(s) of the study that could be stated as under:  To understand the basic concept of Derivative “F&O”& how they work in Indian capital market. .  To know the nuances of derivatives.

2. the data-collection methods. This includes the overall research design. the sampling procedure. c) Sampling technique The simple random sample method is used. b) Sample size The sample size is 50. 1. . Data Collection Through both the primary and secondary methods. Research Design A research using survey method with the help of structure. questionnaire was used as it best conforms to the objectives of the study. Secondary sources 1) Financial newspapers 2) magazines 3) Internet 3.RESEARCH METHODOLOGY Research Methodology describes the research procedure. Sampling plan a) Universe Bathinda. Primary data collection 1) Survey through a questionnaire.

 Sample size is not enough to have a clear opinion. however good it may and every study has some limitations.LIMITATIONS OF STUDY No study is complete in itself.  Insufficient information. . Following are the limitations of my study:  Time constraint.