syn nirmal bang s equity

8/11/2019 Syn Nirmal Bang s Equity

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SYNOPSI REPORT ON

AWARENESS ABOUT THE DERIVATIVE AND ITS

COMPARISON WITH EQUITY

UNDERTAKEN AT:

NIRMAL BANG SECURITIES PVT. LTD


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INTRODUCTION:-

Nirmal Bang Securities Private Limited, a retail broking house, provides an online share trading

platform to customers to trade on equities, derivatives, commodities, currency derivatives,

insurance, depository services, and subscription to initial public offerings and mutual funds inIndia. The company offers daily and company reports, stock ideas, and sector updates. It also

provides franchising opportunities to individual to use its infrastructure by being its channel

partners. Nirmal Bang Securities was founded in 1986 and is based in Mumbai, India.

Nirmal Bang Group is one of the largest retail broking house in India, providing the investors

state of art services in capital markets in the country. The Group has memberships of Bombay

Exchange Limited, National Stock of India Limited, Multi Commodity Exchange of India

Limited, National Commodity and Derivatives Exchange Limited and is also a depository

participant of NSDL and CDS (I) L, the depositories of the country.

They started in 1986 under Late Shri Nirmal Bang as sub brokers but have grown steadily and

progressively since then. Their clients had contributed tremendously to their growth they

recognize and applaud that, they value their relationship with the customers and for their

convenience had all investing avenues under one roof.

NIRMAL BANG consultantAs the flagship company of the NIRMAL BANG Group, NIRMAL BANG Private Limited has

always remained at the helm of organizational affairs, pioneering business policies, work ethic

and channels of progress.

NIRMAL BANG believe that they were best positioned to venture into that activity as a

Depository Participant. They were one of the early entrants registered as Depository Participant

with NSDL (National Securities Depository Limited), the first Depository in the country and

then with CDSL (Central Depository Services Limited). Today, It service over 1Lac customer

accounts in this business spread across over 350 cities/towns in India and are ranked amongst the

largest Depository Participants in the country. With a growing secondary market presence.


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Business Focus:-

The focus of the business is the Customer Customer service, Customer education, Customer

support, Customer relations and last but not the least Customer acquisition. Trade execution

transparency, timely settlements, risk monitoring and superior service shall have topmost priority, in the best interests of all concerned.

VISION STATEMENT

TO CREATE VAL UABL E RELATI ONSH I P AND PROVID E THE BE STF I NANCI AL SERVICES M OST PROFESSI ONALL Y

MISSION STATEMENT

TO WORK TOGETHER WI TH I NTEGRI TY & M AKE OUR CUSTOME RFEEL VALUED

CORE VALUE

RESPECT OUR COLLEAGUE AND THE BUSINESS ITSELF

NIRMAL BANGs CORE SERVICES: -

NIRMAL BANG is one of Indias leading broking houses providing a complete life-cycle of

investment solution.


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THEORETICAL ASPECT

INTRODUCTION:

According to dictionary, derivative means something which is derived fromanother source. Therefore, derivative is not primary, and hence not independent. In

financial terms, derivative is a product whose value is derived from the value of one or

more basic variables. These basic variable are called bases, which may be value of

EQUITIESDERIVATIVES

COMMODITIES

Research BasedInvestment Advice

Investment andTrading Services

Integrated DematFacility

Technology BasedInvestment Tools

Training andSeminars


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underlying asset, a reference rate etc. the underlying asset can be equity, foreign

exchange, commodity or any asset.

For example: - the value of any asset, say share of any company, at a future

date depends upon the shares current price. Here, the share is underlying asset, the

current price of the share is the bases and the future value of the share is the

derivative. Similarly, the future rate of the foreign exchange depends upon its spot rate

of exchange. In this case, the future exchange rate is the derivative and the spot

exchange rate is the base.

Derivatives are contract for future delivery of assets at price agreed at the time

of the contract. The quantity and quality of the asset is specified in the contract. The

buyer of the asset will make the cash payment at the time of delivery.

Meaning:

Derivatives are the financial contracts whose value/price is dependent on the

behavior of the price of one or more basic underlying assets (often simply known as

the underlying). These contracts are legally binding agreements, made on the trading

screen of stock exchanges, to buy or sell an asset in future. The asset can be a share,

index, interest rate, bond, rupee dollar exchange rate, sugar, crude oil, soybean,

cotton, coffee etc.

In the Indian Context the Security Contracts (Regulation) Act, 1956 (SC(R) A)

defines derivative to include

A security derived from a debt instrument, share, loan whether secured or

unsecured, risk instrument or contract for differences or other form of security.

A contract, which derives its value from the prices, or index of prices of

underlying securities.


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In financial terms derivatives is a broad term for any instrumental whose value is

derived from the value of one more underlying assets such as commodities, forex,

precious metal, bonds, loans, stocks, stock indices, etc.

Derivatives were developed primarily to manage offset, or hedge against risk but

some were developed primarily to provide potential for high returns. In the context of

equity markets, derivatives permit corporations and institutional

Investors to effectively manage their portfolios of assets and liabilities through

instrument like stock index futures.

Contracts agreement

Cash Derivatives

Forward Others likeSwa s, FRAs etc

Merchandising,

Futures(Standardized

Options


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Risk Associated With Derivatives:

While derivatives can be used to help manage risks involved in investments,

they also have risks of their own. However, the risks involved in

derivatives trading are neither new nor unique they are the same kind of risks

associated with traditional bond or equity instruments.

Market RiskDerivatives exhibit price sensitivity to change in market condition, such as

fluctuation in interest rates or currency exchange rates. The market risk of leveraged

derivatives may be considerable, depending on the degree of leverage and the nature

of the security.

Liquidity Risk

Most derivatives are customized instrument and could exhibit substantial

liquidity risk implying they may not be sold at a reasonable price within a reasonable

period. Liquidity may decrease or evaporate entirely during unfavorable markets.


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Speculative trades shift to a more controlled environment of derivatives market.

In the absence of an organized derivative market, speculators trade in the

underlying cash market.

An important incidental benefit that flows from derivatives trading is that it acts

as a catalyst for new entrepreneurial activity.

The derivatives have a history of attracting many bright, creative, well-educated

people with an entrepreneurial attitude. They often energize others to create

new businesses, new products and new employment opportunities, the benefit

of which are immense.

Derivatives markets help increase savings and investment in the end. Transferof risk enables market participants to expand their volumes of activity.

RESEARCH METHODOLOGY:-

Problem Statement:

The topic, which is selected for the study, is DERIVATIVE MARKET in the firm

so the problem statement for this study will be, AWARENESS ABOUT THEDERIVATIVE AND ITS COMPARISION WITH EQUITY.

Objective of the Study:

1. To know the awareness of the Derivative Market in Surat City.

2. To know which one is beneficial for the investor.

3. To find what proportion of the population are investing in such derivatives along

with their investment pattern and product preferences.

Research Design:

The research design specifies the methods and procedures for conducting a

particular study. The type of resea rch design applied here are DESCRIPTIVE as the

objective is to check the position of the Derivative Market in Surat city. The objectives


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of the study have restricted the choice of research design up to descriptive research

design. This survey will help the firm to know how the investors invest in the derivative

segment & which factors affect their investing behavior.

Scope of the Study:

The scope of the study will include the analysis of the survey, which is being

conducted to know the awareness of the Derivative Market in the city & also doing

comparison of derivatives with equity.

Research Source of Data:-

There are two types of sources of data which is being used for the studies:-

Primary Source of Data:

Preparing a Questionnaire is collecting the primary source of data & it was

collected by interviewing the investors.

Secondary Source of Data:

For having the detailed study about this topic, it is necessary to have some of

the secondary information, which is collected from the following:-Books.

Magazines & Journals.

Websites.

Newspapers, etc.

Methods of Data Collection:-

The study to be conducted is about the awareness of the Derivative Market in

the Surat City so the method of data collection used id SURVEY METHOD.


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APPENDIX

Questionnaire

Myself Saurav.P.Gohil student of B.B.A studying at Vivekanand College for

B.B.A, Surat. I had prepared this questionnaire for project work meant for educational

purpose only. On Awareness about Derivatives and Its Comparison with Equity.

No personal information will be disclosed in any form at anywhere.

1. ARE YOU INVESTING IN DERIVATIVE MARKET?

YES

NO

2. REASON FOR NOT INVESTING IN DERIVATIVE MARKET. {GIVE THE RANK}

LACK OF KNOWLEDGE LACK OF AWARENESS

HIGH RISKY HUGE AMOUNT OF INVESTMENT

OTHER

3. WHAT ARE THE OBJECTIVES OF THE INVESTING IN DERIVATIVES

MARKET?


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4. WHAT ARE THE CRITERIA DO YOU TAKEN IN THE CONSIDERATION WHILE

INVESTING IN DERIVATIVE MARKET?

SCALE

5 4 3 2 1

INSTRUMENT MOST

PREFERED

SOMEWHAT

PREFERED

NUTRAL SOMEWHAT

NOT

PREFERED

NOT AT

ALL

PREFERED

HIGH RETURN

HEDGE THE

RISK

MORE

RELIABLE

SAFE TO

INVEST IN

DERIVATIVE

MARKET

MORE LIQUID


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SCALE 5 4 3 2 1

INSTRUME

NT

MOST

PREFERE

D

SOMEWH

AT

PREFERE

D

NUTRAL SOMEWH

AT NOT

PREFERE

D

NOT AT

ALL

PREFERE

D

FLEXIBILIT

Y

EASE IN

TRANSAC

TION

LESS

COSTLY

AVALABILI

TY OF

DIFFEREN

T

CONTRAC

T

MARGINMONEY

5. GIVE YOUR PREFERENCE OF INVESTMENT IN DERIVATIVE INSTRUMENT.


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SCALE 5 4 3 2 1

INSTRUME

NT

MOST

PREFERE

D

SOME

HOW

PREFERE

D

NEUTRAL SOMEWH

AT NOT

PREFERE

D

NOT AT

ALL

PREFERE

D

INDEX

FUTURE

STOCK

FUTURE

INDEX

OPTION

STOCK

OPTION

6. GIVE YOUR PREFERENCE IN TERMS OF INVESTMENT DERIVATIVE MARKET.

SCALE 5 4 3 2 1


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TERMS MOST

PREFER

SOMEWHA

T PREFER

NEATRUL SOMEWHA

T NOT

PREFER

NOT AT

ALL

PREFER

SHORT

TERM

MEDIUM

TERM

LONG

TERM

7. HOW MUCH PERCERNTAGE OF YOUR INCOME YOU INVEST IN DERIVATIVE

MARKET?

LESS THAN 5% 5% TO 10%

11% TO 15% 16% TO 20%

MORE THAN 20%

8. WHAT IS THE RATE OF RETURN EXPECTED BY YOU FROM DERIVATIVE

MARKET?

5 % TO 9.5% 10% TO 13.5%


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14 % TO 17% 18% TO 23%

ABOVE 23%

9. YOU ARE SATISFIED WITH THE CURRENT PERFORMANCE OF THE

DERIVATIVE IN TERMS OF EXPECTED RETURN.

STRONGLY AGREE AAGREE

NUTRAL DISAGREE

STRONGLY DISAGREE.

DEMOGRAPHIC PROFILE

NAME:


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CONTACT NO:

EMAIL ID: .

AGE:

BELOW 20YRS 20 TO 30 YRS

31 TO 40 YRS 41 TO 50 YRS

ABOVE 50

GENDER:

MALE FEMALE

FROM WHICH CATEGORY DO YOU FEET MORE?

STUDENT

EMPLOYEED


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BUSINESS OWNER

OTHER

INCOME {YEARLY}:

LESS THAN 100000RS.

100000 TO 200000RS.

200001 TO 300000RS.

300001 TO 400000 RS

ABOVE 400000RS.

THANK YOU

syn nirmal bang s equity

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