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A STUDY ON EMPLOYEE WELFARE AT NACE SOLUTION (P)LTD Submitted by R.

AZHAGURAJA Reg No 1034977 Of KARPAGA VINAYAGA COLLEGE OF ENGINEERING & TECHNOLOGY MADHURANTHAGAM - 603308 A PROJECT REPORT Submitted to the FACULTY OF MANAGEMENT STUDIES In partial fulfillment for the award of the degree Of MASTER OF BUSINESS ADMINISTRATION IN ANNA UNIVERSITY OF TECHNOLOGY CHENNAI 600 025 NOVEMBER 2011

BONAFIDE CERTIFICATE

Certified that the Project report titled A STUDY ON EMPLOYEE WELFARE AT NACE SOLUTION (P) LTD is the bonafide work of MR.R.AZHAGURAJA REG NO 1034977 who carried out the work under my supervision. Certified further that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.

Signature of HOD

Signature of guide in charge

Internal examiner: Date:

DECLARATION

I R.AZHAGURAJA hereby declare that the project report entitled

ASTUDY ON

EMPLOYEE WELFARE IN NACE SOLUTION (p) LTD IN T.NAGAR done by me under the guidance of Prof. Mr.NIRMAL JOSEPH, dean of the Department of Management Studies is submitted in partial fulfillment of the requirement for the award of degree in MASTER OF BUSINESS ADMINISTRATION

Date: Place: R.AZHAGURAJA

ACKNOWLEDGEMENT

I am immensely thankful and profoundly grateful to SMT.MEENAKSHI ANNAMALI, DIRECTOR KVCET , for giving me this sample opportunity to do this professional course in this campus. I express my sincere gratitude and thanks to Prof.T.RANGARAJULU (DEAN), and Prof.V.ILANGOVAN (PRINCIPAL), KVCET, for facilitation to conduct research study. I have great pleasure in acknowledgement my thanks to our DEAN Prof.Mr.NIRMAL JOSEPH and HOD, Mrs.S.SHALINI , for their moral support and his guidance in conduction the research work. I express my sincere and profound thanks to my project guide Prof.Mr.NIRMAL JOSEPH DEAN OF MANAGEMENT STUDIES, KVCET whose guidance, induced information, timely suggestions and encouragement help me to complete this project successfully. I express my sincere thanks to all officers of HUMAN RESOURES group whose constant encouragement and his valuable guidance helped me in completing of this project.

R.AZHAGURAJA

ABSTRACT

The project is aimed to find out the EMPLOYEE WELFARE for successful functioning of nace software solution in t.nagar.The researcher collected the primary information required for the study through a structural questionnaire and books are the main parts of secondary data.

The nature of the study was exploratory. The sampling methods used are convenience. The sampling size was 50 respondents. This includes only workers.

The researcher while analyzing converted data into simple tabulations percentage, correlation are used for analysis and interpretation.

The need of the study is to find the Employee Welfare for successful functioning of Nace solution in t.nagar

TABLE OF CONTENT
CHAPTER NO ABSTRACT LIST OF TABLES LIST OF FIGURES LIST OF SYMBOLS 1. TITLE PAGE NO

1.1 INTRODUCTION
1.2 OBJECTIVE OF STUDY 1.3 SCOPE OF STUDY 1.4 LIMITATIONS OF THE STUDY 1.5 COMPANY PROFILE

2. 3.

2.1 REVIEW OF LITERATURE 3.1 RESEARCH METHODOLOGY


3.2 METHODS OF DATA COLLECTION 3.3 TOOLS OF ANALYSIS

4.

4.1 DATA ANALYSIS AND INTERPRETATION


4.1.1 PERCENTAGE ANALYSIS

5.

5.1 FINDINGS
5.2 SUGGESTIONS 5.3 CONCLUSION ANNEXURE BIBLIOGRAPHY

LIST OF TABLES
NO. 1 Gender of the Respondents. 2 Opinion about aware of derivatives market 3 Opinion about awareness level about derivatives market 4 Opinion about the source helps you to invest in derivatives 5 Opinion about you participate in derivatives as a 6 Opinion about How long you are participating in derivatives 7 Opinion about your investing objective 8 Opinion about your present attitude of investment 9 Opinion about the factors influences to invest in Derivative Market. 10 Opinion about your most segments to investment in derivatives 11 Opinion about the derivatives instrument do you deal Opinion about index derivatives proved to be more important than security 12 derivatives 13 Opinion about frequently you are investing in derivatives 14 Opinion about maturity period contract 15 Opinion about Derivatives are the hedging tool 16 Opinion about derivatives investing is the best alternative to equity 17 Opinion about you prefer to investment in derivatives on the basic of 18 Opinion about kind of risk do you perceive 19 Opinion about statement is suitable regarding derivatives market 20 Opinion about the present status of derivatives market in India Title. P No.

LIST OF CHART
NO. 1 Gender of the Respondents. 2 Opinion about aware of derivatives market 3 Opinion about awareness level about derivatives market 4 Opinion about the source helps you to invest in derivatives 5 Opinion about you participate in derivatives as a 6 Opinion about How long you are participating in derivatives 7 Opinion about your investing objective 8 Opinion about your present attitude of investment 9 Opinion about the factors influences to invest in Derivative Market. 10 Opinion about your most segments to investment in derivatives 11 Opinion about the derivatives instrument do you deal Opinion about index derivatives proved to be more important than security 12 derivatives 13 Opinion about frequently you are investing in derivatives 14 Opinion about maturity period contract 15 Opinion about Derivatives are the hedging tool 16 Opinion about derivatives investing is the best alternative to equity 17 Opinion about you prefer to investment in derivatives on the basic of 18 Opinion about kind of risk do you perceive 19 Opinion about statement is suitable regarding derivatives market 20 Opinion about the present status of derivatives market in India Title. P No.

CHAPTER-1

1.1 INTRODUCTION A Derivative is a financial instrument that derives its value from an underlying asset. Derivative is an

financial contract whose price/value is dependent upon price of one or more basic underlying asset, these contracts are legally binding agreements made on trading screens of stock exchanges to buy or sell an asset in the future. These assets can be anything ranging from share, index, bond, rupee dollar exchange rate, sugar crude, soyabean, cotton, coffee etc.

Derivative on its own does not have any value. It is considered important because of its underlying asset. Derivatives can of different types like forwards, futures, option, swaps, collars, caps, floor etc. The most popular derivative instruments are futures and options.

Example: A very simple example of derivative is curd, which is derivative of milk. The price of curd depends upon the price of milk, which in turn depends upon the demand, and supply of milk. Lets see it in this way, the price of the Reliance Triple Option Convertible debentures (Reliance TOCD) varies upon the price of the Reliance Shares, similarly the price of TELCO Warrants depends upon the price of the TELCO shares.

The American Depository Receipts (ADR) and Global Depository Receipts (GDR) Of ICICI, Satyam and Infosys Traded on stock exchanges in NASDAQ of USA, draw their values from the prices of shares traded in India. Similarly in mutual funds the prices of mutual fund units depends upon the prices of portfolio of securities under that scheme.

History of Derivatives The Derivatives market has existed from centuries as need for both users and producers of natural resources to hedge against price fluctuations in underlying commodities. Although trading in agriculture and other commodities has been the driving force behind the development of Derivatives market in India, the

demand for products based on financial instruments such as bond, currencies, stocks and stock indices had outstripped the commodities markets.

India has been trading in derivatives market in Silver, spices, gold, coffee, cotton and in oil markets for decades gray market. Trading in derivatives market was legal before Morarji Desais Government had banned forward contracts. Derivatives on stocks were traded in the form of Teji and mandi in unorganized markets. Recently futures contracts various commodities were allowed to be on various exchanges. For Example Cotton and Oil futures were traded in Mumbai, Soya bean futures in Bhopal, Pepper futures in Kochi, Coffee futures in Bangalore etc.

In June 2000, National stock exchange and Bombay stock exchange started trading in futures in Sensex and Nifty. Options trading on Sensex and Nifty commenced in June 2001. Very soon thereafter trading began on futures and options on 31 prominent stocks in the month of July and November respectively, currently there are 41 stocks trading in NSE derivatives and the list keeps growing.

Derivatives products initially emerged has hedging devices against fluctuations in commodity prices and commodity linked derivatives remained the sole form of such products for almost three hundred years. The financial derivatives came into spotlight in post 1970 period, due to the in stability in the financial markets.

Financial derivatives are instruments that their value from financial assets. These assets can be stocks, bonds, currency etc. These Derivatives can be Forward rate agreements, Futures, Options, and Swaps. As stated earlier the most traded instruments are futures and options. However these products became very popular and by 1990s, they accounted for about two-thirds of total transactions in derivatives products. In recent years, the market for financial derivatives has grown tremendously both in terms of variety of instruments available, their complexity and also turnover. In class of equity derivatives, futures and options on stock indices have gained more popularity than on individual stocks,

especially among the institutional investors, who are major users of index-linked derivatives. Even small investors find these useful due to high correlation of popular indices with various portfolios and ease of use.

The following factors have been driving the growth of financial derivatives: Increased volatility in asset prices in financial markets. Increased integration of national financial markets with the international markets. Marked improvement in communication facilities and sharp decline in their costs. Innovations in the derivatives markets, which optimally combine the risks and returns over a large number of financial assets, leading to higher returns, reduced risks as well as transactions costs as compared to individual financial assets.

PLAYERS IN THE MARKET

The following are the players in the Derivatives markets: Speculators: People who buy or sell in the market to make profits. For example, if you will the stock price of Reliance is expected to go up to Rs. 400 in one month; one can buy a one-month future of Reliance at Rs. 350 and make profits. Hedgers: People who buy or sell to minimize their losses. For example, an importer has to pay US $ to buy goods and rupee is expected to fall to Rs.50/$ from Rs.48/$, then the importer can minimize his losses by buying a currency future at Rs.49/$. Arbitrageurs: People who buy or sell to make money on price differentials in different markets. For example, a futures price is simply the current price plus the interest cost. If there is any change in the interest, it presents an arbitrage opportunity. We will examine this in detail when we look at futures in a separate chapter. Basically, every investor assumes one or more of the above and derivatives are a very good option for him.

TYPES OF DERIVATIVES

The most commonly used derivatives contracts are forwards, futures and options, which we shall discuss in detail later. Here we take a brief look at various derivatives contracts that have come to be used. Forwards: A forward contract is a customized contract between two entities, where settlement takes place on specific date in the future at todays pre-agreed price.

Futures: A futures contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the former are standardized exchange-traded contracts. Options: Options are of two types Call option Put option Call option gives the buyer the right but not the obligation to buy a given quantity of the underlying asset, at a given price on or before a given future date. Put option gives the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Warrants: Options generally have lives of unto one year, the majority of options traded on options exchanges having a maximum maturity of nine months. Longer-dated options are called warrants and are generally traded over the years. Baskets: Basket options are on portfolios of underlying assets. The underlying asset is usually a moving average or a basket of assets. Equity index options are a form of basket options Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are:

Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite direction.

1.2 OBJECTIVES

PRIMARY OBJECTIVE:
i. To study the investor perception towards trading in derivatives market.

SECONDARY OBJECTIVES:
1. To study the concept of derivatives market 2. To analyze the effectiveness of derivatives focusing on risk reduction and return enhancement 3. To find out the awareness level of investment in derivatives market 4. To perceive the preferred communication mode of investor. 5. To examine the investing objective of investor. 6. The information sources influences in investors for the selection of derivatives.

1.3 SCOPE OF THE STUDY

1. In the India environment invertors are facing a lot risk to invest in various financial instruments. So one of the instruments creating awareness regarding futures and options, Investment in Futures& Options is subjected to different kinds of Risk& Return evaluating Risk& Return of futures & options of various securities will be helpful for taking various decisions relating to the investments 2. This study has used the S&P CNX NIFTY INDEX for studying the liquidity behavior. 3. The study has only made a humble attempt at evaluation of derivatives market only in Indian context. 4. The other statistical tools for further in depth analysis could not be used due to constraint of time 5. The study was under taken with some market assumptions but in reality they could not be applicable

1.4 LIMITATION OF THE STUDY

The following are the limitation of this study.

1. The Scope of the study is limited to Indian market only 2. The data has been collected only from the National stock exchange and no 3. Trading cost is not included in the contract 4. There is no lack of Buyers and Sellers in the Future and Option

COMPANY PROFILE

........................................................................................................................................................................

......

Company Profile: ShareKhan is a retail farm of SSKI that caters to the needs of individual investors.While the investment world abounds with 'jack of all trades', we chose to build our business by focussing on what we know best -market-driven investment avenues like equities,derivatives and commodities.We facilitate the investment process for you and provide value added serivices like research,stock ideas,demat,online trading,to make investment experience rewarding. OUR CORE SERVICES:
Equity

and Derivativs trading on BSE and NSE services

Depository Online IPO

Trading

services trading on MCX and NCDEX Services

Commodity

PortfolioManagement

WHY YOU SHOULD CHOOSE SHAREKHAN Experience : More than Eight decades of trust and credibility in the Indian Stock Market. Technology : Buy and sell of shares through net connection. Accessibility : Ground Network of 240 share shops. Knowledge : In a business where the right information at the right time can translate intodirect profits,you can access to a wide range of information on our content-rich portal,Sharekhan.com.You will also get a useful set of knowledge

based tools that will empower you to take informed decisions. Convenience : You can call our Dial-n-trade number to get investment advice and execute your transactions.We have a dedicated call center to provide this service via a toll-free number from anywhere in india. Customer service: Our customer service team will assist you for any help that you need relating to transactions, billing,demat and other queries. Our customer services can be contacted via a toll-free number,email or live chat on sharekhan.com Investment Advice:Sharekhan has dedicated reseach teams for fundamental and technical research.Our analyst constantly track the pulse of the market and provide timely investment advice to you in the form of daily research emails,online chat,printed reports and SMS on your phone. KINDS OF PRODUCT: CLASSIC, SPEEDTRADE, PORTFOLIO MANAGEMENT SERVICES PREPAID SCHEMES: Scheme 1 BROKERAGE IN ADVANCE RS.750/A/C OPENING FEE INTRADAY BUYING SELLING DELIVERY BUYING SELLING - ZERO

- 0.1% - Nil - 0.5% - 0.5%

DERIVATIVE SEGMENT FIRST LEG SECOND LEG CARRY FORWARD

: : :

0.1 nil 0.1

Scheme 2 BROKERAGE IN ADVANCE RS.1000/A/C OPENING FEE INTRADAY BUYING SELLING DELIVERY BUYING SELLING - ZERO

- 0.09% - Nil - 0.45% - 0.45%

DERIVATIVE SEGMENT FIRST LEG SECOND LEG CARRY FORWARD

: : :

0.09 nil 0.09

PREPAID SCHEMES: Scheme 3 BROKERAGE IN ADVANCE RS.2000/A/C OPENING FEE INTRADAY BUYING SELLING DELIVERY BUYING SELLING - ZERO

- 0.07% - Nil - 0.4% - 0.4%

DERIVATIVE SEGMENT FIRST LEG SECOND LEG CARRY FORWARD

: : :

0.07 nil 0.07

Scheme 4 BROKERAGE IN ADVANCE RS.6000/A/C OPENING FEE INTRADAY BUYING SELLING DELIVERY BUYING SELLING - ZERO

- 0.05% - Nil - 0.25% - 0.25%

DERIVATIVE SEGMENT FIRST LEG SECOND LEG CARRY FORWARD

: : :

0.05 Nil 0.05

CORPORATE ACCOUNT A/C OPENING FEE MAGIN - 5000 INTRADAY BUYING SELLING DELIVERY BUYING SELLING - 200

- 0.05% - 0.05 - 0.3% - 0.3%

DERIVATIVE SEGMENT FIRST LEG SECOND LEG CARRY FORWARD

: : :

0.1 nil 0.1

Documents Required
1)PAN card front and back xerox compulsory. 2) Address proof (Any one of following) Bank statement (Should not be morethan 6 months old) Passport Driving Licence Voter's Id RationCard 3) ID Proof (Any one of following) Pan card (COMPULSORY) Passport Driving Licence Voter's Id

4) Bank Proof - Passbook photo copy or bank statement (Incase of Non - Personalised cheque) 5) Passport size colour photos-2 numbers (should be signed across)

BANKS HDFC, ICICI, IDBI, UTI, CITI BANK, YES BANK, INDUSIND BANK, ORIENTAL BANK OF COMMERCE, UNION BANK OF INDIA,BANK OF INDIA.

Office Address.

NO. 68, 2nd FLOOR CP. RAMASAMY ROAD ALWARPET, CHENNAI-18 (OPP. TO CITI BANK OR BANK OF MYSORE 2ND FLOOR)

2.1 REVIEW OF LITERATURE

REVIEW OF LITERATURE

DERIVATIVES:The emergence of the market for derivatives products, most notably forwards, futures and options, can be tracked 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 are marked by a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking-in asset prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivative product minimizes the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors. Derivatives are risk management instruments, which derive their value from an underlying asset. The underlying asset can be bullion, index, share, bonds, currency, interest, etc.. Banks, Securities firms, companies and investors to hedge risks, to gain access to cheaper money and to make profit, use derivatives. Derivatives are likely to grow even at a faster rate in future.

INTRODUCTION TO FUTURES CONTRACTS: In the Derivatives market Futures contract is most actively traded contract. It has gained its momentum in recent years, after forwards contract were banned in some parts of the world. It is one of the most popular types of contracts for the traders in the world.

FUTURES CONTRACT: Futures contract was designed to solve limitations that existed in forward contracts. Futures contract is an agreement between two parties to buy or sell an asset at a certain time in future at a certain price. To make it simple Futures are exchange-traded contracts to buy or sell an asset in future at a price agreed upon today. The asset can be share, index, interest rate, bond, rupee-dollar exchange rate, sugar, crude oil, soybean, cotton, coffee etc.

To facilitate liquidity in the futures contract, the exchange specifies certain standard features of the contract. It is a standardized contract with standard underlying instrument.

The following are the Standard terms in any Futures contract: Quantity of the underlying asset Quality of the underlying asset (not required in case of financial futures) Expiration date The unit of price quotation (not the price) Minimum fluctuation in price (tick size)

Settlement style

Example: when you are dealing in March 2002 Satyam futures contract, you know that the market lot, i.e. the minimum quantity you can buy or sell, is 1,200 shares of Satyam, the contract would expiry on March 28, 2002, the price is quoted per share, the tick size is 5 paisa per share or (1200*0.05) = Rs 60 per contract/ market lot, the contract would be settled in cash and the closing price in the cash market on expiry date would be the settlement price.

TERMINOLOGY USED IN FUTURES MARKET:

The terminologies used in futures market are as follows: SPOT PRICE: The price at which an asset trades in the spot market.

FUTURE PRICE: The price at which the futures contract trades in the futures

market.

CONTRACT CYCLE: The period over which a contract trades.

BASIS : It is the difference between future price and the spot price. Popularly termed as spread among the trading community.

INITIAL MARGIN: The amount deposited in the margin account, when the future contract is first entered.

MARKING TO MARKET: In the futures market, at the end of each trading day, the margin account is adjusted to reflect the investors gain or loss depending upon the futures closing price. This is called as marking to market.

MAINTENANCE MARGIN: It is the minimum margin the investor has to keep in his account, so that it never shows negative balance.

PRICING FUTURES THEORYTICALY: The theoretical price of a futures contract is spot price of the underlying plus the cost of carry. Please note that futures are not about predicting future prices of the underlying assets. In general, Futures Price = Spot Price + Cost of Carry The Cost of Carry is the sum of all costs incurred if a similar position is taken in cash market and carried to expiry of the futures contract less any revenue that may arise out of holding the asset. The cost typically includes interest cost in case of financial futures (insurance and storage costs are also considered in case of commodity futures). Revenue may be in the form of dividend. Though one can calculate the theoretical price, the actual price may vary depending upon the demand and supply of the underlying asset.

Example: Suppose Reliance shares are quoting at Rs 300 in the cash market. The interest rate is about 12% per annum. The cost of carry for one month would be about Rs 3. As such a Reliance future contract with one-month maturity should quote at nearly Rs303. Similarly Nifty level in the cash market is about 1100. One month Nifty future should quote at about 1111. However it has been observed on several occasions that futures quote at a discount or premium to their theoretical price, meaning below or above the theoretical price. This is due to demand-supply pressures. Every time a Stock Future trades over and above its cost of carry i.e. above Rs. the arbitragers would step in and reduce the extra premium commanded by the future due to demand. E.g.: would buy in the cash market and sell the equal amount in the future, Hence creating a risk free arbitrage, vice-versa for the discount.

When the future contract approaches expiry date, the cost of carry reduces as the time to expiry reduces; thus futures and cash prices start converging. On expiry date, futures price should equal cash market price.

Settlement in Futures markets: Presently both stock and index futures are settled in cash. The closing price in the cash segment is considered as the settlement price. The difference between the trade price and the settlement price is ultimately your profit/loss.

In case of delivery based settlement Stock-based derivatives are expected to be settled in delivery. On expiry of the futures contract, the buyer/seller of the future would receive a long/short position at the closing price in the cash segment on the next trading day. This position in the cash segment would merge with any other position the buyer/seller has. In case the buyer/seller wants he can square up this position by selling/buying the shares. Or else he would be required to deliver/receive the underlying shares on the settlement day (e.g. T+2) in the cash segment.

The aforesaid methodology is not final yet. Sebi guidelines in this regard are awaited. You can call exchanges and me to know the exact methodology once the regulator. Index based Derivatives would continue to be settled in cash

USAGE of Futures contracts: You can do directional trading using futures. In case you are bullish on the underlying stock or index, you can simply buy futures on stock/index. Similarly if you are bearish on the underlying, you can sell futures on stock/index. There are eight basic modes of trading on the index futures market:Hedging H1 Long stock, short Nifty futures H2 Short stock, long Nifty futures H3 Have portfolio, short Nifty futures H4 Have funds, long Nifty futures S1 Bullish index, long Nifty futures S2 Bearish index, short Nifty futures

ave funds, lend them to market

A2 Have securities, lend to the market

Advantages of trading in Index futures:

After listening to the news and other happenings in the economy, you take a view that the market would go up. You substantiate your view after talking to your near and dear ones. When the market opens, you express your view by buying ABC stock. The whole market goes up as you expected but the price of ABC stock falls due to some bad news related to the company. This means that while your view was correct, its expression was wrong.

Using Nifty/Sensex futures you can express your view on the market as a whole. In this case you take only market risk without exposing yourself to any company specific risk. Though trading on Nifty or Sensex might not give you a very high return as trading in stock can, yet at the same time your risk is also limited as index movements are smooth, less volatile with unwanted swings.

When trading futures in cash the biggest advantage of futures is that you can short sell without having stock and you can carry your position for a long time, which is not possible in the cash segment because of rolling settlement. Conversely you can buy futures and carry the position for a long time without taking delivery, unlike in the cash segment where you have to take delivery because of rolling settlement.

Further futures positions are leveraged positions, meaning you can take an Rs 100 position by paying Rs 25 margin and daily mark-to-market loss, if any. This can enhance the return on capital deployed. For example, you expect an Rs 100 stock to go up by Rs 10. One way is to buy the stock in the cash segment by paying Rs 100. You make Rs 10 on investment of Rs 100, giving about 10% returns. Alternatively you take futures position in the stock by paying about Rs 30 toward initial and mark-to-market margin. You make Rs 10 on investment of Rs 30, i.e. about 33% returns. Please note that taking leveraged position is very risky, you can even lose your full capital in case the price moves against your position. You can square up your future at any time once you have initiated the position, you need not wait until its expiry you can book profits or cut losses.

One can use volume and open interest rates to predict the movement of the market this is done like this, the total outstanding position in the market is called open interest. In case volumes are rising and the open interest is also increasing, it suggests that more and more market participants are keeping their positions outstanding. This implies that the market participants are expecting a big move in the price of the underlying. However to find in which direction this move would be, one needs to take help of charts. In case the volumes are sluggish and the open interest is almost constant, it suggests that a lot of day trading is taking place. This implies sideways price movement in the underlying.

When Corporate Dividends are announced: In the event of such corporate announcements, the exchanges adjust the position such that economical value of your position on cum-benefit and on ex-benefit day is the same. While calculating the theoretical price of a futures contract, the interest rate should be taken as net of dividend yield. So on announcement of the dividend, the futures price should be discounted by the dividend amount. However as per the policy of Sebi and stock exchanges, if the dividend is more than 10% of the market price of the stock on the day of dividend announcement, the futures price is adjusted. The exchanges roll over the positions from last-cum-dividend day to the ex-dividend day by reducing the settlement price by dividend. In such a case, the announcement of such exceptional dividends does affect the price of futures.

Suppose Reliance is trading at Rs 300 and a two-month Reliance future which has 45 days to maturity is trading at Rs 304. Reliance declares 50% dividend, i.e. Rs 5. The dividend amount is less than 10% of the market price of Reliance, so the exchange would not adjust the position. As such the market adjusts this dividend in the market price and the futures price goes down by Rs 5 to Rs 299. In case of Bonus the lot size of the stock that gives bonus gets adjusted according to the ratio of the bonus. The position is transferred from cum-bonus to ex-bonus day by adjusting the settlement price to neutralize the effect of bonus.

For example: the current lot size of Cipla is 200. Suppose Cipla announces a bonus of 1:1. You are long on 200 shares of Cipla and the settlement price of Cipla on cum-bonus day is Rs 1,000. On ex-bonus day your position becomes long on 400 shares at Rs 500. Thereafter the lot size of Cipla would be 400.

Hedging of stock positions using futures:

Suppose you are holding a stock that has futures on it and for two to three weeks the stock does not look good to you. You do not want to lose the stock but at the same time you want to hedge against the expected adverse price movement of the stock for two to three weeks. One option is to sell the stock and buy it back after two to three weeks. This involves a heavy transaction cost and issue of capital gain taxes. Alternatively you can sell futures on the stock to hedge your position in the stock. In case the stock price falls, you make profit out of your short position in the futures. Using stock futures you would virtually sell your stock and buy it back without losing it. This transaction is much more economical as it does not involve cost of transferring the stock to and from depository account. You might say that if the stock had moved up, you would have made profit without hedging. However it is also true that in case of a fall, you might have lost the value too without hedging. Please remember that a hedge is not a device to maximize profits, it is a device to minimize losses. As they say, a hedge does not result in better outcome but in predictable outcome.

You can hedge your cash market position in stocks that do not have stock futures by using index futures. Before we go any further, we need to understand the term called beta. Beta of a stock is nothing but the movement of the stock relative to the index. So suppose a stock X moves up by 2% when the Nifty moves up by 1% and it goes down by 2% when the Nifty falls by 1%, the beta of this stock is 2. Beta is crucial in deciding how much position should be taken in index futures to hedge the cash market position. Suppose you have a long position in ABB worth Rs 2 lakh. The beta of ABB is 1.1. To hedge this position in the cash market you need to take an opposite position in Nifty futures worth 1.1 x 2, i.e. worth Rs 2.2 lakh. Suppose Nifty futures are trading at 1100 and the market lot for Nifty futures is 200. Then each market lot of Nifty is worth Rs 2.2 lakh. Therefore to hedge your position in ABB you need to sell one contract of Nifty futures.

Hedging with index futures are not perfect, Hedging is like marriage and one should not expect it to be perfect. The beta taken in the calculation of the position of Nifty futures is historical and there is no guarantee

that it will be the same in future. So, any deviation of beta makes the hedge imperfect. Suppose you want to hedge your position in ABB for 15 days and

during those 15 days ABB becomes very volatile and the beta goes up as high as 1.5. In this case your hedging position of one contract is not sufficient and you will be under hedged. It is very difficult (in fact impossible) to get perfect hedge but one can improve the perfection by adjusting the position in Nifty futures from time to time.

Demystifying Stock Futures


Here we try to solve some myths about futures When some liquid money is available to you and you are trying to buy future stocks for risk free interest. Using stock futures you can deploy this money to earn risk-free interest. Suppose Satyam is quoting at Rs 300 in the cash segment and one-month future is quoting at 305, you can earn risk-free interest by following the steps mentioned below: Buy Satyam in cash market at Rs 300 and simultaneously sell Satyam future at Rs 305. Pay Rs 300 to take delivery of Satyam stock in cash market. On expiry of Satyam future contract, the short position would be transferred to your account in the cash segment and a delivery order would be issued against you. Deliver the Satyam stock. Whatever happens to the price of Satyam, you earn Rs 305 - 300 = 5 on Rs 300 for one month. Need to have mark-to-mark margins in your account, incase Satyam moves up. If required the future position can be rolled over to the next month position with a difference of Rs 4-5. This rollover process can continue till you want to get your money back.

The above example was about how earn risk free interest when liquid cash is available with you, when the futures stock is going down in futures market but going up in the cash segment then we can do the following: Suppose one-month SBI future is quoting at 200 while SBI is quoting at Rs 205 in the cash segment. Follow the steps mentioned below to make risk-free money. Sell SBI in the cash market at Rs 205 and simultaneously buy SBI future at 200. Receive Rs 205 and make delivery of SBI stock in the cash market. On expiry of the SBI future contract, the long position would be transferred to your account in the cash segment and a receive order would be issued to you.

Get your SBI stock back. Whatever happens to the price of SBI, you earn Rs 205 200 = 5 on your stock. rrow against the future stock and that is the advantage of futures. Instead of going to the banker and complying with a whole lot of formalities, you can in fact just call me to help you raise money against your shares using futures. Suppose ACC is quoting at Rs 150 in the cash segment and one-month ACC futures are quoting at 152. Follow the steps mentioned below to raise money against your ACC shares. Sell ACC in the cash market at Rs 150 and simultaneously buy ACC futures at 152. Receive Rs 150 and make delivery of ACC stock in the cash market. On expiry of the ACC futures contract, the long position would be transferred to your account in the cash segment and a receive order would be issued to you. Get your ACC stock back. Whatever happens to the price of ACC, you lose Rs 152 150 = 2 to raise money against your shares as cfuture price varies in the intra day trading, in that case you can do arbitrage to raise money in that situations. When the futures are quoting at a premium to their theoretical price, one can buy cash and short futures. When the prices come in line, that is when the difference between the futures and cash prices comes down, reverse the positions. Conversely when the futures are quoting at a discount to the theoretical price, one can sell cash and buy futures. When the prices come in line, that is the difference between the futures and cash prices goes up, reverse the positions. This way it is possible to take advantage of fluctuations in the basis. Please note that there is the risk of execution of order. Also you need to decide the arbitration band depending on the transaction cost you bear.

INTRODUCTION TO OPTIONS MARKET:

In this section, we look at the next Derivative product to be traded at NSE, namely Options. Options are fundamentally different from Forward and Futures contracts. An option gives the holder the right do something; the holder does not have to exercise this price.

OPTIONS MARKET: Options are contracts that give the buyers the right (but not the obligation) to buy or sell a specified quantity of certain underlying asset at a specified price on or before a specified date. On the other hand, the seller is under obligation to perform the contract (buy or sell the underlying). The underlying asset can be share, index, interest rate, bond, rupee-dollar exchange rate, sugar, crude oil, soybean, cotton, coffee etc.

For example: A railway ticket is an option in daily life. Using the ticket, a passenger has an option to travel. In case he decides not to travel, he can cancel the ticket and get a refund. But he has to pay a cancellation fee, which is analogous to the premium paid in an option contract. The railways on the other hand have an obligation to carry the passenger if he decides to travel and refund his money if he decides not to travel. In case the passenger decides to travel the railways get the ticket fare. In case he does not then they get the cancellation fee. The passenger on the other hand, by booking ticket he has hedged his position in case he has to travel as anticipated. In case the travel does not materialize, he can get out of the position by canceling the ticket at a cost, which is the cancellation fee.

Example 2: Suppose you have a right to buy 1,000 shares of Hindustan Lever at Rs 250 per share on or before March 28, 2002. In other words you are a buyer of a call option on Hindustan Lever. The option gives you the

right to buy 1,000 shares. You have the right to buy Hindustan Lever shares at Rs250 per share. The seller of this call option who has given you the right to buy from him is under obligation to sell 1,000 shares of Hindustan Lever at Rs250 per share on or before March 28, 2002 whenever asked.

Option Terminology: There are some basic terminologies used in options, they are as follows: Index option: These options have the index as the underlying. Some options are European options while others are American options. Indexed option contracts settled in cash. Stock option: Stock options are options on individual stocks. Options currently traded on more than 500 stocks in the United States. The contract gives the holder the right to buy or sell shares. Option holder: Buyer if the option who has the right. Option writer: Seller of the option who has the obligation. Premium: The consideration paid by the buyer for the right. Call option: Option that gives the holder the right to buy. Put option: The option that gives the holder the right to sell. American option: These are options that are exercised at any point till the expiration date. European option: These are option that can be exercised only on the expiration date. In the money: It is an option that would lead to profits if it were exercised immediately. Out of money: It is an option that would lead to loss if exercised immediately. At the money: It is an option that would even the holders option if exercised immediately.

How money is made in the option market? The money made in the option market is known as option pay off. There can be two types of option pay off.
Call option Put option Call option:

A call option gives the holder the right to buy shares. The option holder will make money if the spot price is higher than the strike price. The pay off assumes that the option holder will buy at the strike price and sell immediately at the spot price. But if the spot price is lower than

the strike price the holder can simply ignore the option. Here the profits for the option holder are unlimited while the losses are limited.

Example1: Suppose you have a right to buy 1,000 shares of Hindustan Lever at Rs250 per share on or before March 28, 2002. In other words you are a buyer of a call option on Hindustan Lever. The option gives you the right to buy 1,000 shares. You have the right to buy Hindustan Lever shares at Rs250 per share. The seller of this call option who has given you the right to buy from him is under obligation to sell 1,000 shares of Hindustan Lever at Rs250 per share on or before March 28, 2002 whenever asked. Example2: Assume you have the right to buy 200 Nifty units at 1100. In other

words, you are a buyer of a call option on Nifty. The option gives you the right to buy 200 Nifty units. You have the right to buy 200 units of Nifty at 1100. The seller of this call option who has given you the right to buy from him is under obligation to sell 200 units of Nifty.

Put Option: The put option gives the right to sell. The option holder will make money if the spot price is lower than the strike price. The pay off assumes that the option holder will buy at spot price and sell at strike price. But if the spot price is higher than the strike price, the option holder will simply ignore the option, it will be beneficial to sell it in the market. But if the spot price falls dramatically then he can make wind fall profits. Thus the profits of the option holder are unlimited and his losses are capped to the extent of the premium.

Example1: Suppose you have the right to sell 1,600 shares of Bharat Heavy

Electrical at Rs 140 per share on or before March 28, 2002. In other words you are a buyer of a put option on Bharat Heavy Electrical. The option gives you the right to sell 1,600 shares. You have the right to sell Bharat Heavy Electrical shares at Rs140 per share. The seller of this put option who has given you the right to sell to him is under obligation to buy 1,600 shares of Bharat Heavy Electricals at Rs140 per share on or before March 28, 2002 whenever asked.

Example2: Suppose you have the right to sell 200 Nifty units at 1200. In other

words you are a buyer of a put option on Nifty. The option gives you the right to sell 200 Nifty units. You have the right to sell 200 units of Nifty at 1200. The seller of this call option who has given you the right to sell to him is under obligation to buy 200 units of nifty.
Option contracts have an expiry date specified by exchanges. The buyer enjoys the right and the seller is under obligation to fulfill the right till the option contract expires. March 28, 2002 is the expiry date in the aforesaid example. Normally as per the contract specifications of options given by the National Stock Exchange and Bombay Stock Exchange, last Thursday of the contract month is the expiry day. In case the last Thursday of a month is a holiday, the previous business day is considered as the expiry day. However you must check with the dealer about the expiry date before placing the order for buying or selling options. There are one-, two- and three-month contracts available presently. It is expected that once these contracts become liquid, the exchanges would introduce contracts of longer-term expiry/maturity.

Who decides the strike price? The exchanges decide the strike price at which call and put options are traded.

Generally to simplify matters, the exchanges specify the strike price interval

for different levels of underling prices, meaning the difference between one strike price and the next strike price over and below it. For example the strike price interval for Bharat Heavy Electricals is Rs10. This means that there would be strike prices available with an interval of Rs10. Typically you can see options on Bharat Heavy Electricals with strike prices of Rs150, Rs160, Rs170, Rs180, and Rs190 etc.

Strike price intervals specified by the exchanges:

Strike price intervals specified by the exchanges are as follows:


Price level of Underlying Less than or equal to 50 Above 50 to 250 Above 250 to 500 Above 500 to 1000 Above 1000 to 2500 Above 2500 Strike Price Interval (in Rs) 2.5 5.0 10.0 20.0 30.0 50.0

Options Market Process: Call and put options are traded on-line on the trading screens of the National Stock Exchange and Bombay Stock Exchange like any other securities. The price of options is decided between the buyers and sellers on the trading screens of the exchanges in a transparent manner. You can see the best five orders by price and

quantity. You can place market, limit and stop loss order etc. You can modify or delete your pending orders. The whole process is similar to that of trading in shares.

You are not compelled to wait till expiry of the option once you have bought or sold an option. Instead you can buy an option and square up the position by selling the identical option (same expiry and same strike) at any time before the
contract expires. You can sell an option and square up the position by buying an identical option. You can buy first and sell later or you can initiate your position by selling and then buyingthere is no restriction on direction. The difference between the selling and buying prices is your profit/loss. The process is similar to that of trading in shares. Factors affecting the price of option: There are five fundamental factors that affect the price of an option. These are: 1. Price of the underlying stock or index 2. Strike price/exercise price of the option 3. Time to expiration of the option 4. Risk-free rate of interest 5. Volatility of the price of underlying stock or index

Adjust the price for dividend expected during the term of the option to arrive atfine prices.

Consider this: suppose a stock is trading at Rs70. There is 40% probability that the stock price would move to Rs80. Similarly the probabilities of the price being Rs90, Rs100, Rs110 and Rs120 are 25%, 15%, 10% and 5% respectively. What would be your expected return if you were the buyer of a call option with a strike price of Rs100? If the stock price were to finish at Rs80, Rs90 and Rs100, the call option would expire worthless. If the stock price

were to finish at Rs110 or Rs120, you would gain Rs10 and Rs20 respectively. Your expected return from the call would be:
(40%*0)+(25%*0)+(15%*0)+(10%*10)+(5%*20) = 11. This means that you would like to pay anything less than Rs11 for this option to make a profit and the seller would always like to get anything more than Rs11 for giving you this option. Settlement: Presently stock options are settled in cash. This means that when the buyer of the option exercises an option, he receives the difference between the spot price and the strike price in cash. The seller of the option pays this difference. It is expected that stock options would be settled by delivery of the underlying stock. This means that on exercise of a call option, a long position of the underlying stock effectively at the strike price would be transferred in the cash segment in the account of the buyer of the call option who has the right to buy. An opposite short position at effectively the strike price would be transferred in the cash segment in the account of the seller of the call option who has obligation to sell. Similarly on exercise of a put option, a short position in the underlying stock effectively at the strike price would be transferred in the cash segment in the account of the buyer of the put option who has the right to sell. An opposite long position at effectively the strike price would be transferred in the cash segment in the account of the seller of the put option who has the obligation to buy. However guidelines in this regard are awaited from SEBI. Please check the exact method of delivery-based settlement once the regulator and exchanges announce it.

Varying time value for at-, in- and out-of-the-money options?


The following graph shows how the premium of 30-day maturity, Rs260 strike price call option on Reliance varies with the movement of the spot price of Reliance. Study the price movement of the option

carefully. You would find that the time value is the highest when the spot price is equal to the strike price; the option is at the money. As the spot price rises above the strike price, the option becomes in the money and its intrinsic value increases but its time value decreases. In the same way as the spot price falls below the strike price, the option becomes out of the money and its intrinsic value becomes zero while its time value decreases.

Premium Varying with the Price of the Option:

The buyers of longer maturity options enjoy the right to longer duration and the sellers are subject to risk of price movement of the underlying during a longer term, since the price of both call and put options increases as the time to expiry increases. The following graph shows the prices of 15- and 30-day maturity, Rs260 strike price call options on Reliance when the spot price of Reliance is Rs260.

Difference between Options and Futures:

In case of futures, both the buyer and the seller are under obligation to fulfill the contract. They have unlimited potential to gain if the price of the underlying moves in their favour. On the contrary, they are subject to unlimited risk of losing if the price of the underlying moves against their views. In case of options, however, the buyer of the option has the right and not the obligation. Thus he enjoys an asymmetric risk profile. He has unlimited potential to profit if the price of the underlying moves in his favour. But a limited potential to lose, to the extent of the premium paid, in case the price of the underlying moves against the view taken. Similarly the seller of the option is under obligation. He has limited potential to profit, to the extent of the premium received, in case the price of the underlying moves in his favour. But an unlimited risk of losing in case the price of the underlying moves against the view taken.

PRICE BEHEVIOUR OF AN OPTION OR GREEK OPTION:

We need to understand and appreciate various option Greeks like delta, gamma, theta, vega and rho to completely comprehend the behavior of option prices.
DELTA of an Option and its Significances: For a given price of underlying, risk-free interest rate, strike price, time to maturity and volatility, the delta of an option is a theoretical number. If any of the above factors changes, the value of delta also changes. The delta of an option tells you by how much the premium of the option would increase or decrease for a unit change in the price of the underlying. For example, for an option with delta of 0.5, the premium of the option would change by 50 paise for an Rs1 change in the price of the underlying. Delta is about 0.5 for near/at the- money options. As the option becomes in the money, the value of delta increases. Conversely as the option becomes out of the money, the value of delta decreases. In other words, delta measures the sensitivity of options with respect to change in the price of the underlying. Deep out-of-the-money options are less sensitive in comparison to at-the-money and deep in-the-money options. Delta is positive for a bullish position (long call and short put) as the value of the position increases with rise in the price of the underlying. Delta is negative for a bearish value of the position decreases with rise in the price of the underlying. Delta varies from 0 to 1 for call options and from 1 to 0 for put options. Some people refer to delta as 0 to 100 numbers. The Delta is an important piece of information for a option Buyer because it can tell him much of an option & buyer he can expect for short-term moves by the underlying stock. This can help the Buyer of an option which call / Put option should be bought. The factors that can change the Delta of an option are Stock price, Volatility and Number of days. position (short call and long put) as the

THETA of an option and its Significance: The theta of an option is an extremely significant theoretical number for an option trader. Like the other Greek terms you can calculate theta using option calculator.

Theta tells you how much value the option would lose after one day, with all the other parameters remaining the same.

Suppose the theta of Infosys 30-day call option with a strike price of Rs3,900 is 4.5 when Infosys is quoting at Rs3,900, volatility is 50% and the risk-free interest rate is 8%. This means that if the price of Infosys and the other parameters like volatility remain the same and one day passes, the value of this option would reduce by Rs4.5. Theta is always negative for the buyer of an option, as the value of the option goes down each day if his view is not realized. Conversely theta is always positive for the seller of an option, as the value of the position of the seller increases as the value of the option goes

down with time. Consider options as depreciating assets because of time decay and appreciating due to

favorable price movements. If the rate of appreciation is more than that of depreciation hold the option, else sell it off. Further, time decay of option premium is very steep near expiry of the option. The following graph would make it clearer.

VEGA of an Option and its Significance:

Vega is also a theoretical number that can be calculated using an option calculator for a given set of values of underlying price, time to expiry, strike price, volatility and interest rate etc. Vega indicates how much the option premium would change for a unit change in annual volatility of the underlying.

Suppose the Vega of an option is 0.6 and its premium is Rs15 when volatility of the underlying is 35%. As the volatility increases to 36%, the premium of the option would change upward to Rs15.6. Vega is positive for a long position (long call and long put) and negative for a short position (short call and short put).
Simply put, for the buyer it is advantageous if the volatility increases after he has bought the option. On the other hand, for the seller any increase in volatility is dangerous as the probability of his option getting in the money increases with any rise in volatility. Sometimes you might have observed that though seven to ten days have passed after you bought an option, the underlying price is almost in the same range while the premium of the option has increased. This clearly indicates that volatility of the underlying might have increased.

GAMMA of an option and its Significances: Gamma is a sophisticated concept. You need patience to understand it, as it is important too. Like delta, the gamma of an option is a theoretical number. Feeding the price of underlying, risk-free interest rate, strike price, time to maturity and volatility, the gamma of an option tells you how much the delta of an option would increase or decrease for a unit change in the price of the underlying. For example, assume the gamma of an option is 0.04 and its delta is 0.5. For a unit change in the price of the underlying, the delta of the option would change to 0.5 + 0.04 = 0.54. The new delta of the option at changed underlying price is 0.54; so the rate of change in the premium has increased.

If I were to explain in very simple terms: if delta is velocity, then gamma is acceleration. Delta tells you how much the premium would change; gamma changes delta and tells you how much the next premium change would be for a unit price change in the price of the underlying.

Gamma is positive for long positions (long call and long put) and negative for short positions (short call and short put). Gamma does not matter much for options with long maturity. However for options with short maturity, gamma is high and the value of the options changes very fast with swings in the underlying prices.

STRATEGY IN THE OPTION MARKET:

When Bullish When you are very bullish, buy a call option. When you are very bullish on the market as a whole, buy a call option on indices (Nifty/Sensex). When you are very bullish on a particular stock, buy a call option on that stock.

The more bullish you are, the more out of the money (higher strike price) should be the option you buy. No other position gives you as much leveraged advantage in a rising market with limited downside.

Upside potential: The price of the option increases as the price of the underlying rises. You can book profit by selling the same option at higher price whenever you think that the underlying price has come to the level you expected. At expiration the break-even underlying price is the strike price plus premium paid for buying the option.

Downside risk: your loss is limited to the

3.1 RESEARCH METHODOLOGY

RESEARCH DESIGN
Research design is the blueprint for fulfilling research objectives and answering questions. Research design is define as the specification of methods and procedures employed for acquiring the information needed. It is a plan or framework for doing the study and collecting the data. Types of research design: 1. Exploratory research design. 2. Experimental research design. 3. Descriptive research design. Out of the research design above said the research design undertaken for the purpose of the study was Descriptive research design.

Descriptive Research:
This study is based on the descriptive research design. Descriptive study is a fact finding investigation with Interpretation. The main objective of descriptive study is to describe the state of affairs as it exists at present. The descriptive research is concerned with specific predictions with narrations of facts and characteristics concerning individual. Hence, the researcher chooses to apply Descriptive design for the current study. Descriptive Design Generally describes the characteristics of a particular individual.

3.2 METHOD OF DATA COLLECTION Data Collection:


There are two ways to collect data 1. Primary data. 2. Secondary data

Primary Data
Primary data are those which are collected afresh and for the first time. It can be obtained through observation or through direct communication. Primary data were collected through Questionnaire.

Secondary Data
Secondary data are those data which results the study done by others and for different purposes than the one for which the data are being reviewed.

SAMPLING TECHNIQUE
In this project Simple random sampling is used. Simple random sample (SRS) is a special case of a random sample. A sample is called simple random sample if each unit of the population has an equal chance of being selected for the sample. Whenever a unit is selected for the sample, the units of the population are equally likely to be selected

SAMPLE SIZE
50 samples are collected

3.3 TOOLS AND TECHNIQUES USED FOR ANALYSIS:


Chi-square test percentage analysis

PERCENTAGE METHOD
In this project Percentage method test was used. The percentage method is used to know the accurate percentages of the data we took, it is easy to graph out through the percentages. The following are the formula.

No. of Respondents Percentage Respondents = Total Respondents From the above formula, we can get percentages of the data given by the respondents. X 100

CHI-SQUARE TEST
In this project chi-square test was used. This is an analysis of technique which analyzed the stated data in the project. It analysis the assumed data and calculated in the study. The Chisquare test is an important test amongst the several tests of significant developed by statistical. Chi-Square, symbolically written as x2 (Pronounce as Ki-Spare), is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance.

O=Observed

CHAPTER- IV

DATA ANALYSIS AND INTERPRETATION


Table no : 1 Gender Distribution of Employees: Perception Male Female Tot No respondents 45 5 50 percentage 90% 10% 100%

Interpretation: 90% of respondents are male & 10% of respondents are female Inference Majority of the respondents are male

Chart no:1

120% 100% 80% 60% 40% 20% 0% Male 10% Female Percentage Tot 90% 100%

Table no : 2 Opinion about aware of derivatives market

Perception yes no Total

No respondents 100 0 100

percentage 100% 0 100%

Interpretation:

The 100% of respondent aware of derivatives.

Chart no: 2

Opinion about aware of derivatives market

opinion about aware of derivatives


No respondents percentage

100% 100 0 no 0 0

100% 100

percentage No respondents

yes 100% 100

Total 100% 100

Table no: 3 Opinion about awareness level of derivatives market Perception Very high High low Very Low Total No respondents No respondents 60 25 15 0 100 percentage 65% 25% 5% 0 100%

Interpretation:

60% of respondents are well known about the derivatives market.and 25% of respondent is known level is high.the rest of 15 is low level regarding awareness level. Inference

Majority of the respondents are highly aware of derivatives.

Chart no: 3 Opinion about awareness level of derivatives market

Chart Title
120 100 Axis Title 80 60 40 20 0 percentage No respondents Very high 65% 60 High 25% 25 low 5% 15 Very Low 0 0 Total 100% 100

able no : 4 Opinion about the source helps you to invest in derivatives Perception media radio broker internet Total No respondents 40 10 10 40 100 Percentage 30% 50% 20% 0% 100%

Interpretation: 40%of respondents says that the source help them to invest in derivatives is media. Radio and broker will help just 10%only. Internet will help them 40%. Inference: Majority of the respondents says

Chart no: 4

Opinion about the source helps you to invest in derivatives

Chart Title
120 100 Axis Title 80 60 40 20 0 Percentage No respondents media 30% 40 radio 50% 10 broker 20% 10 internet 0% 40 Total 100% 100

Table no : 5 Opinion about you participate in derivatives as a Perception Investor Speculator Hedger trader Total No respondents 40 10 35 15 100 Percentage 40% 48% 12% 0% 100%

Interpretation: 40% of respondents are participated as a investor in derivatives market.and 35% of respondents are participated as a hedger and 15% of respondents are traders.the rest of10% are speculator. Inference:

Majority of the respondents are highly satisfied with existing rest room facilities.

Chart no : 5

Opinion about the source helps you to invest in derivatives

Chart Title
120 100 Axis Title 80 60 40 20 0 Investor Percentage No respondents 40% 40 Speculat or 48% 10 Hedger 12% 35 trader 0% 15 Total 100% 100

Table no:.6

Opinion about How long you are participating in derivatives Perception Less than a year 1 to 2 year 2to 3years 3 and above Total No respondents 25 40 20 15 100 Percentage 25% 40% 20% 15% 100%

Interpretation: 25% of respondents are trading in derivatives less than a year and 40% of respondents Are trading 1 to 2 years The 20% respondents are trading in derivatives 2 to3years and the rest of 15% respondents are trading 3 and above.

Inference:

Chart no: 6 Opinion about How long you are participating in derivatives

Chart Title
120 100 Axis Title 80 60 40 20 0 Less than a year 25% 25 1 to 2 year 40% 40 2to 3years 20% 20 3 and above 15% 15

Total 100% 100

Percentage No respondents

Table no: 7 Opinion about your investing objective Perception Profit making Contingency Safety others Total No respondents 60 20 20 0 50 Percentage 40% 20% 20% 20% 100%

Interpretation: 60% respondents investing objective is profit making and20% of respondents

Objective is contingency.the rest of 20% respondents need safety.none of need others

Inference:

Chart no: 7

Opinion about your investing objective

Chart Title
70 60 Axis Title 50 40 30 20 10 0 Percentage No respondents Profit making 40% 60 Continge ncy 20% 20 Safety 20% 20 others 20% 0 Total 100% 50

Table no: 8 Opinion about your present attitude of investment Opinion about job security Perception Mutual fund Sharemarket Real estate gold Total No respondents 10 70 10 10 50 Percentage 50% 20% 20% 10% 100%

Interpretation:

The 70% of respondents present attitutude is regarding to invest in share market.and 10% are mutual fund and 10% are real estate and gold Inference:

Majority of the respondents are satisfied to work stress.

Chart no: 8

Opinion about your present attitude of investment

Chart Title
80 70 60 50 40 30 20 10 0 Percentage No respondents

Axis Title

Mutual fund 50% 10

Sharema rket 20% 70

Real estate 20% 10

gold 10% 10

Total 100% 50

Table no: 9 Opinion about the factors influences to invest in Derivative Market.

content

Very high high

moderate low

Very low

percentage

liquidity Risk Return Hedging Consistency total

10 25 35 70

5 5

25 25

10% 25% 25% 35% 5% 100%

Interpretation:

The 35% of respondent said that hedging is influence them to invest in derivatives and 25%of respondent said that they are influenced by risk and another 25% respondent said they are influenced by return. The 10% of respondent is are influenced by liquidity.just 5% only said consistency. Inference: Majority of the respondents are neutral.

Chart no: .9 Opinion about the factors influences to invest in Derivative Market.

percentage
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Axis Title

10 liquidity

25 Risk 25%

25 Return 25%

percentage

10%

35 Hedgin g 35%

5 Consist ency 5%

25 5 70 total 100%

Table no: .10 Opinion about your most segments to investment in derivatives Perception Futures Options both Total No respondents 20 15 65 100 Percentage 20% 15% 65% 100%

Interpretation: The 20%of respondent s are trading in only futures and 15%of respondents are only trading in options but 65% of respondent trading in both. Inference:

Majority of the respondents are excellent with infrastructure

Chart Table no: 2.1.10 Opinion about your most segments to investment in derivatives

Chart Title
120 100 Axis Title 80 60 40 20 0 Percentage No respondents Futures 20% 20 Options 15% 15 both 65% 65 Total 100% 100

Table no:11 Opinion about the derivatives instrument do you deal Perception Stock futures Index futures Stock option Index option Total No respondents 30 25 20 25 100 Percentage 30% 25% 20% 25% 100%

Interpretation: The 30%of respondents are dealing stock futures and 25% of respondents are dealing with index futures.and 20%of respondents are dealing with stock option. The rest of respondents 25% dealing with index option. Inference:

Majority of the respondents are high satisfied the first aid measures of the organization.

Chart no: .11 Opinion about the derivatives instrument do you deal

Chart Title
120 100 Axis Title 80 60 40 20 0 Percentage No respondents Stock futures 30% 30 Index futures 25% 25 Stock option 20% 20 Index option 25% 25 Total 100% 100

Table no: Opinion about index derivatives proved to be more important than security derivatives Perception Profit margin Risk level low Liquidity Despite the volatilities conversion rate Total No respondents 45 35 10 10 100 Percentage 45% 35% 10% 10% 100%

Interpretation: The 45% of respondents said index derivatives proved to be more important than security derivatives on the basic of profit margin. The 35% of respondents said index derivatives proved to be more important than security derivatives on the basic of risk level low. The 10% of respondents said index derivatives proved to be more important than security derivatives on the basic of liquidity. The 10% of respondents said index derivatives proved to be more important than security derivatives on the basic of despite the volatilities conversion rate

Inference:

Majority of the respondents says good with work place ventilization.

Chart Table no: 12 Opinion about index derivatives proved to be more important than security derivatives

Chart Title
Axis Title 250 200 150 100 50 0 Profit margin Risk level low

Liquidity

Percentage No respondents Percentage No respondents

45% 45 45% 45

35% 35 35% 35

10% 10 10% 10

Despite the volatilitie s conversi on rate 10% 10 10% 10

Total

100% 100 100% 100

Table no: opinion about frequently you are investing in derivatives Perception Many times in a week Once in a day Many times in a week Once in aweek Total No respondents 40 30 15 15 100 Percentage 40% 30% 15% 15% 100%

Interpretation: The 40% of respondents are trading in derivatives many times in a day. And 30% of investor trading once in a day.the 15% of respondents are trading many times in a week.and another 15% of respondent are trading once in a week in derivatives. Inference:

Majority of the respondents are fair with canteen facility.

Chart no: 2.1.13 opinion about frequently you are investing in derivatives

Chart Title
120 100 Axis Title 80 60 40 20 0 Many times in a week 40% 40 Once in a day 30% 30 Many times in a week 15% 15 Once in aweek 15% 15

Total 100% 100

Percentage No respondents

Table no: 1 Opinion about maturity period contract Perception 1 month 2 month 3 month And above Total No respondents 60 20 10 10 100 Percentage 14% 50% 30% 6% 100%

. Interpretation: The majority of 60% of respondents are participate in 1 month contract and 20% of respondents are participate in 2 month contract.just 10% of respondent are taking 3 month contract.the rest of 10% take above contract

Inference:

Majority of the respondents are agree with the break time facilities

Chart no: 14

Opinion about maturity period contract

Chart Title
120 100 Axis Title 80 60 40 20 0 1 month Percentage No respondents 14% 60 2 month 50% 20 3 month 30% 10 And above 6% 10 Total 100% 100

Table no: 15 O Opinion about Derivatives are the hedging tool Perception Strongly agree Agree Disagree Strongly disagree Total No respondents 85 15 0 0 100 Percentage 85% 15% 0% 0 100

Interpretation: The 85% of respondent said that they are strongly agree with derivatives are hedging tool. 15% of respondents are agree with derivatives are hedging tool.none of themdisagree as derivatives are hedging tool Inference:

Majority of the respondents are favour to excellent lighting and water

Chart no: 15

Opinion about Derivatives are the hedging tool

Chart Title
250 200 Axis Title 150 100 50 Strongly agree Percentage 85% No respondents 85 0 Strongly disagree 0 0

Agree 15% 15

Disagree 0% 0

Total 100 100

Table no: 16 Opinion about derivatives investing is the best alternative to equity perception Yes No total No respondents 85 15 50 Percentage 85% 15% 100%

Interpretation: 85% of respondents are said yes that trading on derivatives is better than equity.and 15% said no . Inference:

Majority of the respondent fully satisfied

Chart no: 2.1.16

Opinion about derivatives investing is the best alternative to equity

Chart Title
100 90 80 70 60 50 40 30 20 10 0 Percentage No respondents

Axis Title

Yes 85% 85

No 15% 15

total 100% 50

Table no:17 Opinion about you prefer to trading in derivatives on the basic of

Perception Consistence Risk Return hediging Total

No respondents 50 40 10 0 100

Percentage 50% 40% 10% 0% 100%

Interpretation:

Inference:

Majority of the respondents are highly satisfied.

Chart no:17 Opinion about you prefer to trading in derivatives on the basic of

Chart Title
120 100 Axis Title 80 60 40 20 0 Series3 Series2 Series1 Percepti Consiste on nce 0 0 50% 50 Risk Return hediging Total

40% 40

10% 10

0% 0

100% 100

TABLE NO:18 Opinion about kind of risk do you perceive Perception Uncertainty of market Stump of share market Fear of company wind up Fake agreement Total No respondents 50 40 10 0 100 Percentage 50% 40% 10% 0% 100%

Interpretation: The 50% of respondent perceive the risk of uncertainty of market and 40%of respondent said they are perceiving risk stump of share market.just 10% of respondent perceive the risk of fake agreement.

CHART NO:18 Opinion about kind of risk do you perceive

Chart Title
120 100 Axis Title 80 60 40 20 0 Uncertai nty of market Percentage No respondents 50% 50 Stump of share market 40% 40 Fear of compan y wind up 10% 10 Fake agreeme nt 0% 0

Total 100% 100

Table no:19 Opinion about statement is suitable regarding derivatives market

Perception High risk high profit Low risk high profit Moderate risk high profit Moderate risk moderate profit Total

No respondents 5 10 15 70 100

Percentage 5% 10% 15% 70% 100%

Interpretation:

The above table shows that 70% of respondent said that the moderate risk moderate profit statement is suitable and Moderate risk high profit is suitable statement for 15% of respondents. Low risk high profit is suitable statement for 10% of respondents. High risk high profit is suitable statement for 5% of respondents.

Table no:19 Opinion about statement is suitable regarding derivatives market

Chart Title
120 100 Axis Title 80 60 40 20 0 High risk high profit Percentage No respondents 5% 5 Low risk high profit 10% 10 Moderat e risk high profit 15% 15 Moderat e risk moderat e profit 70% 70

Total 100% 100

Tableno:20

Opinion about the present status of derivatives market in India

Perception High growth Moderate growth Stable growth Not in growth Total

No respondents 10 10 60 20 50

Percentage 10% 10% 60% 20% 100%

Interpretation: 60% of respondents are saying the derivatives market is stable growth.20% of respondents are said the derivatives market in not in growth.10% of respondents are said that derivatives market in moderate growth. just 10% of respondents are said that derivatives market are in high growth.

CHART no:20 Opinion about the present status of derivatives market in India

Chart Title
70 60 Axis Title 50 40 30 20 10 0 Percentage No respondents High growth 10% 10 Moderat e growth 10% 10 Stable growth 60% 60 Not in growth 20% 20 Total 100% 50

STATISTICAL TOOLS APPLIED

Analyst must use different statistical tools for analyzing and interpreting the data in this study the following tools were applied.
Chi-square test no respondents analysis

NO RESPONDENTS METHOD
In this project No respondents method test was used. The no respondents method is used to know the accurate no respondentss of the data we took, it is easy to graph out through the no respondentss. The following are the formula. No. of Respondents Percentage Respondents = Total Respondents From the above formula, we can get no respondentss of the data given by the respondents. X 100

CHI-SQUARE TEST
In this project chi-square test was used. This is an analysis of technique which analyzed the stated data in the project. It analysis the assumed data and calculated in the study. The Chisquare test is an important test amongst the several tests of significant developed by statistical. Chi-Square, symbolically written as x2 (Pronounce as Ki-Spare), is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance.

Chi- square analysis:

SOLUTION: Hypothesis:
.Null hypothesis Ho: there is no significant difference between the carrier development services are

offered to employees and appreciation and recogisation given for employee for their excellence Alternative hypothesis H1: : there is a significant difference between the carrier development services are offered to employees and appreciation and recogisation given for employee for their excellence

S.Agree carrier development 10

Agree 20

Neutral D.Agree 15 5

No of respondents 50

appreciation and recogisation

25 35

10 30

10 25

5 10

50 100

Chi square = (O-E)/E

EXPECTED TABLE
O 10 20 15 5 25 10 10 5 E 17.5 15 12.5 5 17.5 15 12.5 5 O-E -7.5 5 2.5 0 7.5 -5 -2.5 0 (O-E) 56.25 25 6.25 0 56.25 25 6.25 0 (O-E)/E 3.21 1.66 0.5 0 3.21 1.66 0.5 0

TOTAL =10.74

Degree Of Freedom = No rows - No Column =3 Critical Region @ 1% =11.345

Decision :
The Calculated Value Is Lesser Than The Table Value, Hence We Accept Ho hypothesis.
OR

null

Conclusion:
There is no significant difference between the carrier development services are offered to employees and appreciation and recogisation given for employee for their excellence

CHAPTER V

5.1FINDINGS
90% of respondents are male & 10% of respondents are female

20% of respondents strongly agree with carrier development services offered by organization. , 40% of respondents are agree and 10% of respondents are strongly disagree and, 30% of respondents are just disagree. The study reveals that 64% of respondents to good satisfaction in their work. The maximum 50% of respondents says that the welfare facilities are taken by organization is good. 48% of respondents are highly satisfied existing rest room facilities .and 40% of respondents feels satisfied. The maximum no of no respondents i.e 60% of respondents are highly satisfied with safety pratices, and ,4% of them are dissatisfied. 40% of respondents always satisfied with their nature of job, 20% of respondents says highly satisfied,20% of respondents rarely dissatisfied.

The half of respondent i.e.50 % satisfied with their job security.

20% of respondents are neutral ,50 of respondents are satisfied and , 20% of respondents feel highly satisfied , 10% of respondents are dissatisfied .

60% of respondents says excellent with the existing infrastructure facilities.

50% of respondents to highly satisfy the first aid measures of the organization, 26% of respondents are disagree. 50% of respondents says good with work plae ventilization. More than half of the respondents i.e.58% say that they are satisfied with canteen facility. 50% of respondent are agree with break time. 55% of respondents says excellent with their lighting and water facilities , ,35% of respondents are good and just 10% say fair 100% of respondents are fully satisfied with the grievance handling procedures 40% of respondents are highly satisfied with existing esi & pf facilities, and 20% of respondents are dissatisfied because of some reason 50% of respondents strongly agree with existing retirement benefit .and just 10% only disagree almost 50% of employee excellent with procedures adopted for career growth of workers in their concern and just 10% poor. 50% of employee strongly agree with Opinion about share as well as suggestion and 10%disagree.

5.2 SUGGESTIONS AND RECOMMENDATION

1. The management can utilize the potential of all employees by providing the adequate welfare measures.

2. 40% of respondents are neutral regarding appreciation and recogisation given for employee for their excellence.so take action to promote it

3. The half of respondent i.e.50 % satisfied with their job security.but rest f them not satisfied

4. just 10% of employee poor with procedures adopted for career growth of workers so the management take satisfied them also

5. 20% of respondents rarely dissatisfied. Their nature of job

6. 40% of respondents feels dissatisfied with the existing infrastructure facilities so make some measures to satisfy them in infrastrure.

5.3 CONCLUSION
The management has to think over the above given finding and recommendation. And it has to consult with the employees over the decision that has been made to reduce the dissatisfication .The management is responsible for all acts of his employees so it is managements primary responsibility to make all effects to provide adequate welfare measure at the same time production and productivity will increase. By keeping in mind profession of adequate welfare measure is very utmost important to management.

Employees are the backbone of the company

APPENDIX

BIBILOGRAPHY

1. Dr, Gupta.C.B. Human resources management. New Delhi, sultan chand & sons, publisher 2003. 2. GUPTA.S.P., STATISTICAL METHODS. New Delhi, sultan chand & sons pulblishers 2003. 3. KOTHARI.C.R., Research methodology, New Delhi, Wishwa pranashan. Publishing 1997. 4. SUBBA RAO.P. RAO.V.S.P., Human Resource Management New Delhi, Konark publishers (P)Ltd 2006. 5. Dr.R,RADHA. Human Resource Management. Chennai prasanna & co publishers 2008.

Questionnaire A STUDY ON EMPLOYEE WELFARE IN NACE SOLUTIONS (P)LTD IN T.NAGAR.

1.

Personal Data : Name Age Gender Education Income : : : : : a) H.Sec [ ] b) Degree [ ] c) postgraduate [ ]

a) 10000 to 15000 [ ] b) 15000 to 25000 [ ] c) Above 25000 [ ]

Experience :

a) 0 to 2 yrs [ ] c) 5 to 10 yrs [ ]

b) 2 to 5 yrs [ ] d) above 10 yrs [ ]

Designation :

a) Employees [ ] b) Supervisor [ ] c) Management [ ]

2. Are you aware of derivatives market? (a)YES [ ]

(b)NO 3.

[ ]

What is your awareness level about derivatives market ? a) Well known b)know c)just know d)un known

4.

what source of information to invest in derivatives? a) media b)radio c)broker d)internet

5.

you participate in derivatives as a 1. Investor 2. Speculator 3. Hedger 4. trader

how long you are participated in derivatives? Less than a year 1 to2years

2 to 3 years 3 and above

7.

what is your saving objective ?

Profit making Contingency Safety others

8.what is your present attitude towards investment from the following? Mutual fund Share market Real estates gold

9.

what are the factors influences in derivatives you invest Very high high moderate low Very low

content

Liquidity

risk

return headging

10.

which is your most segment to investment in derivatives?

Futures Options both 11. which of the derivatives instrument do you deal?

Stock future Stock futures index

Stock option Stock option index

12. what frequency of investing in derivatives? Many times in a day Many times in a week Once a day More than 13.which contract maturity period would you always prefer to investment? 1 month 2 month 3 month And above 14.derivatives are the hedging tool do you agree? a)Strongly agree (b)Agree

(c)Disagree (d)Strongly Disagree 15. do you think derivatives investing best alternative to equity? Yes no 16. generally you prefer to investment in derivatives on the basic of ? please

rank it from 1 to 5 Consistence Risk Return hediging

17.

what kind or risk do you precive while investing in the derivatives market?

Uncertainty of risk Stump of share market Fear of company performance 18 which statement is suitable regarding derivatives market ?

High risk high profit Low risk high profit Moderate risk high profit Moderate risk moderate profit 19. why have index derivatives proved to be more important than security

derivatives?

20.what is the present status of derivatives market in india?

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