Mrp Final Content

8/18/2019 Mrp Final Content

1/24


2/24

Certificate


3/24

Dr.S.MAYILVAGANAN, M.Com.,M.Phil.,MBA.,M.Phil.,Ph.D.,

Assistant Professor & Research Adviser

PG & Research Department of Commerce

A.V.C. College (Autonomous)

Mannampandal – 609 305Mayiladuthurai.

Date :

CERTIFICATE

This is to certify that the thesis entitled "INVESTORS’

PERCEPTION TOWARDS DERIVATIVES WITH REFERENCE TO

FUTURE AND OPTIONS IN TANJORE DISTRICT, TAMILNADU" is a

bonafide record of research work done by M.SANTHINI, in the

Department of Commerce, A.V.C. College (Autonomous),

Mannampandal – 609 305, Mayiladuthurai, Nagai District, under

my guidance and supervision, submitted to the Bharathidasan

University, Tiruchirappalli for the award of the Degree of DOCTOR

OF PHILOSOPHY IN COMMERCE and that the thesis has not

previously formed the basis for the award to the candidate of any

Degree, Diploma, Associateship, Fellowship or any other similar

titles.

I further certify that the thesis represents independent work

on the part of the candidate.

(Dr.S.MAYILVAGANAN)

Guide & Supervisor


4/24

Declaration


5/24

M. SANTHINI, M.Com., M.Phil., MBA.,

Lecturer in PG & Research Department of Commerce

A.V.C. College (Autonomous)

Mannampandal – 609 305

Mayiladuthurai.

DECLARATION

I hereby declare that the dissertation entitled "INVESTORS’

PERCEPTION TOWARDS DERIVATIVES WITH REFERENCE TO

FUTURE AND OPTIONS IN TANJORE DISTRICT, TAMILNADU" is the

result of Investigation carried out by me under the Guidance of

Dr.S.MAYILVAGANAN, Assistant Professor & Research Adviser, PG &Research Department of Commerce, A.V.C. College (Autonomous),

Mayiladuthurai, and it is not formed the basis for the award of any

degree, diploma, associate ship, fellowship or similar other titles. It has

not been submitted to any other University or Institution for the award

of any degree or diploma.

Date :

Place :

(M.SANTHINI)


6/24

Acknowledgement


7/24

ACKNOWLEDGEMENT

“We must find time to stop and thank the people

Who make a difference in our lives.”

I wish to express my sincere thanks to those who have contributed to this

thesis and supported me in one way or the other during this amazing journey.

“Good teachers impart good education;

Great teachers groom their students to become leaders;

Ordinary teachers direct us along the right path;

but great teachers inspire us to seek our own path;

They encourage us to discover our talents”.

I would like to record my sincere thanks to a great teacher, my honorific

supervisor Dr.S.MAYILVAGANAN, M.Com., M.Phil., MBA., M.Phil., Ph.D.,

Assistant Professor & Research Advisor, P.G. & Research Department of

Commerce, A.V.C. College (Autonomous), Mannampandal, who accepted me

as his Ph.D., student without any hesitation when I presented him my research

proposal. Thereafter, his wide knowledge and his logical way of thinking have

been of great value for me, he offered me so much advice, patiently supervising

me, and always guiding me in the right direction. I’ve learned a lot from him,

without his help I could not have finished my dissertation successfully. I also

remain indebted for his understanding and support during the time when I wasreally down and depressed due to personal family problems.

I extend my thanks to the Vice-Chancellor, Registrar and Controller of

Examinations, Bharathidasan University, Thiruchirappalli, for admitting me in

the Part –Time Ph.D., programme in the esteemed University.

I’d like to convey my heartfelt thanks to The Chairman, Secretary,

Treasurer and Members of the management, A.V.C. College (Autonomous),

for granting me permission to do Part-Time Ph.D., research in the department of

commerce.


8/24

His vision is to guide us;

His words aim to encourage us;

His deeds continue to inspire us;

His achievements motivate us go for higher levels;

I am extremely thankful to the Guiding Force and Man of Achievements

Dr.K.THIYAGESAN, M.Sc., M.Phil., Ph.D., DCO. Principal, A.V.C. College

(Autonomous), his firm and kind-heartedness has attracted me to be steadfast and

never bend to difficulty. He always lets me know that he is proud of me, which

motivates me to work harder and do my best.

"He is greatest whose strength carries up the most hearts

by the attraction of his own." — Henry Ward Beecher

I wish to thank the great personality Dr.M. VARATHARAJAN, DEAN,

Evening Section, A.V.C. College (Autonomous), for offering me an ideal

environment in which I felt free and could concentrate on my research work

comfortably.

“True teachers are those who use themselves

as bridges over which

they invite their students to cross;

then, having facilitated their crossing, joyfully collapse,

encouraging them to create their own.” ― Nikos Kazantzakis

I am grateful to the real teacher Dr. M.K. KALIYAMURTHY, M.Com.,

M.Phil., Ph.D., Associate Professor & Head of the Department of Commerce,

A.V.C. College (Autonomous), Mannampandal, who gave me constant inspiration

and extended necessary help in the study.

I express my whole hearted thanks to my Mentor

Dr.V.VENGATACHALAM, M.Com, M.Phil., Ph.D., former Associate

Professor & Head of the Department of Commerce, A.V.C. College

(Autonomous), Mannampandal,, who helped me in all my endeavors.

I would like to place on record my sincere thanks to all the staff members

of the Department of Commerce, A.V.C. College (Autonomous),

Mannampandal, for the kind help and encouragement by Dr. M. Mathivanan,

Associate Professor, Dr. R. Rajanbabu, Associate professor,

Major Dr. G. Raviselvam, Associate professor, Dr. K. Kalidoss, Assistant


9/24

professor, Mr. B.Varadarajan, Mr. K. Muthu, Mr. R. Thirumavalavan,

Mrs. S.Soundaranayaki, Mrs. R.Vanitha, Mr. D.Mohan, Mrs. E.

Jenmarakkini, Mr. M. Panneerselvam, Mr. C. Balaji,

Mr. K. Sankaranarayanan, Mr. A. Muthukumaran, Miss. R.K. Biruntha and

Miss. K. Sundari.

During my research, Prof. R. GNANASEKARAN, Principal i/c (Rtd.),

A.V.C. College (Autonomous), Mannampandal, Dr. M. TAMILARASAN, HOD

of Commerce (Rtd.), and Dr. S. MUTHUKUMAR, HOD of commerce (Rtd.),

offered me a lot of friendly help and suggested to me the necessary readings for

pursuing Ph.D., research, I would like to give my sincere thanks to the dignitaries.

I acknowledge my sincere thanks to Mr.G.KARTHIKEYAN, M.Com.,

M.Phil., M.B.A., (UGCNET)., Lecturer in Post Graduate and Research Department

of Commerce, A.V.C.College (Autonomous), Mannampandal and S.DEVI,

M.Sc., B.Ed., B.T.Assistant, Gurumoorthy Middle School, Mayiladuthurai, for

their kind help and encouragement for completion of the research work

successfully.

I am extremely grateful to my Doctoral Committee member Dr.C.

SURESH KUMAR, HOD of Commerce, S.K.S.S Arts and Science College,

Thiruppanandal, for his guidance and all the useful discussions and

brainstorming sessions, especially during the difficult conceptual development

stage. His deep insights helped me at various stages of my research.

Heartfelt thanks goes to my mentor, Dr. K. RAMAKRISHNAN, Ph.D.,

Principal, Vivekanandha Arts & Science College for Women, Sirkali, for his

detailed review, constructive criticism and excellent advice during the preparation

of this thesis. I will never forget his support and for providing me numerous

opportunities to learn and gave me hints to develop as a teacher.

I would like to express my sincere thanks to all the officials in the Stock

broking companies in Tanjore and Kumbakonam who have helped me to issue

questionnaires to the investors to collect the necessary data and other information

in connection with their perception towards investment in derivatives.


10/24

I wish to thank Dr. K. SENTHILNAYAKAM, Ph.D., Librarian, A.V.C.

College (Autonomous), Mannampandal, and his staff members for supplying the

necessary books, journals and periodicals with kindness and co-operation and I

must thank the Librarians of the Bharathidasan University, Thiruchirappalli,

Central University, Pondicherry, Annamalai University, Chidambaram,

Madras Institute of Development Studies, Chennai, IFMR, Chennai, for

giving me opportunity to use their libraries.

Special thanks are given to Mr . Arokkiyaraj, M.A., M.Ed., P.G.

Assistant, Kittappa Municipal Higher Secondary school, Mayiladuturai for his

encouragement and help made me feel confident to fulfill my desire and to

overcome every difficulty I encountered. At the last stage of my dissertation, he

helped me to correct grammar mistakes in my dissertation and suggested possible

improvements. It is not sufficient to express my gratitude with only a few words.

I express my heartfelt thanks to the Staffs of Sree Radhaa krishnaa

Educational Trust, who have helped me in typing of my research work.

I especially thanks to Naveen Printers, Mayiladuturai for Computerizing

and the neat execution of this research work.

My special gratitude is due to my Father, Mother, Mother-in-law,

brothers and sisters for their loving support. Without their encouragement and

understanding it would have been impossible for me to finish this work.

Last but not least, I owe my loving thanks to my Husband

Thiru.K.SHANMUGA SUNDARAM, my daughter S.LOKESWARY, my son

PRABANJAN, and my friends R. SAHITHYA and M. SREENITHI. They have

supported me in completion of my research work.

With devotion and respect, I dedicate this Research Report to the Lotus feet

of Shreedi Babaji.

Place:

Date:

(M.SANTHINI)


11/24

Table of Contents


12/24

TABLE OF CONTENTS

CHAPTER TITLE PAGE

CERTIFICATE

DECLARATION

ACKNOWLEDGEMENT

LIST OF TABLES

LIST OF FIGURES

I INTRODUCTION 1 – 26

II REVIEW OF LITERATURE 27 – 72

III DEVELOPMENT OF DERIVATIVE MARKETS IN

INDIA

73 – 107

IV AWARENESS OF DERIVATIVE TRADING

AMONG RETAIL INVESTORS108 – 188

V

PERCEIVED RISK AND INVESTMENT

BEHAVIOUR OF RETAIL INVESTORS IN

DERIVATIVE MARKET

189 – 248

VISTATUS OF DERIVATIVE TRADING : RETAIL

INVESTORS’ PERSPECTIVE249 – 281

VIISUMMARY OF FINDINGS, SUGGESTIONS AND

CONCLUSION282 – 315

BIBLIOGRAPHY

APPENDICES


13/24

List of Tables


14/24

LIST OF TABLES

S.No.Table

No.Title Page No.

1.

1.1 Number of Individual Retail Investors aged 18-59 4

2. 3.1 Milestones in the development of Indian derivativemarket

77

3. 3.2 Trend in Index and Stock Futures Trading in BSEof India

103

4. 3.3 Trend in Index and Stock Futures Trading in NSEof India

104

5. 3.4 Trend in Index and Stock Options Trading in BSE

of India

105

6. 3.5 Trend in Index and Stock Options Trading in NSE

of India

106

7. 4.1 Distribution of Respondents by Socio-Economic

Characteristics

111

8. 4.2 Distribution of Respondents by Total Investments 116

9. 4.3 Results of Friedman ANOVA and KendallCoefficient of Concordance Identifying MostlyPreferred Investments

117

10. 4.4 Results of Friedman ANOVA and KendallCoefficient of Concordance Identifying Mostly

Preferred Investments by Gender

119

11. 4.5 Results of Friedman ANOVA and Kendall

Coefficient of Concordance Identifying Mostly

Preferred Investments by Age

120


Coefficient of Concordance Identifying MostlyPreferred Investments by Educational Status

122

13. 4.7 Results of Friedman ANOVA and KendallCoefficient of Concordance Identifying MostlyPreferred Investments by Occupational Status

123

14. 4.8 Results of Friedman ANOVA and KendallCoefficient of Concordance Identifying Mostly

Preferred Investments by Area of Residence

124

15.

4.9 Results of Friedman ANOVA and KendallCoefficient of Concordance Identifying MostlyPreferred Investments by Marital Status

126


Coefficient of Concordance Identifying MostlyPreferred Investments by Income Level

127


15/24

LIST OF TABLES (Contd..)

S.No Table

No.

Title Page

No.

17.

4.11 Perceived Level of Risk in Various Investmentsamong Derivative Market Investors

129

18. 4.12 Perceived Risk in Various Investments amongDerivative Market Investors – Comparison byGender

131

19. 4.13 Perceived Risk in Various Investments amongDerivative Market Investors – Comparison by Age

Levels

133

20. 4.14 Perceived Risk in Various Investments amongDerivative Market Investors - Comparison by

Educational Status

135

21.

4.15 Perceived Risk in Various Investments amongDerivative Market Investors – Comparison byOccupational Status

136

22. 4.16 Perceived Risk in Various Investments amongDerivative Market Investors – Comparison by Area

of Residence

138

23. 4.17 Perceived Risk in Various Investments among

Derivative Market Investors – Comparison by

Marital Status

139

24. 4.18 Perceived Risk in Various Investments among

Derivative Market Investors – Comparison by

Income Level

141

25. 4.19 Perceived Risk in Various Investments amongDerivative Market Investors – Comparison by TotalInvestments

142

26. 4.20 Distribution of Respondents by Type of Investor 144

27. 4.21 Relationship between Type of Investor and Socio-

Economic Characteristics

146

28. 4.22 Relationship between Type of Investor and AmountInvested

147

29. 4.23 Distribution of Respondents by Duration of Association with Capital Market

148

30.

4.24 Relationship between Duration of Association withCapital Market and Socio-Economic Characteristics

of the Investors

150

31. 4.25 Relationship between Duration of Association with

Capital Market and Amount of Investment

151


16/24


S.NoTable

No. Title

Page

No.

32.

4.26 Distribution of Respondents by Duration ofInvestments in Derivative Market

152

33. 4.27 Relationship between Duration of Investment inDerivative Market and Socio-EconomicCharacteristics of the Investors

154

34. 4.28 Relationship between Duration of Investment inDerivative Market and Amount of Investment

156

35. 4.29 Level of Awareness about Various DerivativeProducts among Derivative Market Investors

157

36. 4.30 Significance of Discrimination function for Gender

with Level of Awareness about Various Derivative

Products

160

37. 4.31 Group Centroid (Means for Canonical variables) for

Gender

162

38. 4.32 Standardized Canonical Coefficients and StructureCoefficients for Predictors with SignificantDiscriminant Function for Gender

163

39. 4.33 Significance of Discrimination function for AgeGroups with Level of Awareness about Various

Derivative Products

164

40. 4.34 Group Centroid (Means for Canonical variables) for

Age levels

165

41.

4.35 Standardized Canonical Coefficients and StructureCoefficients for Predictors with Significant

Discriminant Function for Age Groups

166

42. 4.36 Significance of Discrimination function for

Educational Status with Level of Awareness aboutVarious Derivative Products

167

43. 4.37 Group Centroid (Means of CanonicalVariables) forEducational Status

168

44. 4.38 Standardized Canonical Coefficients and Structure

Coefficients for Predictors with SignificantDiscriminant Function for

Educational Status

169


17/24


S.NoTable

No. Title

Page

No.

45.

4.39 Significance of Discrimination function forOccupational Status with Level of Awareness aboutVarious Derivative Products

171

46. 4.40 Group Centroid (Means for Canonical Variables) forOccupational Status

171

47. 4.41 Standardized Canonical Coefficients and StructureCoefficients for Predictors with Significant

Discriminant Function forOccupational Status

173

48. 4.42 Significance of Discrimination function for Area of

Residence with Level of Awareness about Various

Derivative Products

174

49. 4.43 Group Centroid (Means for Canonical Variables) for Area of Residence

175


Discriminant Function for Area of Residence

176

51. 4.45 Significance of Discrimination function for Marital

Status with Level of Awareness about Various

Derivative Products

177

52. 4.46 Group Centroid (Means for Canonical Variables) for

Marital Status

178

53.

4.47 Standardized Canonical Coefficients and StructureCoefficients for Predictors with SignificantDiscriminant Function for Marital Status

179

54. 4.48 Significance of Discrimination function for IncomeGroups with Level of Awareness about VariousDerivative Products

180


Income Groups

181


Discriminant Function for Income Groups

182

57. 4.51 Significance of Discrimination function for Total

Investment with Level of Awareness about VariousDerivative Products

183


18/24


S.NoTable

No. Title

Page

No.

58.

4.52 Group Centroid (Means for Canonical Variables) forTotal Investment

184

59. 4.53 Standardized Canonical Coefficients and StructureCoefficients for Predictors with SignificantDiscriminant Function for Total Investment

185

60. 5.1 Results of Friedman ANOVA and Kendall Coefficientof Concordance Identifying Major Factors Attracting

to Invest in the Derivative Market

190

61. 5.2 Distribution of Respondents by Percentage of TotalInvestment invested in Derivative Market

191

62. 5.3 Significance of Discrimination function for

Percentage of Total Investment Invested inDerivative Market by Socio-Economic Status ofInvestors

193

63. 5.4 Group Centroid (Means for Canonical Variables) forPercentage of Total Investment Invested in

Derivative Market

194


Coefficients for Predictors with Significant

Discriminant Function for Percentage of TotalInvestment Invested in derivative Market

195

65. 5.6 Relationship between Investor Type and Percentage

of Total Investment Invested in Derivative Market

196

66. 5.7 Relationship between Duration of Association withCapital Market and Percentage of Total Investmentin Derivative Market

197

67. 5.8 Relationship between Duration of association withDerivative Market and Percentage of Total

Investment in Derivative Market

199

68. 5.9 Relationship between Percentage of Total

Investment in Derivative Market and Level of Risk Associated with Derivative Market

200

69. 5.10 Frequency of Trading in Derivative Market 202


19/24


S.No Table

No.

Title Page

No.

70.

5.11 Significance of Discrimination function for TradingFrequency by Socio Economic Status

203

71. 5.12 Group Centroid (Means for Canonical Variables) fortrading requency

204


Coefficients for Socio-Economic Variables withSignificant Discriminant Function for Trading

Frequency

205

73. 5.14 Relationship between Investor Type and Frequencyof Trading in Derivative Market

207

74. 5.15 Relationship between Level of Risk in Derivative

Market and Frequency of Trading in DerivativeMarket

208

75. 5.16 Method of Analysis Adopted for Investments inDerivative Market

209

76. 5.17 Significance of Discrimination function for Adoptionof Fundamental Analysis with InvestmentCharacteristics of Investors

211


Adoption of Fundamental Analysis

212


Coefficients for Predictors with Significant

Discriminant Function for Adoption of Fundamental Analysis

212

79. 5.20 Significance of Discrimination function for Adoptionof Technical Analysis with InvestmentCharacteristics

214

80. 5.21 Group Centroid (Means for Canonical Variables) for Adoption of Technical Analysis

215


Coefficients for Predictors with SignificantDiscriminant Function for Adoption of Technical

Analysis

216

82. 5.23 Significance of Discrimination function for Adoption

of Both Fundamental and Technical Analysis withInvestment Characteristics

216


20/24


S.NoTable

No. Title

Page

No.

83.

5.24 Group Centroid (Means for Canonical Variables) for Adoption of both Fundamental and Technical Analysis

217


Discriminant Function for Adoption of BothFundamental and Technical Analysis

218

85. 5.26 Significance of Discrimination function for ‘Experts Advice’ with Investment Characteristics

219


‘Experts Advice’

220

87.

5.28 Standardized Canonical Coefficients and StructureCoefficients for Predictors with SignificantDiscriminant Function for ‘Experts Advice’

221

88. 5.29 Significance of Discrimination function for All Typesof Analysis with Investment Characteristics

222

89. 5.30 Group Centroid (Means for Canonical Variables) for Adopting All Types of Analysis

222


Coefficients for Predictors with SignificantDiscriminant Function for Adopting All Types of

Analysis

223

91.

5.32 Results of Friedman ANOVA and Kendall Coefficientof ConcordanceIdentifying Major Sources to get Advice forInvesting in Derivative Market

224

92. 5.33 Results of Friedman ANOVA and Kendall Coefficientof Concordance Identifying Mostly AdoptedTechniques for Managing the Risks in Derivative

Market

226

93. 5.34 Averaging as Risk Management Technique –

Comparison by Socio Economic Status

228

94. 5.35 Exit with Minimum Loss as Risk Management

Technique – Comparison by Socio Economic Status

230


21/24

LIST OF TABLES (Contd.)

S.No Table

No.

Title Page

No.

95.

5.36 Diversification as Risk Management Technique –

Comparison by Socio Economic Status

231

96. 5.37 Results of Friedman ANOVA and Kendall Coefficientof Concordance Identifying Advantages of Investingin Derivative Market

233

97. 5.38 Results of Friedman ANOVA and Kendall Coefficientof Concordance Identifying Disadvantages of

Investing in Derivative Market

234

98. 5.39 Results of Friedman ANOVA and Kendall Coefficientof Concordance Identifying Advantages of Investing

in Future and Options Market

236

99. 5.40 Results of Friedman ANOVA and Kendall Coefficientof Concordance Identifying Limitations of Future

and Options Market

236

100. 5.41 Extent of Objectives Match with the Investment inFutures and Options

238

101. 5.42 Frequency of Investments and Derivative Products 239

102. 5.43 Results of Multiple Regression for Frequency of

Investments in Equity Futures with VariousInvestment Attributes

241

103.

5.44 Results of Multiple Regression for Frequency ofInvestments in Equity Options with Various

Investment Attributes

243

104. 5.45 Results of Multiple Regression for Frequency ofInvestments in Stock Index Futures with VariousInvestment Attributes

244

105. 5.46 Results of Multiple Regression for Frequency of

Investments in Stock Index Options with VariousInvestment Attributes

246

106. 6.1 Reliability of Scale Items Measuring Characteristicsof Derivative Market

251

107. 6.2 Eigenvalues of Factors Underlying Scale Items

Measuring Status of Derivative Market

253

108. 6.3 Factor Loadings of Items with Valid factorsunderlying derivative market

255

109. 6.4 Status of Derivative Market – Perception of

Investors in the Entire Sample

257


22/24

LIST OF TABLES (Contd.)

S.No Table

No.

Title Page

No.

110.

6.5 Investors’ Perceived Status of Derivative Market –Comparison by Gender

259

111. 6.6 Investors’ Perceived Status of Derivative Market –Comparison by Age Levels

260

112. 6.7 Investors’ Perceived Status of Derivative Market –

Comparison by Educational Status

262


Comparison by Occupational Status

264

114. 6.9 Investors’ Perceived Status of Derivative Market –Comparison by Area of Residence

265


Comparison by Marital Status

267

116. 6.11 Investors’ Perceived Status of Derivative Market –Comparison by Income Level

268

117. 6.12 Investors’ Perceived Status of Derivative Market –Comparison by Total Investments

269

118. 6.13 Relationship between Characteristics of Derivative

Trading and Investors’ Behavior in terms of TradingFrequency

271

119. 6.14 Satisfaction with Various Aspects of DerivativeMarket – Perception of Investors in the Entire

Sample

274

120.

6.15 Results of Cluster Analysis Segmenting Investorsbased on Overall Satisfaction Score

275

121. 6.16 Level of Satisfaction with Derivative Market andSocio-Economic Characteristics of the Investors

277

122. 6.17 Level of Satisfaction with Derivative Market and Amount of Investment

279


23/24

List of Figures


24/24

LIST OF FIGURES

S.No.FIGURE

No.Title

Page

No.

1.

1.1 GDP Growth and Investment 3

2. 2.1

Behavioural portfolio pyramid29

3. 2.2

Prospect theory value function30

4.

3.1Classification of Derivatives

75

5. 3.2

Flow of transactions in a futures contract83

6. 3.3

Long Position in a Call Option87

7.

3.4

Long Position in Put Option

88

8. 3.5

Short Position in Call Option89

9. 3.6

Short position in put option90

10. 3.7(a)

Bear spread91

11. 3.7(b)

Bull spread91

12. 3.8

Straddle Position in Call and Put Option92

13. 3.9(a)

Long strangle position93

14. 3.9(b)

Short strangle position93

15. 4.1(a) Sex-wise Classification of the

Respondents112

16. 4.1(b) Age wise Classification of the

Respondents112

17. 4.1(c) Education wise Classification of the

Respondents113

18. 4.1(d) Occupation wise Classification of the

Respondents113

19.

4.1(e) Location wise Classification of theRespondents

114

20. 4.1(f) Marital status wise Classification of the

Respondents114

21. 4.1(g) Income wise Classification of the

Respondents115

Mrp Final Content

Documents

Transcript of Mrp Final Content