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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


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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


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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, M rs.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


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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 requiredfor 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


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TABLE OF CONTENT

CHAPTER NO TITLE PAGE NO

ABSTRACT

LIST OF TABLES

LIST OF FIGURES

LIST OF SYMBOLS

1. 1.1 INTRODUCTION

1.2 OBJECTIVE OF STUDY

1.3 SCOPE OF STUDY

1.4 LIMITATIONS OF THE STUDY

1.5 COMPANY PROFILE

2. 2.1 REVIEW OF LITERATURE

3. 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


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LIST OF TABLES

NO. Title. P 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 objective8 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

12

Opinion about index derivatives proved to be more important than security

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


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CHAPTER-1


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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,


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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

s pecific 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 arestandardized 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:


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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


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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 returnenhancement

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.


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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


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......

Company Profile:

ShareKhan is a retail farm of SSKI that caters to the needs of individualinvestors.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 andcommodities.We facilitate the investment process for you and providevalue added serivices like research,stock ideas,demat,online trading,tomake investment experience rewarding.

OUR CORE SERVICES:

Equity and Derivativs trading on BSE and NSE

Depository services

Online Trading

IPO services

Commodity trading on MCX and NCDEX

PortfolioManagement Services

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 cantranslate intodirect profits,you can access to a wide range of information on ourcontent-rich portal,Sharekhan.com.You will also get a useful set of knowledge


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based tools that will empower you to take informed decisions.

Convenience : You can call our Dial-n-trade number to get investment advice andexecute your transactions.We have a dedicated call center to provide this servicevia a toll-free number from anywhere in india.

Customer service: O ur customer service team will assist you for any help thatyou need relating to transactions, billing,demat and other queries. Our customerservices can be contacted via a toll-free number,email or live chat onsharekhan.com

Investment Advice: Sharekhan has dedicated reseach teams for fundamental andtechnical research.Our analyst constantly track the pulse of the market and providetimely 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 - ZERO

INTRADAYBUYING - 0.1%SELLING - Nil

DELIVERYBUYING - 0.5%SELLING - 0.5%

DERIVATIVE SEGMENTFIRST LEG : 0.1SECOND LEG : nilCARRY FORWARD : 0.1


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Scheme 2






PREPAID SCHEMES:

Scheme 3




DELIVERYBUYING - 0.4%

SELLING - 0.4%



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Scheme 4





DERIVATIVE SEGMENTFIRST LEG : 0.05SECOND LEG : NilCARRY FORWARD : 0.05

CORPORATE ACCOUNT

A/C OPENING FEE - 200MAGIN - 5000

INTRADAYBUYING - 0.05%SELLING - 0.05


DERIVATIVE SEGMENT

FIRST LEG : 0.1SECOND LEG : nilCARRY FORWARD : 0.1


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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)PassportDriving LicenceVoter's IdRationCard

3) ID Proof (Any one of following)

Pan card (COMPULSORY)PassportDriving LicenceVoter'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.


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NO. 68, 2nd FLOORCP. RAMASAMY ROADALWARPET, CHENNAI-18

(OPP. TO CITI BANK OR BANK OF MYSORE 2ND FLOOR)

2.1 REVIEW OF LITERATURE

REVIEW OF LITERATURE


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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.


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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.


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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 anyother 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


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A2 Have securities, lend to the market


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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.


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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 positionsoutstanding. 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 thateconomical value of your position on cum-benefit and on ex-benefit day is the same. Whilecalculating 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 thedividend amount. However as per the policy of Sebi and stock exchanges, if the dividend is morethan 10% of the market price of the stock on the day of dividend announcement, the futures price isadjusted. The exchanges roll over the positions from last-cum-dividend day to the ex-dividend dayby 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.


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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 notlook good to you. You do not want to lose the stock but at the same time you want to hedge againstthe expected adverse price movement of the stock for two to three weeks. One option is to sell thestock 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 stockfutures you would virtually sell your stock and buy it back without losing it. This transaction is muchmore economical as it does not involve cost of transferring the stock to and from depositoryaccount. You might say that if the stock had moved up, you would have made profit withouthedging. However it is also true that in case of a fall, you might have lost the value too withouthedging. Please remember that a hedge is not a device to maximize profits, it is a device to minimizelosses. 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


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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 FuturesHere 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 roll-

over process can continue till you want to get your money back.


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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.


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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 specifiedquantity of certain underlying asset at a specified price on or before a specified date. On the otherhand, the seller is under obligation to perform the contract (buy or sell the underlying). Theunderlying asset can be share, index, interest rate, bond, rupee-dollar exchange rate, sugar, crudeoil, 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


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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:


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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 theright 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 islower than the strike price. The pay off assumes that the option holder will buy at spot price and sell atstrike 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 canmake wind fall profits. Thus the profits of the option holder are unlimited and his losses are capped tothe extent of the premium.

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


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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


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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 buying there 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


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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-basedsettlement 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


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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.


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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:


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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, thedelta 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 position (short call and long put) as the

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.


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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 otherparameters remaining the same.

Suppose the theta of Infosys 30-day call option with a strike price of Rs3,900 is 4.5when Infosys is quoting at Rs3,900, volatility is 50% and the risk-free interest rate is 8%. Thismeans that if the price of Infosys and the other parameters like volatility remain the sameand 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


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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.


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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.


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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 BullishWhen 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.


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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.


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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 = X 100

Total Respondents

From the above formula, we can get percentages of the data given by the respondents.

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 Chi-

square test is an important test amongst the several tests of significant developed by statistical.

Chi-Square, symbolically written as x 2 (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


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CHAPTER- IV


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DATA ANALYSIS AND INTERPRETATION

Table no : 1

Gender Distribution of Employees:

Perception No respondents percentage

Male 45 90%

Female 5 10%

Tot 50 100%

Interpretation:

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

Inference

Majority of the respondents are male


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Chart no:1

90%

10%

100%

0%

20%

40%

60%

80%

100%

120%

Male Female Tot

Percentage


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Table no : 2

Opinion about aware of derivatives market


yes 100 100%

no 0 0

Total 100 100%

Interpretation:

The 100% of respondent aware of derivatives.


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Chart no: 2

Opinion about aware of derivatives market

yes no Totalpercentage 100% 0 100%No respondents 100 0 100

100

0

100

100%

0

100%

opinion about aware ofderivatives

No respondents percentage


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Table no: 3

Opinion about awareness level of derivatives market


Very high 60 65%

High 25 25%

low 15 5%

Very Low 0 0

Total 100 100%

No respondents

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.


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Chart no: 3 Opinion about awareness level of derivatives market

Veryhigh High low

VeryLow Total

percentage 65% 25% 5% 0 100%No respondents 60 25 15 0 100

0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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able no : 4

Opinion about the source helps you to invest in derivatives

Perception No respondents Percentage

media 40 30%

radio 10 50%

broker 10 20%

internet 40 0%

Total 100 100%

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


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Chart no: 4


media radio broker internet TotalPercentage 30% 50% 20% 0% 100%

No respondents 40 10 10 40 100

0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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Table no : 5

Opinion about you participate in derivatives as a


Investor 40 40%

Speculator 10 48%

Hedger 35 12%

trader 15 0%

Total 100 100%

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.


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Chart no : 5


InvestorSpeculat

or Hedger trader TotalPercentage 40% 48% 12% 0% 100%No respondents 40 10 35 15 100

0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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Inference:

Chart no: 6

Opinion about How long you are participating in derivatives

Lessthan ayear

1 to 2year

2to3years

3 andabove Total

Percentage 25% 40% 20% 15% 100%No respondents 25 40 20 15 100

0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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Table no: 7

Opinion about your investing objective


Profit making 60 40%

Contingency 20 20%

Safety 20 20%

others 0 20%

Total 50 100%

Interpretation:

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


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

Inference:

Chart no: 7

Opinion about your investing objective

Profitmaking

Contingency Safety others Total

Percentage 40% 20% 20% 20% 100%


0

10

20

30

40

50

60

70

A x

i s T i t l e

Chart Title


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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

Mutualfund Sharemarket Realestate gold Total


01020304050607080

A x

i s T i t l e

Chart Title


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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.just5% only said consistency.

Inference:

Majority of the respondents are neutral.

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

- - - - - -- - - - - -- 25 - - - 25- - - - 5 5

10 - 25 35 - 70

liquidity Risk Return HedgingConsist

ency total

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

0%10%20%30%40%50%60%70%80%90%

100%

A x

i s T i t l e

percentage


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Chart Table no: 2.1.10

Opinion about your most segments to investment in derivatives

Futures Options both TotalPercentage 20% 15% 65% 100%No respondents 20 15 65 100

0

20

40

60

80

100

120

A x i s

T i t l e

Chart Title


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Table no:11

Opinion about the derivatives instrument do you deal


Stock futures 30 30%

Index futures 25 25%

Stock option 20 20%

Index option 25 25%

Total 100 100%

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:


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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

Stockfutures

Indexfutures

Stockoption

Indexoption Total


0

2040

60

80

100

120

A

x i s T i t l e

Chart Title


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Table no:

Opinion about index derivatives proved to be more important than security derivatives


Profit margin 45 45%

Risk level low 35 35%

Liquidity 10 10%

Despite the volatilities conversion rate 10 10%

Total 100 100%

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


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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

Profitmargin

Risklevel low Liquidity

Despitethe

volatilities

conversion rate

Total

Percentage 45% 35% 10% 10% 100%No respondents 45 35 10 10 100Percentage 45% 35% 10% 10% 100%


050

100150200250

A x

i s T i t l e

Chart Title


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Table no:

opinion about frequently you are investing in derivatives


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%

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.


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Chart no: 2.1.13

opinion about frequently you are investing in derivatives

Manytimes ina week

Once ina day

Manytimes ina week

Once inaweek Total

Percentage 40% 30% 15% 15% 100%


0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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Table no: 1

Opinion about maturity period contract


1 month 60 14%

2 month 20 50%

3 month 10 30%

And above 10 6%

Total 100 100%

.

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:


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Majority of the respondents are agree with the break time facilities

Chart no: 14

Opinion about maturity period contract

1 month 2 month 3 month Andabove Total

Percentage 14% 50% 30% 6% 100%


0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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Table no: 15

O Opinion about Derivatives are the hedging tool


Strongly agree 85 85%

Agree 15 15%

Disagree 0 0%

Strongly disagree 0 0

Total 100 100

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


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Table no: 16

Opinion about derivatives investing is the best alternative to equity

perception No respondents Percentage

Yes 85 85%

No 15 15%

total 50 100%

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


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Chart no: 2.1.16

Opinion about derivatives investing is the best alternative to equity

Yes No totalPercentage 85% 15% 100%No respondents 85 15 50

0102030405060708090

100

A x i s

T i t l e

Chart Title


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Table no:17

Opinion about you prefer to trading in derivatives on the basic of


Consistence 50 50%

Risk 40 40%

Return 10 10%

hediging 0 0%

Total 100 100%

Interpretation:


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Inference:

Majority of the respondents are highly satisfied.

Chart no:17

Opinion about you prefer to trading in derivatives on the basic of

Perception

Consistence Risk Return hediging Total

Series3Series2 0 50% 40% 10% 0% 100%Series1 0 50 40 10 0 100

0

20

40

60

80

100

120

A x

i s T i t l e

Chart Title


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TABLE NO:18

Opinion about kind of risk do you perceive

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.


Uncertainty of market 50 50%

Stump of share market 40 40%

Fear of company wind up 10 10%

Fake agreement 0 0%

Total 100 100%


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CHART NO:18

Opinion about kind of risk do you perceive

Uncertainty of

market

Stump ofshare

market

Fear ofcompany wind

up

Fakeagreeme

ntTotal


020406080

100120

A x

i s T i t l e

Chart Title


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Table no:19

Opinion about statement is suitable regarding derivatives market

Interpretation:


High risk high profit 5 5%

Low risk high profit 10 10%

Moderate risk high profit 15 15%

Moderate risk moderate profit 70 70%

Total 100 100%


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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


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Tableno:20

High riskhighprofit

Low riskhighprofit

Moderate riskhighprofit

Moderate risk

moderate profit

Total


020406080

100120

A x

i s T i t l e

Chart Title


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CHART no:20

Opinion about the present status of derivatives market in India

Highgrowth

Moderate growth

Stablegrowth

Not ingrowth Total


0

10

20

30

40

50

60

70

A x

i s T i t l e

Chart Title


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STATISTICAL TOOLS APPLIED


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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 = X 100

Total Respondents

From the above formula, we can get no respondentss of the data given by the

respondents.

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 Chi-

square test is an important test amongst the several tests of significant developed by statistical.

Chi-Square, symbolically written as x 2 (Pronounce as Ki-Spare), is a statistical measure used in

the context of sampling analysis for comparing a variance to a theoretical variance.


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Chi- square analysis:

SOLUTION:

Hypothesis:

.Null hypothesis Ho : there is no significant difference between the carrier development services areoffered to employees and appreciation and recogisation given for employee for their

excellence

Alternative hypothesis H 1: : 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 Agree Neutral D.AgreeNo of

respondents

carrierdevelopment 10 20 15 5 50


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appreciation andrecogisation 25 10 10 5 50

35 30 25 10 100

Chi square = (O-E)/E

EXPECTED TABLE

O E O-E (O-E) (O-E)/E

10 17.5 -7.5 56.25 3.21

20 15 5 25 1.66

15 12.5 2.5 6.25 0.5

5 5 0 0 0

25 17.5 7.5 56.25 3.21

10 15 -5 25 1.66

10 12.5 -2.5 6.25 0.5

5 5 0 0 0

TOTAL =10.74

Degree Of Freedom = No rows - No Column =3

Critical Region @ 1% =11.345


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Decision :

The Calculated Value Is Lesser Than The Table Value, Hence We Accept H o OR null

hypothesis.

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


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CHAPTER V

5.1FINDINGS

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


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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.


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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.


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APPENDIX


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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.


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Questionnaire

A STUDY ON EMPLOYEE WELFARE IN NACE SOLUTIONS (P)LTD IN

T.NAGAR.

1. Personal Data :

Name : Age :

Gender :

Education : a) H.Sec [ ] b) Degree [ ] c) postgraduate [ ]

Income : a) 10000 to 15000 [ ] b) 15000 to 25000 [ ]

c) Above 25000 [ ]

Experience : a) 0 to 2 yrs [ ] b) 2 to 5 yrs [ ]

c) 5 to 10 yrs [ ] d) above 10 yrs [ ]

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

2. Are you aware of derivatives market?

(a)YES [ ]


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(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


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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


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9. what are the factors influences in derivatives you invest

content Veryhigh

high

moderate low Very low

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


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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


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(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 ?


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