STUDENT DECLARATION I Vinay kumar hereby declare that In Final Project Report on Trends And Future Of Derivatives In India:

: A Detailed Study which is submitted in partial fulfillment of the requirements of degree of Masters Of Business Admi nistration to Punjab Technical University, Jalandhar is my original work and not submitted for the award of any other degree, diploma, fellowship or other simil ar titles. ACKNOWLEDGEMENT This formal piece of acknowledgement may be sufficient to express the feelings o f gratitude people who have helped me in successfully completing my Final Projec t Report. I am grateful to Lect. Ruchi for giving me a chance to do my Final Project Report on Trends And Future Of Derivatives In India: A Detailed Study which required extensive study of various Brokers and Investors that are engaged in Derivatives investment. I feel,I shall always remain indebted to Mrs. Sarabjeet kau r(Head Of Department, Management) without whom it is being impossible to complete my project report.He gave his kind supervision,guidance,t imely support and all other kind of help required in each and every moment of ne ed. I am deeply indebted to my dear parents,friends whose blessings and inspirations have brought me up to this stage of my carreer. CONTENTS OF THE TABLE 1. PROJECT ASSIGNED. Introduction of the project. Objectives of the project. 2. CONCEPT OF STOCK MARKET. Introduction to stock market a global approach. History of stock market. Features and characterstics of stock market. Future Plans for developing stock market. Various Functions performed in stock market. Performance of stock market in Indian market. 3.FINANCIAL DERIVATIVES MARKET. Introduction. Historical aspect. Products, participants and functions. Derivative terminology. Reasons behind its evolution. Requirements for Future and Options. Strength of Indian capital market. Importance of derivative investment. Instruments involved in derivative. Performance in India. Regulatory framework. 4.ANALYSIS OF THE PROJECT. Research Methodology. Graphical analysis. 5.RESULTS AND FINDINGS. Reasons behind less development of F &O at AMRITSAR stock exchange. 6.SUGGESTIONS. 7.LIMITATIONS OF STUDY. 8.CONCLUSIONS. 9.BIBLOGRAPHY. 10.SAMPLE OF QUESTIONNAIRE

INTRODUCTION OF THE PROJECT Derivatives have vital role to play in enhancing shareholder value by ensuring a ccess to the cheapest source of funds. Active use of derivatives instruments all ows the overall business risk profile to be modified, thereby providing the pote ntial to improve earning quality by offsetting undesired risk. Under my project report, I have studied various trends that comes in the way of Derivatives market. Because impression is usually given that losses arose from d erivatives are extremely complex and difficult to understand financial strategie s. So after interviewing with different brokers ,investors and dealers, I have t ried to give a solution to these complexities. i also find out that what would be the future of derivative market in india on t he basis of interviews and observations of brokers, dealers and investors. regar ding future, I have find out that derivatives can indeed be used safely and succ essfully provided a sensible control and management strategy is established and executed. inspite of that more awareness should be done and technical expertise knowledge should be more expanded. OBJECTIVES OF THE PROJECT The main objectives of my final project report are as follows:To study the various trends that comes in the way of Derivatives market To find out that what would be the future and market potential of derivative market in india. To know the awareness & familiarity investors, dealers and brokers hold regarding derivatives market. To know the experience of dealers, investors and brokers with derivatives till date. To get knowledge about shortcomings in indian derivative market. INTRODUCTION TO THE STOCK EXCHANGE A stock exchange is the place where securities, shares, debentures and bonds of joint stock companies, central & state govt., semi govt. organizations, local bo dies and foreign govt. are bought and sold. A stock exchange is the nerve center of capital market. Changes in the capital market are brought about by a complex set of factors, all operating on the market simultaneously. Such changes are su bject to secular trends set by the economic progress of the nation, and governed by the factors like general economic situation, financial and monetary policies , tax changes, political environment, international economic and financial devel opment etc. A stock exchange provides necessary mobility to capital and directs the flow of capital into profitable and successful enterprises. The Securities Contract (Regulation) Act 1956 defines stock exchange as: A body of individuals whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling, & dealing in securities. A stock exchange is a platform for the trade of already issued securities through primary market. It is the essential pillar of the private sector and corporate economy. It is the open auction market where buyers and sellers meet and involve a competitive price for the securities. It reflects hopes aspiration and fears of people regarding the performance of th e economy. It exerts a powerful and significant influence as a depressant or sti mulant of business activity. So, stock exchange mobilizes savings, canalizes the m as securities into those enterprises which are favored by the investors on the basis of such criteria as - Future growth prospects.

- Good returns. - Appreciation of capital. The stock exchange serves the role of barometer, not only of the state of health of individual companies, but also of the nations economy as a whole (it measures of all the pull and pressure of securities in the market). The trade in market is through the authorized members who have duly registered with concerned stock exchange and SEBI HISTORY OF STOCK EXCHANGE The trading of securities in India was started in early 1973. The only stock exc hange operating in the 19th century were those of Bombay set up in 1875 and in A hemdabad set up in 1894. These were organized as voluntary non- profit making as sociations of brokers to regulate and protect their interests. Before the contro l on securities trading became a central subject under the constitution in 1950. It was a state subject and Bombay securities contract (control) act of 1925 use d to regulate trading in securities. Under this act, Bombay stock exchange was r ecognized in 1927 and Ahemdabad stock exchange were organized at Bombay, Ahemdab ad and other centers but they were not recognized soon after it became a central subject, central legislation was proposed and a committee headed by sh. A.D.GOR WALA went into bill for security regulation. On the basis securities contract ac t became law in 1956. At present there were 23 recognized stock exchanges in India. From these BSE & N SE are the two major stock exchanges and rest 21 are the regional stock exchange s. Daily turnover of all the stock exchange is app. 20,000cr. BSE is 129 years old. NSE is 11 years old and it brought the screen based trading system in India FEATURES OF THE STOCK EXCHANGE It is a place where listed securities are bought and sold. It is an association of persons known as members. Trading in securities is allowed under rules and regulations of stock exchange. Membership is must for transacting business. Investors and speculators, who want to buy and sell securities, can do so through members of stock exchange i.e. brokers. There are mainly three participants in stock exchange i.e. Issuer of security (company). Investor of security (Individual, HUF). Intermediaries and products (broker, merchant bankers and shares, bonds, warrants, derivatives products etc.). It is the market as well as source for the capital. Corporate and govt. raise resource from the market. FUTURE PLANS OF STOCK EXCHANGE The current market scenario in the capital market is not very encouraging, howev er, in the future; the business model of ISE would be the most preferred method of accessing multiple markets with low cost and high credibility of an Exchange. ISE is considering several value added services or new products which may help ISE and ISS in fulfilling the demands of low cost users. We are considering deri vative segment through NSE and DP services initially for the participants and la ter for clients through CDSL and NSDL. This futuristic concept of consolidation being pursued by ISE is now being also explored by the Developed Countries. We t hink such consolidation enables optimal utilization of existing resources, enhan ced due to economies of scale and permit product innovation, a sign o any dynami c market. On account of this philosophy we are proposing to implement most of th e