A STUDY ON DERIVATIVES AND ITS STRATEGIES IN

RELIGARE SECURITIES LTD

Dissertation Submitted in partial fulfillment of the requirements

for the Award of the Degree of

MASTERS OF BUSINESS ADMINISTRATION

Of
BANGALORE UNIVERSITY

By
SIDDANAGOWDA SADASHIVAPPA PATIL
Reg. No. 05JJCM6051

Under the guidance of

Dr. MADHUMITHA G. MAJUMDER

KRISTU JAYANTI COLLEGE OF MANAGEMENT AND TECHNOLOGY

BANGALORE
2007
DECLARATION

I hereby state that the dissertation entitled “DERIVATIVES & ITS STRATEGIES”

submitted by me in partial fulfillment of the requirements for the award of MBA, is my

original work and that it has not previously formed the basis for the award of any other

Degree, Diploma, Fellowship or other similar titles.

Date: 18/5/07
Place: Bangalore

(SIDDANAGOWDA SADASHIVAPPA PATIL)

 CERTIFICATE FROM GUIDE & HEAD OF THE INSTITUTION

Certified that this declaration entitled “A STUDY ON DERIVATIVES AS A HEDGING

TOOL FOR INSTRUMENTAL PLAN”, submitted in partial fulfillment for the award of
MBA Degree of Bangalore University was carried out by Mr.Siddanagowd. S. patil under
the guidance of Dr. Madhumitha G. Majumder. This has not been submitted to any other
university or institution for the award of any degree/ diploma/ certificate.

GUIDE DEAN
MBA DEPARTMENT

PRINCIPAL
 Acknowledgement
My project work would have become practical without the help of grace of the
“Almighty” and timely advice and creative support rendered by many. I express my
affectionate thanks to The Principal, Kristu Jayanti College, and Bangalore for giving
me an opportunity to do this training.

I am highly indebted to my faculty guide Dr. Madhumitha G. Majumder. Department

of management studies for inspiring me and for his valuable guidance and assistance
provided.
A special word of thanks to Dr. Arun Kumar (Dean of MBA Department) for his

guidance and support throughout the project work.

A special word of thanks to Prof A.M. Tatti (MBA co-ordinate) for his guidance and

support throughout the project work.

I also thank all other staff members of the department for guiding me in my training.

I express my sincere gratitude and special thanks to all employees for their valuable
suggestions and keen interest which are extremely helpful in shaping this project work to
success.

Siddanagowda. S. Patil
 EXECUTIVE SUMMERY

On The eve of the new millennium India is preparing itself to keep pace with the
developed countries in all the aspects of the rapidly integrating global economy. With the
expansion of innovative practices in information technology, especially in the trade and
tele-communication systems. There is a growing pressure in the stock exchange to get
ready to face the new unforeseen challenges.

This study analysis the various strategies used in Derivative trading and the usage of
these strategies by Derivative traders with respect to investors of Religare Securities
Limited in Bangalore.

This study mainly focuses on Derivatives & its strategies used in different conditions and
the purpose of the strategy that is whether it aimed to reduce the market risk of the
position or with the motive to speculate. The study analyses the investment allocation of
the investors into different areas like mutual fund, insurance, derivative, etc.

It also studies the decision making process in investment. It studies the various
information used by investors to make the decision. Whether the investors are going with
high technical analysis or those going with the market information that is the information
collected from family, friends, brokers, market experts etc., or at the end going with the
individual analysis.
 TABLE OF CONTENTS
NO CONTENTS PAGE NO
CHAPTER 1 INTRODUCTION 1-23
CHAPTER 2 RESEARCH DESIGN 24-29
2.1 Statement of the problem.
2.2 Need for study.
2.3 Review of literature.
2.4 Objective the study.
2.5 Operational definition of concepts.
2.6 Scope of the study.
2.7 Source of data.
2.8 Tools of data collection
2.9 Limitation of the study
CHAPTER 3 PROFILES 30-50
3.1 Industrial profile

3.2 Company profile

CHAPTER 4 STUDY OF DERIVATIVES AND ITS STRATEGY 51-64
CHAPTER 5 SUMMERY 65-67

5.1 Findings
5.2 Suggestion
5.3 Conclusion
Bibliography
Annexure

LIST OF TABLES
Sl/no Table no CONTENT PAGE NO

1 3.1 Capital stricture 49

2 4.1 age group of respondents 51

3 4.2 occupation of the respondents 52

4 4.3 Monthly income of the respondents 53

5 4.4 types of investors 54

6 4.5 allocation of investment 55

7 4.6 investment objectives 56

8 4.7 Information using in derivative trading 57

9 4.8 Derivative products using by the investors 58

10 4.9 risk in trading derivatives 59

11 4.10 strategy at bullish market 60

12 4.11 strategy at bearish market 61

13 4.12 familiar with hedging in derivatives 62

14 4.13 derivatives as an effective hedging tool 63

15 4.14 Satisfaction level present regulatory 64

mechanism

LIST OF FIGURES
SL/NO FIGURE CONTENT PAGE NO
NO

1 3.1 Organization chart 48

2 4.1 age group of respondents 51

3 4.2 occupation of the respondents 52

4 4.3 Monthly income of the respondents 53

5 4.4 types of investors 54

6 4.5 allocation of investment 55

7 4.6 investment objectives 56

8 4.7 Information using in derivative trading 57

9 4.8 Derivative products using by the 58

investors
10 4.9 risk in trading derivatives 59

11 4.10 strategy at bullish market 60

12 4.11 strategy at bearish market 61

13 4.12 familiar with hedging in derivatives 62

14 4.13 derivatives as an effective hedging tool 63

15 4.14 Satisfaction level present regulatory 64

mechanism
 CHAPTER 1

INTRODUCTION
CHAPTER 2

RESEARCH
DESIGN
 CHAPTER 3

PROFILES

♦INDUSTRIAL
PROFILE

♦COMPANY PROFILE
 CHAPTER 4

STUDY OF DERIVATIVES AND

ITS STRATEGY
CHAPTER 5

SUMMERY