smart disha derivative market seminar- 15 april 2017
TRANSCRIPT
Titl
e
Derivatives
www.smartdisha.com
LL-079-48007780
M- 7043690580
SMART DISHA Seminar on Derivatives-
15 April 2017
Session Objective:
To understand the basic fundamentals of Derivatives
www.smartdisha.com
LL-079-48007780
M- 7043690580
Seminar on Derivatives- 15 April 2017
Definition: Derivatives are financial instruments whose value
depends on the value of other, more basic underlying assets. The underlying asset can be an Index, stock,
commodity, currency, etc.
www.smartdisha.com
LL-079-48007780
M- 7043690580
Crude Oil
Petrol
Diesel
Curd
Milk
Paneer
Kerosene Butter Milk
Underlying
Derivative
Real Life example of Derivatives
www.smartdisha.com
LL-079-48007780
M- 7043690580
Derivatives Derivatives
Futures Futures Options Options
Types of Derivatives
www.smartdisha.com
LL-079-48007780
M- 7043690580
• Future Contract – A future contract is a standardized forward contract between two parties where one of the parties commits to sell and the other to buy a stipulated quantity of a security or an index at an agreed price on or before a given date in future.
Clearing
House
Clearing
House A (Buyer)
B (Seller)
What are Futures ?
www.smartdisha.com
LL-079-48007780
M- 7043690580
Comparison : Cash and Futures
Cash
•Full Payment •T + 2 Settlement
Futures
•Requires margin payments
•Follows daily settlement
www.smartdisha.com
LL-079-48007780
M- 7043690580
Basic concepts of Futures
Contract System instead
of Delivery system
Fixed Lot size
Expiry Dates
- This Month
- Next Month
- Far Month
Margin types
- Gross Margin
- Mark to
Market Margin
Futures
www.smartdisha.com
LL-079-48007780
M- 7043690580
Advantages of Futures
Portfolio without Hedging
Portfolio worth Rs. 6lacs
Market Corrects by 15%
Portfolio loss of = - Rs.90000
Portfolio without Hedging
Portfolio worth Rs. 6lacs
Market Corrects by 15%
Portfolio loss of = - Rs.90000
Portfolio after Hedging
Portfolio worth Rs. 6lacs &
Sells one lot of Nifty @
9000
Market Corrects by 15%
Approx Portfolio loss of
600000*15% = - Rs.90000
225000*15% = Rs. 33750
-Rs. 56250
Portfolio after Hedging
Portfolio worth Rs. 6lacs &
Sells one lot of Nifty @
9000
Market Corrects by 15%
Approx Portfolio loss of
600000*15% = - Rs.90000
225000*15% = Rs. 33750
-Rs. 56250
Hedging
www.smartdisha.com
LL-079-48007780
M- 7043690580
Benefits of Futures… Continued
Short
Position
Possible
Margin
Payment
Index
Trading
BTST/ST
BT
Possible
www.smartdisha.com
LL-079-48007780
M- 7043690580
What are Options?
• A Contract that:
• Gives the buyers the right, but not the obligation;
• To buy or sell a specified underlying asset;
• At a set price;
• On or before a specified date.
Options
www.smartdisha.com
LL-079-48007780
M- 7043690580
Options
Type of Options
Call
Bullish
Put
Bearish
www.smartdisha.com
LL-079-48007780
M- 7043690580
Real Life example of Options
You want to buy house worth Rs.25lakhs
You pay Rs. 50k as a initial
amount (Valid for 2 months)
After 1 month you get an offer
of Rs.28lakh
You exercise your right
Total Profit of Rs. 2.5Laks.
www.smartdisha.com
LL-079-48007780
M- 7043690580
Profit is unlimited if price increases,
and loss is limited to the amt of premium
paid
Buying a call
option:
Selling a call option:
Profit limited to premium received,
loss is unlimited if price increases
www.smartdisha.com
LL-079-48007780
M- 7043690580
Buying a put option:
Profit unlimited if market falls,
loss limited to the amt of premium paid
Selling a put option:
Profit limited to premium received,
Loss unlimited if the market falls
www.smartdisha.com
LL-079-48007780
M- 7043690580
Options payoff
Market Trend Buy Sell Profit Loss
Bullish Call Unlimited Limited
Bullish Put Limited Unlimited
Bearish Put Unlimited Limited
Bearish Call Limited Unlimited
www.smartdisha.com
LL-079-48007780
M- 7043690580
➢Sir Cash ke open position ke against Futures mein hedging kar sakte hain. ➢Aur Futures ke again option me bhi ➢Sath hi sath kam investment mein jyada maal bhi utha sakte ho ➢ Short term me high returns bhi milta hai ➢ Aur Options mein sirf premium pay karna padta hai
F & O – Product Pitching
www.smartdisha.com
LL-079-48007780
M- 7043690580
Thank You
www.smartdisha.com
LL-079-48007780
M- 7043690580