IMPACT OF RISK-RETURN ANALYSIS ON STOCK FUTURES AND OPTIONS TRADING IN INDIAN EQUITY DERIVATIVES MARKET WITH SPECIAL REFERENCE TO NSE.

Abstract

Futures & options is one of the most important segments in derivatives market in India. Financial derivatives have emerged as one of the largest market of the world during the past two decades in terms of trading volume, number of index and stock options available for trading, participation of investors in derivatives market. It is also observed that investors are showing lot of interest in the derivatives market. However, investors have lost lot of money in the derivatives market due to lack of knowledge about the product and investment strategies etc. The risk involved in futures and options trading can be minimized / return on futures and options trading can be improvised through designing suitable investment strategies. So, investor need to develop risk management as well as risk analysis tool which is the key to limiting futures and options risk/maximizing profit. The derivatives contract is standardized contract. In India, the BSE Sensex and Nifty- 50 are the popular indices on futures and options trading. The everyday price changes will occur on stock index futures and options. Some of the major factors such as weather, war, Debt, refugee displacement, land reclamation and micro & macro economic factors will affect the index prices. So, this study challenge to test the precariousness of stock index prices in Indian Derivatives market and also this study have to focus on software industry Infosys & TCS during the period of April to June 2016.