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By surbhi Pathak MBA (G)

To

study the currency market in detail and factor affecting currency market in India. To study various hedging strategies. To analyse and study the performance of various currencies in currency market. To suggest the investors of religare on their investment in the currency market and also to suggest the investors about the future prospects.

Religare is India's leading retail financial services company with over 250 share shops across 115 cities in India. They have over 750 Client Relationship Managers that are dedicated to serving clients unique needs. They have class Infrastructure that provides clients with real-time service & 24/7 access to all information and products. Services provided by the RELIGARE:- 1. Equities & Derivatives :--Comprehensive services for independent investors, active traders & Non-Resident Indians. 2. Religare equity analysis :--Premium research on 401+ companies updated daily. 3. Depository Services :--Value added services for seamless delivery.

Derivatives are financial contracts whose value/price is independent on the behaviour of the price of one or more basic underlying assets. These contracts are legally binding agreements, made on the trading screen of stock exchanges, to buy or sell an asset in future. These assets can be a share, index, interest rate, bond, rupee dollar exchange rate, sugar, crude oil, soybeans, cotton, coffee and what you have.

DERIVATIVES

Financials
Basics 1. Forwards 2. Futures Complex

Commodities

1. Swaps
2.Exotics

3. Options 4. Warrants and Convertibles

Future: A currency future contract is a standardized contract between two parties to buy or sell a particular currency at a specified future date on a price agreed today. Forward: A currency forward contract is almost similar to future contract but it is the customized contract between two parties where contract matures on a specified date on a price agreed today. Option: It is a contract between two parties for future transactions on a financial instrument at a specified price. There are two types of options: call option and put option.

Swaps: swaps are the portfolio of forward contract between two parties to exchange cash flows in the future according to a pre arranged formula. There are 2 types of swaps: Interest rate swaps Currency swaps

The various strategies in Currency futures are Hedging Speculation Arbitrage Trading in Spreads 1. Hedging: Hedging means taking a position in the future market that is opposite to a position in the physical market with a view to reduce or limit risk associated with unpredictable changes in exchange rate.

Arbitrage means locking in a profit by simultaneously entering into transactions in two or more markets. If the relation between forward prices (OTC market) and futures prices (exchange market) differs, it gives rise to arbitrage opportunities. Difference in the equilibrium prices determined by the demand and supply at two different markets also gives opportunities to arbitrage. Speculators means Based on the forecast, a speculator would like to make gains by taking long /short positions in derivatives. Speculators, or traders, assume the price risk that hedgers attempt to lay off in the markets

The

Euro The Japanese Yen The British Pound US Dollar

RESEARCH DESIGN The project uses both exploratory and descriptive research. An intensive primary research is conducted to gain insights in the currency market. SAMPLING UNIT Every person who is the active client of Religare Securities is the sampling unit. The survey has been conducted on sample size of 40. In nature of data, it was both primary and secondary.

Most of the people are aware about the currency market. Most of the people invest in the currency market. Risk is the most considerable factor by the respondent while trading in currency derivative compare to the price, return, volatility and status of the countries.

Lack of fund is the main cause which hold respondent back to invest in cash market and trade in currency derivative market.
Out of total respondents most of them think that the advantages of currency market over Commodity and Equity Market is Low investment cost, Lesser Volatility, Lesser risk and Comparatively low manipulation.

The investors are not fully aware about the currency market as this is the upcoming market so the company needs to make such awareness campaign to provide the awareness amongst the investors. As far as the investors are concern they only prefer investing in the US Dollar because they only know about US Dollar so the company needs to educate them about the other currencies also i.e Pound Sterling, Euro, Japanese Yen. For some investors Brokerage cost, Brand of the broking firm, Regular tips from the broking firm, Opening Demat account charges, Allocated account/relationship manager is important so the company needs to make plans and policies accordingly.

Their is a sense of unpopularity amongst the investors regarding the currency market reasons being Lack of knowledge, complexity, time delays and unlimited risks. The currency market has a bright future in the near upcoming market trends due to its easy to understand the market, Commission-free Trading and Low Transaction Cost, low investment cost, lesser risk and the most importantly Comparatively Low manipulations.

Level of accuracy of the results of research is restricted to the accuracy level with which the customers have given their answers and the accuracy level of the answers cannot be predicted. The currency future is new concept so only few topic related book are available in library and market. Observations and Interactions were also the limiting factors in the proper conclusion of the study. Since segment wise investors is not available in RCL this means consumers are not only investing in commodities they also investing in equity ,insurance, mutual funds, wealth management & investment Banking . Hence overall concept is taken for the study.

Information is partly based on secondary data and hence the authenticity of the study can be visualized and is measurable.