Alpha Derivatives

Abstract

The purpose of this project is to understand the derivatives market in depth. The understanding of the derivatives market can be derived by properly analysing the related underlying stocks. The derivative market consists of futures and options. These are the two things which mainly form the whole derivatives market. They derive their value from the underlying asset. The derivatives markets can prove to be one of the best investments if properly monitored and then invested into. This project involved analysing the futures. For this purpose, monthly and weekly analysis was done based on the data collected from websites of National Stock Exchanges. In case of monthly analysis, after the data collection, various calculations were done and possible trends in stock were predicted. Then these predicted trends were compared with the actual trends that prevailed in the market. If there was discrepancy in this trend then the possible reasons were sought and it was also seen that how frequently are this predicted trends followed in the futures market. While in case of weekly analysis, these predicted trends based on calculations were used to further predict the possible trends in the coming days in the futures market. This analysis helps the budding investors in the market, who wants to earn money but have a little knowledge.