Study on Knowledge of investors and impact of Advisory services on investment output in Future & options

Abstract

Derivative trading was launched in India on NSE as well as BSE in the year 2000 and since then it has been witnessed that trading in Derivative segment is growing at a very high speed. If we look at the data for the last 10 years i,e. from 2012-13 to 2021-2022, the turnover of trading in options and Futures on Stock & index has moved from 31533003.96 cr to 1695233134.47cr (source: NSE). It has also been observed that nowadays most of the traders who were trading in equity segment only have started trading in future and options segment. The F&O contracts are used by the investors for variety of purpose such as hedging, speculation, arbitrage, profit maximization etc. It has also been observed that nowadays most of the individuals, who have little knowledge about stock market and trading, are entering into options and future trades and some of them are taking the services of some advisors for reaping maximum profit out of it. As per the current study conducted by SEBI, it has been observed that total number of traders who traded from the top 10 brokers in Indian in F&O segments has increased to 45.2 lakhs in the FY 22 from the 7.1 lakhs in the FY 2019. It shows that there is a significant increase of around 500% in the FY 2022 as compared to the FY 2019. The current study has been conducted to understand the awareness level and perception of investors towards making investment in future and options. The data has been collected from 102 respondents of Jammu & Kashmir who are actively involved in F&O trading through Non-random purposive sampling technique. After an in-depth review of literature, a comprehensive questionnaire was developed to collect the data that can be analyzed by using the relevant statistical tools to achieve the objectives of the study. The data shows that 76% of the respondents were aware about the F&O contracts available in the market and around 70% have knowledge about the concept of expiry in future and options. Regarding preference of investment in future & options only 50% of the investors are there who prefer to make investment in future & options. It has also been found that majority of the investors have gone for taking the help of financial advisors for making investment in future and options and chi-square analysis shows that there exists a significant relationship between investment output of the investors and advisory services taken by the investors