INVESTORS’ PERCEPTION TOWARDS EQUITY DERIVATIVES WITH SPECIAL REFERENCE TO ANANTAPURAMU DISTRICT

Dr. U. Raghavendra Prasad. Assistant Professor, Department of Management Studies, Madanapalle Institute of Technology & Science (UGCAutonomous),Madanapalle-517325, (A P) India. ...................................................................................................................... Manuscript Info Abstract ......................... ........................................................................ Manuscript History


(8), 1452-1458
1453 Arbitrageurs:-They take positions in financial markets to earnriskless profits. The arbitrageurs take short and long positions in thesame or different contracts at the same time to create a position whichcan generate a riskless profit.

Review of literature:-
Sarathkumar, K., &Dhandhayuthapani, S. P. (2016). The attitude of investor's is changing towards derivative market in India for the last some years and with the introduction of behavioral finance the researcher would like to capture that. The concept of behavioral finance is growing in the capital market, there is hardly any place where its concepts aren't being applied. Manrai, D. R. (2015). The crux of the study will give the researcher a quantitative model reflecting the factors affecting the investor behavior in derivative market with load factors. Through this study the researchers would like to study the various factors responsible for the investment behavior in derivative market.
RAKESH, H.M. (2015). Study Intends to find preference level of investors on various Capital Market instruments, to find out the type of risk which are considered by the investors, to find out the ways through which the investors on various minimizes their risk and lastly to find out the preferences of Investors in derivatives market.
Pallavi, E. V. P. A. S., & Raju, T. K. (2014). The derivatives market is witnessing tremendous growth in India. The statistical data reveals that the total turnover of futures and options in NSE market are Rs 67510.02 billion and Rs 247820.01 billion respectively by 2012-13. The retail and institutional investors occupied a key role in development of derivatives trading in India. Tripathi, G. (2014). Conducted a survey through structured questionnaire targeting 100 retail investors of Delhi/NCR region to understand the awareness and attractiveness of different derivative securities amongst the retail investors.
Pasha, S. A. M. (2013). An attempt is made by the researcher to know what kind of perceptions had by retail investors in India based on Andhra Pradesh State reference with a sample size of 500 respondents by using simple percentage bar diagrams. Ultimately, financial derivatives should be considered part of any investor's riskmanagement strategy to ensure that valueenhancing investment opportunities are pursued.
Savitha, R., &Deepika, S. R. (2013). This research is an attempt to find the efficiency of the sentimental indicators of financial derivatives in predicting the trend of the market (behaviour of NIFTY index). Participants in the stock markets believe that the amount of open interest (OI) in a particular contract has a bearing on the behavior of the price of the contract. Kukreja, G. (2012). Aims to measure the investors' perception towards Indian capital market with reference to National Capital Region (NCR) investors of India. 120 samples are selected for this study. Major findings of this study include, age has significant impact on investment, and educational qualification has significant impact on tax advantages. 119 functional variables are used in this study to measure investors' perception. Choksi, A. (2010). The most significant event in finance during the past decade has been the astonishing development and expansion of financial derivatives. These instruments enhance the ability to differentiate risk and allocate it to those investors who are most able and willing to take it-a process that has undoubtedly improved national productivity, growth and standards of living.
Ramanjaneyalu, N., &Hosmani, A. P. (2010). Studied, derivatives occupy an important place as a risk reducing mechanism. Derivatives are useful for reducing many of the risks mentioned above. History of financial markets has evidence to suggest that when risk management avenues are provided by means of derivatives, markets attract higher volumes of investments from savers, strengthening the markets in the process.
Paraschiv, D., &Raghavendra, S. (2009, March). Introduced a stock scanner evaluator for stocks and options. In the presented work the scanner picks from thousands of stocks the most suitable stocks for an options or stocks investor. The proposed stocks scanner evaluator suggests the stocks that have the largest positive near future change (for purchasing stocks or calls) and the stocks that have the largest negative near future change (for purchasing puts).
1454 Ravichandran, D. K. (2008) was undertaken to find out the awareness level of various capital market instruments and also to find out their risk preference in various segments.
Sandeep Srivastava, Surendra S Yadav, P K Jain September (2008). The authors conducted a survey of brokers in the recently introduced derivatives markets in India to examine the brokers' assessment of market activity and their perception of the benefits and costs of derivative trading.
Objectives of the study:-1. To analyze investors' perception towards stock market. 2. To analyzeinvestors'preference of the equity derivatives product and their participation in Equity Derivatives.

Methodology for research:-
The research design is analytical in nature. The study is based on primary and secondary data. The primary data is collected through structured Questionnaire. Secondary data was gathered from books, journals and websites like SEBI, BSE and NSE etc., for review of literature. Convenience sampling method is used for this study. The sample size covered 100 investors belonging to Anantapuramu district in Andhra Pradesh.Statistical tools like Mann-Whitney U andKruskal-Wallis H test were used for analysing data. The study was conducted during the period in June and July 2016.

Limitations of the study:-
Only 100 investors have been considered for this study. Hence, it cannot be generalized for the entire active market participants in the equity derivatives. The geographical area of this study is confined to Anantapuramu district only.

Hypotheses of the Study:-
In line with the objectives of the study, the following hypotheses have been framed and tested. 1. H0: Index options preference doesn't differ with gender of investors'. 2. H0: Index options preference doesn't differ with age of investors'. 3. H0: Index options preference doesn't differ with income of investors'. 1455 having educational qualification of less than graduation. Thirty nine percent, average income of the investor range between 2.5 lakh to 5 lakh followed by thirty four percent less than 2.5 lakh   Table 3, shows that 27 percent of the total sample takes cues from brokers for their investing decisions, twenty five percent takes from print media, twenty one percent take cues from electronic media, self and actions of others take seventeen percent and ten percent respectively. More than half of the investors follow both fundamental analysis and technical analysis for decision making to invest in the market. Twenty seven percent investors follow fundamental analysis and twenty percent investors follow technical analysis.  More than half of the investors are taking low risk in the market. Thirty three percent investors are taking medium risk followed by high risk fifteen percent. More than half of the investors' participation in derivatives segment as speculators. Twenty six percent are trading as arbitrageurs and twenty two percent are using derivatives products are hedging purpose.

Index Options Preference:-
Among the derivative products, investors prefer index options as their first preference (1.36). Further, hypotheses were tested with demographic profiles of investors in terms of gender, age and income. .473 a. Grouping Variable: Gender Inference:Man Whitney U test was performed for determining the differences between male and female preferences for index options. The mean ranks of male and female are 51.28 and 46.94 respectively. The Asymp. Sig. value is .473 which is more than .05 of probability value hence we need to accept the null hypothesis. Therefore, Index options preference doesn't differ with investors' gender. Sig.value is .509 which is more than .05 of probability value hence we need to accept the null hypothesis. Therefore, Index options preference doesn't differ with investors' age. Inference:Kruskal Wallis Test was performed for determining investors' index preferences with income. The mean ranks of income below 2.5 lakh is 50.44, 2.5lakh-5 lakhs is 48.22, 5, 00,001-10 lakhs is 54.17 and Above 10 lakhs 53.28. The Asymp. Sig.value is .812 which is more than .05 of probability value hence we need to accept the null hypothesis. Therefore, Index options preference doesn't differ with investors' income.

Conclusion:-
Risk is a key element of investment. Index options preference doesn't differ with age, gender and income of investors'. Investors' first preference in derivatives product is index options followed by stock futures,stock options and index futures. Most of the investors are trading in derivatives market, monthly followed by occasionally. Majority of the investors are participating as speculators in equity derivatives.