Trends in Wealth Management in APAC region

COVID 19: Impact Of The Great Lockdown, 2020

The impact of the Covid 19, on the world economy cannot be undermined in any of the studies. The Great Lockdown 2020, closed down the free movement of people, trade, and commerce. Many economies were subjected to lockdown even in the mid-of-2021 (still continuing as on Jul 08, 2021).

Economic Impact: The Global GDP dropped to -3.5% from +2.8%. The rapid growth of the emerging economies were shunned.

As per International Monetary Fund (IMF) report, nations will show the signs of recovery by 2025. The global impact will start reducing by mid-2023, giving a upside by 1%. Recovery in emerging and developing APAC market is considered to be faster.

Psychological Impact: The Covid 19, impacted livelihood of many families. Families also lost many of the senior members and bread winners. Health and well-being become primary factor.

The main driver of investment and wealth creation is sentiments. Liquidity of wealth will become one of the main driving force for any future investments.

Introduction: Why APAC is an Emerging Leader?

APAC View of Real GDP*
Global View of Real GDP*

* The chart represents the real economies and doesn’t include tax heaven markets

  1. Percentage growth post Covid 19 seems to be higher in emerging and developing markets.
  2. APAC market shows higher GDP growth in comparison to the developed markets.
  3. 6 / 10 top stock exchanges are housed in APAC region.  Ranked by market capitalization.
  4. APAC regions asset under managed has raised to USD 17.8 trillion in 2019 from USD 5.8 trillion in 2008.
  5. PwC expects the AUM in APAC region to raise to USD 29.6 trillion by 2025, a total compound annual growth rate (CAGR) of 8.7%.
  6. Predominant APAC asset management hubs like AU, Japan, Hong Kong, Singapore are being supported by emerging leaders like China, & India. New frontier markets such as in Central Asia, Sri Lanka, Vietnam, and Myanmar, will further compliment.

Client Lifecycle: Wealth Management

Client Life Cycle in Wealth Management

Disruptions: Faced by Wealth Management Industry

  1. Demographic:
    1. Switching Hands: Elder generation are transferring their assets to the Millennial’s.
    2. Concentration on Liquid Assets: Gold and Real-Estate are being replaced with high-yield and quick liquidating assets.
    3. Information Access: knowledge in investment products are freely and easily available.
  2. Legal / Regulatory:
    1. Boost to Free Economy: Rise of regulators like CIS, & ARFP, are boosting the ease of doing business; Giving global markets access to Financial Institutes.
  3. Economical:
    1. Transparency: Transparency in Fees and Commissions are imposed by governing bodies allowing investors to make a conscious choice while making an investment decision.
    2. Smaller Ticket-Sizes: Participation of small size investors are now enabled the Wealth Management institutes. HNIs are not the only target customers.
  4. Products:
    1. Glocal products: products are driven by “Think Globally and Act Locally” moto. There by, allowing institutes to achieve economies of scale.
    2. Fund Passport: Availability of fund passport is challenging the convectional intra-border and multi-day settlement process.
  5. Technological:
    1. Quicker and Affordable Technologies:  ease of business by adopting technology is challenging   the conventional operational models.

Counter Disruptions: Through Digital Transformation

Objectives to Counter Disruptions:

  1. Enrich customer delight, by reducing TAT to service client.
  2. Capitalize market opportunities, by understanding customer sentiments. 
  3. Achieve economies of scale, by creating & accessing global products. 
  1. Reduce cost – both fixed and operational costs, by achieving operational excellency.
  2. Enable ease of doing business, by enabling Digital Transformation programs. 
  3. Be market ready, by equipping for near real-time settlements and reducing overheads involved in regulatory reporting.
Bank Front-OfficeRelationship Manager
  1. Minimize investments in brick-and-mortar setups.
  2. Enable remote / virtual branches, and service kiosks.
  3. Technology adoption will enable omni-service channel and render a consolidated view of a client.
  1. Enable virtual assistants.
  2. Adopt artificial intelligence and machine learning algorithms to enable unbiased services to clients.
Account OpeningRegulatory Reporting
  1. Adopt onboarding process using social media and government approved digital databases (Aadhar, PAN, SSN etc.).
  2. Enable smart forms and digital signatures to reduce TAT.
  1. Enable cloud and blockchain – distributed ledgers – to enable automated capturing and disclosure of the transaction information to the regulatory bodies, as well as to the investors
KYCPost Trade
  1. Tap public channels to assimilate client information and reduce client outreach.
  2. Adopt e-sign and smart forms.
  1. Enable single platform approaches to enable order to settlement flows.
  2. Enable APIs to ease exchange of information.
Digital MarketingOther Operational Strategy
  1. Tap social media channel to attract new clients, promote new investment products, & address concerns. By deploying AI & ML.
  1. Outsource mid-and-back-office processes to achieve efficiencies.

Conclusion

  1. Wealth Management industry in APAC region will see a stronger growth opportunity.
  2. Adoption of technological revolutions like Blockchain, Artificial Intelligence, Machine Learning, Robotic Process Automation etc. will determine the success of Financial Institutes (FI).
  3. Fund passport, will enable FIs to create innovative products. Products like Equity, Mutual Funds, ETF, Bonds, Forex will gain attraction as an alternative to Gold, and Real-estate products.  
  4. FIs through Digital platforms will increasingly start focusing on personalised services, such as tracking expenses, setting investment goals, competitive alternatives that are tailored to pre-set requirements, and using the cloud to track personal data that earlier existed in information silos.
  5. Driven by the factors like low fees, transparency in product pricing, disclosure of transactions the financial institutes will see a shift in its core operations. From being a capital-intensive organization, to more technology driven institutes.
  6. Operational excellency will be achieved by deploying robots and virtual reality. Existing workflow will seek upliftment in their skill sets and work towards new product creation.
  7. Major FIs will outsource their core operations from developed nations to APAC region.
  8. Industry will see transformation in the tax regimes where the individual and organizations tax declaration at the end of every FY will see an end. Higher rate of transaction transparency will be a driver for this change. The institutes will see operational cost reduction in terms of conducting, recording, distributing, and reporting the trades to the governing authorities.
  9. FIs will onboard consulting services from their preferred technology vendors. The consulting firms will partner this digital transformation journey; By, bridging the gap between the process and technology adoption.

Introduction to Design Thinking

A brief on Design Thinking

Design Thinking: What is Design Thinking? How is it different than what I am doing now? Is it alternative to Agile? What are the available tools and techniques?If you are facing these queries, this article is for you😊 Please carry on reading…

Be rest assured, Design Thinking is no different than what you have been doing till date, as a Business Analyst.

Design Thinking is an approach to refine the thought process and to apply a more structured approach to define and solve an END USERs problem.It is an end user centric approach, an approach to empathize and enrich the user experience. Where the proposed solution to resolve a problem is at the equilibrium statei.e.the Cost to implement is optimal, User Preference is guaranteed to the utmost state and Technology adopted to solve is reliable and scalable.

Imagine an oversized truck stuck under a bridge. How would you attempt freeing it? Multiple solutions are available; Some of the approaches can be: To dismantle the parts and reassemble, To demolish and rebuild the bridge, To push-and-pull truck in different directions etc. The approaches to resolve the issue is only limited to one’s imagination. If you keenly observe in the above approaches, either one or the several factors (Cost, User Experience/Preference, Technology) are not in coherence. One of the best solution to this problem can be just to deflate the truck tyres and free, in this case you will notice that the factors are in equilibrium (Cost impact is less, User is at ease, Technique/Technology is amicable). This is Design Thinking!

Series of steps are prescribed in the Design Thinking approach viz:

  1. Empathize:understand the challenge faced by a user.
  2. Define:Articulate and define the right problem statement.
  3. Ideate: Define potential solution to resolve the problem.
  4. Prototype: Design and represent the identified solution using prototype.
  5. Test:Test and validate the approaches.

There are various tools and techniques that can be adopted at various stages to name a few: Focused Group Interviewing, Double Diamond, Crazy Eight, 5WH Questionnaire, Exploration Map, Customer Journey Mapping etc.

Finally, all you must know is! The Design Thinking is an approach to build a correct / right product and Agile Methodology helps in building a product in a right way.

Hope you enjoyed reading this.

– Author: Bharath Nanda Kumar, Senior Consultant.

Petrol and Diesel price in India

The change in the price of Petrol and Diesel can be understood from the graph below, the graph captures the data from the year 1989 to 2012.

The percentage change in the Petrol and Diesel price can be understood through the chart shown below:

Year on year the change in the fuel price is found to be:

Yr Petrol Diesel
1999 – 95

11.27%

11.34%

1995 – 2000

7.24%

14.79%

2000 – 2005

9.72%

13.57%

2005 – 2010

3.40%

4.61%

2010 – 2012

17.84%

7.51%

Average

9.89%

10.36%

 

The future projection of the Petrol and Diesel price is as below:

Year Petrol Rate Diesel Rate

2012

73.18

40.91

2013

80.42

45.15

2014

88.37

49.83

2015

97.12

54.99

2016

106.72

60.69

2017

117.28

66.98

2018

128.88

73.92

2019

141.63

81.58

2020

155.64

90.03

2021

171.04

99.36

2022

187.96

109.66

 

Despite such frequent hikes in the price of fuel, consumers are still opting to buy cars. An attempt is made, to assist such individual in making a decision to buy Petrol / Diesel engine cars. Assuming, the particulars mentioned below for an individual to buy a car, following calculation will allow him to decide whether to opt for a Petrol or Diesel engine car.

Particulars  Petrol  Diesel
 Average Mileage ( Km )          15.00              16.00
 Maintenance cost (per month)       600.00            650.00
 Diff in cost ( Rs )                 –    100,000.00
 Growth rate of cost of fuel

9.89%

10.36%

 Usage per year    5,000.00        5,000.00
 n          10.00                 9.00
 cost of fuel          73.18              40.91
 Growth rate for cost of maintenance

10%

10%

 Lts of fuel consumed per year       333.33            312.50

 

If an individual opts to buy a Diesel car, which gives an average mileage of 16 km / lt (city and highway mileage together) and with the above said particulars, he / she should use the car for atleast 6 – 7 years to obtain leverage over the Petrol engine car. If the car runs more than 5,000km per year the time line of 6 – 7 years will be further reduced.

Disclaimer: The above suggestion, should not be taken as the final decision to buy car. The buyers should explore his / her own requirements and then decide accordingly. The author of this post, doesn’t hold any responsibility for anything. This is purely for an educational purpose. 

Marketing Research – Insured perspective on Indian Insurance Industry

Understanding the root-cause of any problem is primary activity which any individual has to solve before tackling a problem. The same approach has been adopted, to evaluate few of the key challenge faced by Indian insurance industry.

A market research, activity was carried out to understand the insured perspective on the Indian insurance industry. This was essential because, the policyholder’s are the consumers of the services rendered by insurance companies; this market research finding provides us the insured perception of the insurance companies and tries to answer the following questions:

  • What are the actual expectations of the insured from the insurance industry?
  • What is the current level of customer satisfaction?
  • What is the current Market share of individual products available in the market place?
  • What has been the Agents role in insurance industry?
  • Are the customers looking into ICT to explore the insurance industry offerings?
  • What has been the perception of insured in regards to premium payment?
  • How familiar are the insured about the policies of the insurance products?
  • How confident are the insured on the insurance companies?
  • Are insured confident that insurance companies execute the claims settlement process if any claims are made?
  • How the insurance perception varies with the demographic attributes of the insured?
  • Whether the products have been matched with the featured needs of the insured?

The questionnaire was designed to capture the interest of the insured both in Life and General insurance. In General insurance, Motor insurance was taken for the sample study because the motor insurance share in general insurance is higher when compared to its other counterparts like Fire insurance, Marine insurance, to name a few. There were five sections in the questionnaire, where in the first section being the opening section, which directs the respondents to respond to the Sections A and B, Section A, contained all questions related to General insurance; Section B, contained all questions related to Life insurance; Section C, contained the common questions related to both General and Life insurance. The last section is the closing section which captures the demographic information of the respondents.

Total of 60 respondents were surveyed online and convenient sampling technique was employed. The rural segment of India is not taken into sampling space, only the urban population is considered in the sample space.

1.1     Findings of the market research

The survey results has been analysed and its details are as follows:

India is an emerging economy and current automotive sales amounts to 7.6% of the GDP this is mainly due to the per-capita income of individuals is increasing, because of which the people of India are left with substantially surplus of the amount out of their earnings, and people are able to afford vehicles; unlike the developed economies where the public transport system is well designed, in India such facilities are yet to be standardised and made convenient to people. So, there is high rate of growth in this sector eventually, enabling the business opportunities to insurance industry as well.

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Chart 1: Type of vehicle possession

The life insurance industry has few product-mix, from the graph below we can infer that the product money back policy has the highest share in the market. On a contrary the pure insurance product the term plan, shares one of the least market shares. In the survey 3 out of 4 of the respondents were in age group of 18 – 22 years and they dint have any life insurance plans, only one of the respondent in the age group of 43 – 47 years dint have any of the life insurance product. We can infer that the insurance penetration in the urban market is quite high. Further, the investors prefer the policies which meet the investment opportunity of the insured.

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Chart 2: Type of Life-insurance possession

Section A:

The Motor Vehicles (MV) Act, 1988 mandates payment of compensation to the victims of accidents arising out of the use of a motor vehicle or motor vehicles, in public places by the owner or owners, as the case may.

The MV Act further provides that no person shall use a motor vehicle in public places without a policy of insurance complying with the requirements of the MV Act. The Indian jurisdiction emphasises various measures to ensure that vehicle users always carry valid insurances all the time. This is validated in the survey, the below graph shows the compliance level of vehicle users with insurance law enforced. Out of the 6 commercial vehicle users it was found to be that 3 of such users don’t have valid vehicle insurance. The default level is higher in case commercial vehicles is highest followed by two-wheelers and in case of private cars no such defaults in the survey were encountered, nonetheless, the least level of default levels can be observed in private cars category.

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Chart 3: Type of vehicle possession

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Chart 4: Vehicle insurance possession

The very basic nature of the people of India is that they are conservative in nature, Motor insurance is not laced with any of the investment plans, its a pure risk cover. Hence only 7% of the motor insurance policyholders agree that premium paid on their vehicle insurance is not high. 47% of the respondents say, that they pay slightly on a higher side. Whereas, 38% of the policyholders, say they pay high price for their vehicle insurance.

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Chart 5: Premium perception

When looking at the perception of the insurance companies being liable to pay for the accident causes, it was observed that 25% of the respondents said that insurance companies are 100% liable to pay for the accident caused by policyholder, but, in reality, some portion of the claim amount nearly 10% of the claim amount is bearable by the policyholder in the form of deductable.  We can see that the data recorded exhibits skewed distribution of the perception, we can infer that the policyholders are not well aware of the liability clause in their policy document, further, when settling vehicle insurance claims, there are various parameters like depreciation, metal and non-metal parts, etc, these parameters when used becomes difficult for laymen to understand the actual claim settlement value and it doesn’t provide the true claim settlement amount so, this might be one of the main reason for such a perception.

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Chart 6: Insurers Liability perception

Section B:

The majority of the policyholders are looking insurance products as an investment tools, high percentage of the people have invested in the insurance sector through Endowment plan, money back policy; we can also observe that, due to the current market instability in the secondary market, not much of the policyholders have selected ULIP based products. From this, we can infer that Life insurance policyholders perceive insurance industry as not only as a pure risk covering instrument but, also as an investment tool. Hence, risk cover along with investment factor if provided to the policyholders, the market share of such products can increase in the market place.

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Chart 7: Type of life insurance plans possession

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Chart 8: Insurance as an investment tool

“Insurance is a subject matter of solicitation” the dictionary meaning of Solicitation is “To Ask For”. Hence insurance is a subject that needs to be asked for, by the consumers. This implies that the customers have to discuss with an Insurance Advisor regarding suggestions and professional advice suggest the right insurance products and services specially tailored or customized to meet an individual’s requirements. Hence, in short, it must be understood that Insurance Products and Services should not be SOLD but Solicited by the Consumers. It’s of much relevance to consumers as it enthrones the responsibility for identifying, choosing and selecting the appropriate insurance products and services on the consumer rather than focussing on the Insurance Company. It must be remembered that “Customer’s participation in availing the insurance products and services are purely on voluntary basis “.

As a Consumer, while availing Insurance Products and Services, the following points should be borne in mind as enlisted below:-

  • Understanding customization of Insurance needs and requirements
  • Planning
  • Meeting a professional insurance advisor
  • Identifying, Choosing and Selecting the right Insurance products and Services from a wide array of mind-boggling products
  • Signing the contract

From the survey its very significant that, majority of the policyholders i.e. 70% of the respondents are not aware of the insurance products which they have brought, this equates to not being aware about either their insurance requirements or the various options available in the market before them.

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Chart 9: policyholders behaviour at the time of buying the insurance policy

Consumers of insurance industry in India are empowered by various legal bodies which try to address the consumer’s grievances. Few of such legal entities are Grievance cell of IRDA, Insurance Ombudsman, Consumer Disputes Redressal Agencies set up under the Consumer Protection Act 1986, Director of Public Grievances under Govt. of India, are some of the important grievance redressal machineries. Further the safe guards in the interest of insurance consumers, in the form of standing instructions have been provided, for compliance by insurers, under IRDA’s Protection of Policyholders’ Interests Regulations, 2002. Despite all these measures taken by the government, people are not empowered by this knowledge; this is also depicted in the survey, wherein, almost 65% of the respondents have 0% to 50% confidence on life insurance industry in respect to claim settlement.

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Chart 10: policyholder’s confidence level on Life Insurance Company.

Section C:

Looking at the distribution channels, agent acts as an intermediary between the insurance company and its customers. From the survey it’s evident that almost 60% of the respondents say that agents don’t employ hard sales strategy to convert a prospective customer into policyholder. On the contrary, almost 40% of the respondents say, that agents employ hard sales strategy.

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Chart 11: Policyholders perception on agents

Looking at the Internet and Communication Technology penetration in India from the survey it’s evident that almost 87% of the respondents haven’t used the ICT instead they prefer traditional methods to meet their requirements.

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Chart 12: ICT awareness

Understanding the processing time involved in awarding a policy to the applicant, it’s evident from the survey that 33% of the respondents feel that insurance companies take quite long time to process the application further 85% in the 33% of such population represent the applicants in age group of 18 – 32 years, this segment of the market represents the prospective customers for the insurance industry in the timeline of next 20 – 40 years to come. The processing of the application has to be faster, currently lots of human intervention is needed to realise the same. If the STP – Straight Trough Processing – is adopted by the insurance industry, the amount of human interventions can be reduced and faster processing of the applications can be enabled.

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Chart 13: Policyholders perception on insurance application processing time

Currently no common database is shared among the insurers in India. Each of the insurers has their own database and the law also enables the policyholder to mobile port their policies from one insurer to the other insurer. In such cases, substantial amount of time is consumed and much of the time is consumed in processing the paper work. A medium which is a common database shared among the insurer should enable and ease such transactions in Insurance industry.

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Chart 14: Perception on document procedures

Personal information section:

The demographic information of the respondents is as summarized below:

  • The sample space included the respondents of all age groups.
  • The survey also sampled the opinions of both the genders, and marital status in the population.
  • Since, the survey was done in urban place, majority of the respondents were found to be literates.

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Chart 15: Demographic information of the respondents: Age

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Chart 16: Demographic information of the respondents: Gender

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Chart 17: Demographic information of the respondents: Marital Status

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Chart 18: Demographic information of the respondents: Number of Children

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Chart 19: Demographic information of the respondents: Qualification

1.2     Suggestions for improvement in the process

It is evident from the market research survey that, the policyholders have bare minimal knowledge about the policy they hold. Its mainly due to the fact, that the insurance business has been operating through intermediaries, further the sales level set the sales team is quite high, so, the intermediaries or the sales personal doesn’t provide enough information to policyholders. In today’s age, where cut-throat competition has become the order of the day, insurance advisers take up the role of pure selling machines trying to “close” the sale and achieve the targets as set by the Insurance Company rather than providing “professional advice” to their customers. Insurance companies put pressure on their agents to achieve their targets and often deviate from the basic dictum that drives the Insurance business. Majority of the policyholders perceive the insurance industry to be a set up where in they don’t furnish the indemnity clause at times of claims. This leaves with the enormous uncertainty among the policyholders and the insurers, wherein, the policyholders might employ illegal medium to cash their fortune through fraudulent claims and on the other hand, the insurers failing to convey the actual benefits to the society at large. This gap between the insurers and the policyholders can be mainly bridged through the proper knowledge discrimination channels, looking back at the methods employed to discriminate the insurance benefits to the society, its very primitive, measures has to be taken to channelize to communicate the actual benefits of the insurance to the society at large. If people are empowered with this knowledge and proper understanding of the benefits of the policy they hold, we can see a much brighter figures of sales in insurance industry. Thus the consumers have to obtain professional advice and help from a trained insurance advisor who “advises” the clients and then helps them to identify, choose and select the Insurance product and Services suited to such individual.

Lastly, the adoption of the ICT is very minimal in insurance industry; the centralized database to share the common fraud related data, the details of policyholders, the claims history etc should be enabled to reduce the loss due to leakages and frauds. Currently, IRDA has setup a body called Insurance Information Bureau – IIB – which maintains such common database which can be shared across the insurance companies; this setup has to be brought into full operation at the earliest. The ICT channels should also enable the knowledge decimation to the customers.

Disclaimer: Only for educational purpose. 

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Stochastic Modeling – 52 weeks stock price prediction.

Disclaimer: The data interpretation is purely for educational purpose. For investors, please evaluate your own options; don’t use these predictions for investment purpose. I do not endorse or uphold any of my findings for investment purpose. IT’S PURELY FOR UNDERSTANDING THE SUBJECT.

Prediction of share price for the next 52 weeks. 

Preface:

Company Name: Infosys Ltd.

1.This model contains the data of 52weeks(31-Jul-2010 to 31-Jul-2011) Infosys Ltd equity shares trading on Bombay Stock Exchange.
2.The source of the data is from BSE India (http://www.bseindia.com)
3.This model aims @ calculating the Volatility of Infy Stock and also to project the next 52weeks equity share price for Infosys Ltd.

Some of the findings from the historical data are:

The projected share price when bifurcated into volatile and certain component looks like:

Log Normal Distribution of share price of Infosys Ltd looks like:

Inference:

Higher returns in Infosys share is subjected to more of volatile component rather than the certain component. The certain component in the share price is projecting a downward trend. Thus, we can infer that the Infosys share is not that attractive for investment and the share is likely to trade in the range:   1431 to 5294.

Cover Letter

“The money you save is the money you earn”, the most famous quote which has been passed down the generations, has been received and followed with utmost respect. But, does the current economic situation allow us to back on just the savings? With rising fuel cost, rise in employment cost, value of money falling down, raw material cost souring up due to inflation etc, have left many of the mighty industries to look into its financials and minimize its cost, in order to meet their stakeholder’s expectations. It’s not only the cost minimization which is going to answer the crucial question but, it’s the intelligent, systematic investments which come to the rescue; in order to realise the objective an entity has to look into various financial instruments as a means to sustain and to grow the intrinsic value of money.

Finance plays a vital role in determining the longevity of any entity; Inspired by the power of Financial Systems. I Bharath Nanda Kumar graduate of Bachelor of Engineering in Information Science and Engineering stream, backing three years of work experience in IT industry, by working with NIIT Technology and executing two of BFSI project, took a time off from work in order to understand the holistic offerings of Finance industry; so, currently I am pursuing my MBA from IIPM, Bangalore in Finance and International Marketing stream.

Right information at the right time and the right decision taken up based on the information will steer the companies to new horizons. So, I am looking forward for a challenging role as an Analyst / Strategist to be sensitive to the real time information processing and to formulate new strategies to adapt to the circumstances. Having done few of the projects like Business Plan formulation, Analysis of Option Derivatives of the companies, Analysis of companies,  to name a few has given me an academic knowledge as well as experience of how financial strategist make use of valuable information to formulate the new strategies. Apart from academic knowledge one of my previous BFSI projects which I had executed when I was employed by NIIT Technologies was FSA, UK project which has given me live experience of how data crunching in real time is done, in order to get information out of the data. With all these experiences I am eager to learn, to be a team player and execute the challenging responsibilities which the organization is going to assign it to me.

Derivative options

Derivative options

Disclaimer: The data interpretation is purely for educational purpose. For investors, please evaluate your own options; don’t use these predictions for investment purpose. I do not endorse or uphold any of my findings for investment purpose. IT’S PURELY FOR UNDERSTANDING THE SUBJECT.

The Suzlon Energy Ltd, Derivatives options trading in NSE on the trading day 3rd June 2011, can be evaluated based on following:

  1. Bull spread
  2. Bearish spread
  3. Butterfly spread
  4. Straddle
  5. Strangle
  6. Strip
  7. Strap
  8. Condors
  9. Box

The detailed evaluation is as below:

Bull Spread

Taking call @ Extreme positions:

 2CE

 CALL

   Price  Premium
 Long @

50.00

2.60

 Short @

60.00

0.20

 StockPrice  Long  Short  Net Pos

40.00

(2.60)

0.20

(2.40)

42.25

(2.60)

0.20

(2.40)

45.00

(2.60)

0.20

(2.40)

47.25

(2.60)

0.20

(2.40)

50.00

(2.60)

0.20

(2.40)

52.25

(0.35)

0.20

(0.15)

55.00

2.40

0.20

2.60

57.25

4.65

0.20

4.85

60.00

7.40

0.20

7.60

62.25

9.65

(2.05)

7.60

65.00

12.40

(4.80)

7.60

Cancel out the transaction:

 2CE

 CALL

   Price  Premium
 Long @

55.00

0.75

 Short @

55.00

0.75

 StockPrice  Long  Short  Net Pos

40.00

(0.75)

0.75

0.00

42.25

(0.75)

0.75

0.00

45.00

(0.75)

0.75

0.00

47.25

(0.75)

0.75

0.00

50.00

(0.75)

0.75

0.00

52.25

(0.75)

0.75

0.00

55.00

(0.75)

0.75

0.00

57.25

1.50

(1.50)

0.00

60.00

4.25

(4.25)

0.00

62.25

6.50

(6.50)

0.00

65.00

9.25

(9.25)

0.00

Taking call @ intermediate positions:
 2CE

 CALL

   Price  Premium
 Long @

52.25

1.50

 Short @

57.25

0.35

 StockPrice  Long  Short  Net Pos

40.00

(1.50)

0.35

(1.15)

42.25

(1.50)

0.35

(1.15)

45.00

(1.50)

0.35

(1.15)

47.25

(1.50)

0.35

(1.15)

50.00

(1.50)

0.35

(1.15)

52.25

(1.50)

0.35

(1.15)

55.00

1.25

0.35

1.60

57.25

3.50

0.35

3.85

60.00

6.25

(2.40)

3.85

62.25

8.50

(4.65)

3.85

65.00

11.25

(7.40)

3.85

Using put option for bull spread:

 2PE

 PUT

   Price  Premium
 Long @

45.00

0.30

 Short @

55.00

4.25

 StockPrice  Long  Short  Net Pos

40.00

4.70

(10.75)

(6.05)

42.25

2.45

(8.50)

(6.05)

45.00

(0.30)

(5.75)

(6.05)

47.25

(0.30)

(3.50)

(3.80)

50.00

(0.30)

(0.75)

(1.05)

52.25

(0.30)

1.50

1.20

55.00

(0.30)

4.25

3.95

57.25

(0.30)

4.25

3.95

60.00

(0.30)

4.25

3.95

62.25

(0.30)

4.25

3.95

65.00

(0.30)

4.25

3.95

———————————————————————————————————————————————————————————————————————————————————

Bear Spread:

Taking call position at extreme ends:

 2CE

 CALL

   Price  Premium
 Long @

60.00

0.20

 Short @

50.00

2.60

 StockPrice  Long  Short  Net Pos

40.00

(0.20)

2.60

2.40

42.25

(0.20)

2.60

2.40

45.00

(0.20)

2.60

2.40

47.25

(0.20)

2.60

2.40

50.00

(0.20)

2.60

2.40

52.25

(0.20)

2.60

2.40

55.00

(0.20)

(0.75)

(0.95)

57.25

(0.20)

(3.00)

(3.20)

60.00

(0.20)

(5.75)

(5.95)

62.25

2.05

(8.00)

(5.95)

65.00

4.80

(10.75)

(5.95)

Taking put position at extreme ends:

 2PE

 PUT

   Price  Premium
 Long @

55.00

4.25

 Short @

45.00

0.30

 StockPrice  Long  Short  Net Pos

40.00

10.75

(4.70)

6.05

42.25

8.50

(2.45)

6.05

45.00

5.75

0.30

6.05

47.25

3.50

0.30

3.80

50.00

0.75

0.30

1.05

52.25

(1.50)

0.30

(1.20)

55.00

(4.25)

0.30

(3.95)

57.25

(4.25)

0.30

(3.95)

60.00

(4.25)

0.30

(3.95)

62.25

(4.25)

0.30

(3.95)

65.00

(4.25)

0.30

(3.95)

—————————————————————————————————————————-

Butterfly spread

 CALL
   Price  Premium
 Long @ E1             50.00              2.60
 Short @ E2             52.25              1.50
 Long @ E3             55.00              0.75
 StockPrice  Long (E1)  Short (E2)  Long (E3)  Net Pos

40.00

(2.60)

3.00

(0.75)

(0.35)

42.25

(2.60)

3.00

(0.75)

(0.35)

45.00

(2.60)

3.00

(0.75)

(0.35)

47.25

(2.60)

3.00

(0.75)

(0.35)

50.00

(2.60)

3.00

(0.75)

(0.35)

52.25

(0.35)

3.00

(0.75)

1.90

55.00

2.40

(2.50)

(0.75)

(0.85)

57.25

4.65

(7.00)

1.50

(0.85)

60.00

7.40

(12.50)

4.25

(0.85)

62.25

9.65

(17.00)

6.50

(0.85)

65.00

12.40

(22.50)

9.25

(0.85)

———————————————————————————————————————————————————————————————————————————————————

Straddle:

Top Straddle

 TOP
   Price   Premium
 Long Call    55.00              0.75
 Long Put    55.00              4.25
 StockPrice  LongCall  LongPut  Net Pos

40.00

(0.75)

10.75

10.00

42.25

(0.75)

8.50

7.75

45.00

(0.75)

5.75

5.00

47.25

(0.75)

3.50

2.75

50.00

(0.75)

0.75

0.00

52.25

(0.75)

(1.50)

(2.25)

55.00

(0.75)

(4.25)

(5.00)

57.25

1.50

(4.25)

(2.75)

60.00

4.25

(4.25)

0.00

62.25

6.50

(4.25)

2.25

65.00

9.25

(4.25)

5.00

Bottom Straddle

Bottom

Price

Premium

Short Call

55.00

0.75

Short Put

55.00

4.25

StockPrice

ShortCall

ShortPut

Net Pos

40.00

0.75

(10.75)

(10.00)

42.25

0.75

(8.50)

(7.75)

45.00

0.75

(5.75)

(5.00)

47.25

0.75

(3.50)

(2.75)

50.00

0.75

(0.75)

0.00

52.25

0.75

1.50

2.25

55.00

0.75

4.25

5.00

57.25

(1.50)

4.25

2.75

60.00

(4.25)

4.25

0.00

62.25

(6.50)

4.25

(2.25)

65.00

(9.25)

4.25

(5.00)

 

——————————————————————————————————————————————————————————————————————————————————–

Strip

 TOP
   Price   Premium
 Long Call         55.00           0.75
 Long Put         55.00           4.25
 StockPrice  LongCall  LongPut  Net Pos

40.00

(0.75)

21.50

20.75

42.25

(0.75)

17.00

16.25

45.00

(0.75)

11.50

10.75

47.25

(0.75)

7.00

6.25

50.00

(0.75)

1.50

0.75

52.25

(0.75)

(3.00)

(3.75)

55.00

(0.75)

(8.50)

(9.25)

57.25

1.50

(8.50)

(7.00)

60.00

4.25

(8.50)

(4.25)

62.25

6.50

(8.50)

(2.00)

65.00

9.25

(8.50)

0.75

——————————————————————————————————————————————————————————————————————————————————–

Strap

 TOP
   Price   Premium
 Long Call         55.00           0.75
 Long Put         55.00           4.25
 StockPrice  LongCall  LongPut  Net Pos

40.00

(1.50)

10.75

9.25

42.25

(1.50)

8.50

7.00

45.00

(1.50)

5.75

4.25

47.25

(1.50)

3.50

2.00

50.00

(1.50)

0.75

(0.75)

52.25

(1.50)

(1.50)

(3.00)

55.00

(1.50)

(4.25)

(5.75)

57.25

3.00

(4.25)

(1.25)

60.00

8.50

(4.25)

4.25

62.25

13.00

(4.25)

8.75

65.00

18.50

(4.25)

14.25

——————————————————————————————————————————————————————————————————————————————————–

Strangle

 Long
   Price   Premium
 Long Put         47.50           0.60
 Long Call         55.00           0.75
 StockPrice  LongPut  LongCall  Net Pos

40.00

6.90

(0.75)

6.15

42.25

4.65

(0.75)

3.90

45.00

1.90

(0.75)

1.15

47.25

(0.35)

(0.75)

(1.10)

50.00

(0.60)

(0.75)

(1.35)

52.25

(0.60)

(0.75)

(1.35)

55.00

(0.60)

(0.75)

(1.35)

57.25

(0.60)

1.50

0.90

60.00

(0.60)

4.25

3.65

62.25

(0.60)

6.50

5.90

65.00

(0.60)

9.25

8.65

——————————————————————————————————————————————————————————————————————————————————–

Condors

 PUT

   Price  Premium
 E1                              45.00           0.30
 E2                              47.50           0.60
 E3                              50.00           1.35  short  long  long  short
 E4                              52.50           2.60  StockPrice  E1  E2  E3  E4  NetPos

40.00

0.30

(0.60)

(1.35)

2.60

0.95

 Rule

42.25

0.30

(0.60)

(1.35)

2.60

0.95

          1.00  E1 < E2 < E3 <E4  PASS

45.00

0.30

(0.60)

(1.35)

2.60

0.95

          2.00  E2 – E1 =  E4-E3  PASS

47.25

(1.95)

(0.60)

(1.35)

2.60

(1.30)

          3.00  E3 – E1 = 2(E2 – E1)  PASS

50.00

(4.70)

1.90

(1.35)

2.60

(1.55)

52.25

(6.95)

4.15

0.90

2.60

0.70

55.00

(9.70)

6.90

3.65

0.10

0.95

57.25

(11.95)

9.15

5.90

(2.15)

0.95

60.00

(14.70)

11.90

8.65

(4.90)

0.95

62.25

(16.95)

14.15

10.90

(7.15)

0.95

65.00

(19.70)

16.90

13.65

(9.90)

0.95

——————————————————————————————————————————————————————————————————————————————————–

Box

 Price  Premium
 E1 – Call         50.00           2.60
 E1 – Put         52.50           2.60

 E1

 E2

 E2 – Call         52.25           1.50  StockPrice  LongCall  ShortPut  ShortCall  LongPut  NetPos
 E2 – Put         55.00           4.25

40.00

(2.60)

(9.90)

1.50

10.75

(0.25)

42.25

(2.60)

(7.65)

1.50

8.50

(0.25)

 Rule:

45.00

(2.60)

(4.90)

1.50

5.75

(0.25)

          1.00  E2 > E1  PASS

47.25

(2.60)

(2.65)

1.50

3.50

(0.25)

50.00

(2.60)

0.10

1.50

0.75

(0.25)

52.25

(0.35)

2.35

1.50

(1.50)

2.00

55.00

2.40

2.60

(1.25)

(4.25)

(0.50)

57.25

4.65

2.60

(3.50)

(4.25)

(0.50)

60.00

7.40

2.60

(6.25)

(4.25)

(0.50)

62.25

9.65

2.60

(8.50)

(4.25)

(0.50)

65.00

12.40

2.60

(11.25)

(4.25)

(0.50)


——————————————————————————————————————————————————————————————————————————————————–