National Securities Depository Limited · BSE:NSDL
National Securities Depository — Investor Presentation (July 2023)
48 slides from National Securities Depository's investor presentation, July 2023
Slide 1: Let's Understand Derivative Trading
Let’s Understand Derivative Trading Be A Prudent Investor
Slide 2: Indian Securities Market - Overview
Indian Securities Market - Overview Market Regulator SEBI Stocks and Commodities Other Depositories Derivative Intermediaries Exchanges Stock Brokers, RTAs, Mutual NSE, BSE, MSE, NSDL, CDSL Funds, MCX etc. Investment Advisors etc.
Slide 3: Starting Investment in Securities Market
Starting Investment in Securities Market Accounts Required Bank Account Trading or Broking Account Demat Account Many DPs offer a 3-in-1 account opening facility which gives you the convenience of opening a trading, demat and bank account – all together. Now many DPs are offering online demat accoun
Slide 4: About NSDL
About NSDL 1996 Demat accountholders First One of the leading present in 99.27% of Depository in Depositories in the world pincodes in India India Wide service network – all States and UTs No. of Service Centres – 59,682
Slide 5: Growing Custody Value
Growing Custody Value > 89% 294.45 337.39 Market Share 227.51 119.30 67.56 Dec. Dec. 2015 Dec. 2020 Dec. June 2023 2010 2021 Total Value of All Assets Held In All NSDL Demat Accounts in ₹ Lakh Crore
Slide 6: NSDL's Progress
NSDL’s Progress 350 Bank deposits and 302 300 NSDL Custody Value 250 244 200 186 172 169 160 155 146 150 140 Aggregate Bank Deposits 129 of All Scheduled Banks (in 117 ₹ Lakh Crore) 110 100 NSDL Demat Custody Value (in ₹ Lakh Crore) 50 Bank Deposit Source : RBI 0 Bulletins Mar. 31, 2017 Mar. 31, 201
Slide 7: NSDL's Progress
NSDL’s Progress GDP and NSDL GDPCustody Value and NSDL Custody Value 350 302 300 250 244 237 201 198 GDP at Market Price (in ₹ Lakh Crore) 200 190186 NSDL Demat Custody Value (in ₹ Lakh 171172 Crore) 154 160 146 150 100 50 GDP Source : https:// dbie.rbi.org.in/ 0 2016-17 2017-18 2018-19 2019-20 2020
Slide 8: Indian Securities Market - Depository System
Indian Securities Market - Depository System Issuer Company / RTA Clearing Corporation (NSE Clearing Other Depository Limited/ Indian Clearing Corporation Limited) DP 1 DP 2 Stock Broker / Stock Broker / Trading Member 1 Investor 1 Investor 2 Clearing Member 2
Slide 9: Services offered by Depository Participant
Services offered by Depository Participant Account Opening Change in account details Demat*, Remat of Account freeze securities, (Account level, ISIN Conversion & Redemption level of Mutual Fund Units and Quantity level) Transfer of securities** Pledge and Margin Pledge of securities *Even unlisted
Slide 10: Key points on Anti-Money Laundering
Key points on Anti-Money Laundering Legislative and Regulatory References • Prevention of Money Laundering Act, 2002 • Prevention of Money Laundering (Rules), 2005 • SEBI Master Circular – October 15, 2019 What is Money Laundering (ML)? • Money Laundering is “the process in which the proceeds of cri
Slide 11: Key points for all Investors
Key points for all Investors Individuals: • Provide officially valid documents for proof of identity and address • Furnish correct information on income, occupation, business, marital status, etc. • Provide accurate financial information – salary or business income as applicable • Inform about any c
Slide 12: Be a Prudent Investor
Be a Prudent Investor Keep record of documents signed, account statements, contract notes received and payments made. Save important emails and take periodic back up of data. Change password of your online accounts frequently. Never share your passwords, OTP, CVV and PIN with any one. Never click on
Slide 13: Be a Prudent Investor
Be a Prudent Investor Inform your DP about any change in your Personal Information such as address, bank account immediately. Always mention your Mobile Number and email ID in account opening form and keep them updated. NSDL publications and presentations are available in Hindi, English and other la
Slide 14: Be a Prudent Investor – Don'ts
Be a Prudent Investor – Don’ts Never deal with any unregistered or unauthorised market intermediary. Check on the SEBI’s website that your stock broker / authorised person, mutual fund distributor, investment advisor are registered with SEBI. Never invest with borrowed money. Avoid unnecessary loans
Slide 15: Be a Prudent Investor
Be a Prudent Investor Nominate Karo - Surakshit, Samajhdaar, | a NSDL aur Atmanirbhar Niveshak Bano! Tecate Hurry!! Last date is 30% September, 2023 ; r NOMINATE YOUR LOVED ONES TODAY!! Opting-in/Opting-out of nomination is mandatory in your Demat Account to avoid your account becoming inactive SCAN
Slide 16: Be a Prudent Investor
| Be a Prudent Investor @ NSDL Technology, Trust & Reach [PT Do Not Fall Prey To Stock Tips, Hot Picks etc. Circulated on Twitter, Instagram, WhatsApp, Telegram, Unsolicited SMS, YouTube Channels etc. Be a Prudent Invest nsult a SEB/ intsgiist red Investment Advisor and D i e Investing
Slide 17: Be a Prudent Investor
| Be a Prudent Investor @ NSDL Technology, Trust & Reach [PT Do Not Invest In Any Ponzi Scheme, Unregistered Collective Investment Scheme or Any Other Schemes Promising Unrealistic Returns
Slide 18: NSDL Newsletter for Investors
NSDL Newsletter for Investors The Financial Kaleidoscope – Free monthly newsletter Newsletter – The www.nsdl.co.in Education Financial Kaleidoscope
Slide 19: SEBI's Mobile App for Investor Education
SEBI’s Mobile App for Investor Education
Slide 20: If You are holding Securities in Paper form
If You are holding Securities in Paper form 1. Provide PAN, KYC information and Nomination to RTA / Company for all joint holders. 2. Get PAN and Aadhaar linked for all joint holders. 3. Folio may be frozen if not complied. 4. Electronic interface provided by company / RTA for various service reques
Slide 21: Grievances Redressal
Grievances Redressal Read Investor Charter at www.nsdl.co.in Education 1. Lodge your complaint with SEBI at www.scores.gov.in/ or SEBI Mobile App - SCORES 2. SEBI Toll free helpline - 18002667575 / 1800227575 3. NSDL helpline - 022-48867000/022- 24997000 4. Online submission of Grievances at www.n
Slide 22: Derivative Trading
Technology, Trust & Reach Derivative Trading
Slide 23: What is a Derivative?
What is a Derivative? 1. It is a financial instrument that derives it value from some other asset. 2. The value is derived from the value of one or more variables related to underlying asset in a contractual manner. 3. Hence, derivative is actually a contract, not an asset.
Slide 24: Type of Underlying Assets
Type of Underlying Assets 1. Financial assets such as equities, debts, bonds, currencies and indices. 2. Agricultural produce such as grains, coffee, pulses and cotton. 3. Metals such as gold, silver, copper and aluminum. 4. Energy sources such as crude oil, natural gas, electricity and coal. 5. Int
Slide 25: Why Derivative?
Why Derivative? 1. Derivatives helps as a risk management tool for anyone having an underlying risk exposure based on the future price of a financial asset or a commodity. It works on the principle of transferring the price risk from one party to another who is willing to take that risk in anticipat
Slide 26: Types Of Derivative Contract
Types Of Derivative Contract Future: I. Futures contract is an agreement between two parties to 'buy' or 'sell' specified quantity of an asset on a specified date at a fixed price. II. Future contracts are standardized and are traded on exchange. Options: III. Gives the holder a 'Right’ to buy or se
Slide 27: Equity Derivatives - Stock Based
Equity Derivatives - Stock Based 1. Equity derivative is a contract between two persons to buy or sell the underlying equity share in the future at a specific price. 2. Equity derivative derives its value from increase or decrease in the price of underlying equity share in the market. 3. Equity deri
Slide 28: Equity Derivatives - Index based
Equity Derivatives - Index based 1. Index derivative is the derivative contract that has an index as underlying asset. 2. Examples : I. Nifty futures and Nifty options II. Nifty midcap 50 futures and options III. Sensex futures and options
Slide 29: Index Future - NIFTY50 Explained
Index Future - NIFTY50 Explained Paramete Explanation r Trading 1. Maximum of 3-month trading cycle - the near month Cycle (one), the next month (two) and the far month (three). 2. A new contract for 3 months duration is introduced on the trading day following the expiry of the near month contract.
Slide 30: Index Option - NIFTY50 Explained
Index Option - NIFTY50 Explained Parameter Explanation Trading 1. 7 weekly expiry contracts, 3 consecutive monthly contracts, 3 Cycle quarterly months of the cycle March / June / September / December and 8 following semi-annual months of the cycle June / December are available. 2. At any point in ti
Slide 31: Currency Derivatives
Currency Derivatives 1. Currency derivatives are contracts that involve the exchange of two currencies at a future date at a pre-defined rate. 2. Currency derivatives are similar to Stock Futures and Options. However, the underlying asset are currency pairs (such as USDINR or EURINR) instead of Stoc
Slide 32: Interest Rate Derivatives
Interest Rate Derivatives 1. Interest Rate Futures I. It’s a contracts to buy or sell a notional security or any other interest-bearing instrument or an index of such instruments or interest rates at a specified future date, at a specified price. II. Currently, IRF contracts are available on Governm
Slide 33: Commodity Derivatives
Commodity Derivatives 1. Commodity Derivative is the contract whose value is derived from an underlying commodity that is to be settled on a specific future date. 2. Commodity derivatives were the first form of derivatives. Later the concept of derivatives was introduced in other securities and asse
Slide 34: Basic Terms
Basic Terms Term Meaning Strike price This is the price at which the buyer of a call option can buy a stock on or before the expiry date of contract. This is the price at which the buyer of a put option can sell a stock on or before the expiry date of contract. Expiration date The date on which
Slide 35: Basic Terms
Basic Terms Term Meaning Contract value It is the notional value of a transaction, calculated by multiplying the contract size with the future price of the stock. Buyer of a Call The Buyer of a Call/Put Option is one who buys the right / Put Option (but not the obligation) to buy/sell the underlying
Slide 36: Basic Terms
Basic Terms Term Meaning In-the- An option is said to be In-the-money at a given time, if on money exercising the option at that time, it would bring cash inflow option for the buyer. This happens when the strike price of the underlying asset is less than its spot price. Out-of-the- An option is sai
Slide 37: Moneyness of Option Contracts
Moneyness of Option Contracts Particul Out of the In the Money At the Money ars Money Call Spot Price > Strike Spot Price = Strike Spot Price < Strike Option Price Price Price Spot Price < Strike Spot Price = Strike Spot Price > Strike Put Option Price Price Price
Slide 38: Basic Terms
Basic Terms Term Meaning Open Total number of option contracts that are still open i.e. have Interest not yet been exercised or not yet expired or have not been closed out by an offsetting transaction. Number of contracts traded during a given period of time. It Volume reflects the number of contrac
Slide 39: How To Interpret Open Interest?
How To Interpret Open Interest? An increase in open interest along with an increase in price is said to confirm an upward trend. Similarly, an increase in open interest along with a decrease in price confirms a downward trend. An increase or decrease in prices while open interest remains flat or dec
Slide 40: How To Trade In Derivatives?
How To Trade In Derivatives? 1. Derivative trading is open to all individual investors having a minimum net worth of ₹2,00,000. 2. You need the following to trade in derivatives – I. A trading (or broking) account II. A savings bank account III. A demat account (to keep collaterals / margins in dema
Slide 41: How To Trade In Derivatives?
How To Trade In Derivatives? 5. Select your stocks and contracts on the basis of the amount you have in hand, margin requirements, the price of the underlying shares, as well as the price of the contract. 6. You can place an order online or on phone or through broker’s website or App. 7. You can hol
Slide 42: Option Pricing
Option Pricing 1. There are various option pricing models. 2. Black-Scholes pricing model is one of most popular model. 3. It uses following factors to compute the fair price of an Option Contract - I. Spot price of the underlying asset II. Strike price of the option III. Volatility of the underlyin
Slide 43: Trading in Futures
Trading in Futures 1. Futures contracts have linear payoffs means there can be potentially unlimited upside or unlimited downside. 2. Convergence : The difference between spot and futures contract declines as the contract nears to its expiry so as to become zero on the date on maturity. 3. Future co
Slide 44: Taxation of Derivative Trades
Taxation of Derivative Trades 1. Prior to F. Y. 2005–06, all derivative trades were considered as speculative transactions for the purpose of Income Tax Act. 2. A loss on a derivative trade could only be set off against other speculative income which resulted in the payment of higher taxes for such
Slide 45: Remember – If you are trading in Derivatives
Remember – If you are trading in Derivatives 1. Derivatives are different from Equities. They need lot more understanding and research. 2. Understand the risks and market dynamics involved in derivative trading. 3. Take qualified professional’s help if you need. 4. Before commencing trade, understan
Slide 46: Remember – If you are trading in Derivatives
Remember – If you are trading in Derivatives 6. Always get a duly signed contract note for every trade and verify all details on it. 7. Keep adequate funds and securities to meet sudden margin calls. 8. A good strategy is to first invest in products like mutual funds. 9. After gaining some experienc
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Slide 48: Thank You
THANK YOU We welcome your feedback and suggestions about this program at www.nsdl.co.in / info@nsdl.com
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