Derivatives Market in India ..Future???

[Rajyedu]

The emergence of the market for derivatives products, most notable forwards, futures, options and swaps can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. By their very nature, the financial markets can be subject to a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking-in asset prices. As instruments of risk management, derivatives products generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivatives products minimize the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors.

Factors generally attributed as the major driving force behind growth of financial derivatives are:

(a) Increased Volatility in asset prices in financial markets,
(b) Increased integration of national financial markets with the international markets,
(c) Marked improvement in communication facilities and sharp decline in their costs,
(d) Development of more sophisticated risk management tools, providing economic agents a wider choice of risk management strategies, and
(e) Innovations in the derivatives markets, which optimally combine the risks and returns over a large number of financial assets, leading to higher returns, reduced risk as well as transaction costs as compared to individual financial assets.
The need for a derivatives market

The derivatives market performs a number of economic functions:

1. They help in transferring risks from risk adverse people to risk oriented people
2. They help in the discovery of future as well as current prices
3. They catalyze entrepreneurial activity
4. They increase the volume traded in markets because of participation of risk adverse people in greater numbers
5. They increase savings and investment in the long run

[sankshep]

the market is quite hot now

[kartik]

the derivatives future in india is very optimistic because every investor wants to reduce his risk by hedging. More so there is speculation of a boom in the commodities derivative market .. keep your fingers crossed.. the future is risk management, the future is derivatives...

[rachit dave]

market is in no mood to come down....!it will raised d indian stander..!

[simran_bhatia]

it would be raising with the time and would be a good option in the future...

[rahulsinghpgdm]

man everything said above is cut copy paste job from ncfm derivative module if someone is really interested in vivid indian scenario of derivative pick up the book by susan thomas it really describes the ground reality thanks for the post

[rahulsinghpgdm]

a dyanamic question option put give the buyer right but not the obligation to sell asset at future date hw buyer can sell?

[rosaryxavier]

Originally Posted by rahulsinghpgdm

man everything said above is cut copy paste job from ncfm derivative module if someone is really interested in vivid indian scenario of derivative pick up the book by susan thomas it really describes the ground reality thanks for the post

hi friend.. can u explain the crux of that book

[sachinkothari00707]

I am having the entire view of this topic as my presentation anyone wants

[rahulsinghpgdm]

Originally Posted by sachinkothari00707

I am having the entire view of this topic as my presentation anyone wants

plz mail it to my mail id rahul8235@gmail.com...........thanks in advance