Derivatives Market in India ..Future???

Hi,

Ample info on derivatives mkt in India and future could found on RBI website.
There's even an article written on it on the site by Rakesh Mohan, Dy Governor of RBI.

Bye
 
the derivatives segment is a gr8 tool to hedge risk on your portfolio but i believe that it is being also viewed as a tool of earning an easy buck which is extremly risk.
investor education should be made mandatory inorder to trade in futures and options in markets.
 
Derivatives in India is not been considered as a risk management tool. Only Big Financial Players like FIIs, Financial Institutions, Banks, Mutual Funds, are using Derivatives as risk management tool to reduce the risk arising out of volatility in asset prices.

The small investors in India are induced to go for derivatives by brokers/dealers to in the name of high profit with low investment.

The volume of derivatives are going up because of small investors entering the derivatives market for quick profits.

Its the speculation drives the derivative market.

If risk management is the main purpose of derivatives then why people suffer huge loss when the stock market crashes. That means, people use derivatives to make quick buck from small investment.

Investing in derivative requires the only 1/3 of the amount required for the real asset.
This less amount captures many investors. and falling in the trap.

When the market collapses, The main culprit is going to be derivatives. When the market collapses, derivative goes for the free fall, which the individual investor don't know, They don't know where to sell the assets.

Derivative is double edged sword, only educated investor can make use of it.
 
DERIVATIVES IN STOCK MARKETS IS ABSOLUTELY UNJUSTIFIED.....
IT IS A SORT OF LEGEL SATTA OR LEGAL MATKA.....


IT GIVES RISE TO SPECULATION AND CAN DAMAGE A GOOD SCRIP.....


I DUN NOE HOW MUCH PEOPLE WILL STOP EARNING MONEY IF DERIVATIVES IS STOPPED BUT AM SURE THAT IT WILL HELP TO REDUCE THE SUICIDES AMONGST THE TRADERS:SugarwareZ-177:
 
hi very good project................................................................................................................................................................:SugarwareZ-297:
 
Rajyedu said:
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
Click to expand...
i want to help on non performing assets of bank
 
Derivatives were originally designed in India to hedge food products and some precious metals. Starting from a controlled economy, India has moved towards a world where prices fluctuate every day. The introduction of risk management instruments in India gained momentum in the last few years due to the liberalization process. Hence, Derivatives are an integral part of the liberalization process to manage risk. NSE gauging the market requirements initiated the process of setting up derivatives market in India. Indian capital market finally acquired the much awaited international flavour when it introduced trading in futures and options on National Stock Exchange (NSE) in 2000 and on Bombay Stock Exchange (BSE) in 2001.

The growth of the Indian market is spear-headed mainly by retail investors, private sector institutions and large corporations. Foreign brokers such as JP Morgan Chase, e boosting their presence in India in reaction to the growth in derivatives. The variety of derivatives instruments available for trading is also expanding, resulting in the expansion of the derivatives market as a whole.
 
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