derivative market in india - a growth prespective
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8/6/2019 Derivative Market in India - A Growth Prespective
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DERIVATIVE MARKET IN INDIA
- A GROWTH PERSPECTIVE
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INTRODUCTION
Derivatives are recognized as the best and most cost-efficient way of
meeting the felt need for risk hedging in certain types of commercial and
financial operations.
y
Through the use of derivatives produc ts, it is possible to partially or fullytransfer pric e risk away from risk-averse investors towards those more
willing and able to bear risk by loc king in asset pric es.
y D erivatives also help pric e disc overy, i.e. the proc ess of determining the
pric e level for any asset based on supply and demand.
y D erivatives market in India started working in 2001
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RESEARCH MOTIVATION
y Derivatives market has emerged in India after 2000, but its foundation
had already been laid just after the reforms of the stoc k market between
1993 and 1996 and these reforms paved the way for the exc hange
traded equity derivatives market in India
y The total turnover of derivatives market has already superseded the
total turnover of c ash market in India. The sc reen based trading in India
has given an edge to the trading of derivatives in India. The derivatives
market of India has expanded torrently but it¶s still very less in
c omparison to the other developed markets of the world.
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OBJECTIVE OF THE STUDY
yTo study Indian derivatives market
yTo study different constituents of Indianderivatives market e.g. commodity derivativesmarket, foreign exchange derivatives market and
exchange traded financial derivatives market.
yTo study the various regulatory requirements of derivatives market of India
yComparative study of cash market andderivatives market of India
yComparative study of Indian derivatives marketand global derivatives market
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TYPES OF DERIVATIVES
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TURNOVER IN CRORES
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INDIAN DERIVATIVES MARKET
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FINDINGS AND DISCUSSION
y After the economic reforms of 1991, capital market
had gained momentum and it paved the way for thederivatives market in India
y In India there are mainly two exchanges e.g. BSEand NSE in which NSE accounts for nearly all the
exchange traded derivatives trading.y Index options and Stock futures has the maximum
share of the total derivatives market and thatmakes India to come in highest position in trading
of these two products.y In both futures and options market, as far as most
traded contract is concerned, Index trading has gotthe maximum share.
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TO CONCLUDE :
BENEFITS :
1. Pric e Disc overy
2. Risk Management
3. They Improve Market Effic ienc y for the Underlying Asset
4. Derivatives Also Help Reduc e Market Transac tion Costs
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TO CONCLUDEDRAWBACKS :
1. Derivatives inc rease spec ulation and do not serve
any ec onomic purpose.
2. Indian Market is not ready for derivative trading
3. Disasters prove that derivatives are very risky and highly leveraged
instruments
4. Derivatives are c omplex and exotic instruments that Indian
investors will have diffic ulty in understanding
5. The existing c apital market is safer than D
erivatives
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