a study on investors behaviour towards financial derivatives

Abstract

Derivatives are tremendously helpful instruments within the management risk. They will be accustomed hedge and existing market exposure (forwards and futures), to get glitch fortification to an exposure even whereas holding upper side potential (options), toremodelthecharacterofanexposure(swaps),andtoobtaininsuranceagainstevents admire default (credit derivatives). For firms and monetary establishments wanting to manage exchange-rate risk, input costs, finance costs, or credit exposure, these are valuablefeatures,andclarifyasubstantialextentthegrowingofthederivativesmarket as economic process and world-wide interlink ages havegrown. newline newlineGiventhelargersizeoftheIndianderivativesmarket,themodesthistoryand therefore the vital contribution of individual investors within the total derivatives turnover one might result in assume that the retail investors are making money in the Indian derivatives market. However, the fact is incredibly unsatisfactory and even pathetic. Although derivatives originally emerged as a hedging tool against market risks, the feedback from individual traders suggest that they are exploiting derivatives platform mostly for speculation. And more seriously, most of them had burned their fingers in derivativestrading. newline newline