A Study On Financial Derivatives With Special Reference Essay

2339 WordsAug 19, 201610 Pages
A STUDY ON FINANCIAL DERIVATIVES WITH SPECIAL REFERENCE TO NIFTY F&O ABSTRACT Derivatives are the contracts whose value is derived from the value of some underlying assets such as equities, commodities or currencies. These contracts helps the investor to reduce the risk of wearing down of his investments. The application of derivatives can be observed as an opportunity to transfer the risk from the person who wish to ignore it, to the person who is ready to accept it i.e. risk management hedging through derivatives. In an environment, in which portfolio managers are pressured to beat the indices, need to protect the investment gains in their portfolios from financial risk. Different hedging strategies can be formulated to meet the particular hedging requirements. Various studies on the outcomes of future and option listing on the underlying asset (equity, commodity, currency market) have been done with a view to study potential of financial derivatives and intensification of derivatives as a hedging instrument. NSE traded derivatives have shown an exponential growth in market turnover, it has grown from Rs 2365 cr. in 2000-2001 to Rs 22916531.92 cr. in 2015-16. NSE can be considered as the one of the high-flying exchanges amongst the entire emerging markets in terms of equity derivatives. The following study tries to make an understanding of operational concepts of F&O mechanism. It encompasses analysis of Nifty Index future & options one month delivery contacts to get
Open Document