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Findings:
The derivatives market is newly started in India, and everyone does not know it.
So SEBI should take necessary actions to create awareness among investors.
In order to create the derivatives in India, the SEBI should revise some of their
regulations like contract size, participation of FII in the derivatives market.
Contract size should be minimized, because small investor cannot afford huge
premiums.
In bearish market, the investor is suggested to opt for put options in order to
minimize his losses.
So the investor should opt for put options in order to minimize his losses.
So the investor should opt for call options in order to maximize his profits.
In bullish market, the investor is suggested to opt for call options in order to
maximize the profits.
Conclusion:
However, because they are markets for risk as opposed to physical assets,
derivatives markets can be very dangerous places for unsophisticated investors.
People who reduce their risk by entering a derivative market are called hedgers,
and those who increase their risk are called speculators.
The derivative securities markets play a vital role in the modern financial systems,
and without them many common business transactions would be rendered much riskier or
practically impossible.
Derivatives are increasingly being used to manage various kinds of risk exposure,
to obtain desirable financing, and to enhance investment and speculative opportunities.
The complexities of the derivatives markets are increasing every day, and it is
important for the policy makers and regulators to understand these markets before hastily
adopting any major legislative or regulatory changes.
There are many unresolved policy issues relating to the derivatives markets that
can only be answered by more data on these transactions.
Bibliography:
Websites:
www.derivativesindia.com
www.indiainfoline.com
www.nseindia.com
www.hseindia.org
www.bseindia.com
www.sebi.gov.in
Referred books: