Derivative Markets in India

Like the growth of other markets, derivative markets are growing very fastly in India. In past 1952, it was banned. But after understanding, it is good tool of minimize the business risk, Securities exchange board of India has first started derivative trading in different stock exchange. Now, after 2001, any one can trade the derivative products in NSE and BSE.


NSE's derivative market is of more than Rs. 130 Lakhs Crores. It is traded with the name of equity derivatives for saving the risk in priced due to fluctuations.


As per International organisation of scientific research (http://www.iosrjournals.org/iosr-jef/papers/vol3-issue3/D0332542.pdf )


Financial derivatives have earned a well deserved extremely significant place among all the financial instruments (products), due to innovation and revolutionized the landscape. Derivatives are tool for managing risk. Derivatives provide an opportunity to transfer risk from one to another. Launch of equity derivatives in Indian market has been extremely encouraging and successful. The growth of derivatives in the recent years has surpassed the growth of its counterpart globally. The Notional value of option on the NSE increased from 1195.691178 lakhs USD in 2003 to 354648.1941 lakhs USD in 2012 and notional value of NSE futures increased from 14329.35627 lakhs USD in 2003 to 39228.38563 lakhs USD in 2012. India is one of the most successful developing country in terms of a vibrate market for exchange-traded derivatives. The equity derivatives market is playing a major role in shaping price discovery. Volatility in financial asset price, integration of financial market internationally, sophisticated risk management tools, innovations in financial engineering and choices at risk management strategies have been driving the growth of financial derivatives worldwide, also in India. Finally we can say there is big significance and contribution of derivatives to financial system. 

Derivatives in Commodities 


The commodity derivative market has been functioning in India since the nineteenth century with organized trading in cotton through the establishment of Cotton Trade Association in 1875. In commodity market, there is national commodity and exchange limited which is public company in company act. It is also provide the platform of commodity derivative products exchange in its market.

Forward markets commission regulates national commodity and derivative exchange ltd (NCDEX). There are 36 products can be bought and sold on derivative basis in In India. There products are oil, rice, wheat and others.

Related : Financial Derivatives 

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Accounting Education: Derivative Markets in India
Derivative Markets in India
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