“A study of investors’ preferences towards various investment avenues in capital market with special reference to derivatives in Ahmedabad city”

Investment culture among the people of a country is an essential prerequisite for capital formation and the faster growth of an economy. Investment culture refers to the attitudes, perceptions, and willingness of the individuals and institutions in placing their savings in various financial assets, more popularly known as securities. A bewildering range of investment alternative or channels for making investment are available like's real asset, precious metal, insurance, money market instrument as well as capital market instrument. Capital market refers to stock market which is associated with high risk and high return as against money market which provide risk free return. The subprime mortgage crises of 2008, global financial crises of 2009 and recently euro zone debt crises in 2011 have caused investors in financial products serious losses. And during this derivative instruments were largely criticised on account of their speculative nature. Derivatives are among the forefront of the innovations in the financial markets and aim to increase returns and reduce risk. They provide an out way for investors to protect themselves from the volatility of the financial markets. These instruments have been very popular with investors a over the world. Derivatives market present wide opportunity to the investors to get better return with hedge the portfolio and equipped to become a dominant player in the market. The problem with derivatives instruments is not with the instruments per se but the lack of understanding of their risk/return characteristics by someone. Study has tried to know the preferences and perceptions of investors who are dealing in derivatives along with other investment vehicles.