Sustainable Development: A Study of Indian Financial Derivatives Market

The world financial market has undergone qualitative changes in last three decades due to phenomenal growth of derivatives, which play a significant role in implementing financial policies. In the present business scenario, importance of derivatives market is an ingenious feat of financial engineering that provides an effective solution to the problem of risk that is embedded in the price unpredictability of the underlying asset. In India, the sustainable development of derivatives market is relatively a recent phenomenon. Since its inception in June 2000, derivatives market has exhibited exponential growth, both in terms of volume and number of traded contracts. In 8 years, derivatives trading in India has surpassed cash segment in terms of turnover and number of traded contracts.

The present study highlights about the types of derivative products, regulation, sustainable growth and volatility of derivative products in Indian stock market. It is an attempt to show the growth and trend of financial derivative of NSE (National Stock Exchange) and BSE (Bombay Stock Exchange)