Topic: factors affecting investment decision in nepalese derivatives market

Investors invest in derivatives market with the help of knowledge components such as technical knowledge and fundamental knowledge. Similarly, training, experience and intuition are other factors that are considered by investors while investing in derivatives market. This study basically deals with the identification of various factors that affects investment decision in Nepalese derivatives market. The study is based on primary sources of data. Stratified and judgmental sampling method is used for selecting the sampling unit. Further, the study focuses on the descriptive and causal research designs by using structured questionnaire to deal with the issues raised as well as the inferential analysis to support the significance of the relationship between different variables.

There is positive correlation between return on investment and technical knowledge, fundamental knowledge, training, experience and intuition and the relationship is significant. International politics, international economy, national legal environment, knowledge on derivatives and economic data and reports are the most important factors that affect investment decision in derivatives investors. Advanced information communication technology (ICT), natural calamities and provision of physical delivery are the moderately affecting variables. Similarly, national politics and national economy are the least important factors affecting investment decision in Nepalese derivatives market. The most important factors for selecting a particular commodity for trading Nepalese derivatives market are expected return, past trend, risk appetite, investment horizon, and investment objectives. Moderately important factors are volatility and portfolio. Similarly, least important factors are contract size and price, liquidity and investible surplus.