A technical analysis of Indian spot and derivative market through digitization

All kind of Financial Instruments were traded on trading floors traditionally. Stockbrokers and sub-brokers show keen interest due to monopolized market. It was observed that not only they market the financial product rather they speculate and control the financial market as they have inside information for investment from the sources. These practices continued for a long time till the introduction of online trading in financial services. Digital trading supports all kinds of financial transactions say stock, share, bond, foreign exchanges or financial derivative from physical floor trading to e-trading. From Comscore's Sept. 2014, it is found that out of 300 mn internet users in India, 170 mn male within the age of 25+ years using internet for financial study. It is observed that India is growing faster in the field of computers, tablets, and smartphones that help in distribution channel of financial services. It gets easy to reduce costs and increase revenues. In this paper, the performances of derivative segments of National Stock Exchange and Bombay Stock Exchange have been studied with respect to a number of contracts and volume of trading during the period from 2003–04 to 2016–17. This study highlights the effect of digitalization on Indian Derivative Market and also analyses the implication of digitalization on security trading platforms in India. It reveals that due to digitalization in security trading the information relating to all aspects of security trading became transparent and accessible. This opportunity makes the security market very strong but affects negatively on derivative trading in India. Further, the problems and risks associated with digitalization in Financial Derivative dealings also examined with a view to make aware the players for hedging the risk and trading efficiently.