International Research Journal of Commerce , Arts and Science

 ( Online- ISSN 2319 - 9202 )     New DOI : 10.32804/CASIRJ

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A STUDY ON INVESTOR’S PREFERENCE TOWARDS EXCHANGE FUTURES AND OPTIONS WITH SPECIAL REFERENCE TO ERNAKULAM DISTRICT

    1 Author(s):  AKHIL SEBASTIAN

Vol -  8, Issue- 11 ,         Page(s) : 107 - 128  (2017 ) DOI : https://doi.org/10.32804/CASIRJ

Abstract

A study on derivatives is futile without knowing the attitude and perception of individual investors in the market.The derivative market segment in India use the derivatives instruments to hedge their risk and earn profit through speculation.. In the present highly uncertain business scenario, the importance of risk management is much greater than ever before. The emergence of derivatives market is an ingenious feat of financial engineering that provides an effective and less costly solution to the problem of risk that is embedded in the price unpredictability of the underlying asset. In India, the emergence and growth of derivatives market is relatively a recent phenomenon. The growth of derivatives usage over the last two decades has been rapid in both advanced economies and emerging markets. Derivatives are enormously useful instruments in the management of risk. In Kerala, the retail investors see derivative instruments as a risky investment option because many of them lack the basic knowledge regarding their purpose and modus operandi. Most of the investors withdraw their investment decision in financial derivative due to lack of knowledge and technical support. A close examination of the derivative market brings out the fact that the retail investors are ready to invest in the derivatives with a support extended by a third party. Therefore it is very important to have an insight into derivative market from the perspective of the investors in Kerala. This study will be very beneficial for the brokers, traders, financial economists, financial consultants and Authorities concerned .

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