The Indian Financial System: Markets, Institutions and Services, 3rd Edition

9

The Derivatives Market

Chapter Objectives

This chapter will enable you to develop an understanding of the following:

1. Meaning of derivatives

2. Economic benefits of derivatives

3. History of derivatives trading

4. Need for financial derivatives

5. Types of financial derivatives

6. Distinctive features of the derivatives market

7. Exchange-traded versus OTC derivatives markets

8. Traders in the derivatives market

9. The derivatives market in India

10. Forwards and futures—need for futures markets, futures terminology, and pricing futures

11. Futures trading strategies

12. Options—types, salient features, terminology, option greeks, comparing futures and options, benefits of options, payoff profile of put and call options, and Black–Scholes option pricing model

13. Options trading ...