Tag Archives: Derivatives Market

History Of Derivatives Market

HISTORY OF DERIVATIVES MARKET: Early forward contracts in the US., addressed merchants concerns about ensuring that there were buyers and sellers for commodities. However “credit risk” remained a serious problem. To deal with this problem, a group of Chicago business men formed the Chicago Board of Trade (CBOT) in the year 1848. The primary intention of CBOT.. was to provide a centralized location known

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Economic Function Of Derivative Market

Inspite of the fear and criticism with which the derivatives markets are commonly looked at. these markets perform a number of economic functions. Princes in an organized derivatives market reflect the perfection of market participants about the future and lead the prices of underlying to the perceived future level. The prices of derivatives converge with the prices of the underlying at the expiration of

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Growth Of Derivatives

Over the last three decades, the derivatives market has seen a phenomenal growth. A large variety of derivative contracts have been launched at exchanges across the world. Some of the factors driving the growth of financial derivatives are: Increased volatility in asset prices in Financial Markets. Increased integration of national financial markets with the International markets. Marked improvement in communication facilities and sharp decline

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Introduction To Derivatives

The emergence of the Market for Derivative products, most notably forwards, futures and options can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. By their very nature the financial markets are marked by a very high degree of volatility. Through the use of derivative products it is possible to partially

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