There are four main types of participants in any Derivatives Market. They are:
1. Dealers
2. Hedgers
3. Speculators and
4. Arbitrageurs
A point to note here is that, the same individuals and organizations may play different roles under different market circumstances
developing a derivatives market in india
The primary objectives of derivatives include risk management, price discovery, and enhancing liquidity in financial markets. They allow participants to hedge against price fluctuations, providing a way to protect investments from adverse movements. Additionally, derivatives facilitate speculation, enabling traders to profit from market changes without the need for direct ownership of the underlying assets. Overall, they contribute to market efficiency and transparency.
Normal market ( Equity or Stock Market ) deals with trading of company shares , their and their index derivatives , mutual funds and bonds. Commodity market deals with the derivatives of physical commodities ( Metals , Edibles etc )
the derivative market means the the price of particular product in the market is fluctuating time by time.
Derivatives market is the market where derivative products are traded. It has a great demand all over the world with the US Derivatives market being the largest in the world. The prices of derivative products are determined based on the price movement of the underlying asset. Derivatives are extremely risky and are not for the novice investors. Some of the derivative products that are available in the derivatives market are: a. Futures b. Forwards c. Options d. Swaps e. Swap Options f. Basket Trades g. etc
Buyers and sellers
The derivatives market serves the needs of several groups of users, including those parties who wish to hedge, those who wish to speculate, and arbitrageurs.
Futures and options
satisfaction from purchase for consumers
As of October 2023, OCC (Options Clearing Corporation) is functioning effectively within the derivatives market, facilitating a significant volume of options trades. The organization continues to adapt to changing market conditions and regulatory requirements, ensuring robust risk management and clearing processes. Its financial health appears stable, reflecting ongoing growth in options trading and increased participation from various market participants.
it is an international financial market where participants buy and sell debt securities
Participants in the primary market involve the issuers, for example, companies or governments, who are selling securities to raise funds. As well as you have the investors who are purchasing these securities directly from the issuers. These investors could be individuals, institutional investors like mutual funds or pension funds, or other things looking to invest money.