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Transaction of the Derivated Financial Products on the Romanian Capital Market. Advantages and Risks

Author

Listed:
  • Dalia Simion

    (Universitatea din Craiova)

  • Felicia Stancioiu
  • Iuliana Cetina

    (Academia de Studii Economice, Bucuresti)

Abstract

The volatility and the uncertainty are extended in the global world, being favorised of the vast proportion of the internet and by the IT development. The volatility and the uncertainty are contributing to the apperance of the speculative movements that increase the posibilities of the price overestimation of some financial actives on the new markets. The overestimated and optimistic foretell on the flow of some stock exchange deeds, on the new markets, lead to the collapse of the flow and to the fast migration of the capital on the other markets, reason for which the economy of some countries or big areas could be destroied. Taking all this into account the development of the opperations with derivated financial instruments have offerd for the market participants bothe the posibility of hedging and a way of speculation. There are advantages and also disadvantages resulted from the derivated use. The derivated market, similar with the financial markets, either creates welfare, or destroies it, because provides a way to transfer the risk. The derivated help the financial markets to become more eficient and also offers better opportunities for the risk management. There is the posibility that the failure of some big transactions with derivates to lead at the appearance of a systemic risk that could spread inside the financial system.

Suggested Citation

  • Dalia Simion & Felicia Stancioiu & Iuliana Cetina, 2007. "Transaction of the Derivated Financial Products on the Romanian Capital Market. Advantages and Risks," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 12(12(517)), pages 13-16, December.
    • Handle: RePEc:agr:journl:v:12(517):y:2007:i:12(517):p:13-16
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