IDEAS home Printed from https://ideas.repec.org/a/acg/sijcom/v8y2020i3p39-44.html
   My bibliography  Save this article

A Derivative is a Risk Hedging Tool from Investor Perspective

Author

Listed:
  • S Manjushree

    (Government First Grade College Narasimharajapura)

Abstract

Derivatives products provide certain important economic benefits such as risk management or redistribution of risk away from risk-averse investors towards those more willing and able to bear the risk. Derivatives also help price discovery, i.e., the process of determining the price level for any asset based on supply and demand. These functions of derivatives help inefficient capital allocation in the economy; at the same time, their misuse also poses a threat to the stability of the financial sector and the overall economy. In the mid-1990s, India started reviving the exchangetraded commodity derivatives market. It introduced a variety of instruments in the foreign exchange derivatives market, while exchange-traded financial derivatives were introduced in 2001. Given India’s experience in informal derivatives trading, the exchange-traded derivatives were quick to pick up substantial volumes. This paper presents the concept of derivative and types of derivative products and how the investor perceives the derivative instrument as a risk-hedging tool in shivamooga city. The study is selected 70 respondents and used percentage analysis. The result obtained from the study reveals that the investor prefers a derivative is a risk-hedging tool.

Suggested Citation

  • S Manjushree, 2020. "A Derivative is a Risk Hedging Tool from Investor Perspective," Shanlax International Journal of Commerce, Shanlax Journals, vol. 8(3), pages 39-44, July.
    • Handle: RePEc:acg:sijcom:v:8:y:2020:i:3:p:39-44
    DOI: 10.34293/commerce.v8i3.3131
    as

    Download full text from publisher

    File URL: http://www.shanlaxjournals.in/journals/index.php/commerce/article/view/3131
    Download Restriction: no
    File URL: http://www.shanlaxjournals.in/journals/index.php/commerce/article/view/3131/2744
    Download Restriction: no
    File URL: https://libkey.io/10.34293/commerce.v8i3.3131?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Luyali Newton Chanzu & Mouni Gekara, 2014. "Effects of Use of Derivatives on Financial Performance of Companies Listed in the Nairobi Security Exchange," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(4), pages 27-43, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Efanga, Udeme Okon & Hanson, Uwem Effiong & Ekanem, Boniface Christopher, 2020. "Derivative Securities and Its Impact on the Nigerian Stock Market," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(9), pages 278-285, September.
    2. Mohamed Rochdi Keffala, 2018. "Analyzing the effect of derivatives on the financial soundness of commercial banks in Italy: An approach based on the CAMELS framework," Review of Financial Economics, John Wiley & Sons, vol. 36(3), pages 267-283, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:acg:sijcom:v:8:y:2020:i:3:p:39-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: S.Lakshmanan (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.