A STUDY ON FUTURE AND OPTIONS MARKET

Abstract

Derivatives are important financial instruments that derive their value from underlying assets such as stocks, indices, commodities, and currencies. The present study titled “A Study on Derivatives (Futures & Options)” focuses on understanding the concept, functions, and importance of derivatives in financial markets, with special reference to Karvy Stock Broking Ltd. Futures and options are widely used derivative instruments that help investors manage risk and enhance returns. Futures contracts involve an obligation to buy or sell an asset at a predetermined price and date, while options provide the right, but not the obligation, to buy or sell an asset. These instruments are extensively used for hedging, speculation, and arbitrage in financial markets. This study aims to analyze the role of derivatives in risk management and investment strategies. It also examines the services provided by Karvy Stock Broking Ltd in facilitating derivatives trading, including trading platforms, advisory services, and research support. Primary data is collected through questionnaires and investor feedback, while secondary data is obtained from books, journals, company reports, and online sources. The collected data is analyzed using statistical methods to understand investor awareness, preferences, and usage of derivatives. The findings of the study indicate that derivatives play a significant role in managing financial risks and improving market efficiency. However, the study also highlights the need for proper knowledge and awareness among investors due to the complex and risky nature of these instruments. The study concludes that derivatives are essential tools in modern financial markets, and financial institutions like Karvy Stock Broking Ltd play a crucial role in promoting their use by providing reliable platforms and services.