5. Factors Driving The Growth Of Financial Derivatives: Factors contributing to the growth of
derivatives are:
Price volatility,
Global-local openness and regulatory support,
Technological advancement,
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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684
Derivative
products
Technical
Assets
Derivative
Market
Forwards
Futures
Options
Swaps
Hardware,
i.e., Computer
Software
Brain ware
Know-how
Risk
Manage
Price
Volatility
Evolution of Derivatives:
Exotic
Exotic
Derivatives
-------Swaps
Options
Futures
Forward
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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684
The growth trend is outlined below: Due to the limitation on length of Research paper, beginning and
current data tables are represented and middle period data is ignored but considered in conclusion,
i.
Year: 2003-2004:-
Month
Total
Contracts
Total
Turnover
(T/o)
Premium
Turnover
Avg. Daily
Turnover
Avg. Daily
Premium
Turnover
Trading
Days
4-Mar
17,439
504.96
417.63
22.95
18.98
22
4-Feb
22,212
729.9
633.71
38.42
33.35
19
4-Jan
1,03,573
3,786.95
3,711.63
180.33
176.74
21
4000
3000
Total Turnover
2000
Premium Turnover
1000
22,212
1,03,573
4-Mar
4-Feb
4-Jan
Trading Days
Interpretation: In the initial time the total contracts were 17,439, reached to over the one lackh
contract size. The total T/o was also reached 3,787 from beginning of its 505 turn over. It shows the
development and growth was started in initial period only.
ii.
Year : 2004-2005:Month
Total
Contracts
Total
Turnover
Premium
Turnover
Avg. Daily
Turnover
Avg. Daily
Premium
Turnover
Trading
Days
5-Mar
7,070
242.57
58.8
11.03
2.67
22
5-Feb
9,213
304.42
155.45
15.22
7.77
20
5-Jan
43,942
1,414.58
1,114.18
74.45
58.64
19
4-Dec
1,54,902
4,947.40
4,504.80
215.1
195.86
23
4-Nov
1,57,458
4,694.82
4,213.01
234.74
210.65
20
4-Oct
1,15,298
3,290.36
2,776.22
164.52
138.81
20
4-Sep
39,788
1,094.29
866.17
49.74
39.37
22
4-Aug
22
4-Jul
10
0.32
0.32
0.01
0.01
22
4-Jun
22
4-May
1,146
38.77
38.77
1.85
1.85
21
4-Apr
2,892
84.79
84.79
4.24
4.24
20
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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Total Contracts
Total Turnover
Premium Turnover
Avg. Daily Turnover
01-Dec
01-Nov
01-Oct
01-Sep
01-Aug
01-Jul
01-Jun
01-May
01-Apr
01-Mar
01-Feb
01-Jan
Interpretation: from the above table it can be observed that, there were huge fluctuations in
Derivatives Market. From the April-04 till the end of August-04, Market was in bearish trend, than after
wards the market showed bullish throughout the 2004 year. The beginning of 2005 year also followed
by bearish trend.
iii.
Year 2015-16:Month
Total
Contracts
Total
Turnover
Premium
Turnover
Avg.
Daily
Turnover
Avg. Daily
Premium
Turnover
Trading
Days
16-Mar
15,11,583
75,437.51
891.53
3,771.88
44.58
20
16-Feb
24,84,837
1,19,908.89
830.11
5,709.95
39.53
21
16-Jan
26,28,859
1,32,590.30
520.4
6,629.51
26.02
20
15-Dec
23,08,640
1,20,287.52
643.79
5,467.61
29.26
22
15-Nov
20,05,197
1,05,526.29
650.06
5,554.02
34.21
19
15-Oct
81,09,124
3,22,276.53
1,204.65
16,113.83
60.23
20
15-Sep
59,66,403
2,27,665.08
1,121.28
11,383.25
56.06
20
15-Aug
1,49,70,460
6,26,775.30
961.9
29,846.44
45.8
21
15-Jul
3,17,40,117
13,27,201.53
1,296.12
57,704.41
56.35
23
15-Jun
1,54,23,676
6,30,200.02
2,299.12
28,645.46
104.51
22
15-May
97,29,507
3,98,923.64
2,487.72
19,946.18
124.39
20
15-Apr
93,30,991
3,88,215.71
2,925.47
20,432.41
153.97
19
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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684
60000
Premium Turnover
50000
40000
30000
20000
10000
3,88,215.71
3,98,923.64
6,30,200.02
13,27,201.53
6,26,775.30
2,27,665.08
3,22,276.53
1,05,526.29
1,20,287.52
1,32,590.30
1,19,908.89
75,437.51
Interpretation: The above table and graph it can be observed that the Derivatives Market is following
the same bearish and bullish trend like previous years, i.e. beginning of year following bearish and
ending year with bullish trend. It may be found that, there are some external factors affecting the
Market volatility.
iv.
Year wise Derivatives Turnover in BSE:Total
Contracts
Total Turnover
Premium
Turnover
Avg. Daily
Turnover
Trading
Days
2016-2017
1,16,728
6,450.42
2,014.73
56.09
115
2015-2016
10,62,09,394
44,75,008.32
5,861.82
18,117.44
247
2014-2015
50,54,78,869
2,03,62,741.42
83,797.29
243
2013-2014
30,19,42,441
92,19,434.32
36,730.81
251
2012-2013
26,24,40,691
71,63,576.66
28,654.31
250
2011-2012
3,22,22,825
8,08,475.99
3,246.89
249
2010-2011
5,623
154.33
0.61
255
2009-2010
9,028
234.06
0.96
244
2008-2009
4,96,502
11,774.83
48.46
243
2007-2008
74,53,371
2,42,308.41
965.37
251
2006-2007
17,81,220
59,006.62
236.97
249
2005-2006
203
8.78
0.03
251
2004-2005
5,31,719
16,112.32
63.69
253
2003-2004
1,43,224
5,021.81
19.77
254
Year
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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684
90000
80000
70000
Trading Days
60000
50000
40000
30000
20000
10000
5,861.82
2,014.73
6,450.42
44,75,008.32
2,03,62,741.42
92,19,434.32
71,63,576.66
8,08,475.99
154.33 234.0611,774.83
2,42,308.41
59,006.62 8.78 16,112.32
5,021.81
1,16,728
10,62,09,394
50,54,78,869
30,19,42,441
26,24,40,691
3,22,22,8255,623 9,028 4,96,502
74,53,371
17,81,220 203 5,31,7191,43,224
2016- 2015- 2014- 2013- 2012- 2011- 2010- 2009- 2008- 2007- 2006- 2005- 2004- 200317
16
15
14
13
12
11
10
09
08
07
06
05
04
Interpretation: From the above table and graph, it is clear that, the Derivative Market has vast bullish
and bearish trends in the one and half decade. Every year it is starting journey with bearish and ending
with bullish trend. In the year 2008 to 2010-11, the market was not in good condition, it might be due
to financial crisis in international market. But the market has changed its trend from the year 2011
and has performed well for the next half decade. The turnover during this period was reached from 8.9
lack (approx) to 2crore and 3 lack (approx) in the year 2014-15. Whereas it started falling down and
reached to 44.75 lach in the next year (i.e. 2016). Till the month of September 2016 the total turnover
was 6,450 (approx).
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Journal of Exclusive Management Science October 2016 - Vol 5 Issue 10 ISSN 2277-5684
Findings & Conclusion: This paper consists, the study related to the trends in Derivative Market (w.r.t
BSE India) for the past one and half decade. Where it is observed that, the Derivative Market has many
ups and downs in every year, still it is performing very well which result in attraction of customers
(market player) to invest into this segment to hedge the risk associate with Cash Market. Derivative
products as used as a tool to avoid the risk of investment and is used to forecast the future prices of
particular asset or investment. This is the reason for the growth of Derivative Market compare to any
other option for investment.
References:
Financial Derivatives (Theory, concepts and problems), S.L Gupta, PHI Learinng private Limited. 9 th
edition- 2010.
Fundamentals of Financial Derivatives, Prafullah Kumar Swain, Himalaya Publishing House, first
edtion-2012.
Derivative Market in India, Practice problems and Prospect, Th. No 401, B.Rajkumar, BM-2012
Osmania University, Hyderabad.
www.bseindia.com
www.moneycontrol.com
www.businessdictionary.com
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