• Dr.P.V.V.SATYANARAYANA

The derivatives market is a financial market where financial instruments known as derivatives are traded. Derivatives are financial contracts whose value is derived from the performance of an underlying asset, index, rate, or event. These contracts allow investors to speculate on the price movements of the underlying assets without owning the assets themselves. The most common types of derivatives include futures contracts, options, swaps, and forwards.. This has led to rapid and unpredictable variations in financial assets prices, interest rates and exchange rates, and subsequently, to exposing the corporate world to an unwieldy financial risk. In the present highly uncertain business scenario, the importance of risk management is much greater than ever before. The emergence of derivatives market is an ingenious feat of financial engineering that provides an effective and less costly solution to the problem of risk that is embedded in the price unpredictability of the underlying asset. In India, the emergence and growth of derivatives market is relatively a recent phenomenon. Since its inception in June 2000, derivatives market has exhibited exponential growth both in terms of volume and number of traded contracts. The market turn-over has grown from Rs.2365 crore in 2000-2001 to Rs. 77010482.20 crore in 2022-2023. Within a short span of eight years, derivatives trading in India has surpassed cash segment in terms of turnover and number of traded contracts. The present study encompasses in its scope an analysis of financial derivatives play a crucial role in risk management, allowing businesses and investors to hedge against market uncertainties. They also provide opportunities for speculation, enabling traders to profit from anticipated market movements. However, the use of derivatives involves a degree of complexity and risk, and market participants need to carefully manage these instruments to avoid potential financial losses.

Forward, Futures, Options, Financial Derivatives, Risk Management, Exchange rates

"Role of Financial Derivatives Market in India- an Empirical study", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.11, Issue 1, page no.g85-g97, January-2024, Available :http://www.jetir.org/papers/JETIR2401612.pdf

"Role of Financial Derivatives Market in India- an Empirical study", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.11, Issue 1, page no. ppg85-g97, January-2024, Available at : http://www.jetir.org/papers/JETIR2401612.pdf