Wednesday, July 18, 2012

What are the functions of Derivative market

1. help in discovery of futures as well as current price.
2.  helps to transfer risks from those who have them but may not like them to those who have an appetit for them.
3. creates high liquidity though it is linked with the underlying cash market.
4. helps in increasing savings ad investment in long run. Transfer of risk enables market participants to expand their volume of activity.

No comments:

Post a Comment