As the name suggests, derivatives are those instruments that derive their value from an underlying asset. The derivatives market in India consists of the forward market and the exchange traded futures market. Futures and options trading are typically exchange traded products. Option trading in India is a lot more complex compared to futures trading which is more plain vanilla. Here are some key details pertaining to the derivatives trading in India…

The derivatives market in India consists of the unorganized forward market and the exchange-traded futures & options market. Derivatives trading for our purpose basically refer to the exchange traded derivatives market. The principal trading products in the derivative market in India are futures and options. An example of the forward market in India is the inter-bank forward dollar market used for currency hedging.