Price Volatility, Trading Volume and Market Depth of Future Market

Many associate the financial market mostly with the equity market. The financial market is far broader and encompassing of shares, bonds, foreign exchange, real estate, commodities and numerous other asset classes. A segment of the market that has become faster and most important one is derivatives. The derivatives market has seen the highest growth of all financial market segments in recent years, which contribute to the stability of the financial system and plays an important role in functioning of the real economy. The derivatives market has attracted against the backdrop of the sub prime lending crisis, financial crisis, fraud cases and the near failure of some market participants. Although, the financial crisis has primarily been caused by structured credit - linked securities that are not derivatives, policy makers and regulators have started to think about strengthening regulation to increase transparency and safety both for derivatives and other financial instruments. Overall, safety and transparency and operational efficiency could be enhanced the Indian derivatives market to become even safer and more efficient.