Operations of Futures and Options with Reference to India Infoline Ltd, India

Financial markets are helpful to provide liquidity in the system and for the smooth functioning of the system. These markets are the centres that provide facilities for buying and selling of financial claims and services. The emergence of the market for derivatives products, most notably forwards, futures and options, can be traced back to the willingness of risk-averse economic agents to guard themselves against sun certainties arising out of fluctuations in asset prices. By their very nature, the financial markets are marked by a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking-in asset prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivative products minimize the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors. The article major intends is to scrutinize operations of futures and options with reference to India Infoline Ltd.