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INVESTORS’ PREFERENCE AND REGULATORY ASPECTS IN THE INDIAN

DERIVATIVES MARKET

Presentation · January 2020

DOI: 10.13140/RG.2.2.12947.84001

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 INVESTORS’ PREFERENCE AND REGULATORY
ASPECTS IN THE INDIAN DERIVATIVES MARKET

By
Vishnu S Kumar, Vijaya Kittu Manda, Preksha Dassani
 Contents of the Presentation

1. Backdrop of the study

2. Objectives
3. Review of literature and Research Gap
4. Research Method
5. Findings of the study
 Backdrop of the study

• Financial derivatives are secondary instruments that hold

their value from an underlying asset. (Council, 1995)

• SEBI introduced regulations-increased lot size of the

instruments to make it unaffordable for small retail traders
.
Backdrop of the study….
In October 2019, SEBI allowed Deutsche Bank to offer
custodial services to institutional investors in areas such as
gold, crude, natural gas and commodity indices. But why?

• To foster the institutional investor participation in the

derivatives market.

• To attract Foreign Portfolio Investors (FPIs) to invest in

derivatives via the offshore derivative instruments (ODI)
route began announcing liberalized norms.
 Objectives
1. To find the preferred investment segment of investors in
the derivatives market.
2. To know whether the investors update themselves about
the latest regulations made by SEBI.
3. To understand investors’ awareness regarding the latest
SEBI regulations and whether they get sufficient time to
respond to it or not.
 Review of literature
1. Investors preferred index options in derivatives, followed
by stock futures, stock options and index futures.
(Prasad, 2016).

2. (Gakhar, 2016) observed that derivatives market has

been able to reach the purpose for its establishment i.e.
to reduce volatility which exists in the stock market.
 Research gap

• To improve our understanding of recent developments of

regulations in the derivatives space.

• Further, adds to our knowledge of the perceptions of

market participants regarding derivative regulations.
 Research method
SAMPLING TECHNIQUE
SAMPLE SIZE &
ANALYSIS METHOD USED

• 127 derivatives market • Non-probabilistic convenience

investors sampling

• Data- collected during • Percentages method used for

December 2019 and analysis
January 2020
 Findings of the Study

1. 74.8% of the respondents invest in Index segment of the

derivatives market, 66.95% in company stocks, commodities
(12.6%) and the least in currencies (7.1%)

2. 56.3% of the respondents keep themselves updated while

the remaining 43.7% do not update themselves regarding the
latest regulations from SEBI.
Findings of the Study ….

3. 76% of investors invest in options market (i.e., 76%)

while 47.2% invest in futures market (i.e., 47.2%).

4. 61.8% of investors did not get sufficient time to react or c

hange their strategy after the change in SEBI regulations.
 Suggestions
FINDINGS SUGGESTIONS
44% of the investors Efforts must be made by the investors to seek
do not update information from reliable sources and take time to
themselves regarding respond to the changes made.
the latest regulations
from the SEBI It is important to update oneself, understand the
change and then react to the changes made by SEBI.

The investors should also make efforts to maintain a

personal record of the transactions.

Stock brokers and the markets should help cascade the

latest information to the investors from time to time to
enable them to enter into contracts with complete
information.
 Scope for further Research

• Additional questions to understand reasons for less

preference given to the currencies (7.1%) and commodities

(12.6%) segment of derivatives market.

• Why the options market is more preferred when compared

to the futures market ?

View publication stats

THANK YOU

Presented by

VISHNU S KUMAR
Postgraduate Student, Department of Commerce
St Aloysius College, Edathua, Kerala, INDIA 689573
Contact: + 91 8086254408;
Email: vishnusreelekha@gmail.com