|
Commodity
Futures: A Ray of Hope
-- K
Seethapathi and T Jyotsna
The
existence of commodity markets can be considered as old as
Indian history itself. It is the market wherein forwards,
futures and options contracts are traded on all the commodities.
Commodity futures allows both the producers and consumers
of agricultural products in managing the price risk that might
arise due to various factors. But this market has not been
utilized to its fullest extent. There still exist certain
drawbacks and intricacies that need to be addressed by the
government. What are the Issues? Read on.
© IUP. All Rights Reserved.
Interest
Rate Futures: New Kid on the Block
-- Vivek
Jain and Sanjeev Kumar
The
Indian derivatives market witnessed a mammoth change in the
recent past. Investors in this market have access to a host
of instruments such as stock options, stock futures, index
futures etc. With the interest rate scenario showing a southward
trend, the RBI has given a green signal for trading in exchange
traded interest rate futures. These instruments can be used
by the market participants for hedging their transactions
against the fluctuations in the interest rates. But it is
important for investors to understand the niceties of this
new instrument in order to reap maximum benefits.
© IUP. All Rights Reserved.
Credit
Derivatives : How
Much Should They Cost?
-- Jessica James
Pricing
of credit derivatives has been a long debated issue. So far
no accurate method for pricing credit derivatives has been
developed and some of the current models often rely on data
that is neither available nor relevant sometimes. For banks,
pricing of credit derivatives has become the biggest challenge.
The article attempts to examine the challenges faced by banks
and suggests strategies to overcome them.
©
Risk Publications. Reprinted with permission. The article
was first published in October 1999 Credit Risk Supplement
to Risk magazine.
Credit
Derivatives :
Compromising Positions
-- Hilary Rosenberg
Banks
and financial institutions are using credit derivatives more
often. The growing importance of credit derivatives is giving
the impression that they will reduce the cost of capital for
banks and in turn, encourage more lending. However, lack of
depth and transparency of credit derivatives markets are hindering
the growth of the credit derivatives. With the abuse of credit
derivatives and need for regulation being hotly debated, the
article examines whether credit derivatives will encourage
more lending or they will harm the interests of the borrowers.
©
CFO Publishing Corporation 2003. Reprinted with permission.
Derivatives
and Risk in Energy Markets
-- Thomas
Lee and John Zyren
Energy
derivatives have assumed importance for energy firms, investors
and customers to manage the risks arising out of high volatility
of energy prices. Businesses operating in the petroleum, natural
gas and electricity industries are susceptible to price risk.
To manage the price risk, energy derivatives are the most
commonly used derivatives. Energy derivatives have allowed
investors to transfer risk to others and isolate cash earnings
from fluctuations in prices. The article explains risk management
strategies adopted by companies in mitigating the risks through
the use of energy derivatives.
©
Energy Information Administration, US Department of Energy,
Washington (www.eia.doe.gov). Reprinted with permission.
Price
Risk and Commodity Markets
-- R
Bhaskaran
Commodity
markets is the place where farmers and other agricultural
producers can effectively hedge themselves against any changes
in the price of the commodity or raw materials. These are
the exchanges wherein forward, futures and options contracts
are traded on all the commodities. India has witnessed the
establishment of organized commodity markets during recent
times, but these markets have been unable to progress, thus
making it impossible for traders to reap the full economic
benefits.
© IUP. All Rights Reserved.
Derivative
Options : How
Reliable are F&O Indicators?
--
Pallavi
Rao
Future
and Option indicators are often used as indicators to broad
direction of markets. There are several derivative indicators
that offer insights into the bullish or bearish trend of the
market. In case of India, the crucial link between cash and
derivative markets is not strong enough to offer insights
about the broad market direction. The article examines four
such indicators and their predictive power in the context
of India.
©
Business Standard, August 18, 2003. Reprinted with permission.
Challenges
and Solutions for Leveraging
RIXML
-- XAware, Inc.
As
technology flourishes, information overload at buy and sell-side
financial services firms has reached critical levels. Without
a standard to classify, sort, filter, manage, and distribute
available research data, investment firms cannot operate effectively.
RIXML (Research Information Exchange Markup Language) was
developed to enable firms to access and use the information
they need on a daily basis, to assist their decision-making
process, act upon market fluctuations, implement corporate
strategies, and communicate with internal and external clients.
©
2002 XAware, Inc. (www.xaware.com). Reprinted with permission.
|
