Abstract

The past decade has witnessed the multiple growths in the volume of international trade and business due to the wave of globalization and liberalization all over the world. As a result, the demand for the international money and financial instruments increased significantly at India level. Capital market investment avenues are perceived to be risky by the investors. But the younger generation investors are willing to invest in capital market instruments and that too very highly in Derivatives segment. Even though the knowledge to the investors in the Derivative segment is not adequate, they tend to take decisions with the help of the brokers or through their friends and were trying to invest in this market. This study was undertaken to find out the awareness level of various derivative market instruments and also to find out their risk preference in various segments. This study Intends to find out the preference level of investors on various derivative market instruments, to find out the type of risk which are considered by the investors to find out the ways through which the investors on various minimizes their risk to find out the preferences of Investors in derivatives market. About 50 samples were collected from Udaipur city from various investors through a structured questionnaire and investors were asked questions regarding awareness about derivatives and the investor risk preference in an elaborate manner within a short span of one month, derivatives trading in Udaipur, India has surpassed cash segment in terms of turnover and number of traded contracts.

Keywords: Derivatives, Forward, Futures, Options, Swaps, Risk management, Exchange rate, National stock exchange, Bombay stock exchange, Notional value underlying asset.