ABSTRACT

                             Speculation is one of the instruments in derivatives for booking significant profit with high risk in certain period of time. The FDI is playing vital role in our country’s economic growth and it is providing huge contribution to volatility in derivatives. The present study analysed speculation opportunities in derivatives towards FDI. This study found that out of seven hypotheses, five hypotheses showed significant “t” values and two hypotheses did not proved significant relation between variables. Finally, the study concluded that volatility is suitable key factor for speculation to high risk traders.

Key Words:  FDI, Derivatives, Volatility, Speculation, Correlation co-efficient, “t” value.