Comparative Study of Financial Derivatives Usage in Indian vs. Global Markets

This research paper presents a comparative study of financial derivatives usage in Indian and global markets, examining their roles in enhancing market efficiency, liquidity, and risk management. The paper analyzes key differences and similarities between these markets, focusing on market size, types of derivatives traded, regulatory frameworks, and their impact on market efficiency. Global markets, with a notional value of $544 trillion, demonstrate a broader scope and higher trading volumes compared to the Indian market, which had a turnover of INR259 trillion. The study highlights how derivatives contribute to price discovery, improve liquidity, and aid in risk management, using quantitative data and qualitative insights. Despite these benefits, the paper also addresses challenges such as systemic risk, market volatility, and regulatory concerns. The findings underscore the need for robust regulatory frameworks and effective risk management practices to mitigate potential drawbacks and enhance market stability. This comparative analysis provides valuable insights into how derivatives markets operate across different economic contexts and identifies areas for growth and improvement in the Indian derivatives market.