Financial Derivatives Antim Prahar 4 Sem -AKTU

Introduction and Evolution and features of Derivatives Market  

•The derivatives market plays a crucial role in the financial world, enabling risk management, speculation, and efficient capital allocation. Let’s delve into its introduction, evolution, and key features.

•Introduction: A Seed of Innovation

•The origins of derivatives can be traced back centuries. Early examples include forward contracts used by farmers to guarantee future crop prices. However, the concept truly blossomed in the medieval era with the development of “commanda” contracts by Italian merchants. These contracts essentially functioned as early prototypes for options, allowing merchants to share risks associated with seafaring ventures.