Abstract:

The performance of financial derivative trading on the Indian stock exchanges has been assessedbased on secondary data from SEBI annual reports for the last ten years (2010-2011 to 2019-2020). The prospects of four derivative segments, i.e., “index futures, stock futures, index options, and stock options”, have been forecasted using a trend least-square regression model specifically for predictingthe contract volume and turnover. It also uses statistical tools, including paired-sample statistics, correlations, and paired-sample tests in SPSS 16.0 to test the hypotheses. It highlighted that derivatives trading on Indian stock exchanges shows a positive trend in contract volumes and turnover. However, some of the hindrances to the progress of derivative trading in the capital market are the lack of adequate professional knowledge, loopholes in the regulatory framework of SEBI and insufficient automated facilities at stock exchanges and clearinghouses. In this study, an attempt has been made to suggest and recommend some views for further growth of derivative trading on Indian stock exchanges.

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