Derivatives and Risk Management

The book, in its Second Edition continues to present a detailed analysis of theoretical concepts and practical approach on derivatives-options, futures, forwards and swaps. It provides a deeper insight into the conceptual background as well as practical application of derivatives. Apart from discussing stock, index and commodity derivatives, it also discusses currency, energy, weather and credit derivatives that are of recent origin in the field of derivatives trading. Three new chapters on Different Types of Market Structures and Derivatives and Operational Aspects of Derivatives (Chapter 2), Regulation of Derivatives in India (Chapter 6) and Linkage between Spot Market and Derivatives Market (Chapter 14) have been added in this edition. Whereas an Appendix-Derivatives from The Lenses of Mishaps gives insights on scams which took place in the past. Practical application of derivatives like trading practices, margin system, valuation of options and futures, linkage between spot market and derivatives market have been discussed using real-life stock and commodity prices. The book features application of derivatives in designing risk management, i.e., hedging strategies and profit maximisation strategies in a lively manner citing real-life data-based examples in a simulated environment. The text contains a good number of examples as well as chapter-end questions for practice on topics like valuation of options and futures, strategic application of derivatives in risk management and profit maximisation in different market swings-upswing, downswing and range-bound movement in the market. This is a comprehensive yet easy to understand text for the students of MBA/PGDBM/CA/CS/NCFM and other related postgraduate courses.

Dhanesh Kumar Khatri, PhD, is Professor and Head, Department of Finance at Institute of Management Studies, B.J.S. Rampuria Jain College, Bikaner. Beginning his career with Stock Holding Corporation of India Limited (SHCIL), Mumbai in the year 1989, Dr. Khatri has gained knowledge on the practical aspects of stock market operations, portfolio management, risk management, derivatives and functioning of depository system. He has been a visiting professor at many reputed institutions. During his twenty six years of teaching and professional experience, he has supervised and guided many PhD scholars. Dr. Khatri has contributed numerous articles in reputed national and international journals, and has authored five books. His research areas include accounting, finance, capital market, money market and derivatives.