The recent past has witnessed tremendous growth of the Indian securities market, the financial derivatives market included. While celebrating this fact it is also pertinent to bear in mind the market fundamentals that underlie and their resultant capacities and limitations. In the context of the derivatives market which inherently is a zero-sum game such exuberance may not be justified. Juxtaposing 'winner' and 'loser' statuses in a derivatives market reveals a perfect equilibrium - 'gain-loss parity', an equilibrium that embeds a disequilibrium of gains.
About the Article:
This post aims to explain the fundamental concept of Financial Derivatives:Futures using illustrative examples.It does so without plunging into intricacies and with minimal use of technical terms. Focusing on the big picture, it explains the working mechanism of Futures and also explains why Futures Market & the Derivatives Market in general is called a Zero-Sum game.