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Trading derivatives options contracts: the associated risk and potential

Vipul Kumar Singh (Department of Finance and Accounts, National Institute of Industrial Engineering, Mumbai, India)

Publication date: 4 December 2018

Abstract

Learning outcomes

It intends to help the learners assess the scenarios of volatility in the Indian capital market which was caused by unpredictable market forces. It also helps in understanding how analysts struggle to predict the direction of the market and what options strategies can be recommended to be deployed by the investors to maximize returns in such compelling scenarios.

Case overview/synopsis

This case study presents snapshots of high volatilities caused by the market and economic forces in the Indian capital market. It depicts how analysts struggled to predict the direction of the market; and how high volatility can put them in trouble. It also exemplifies as to how by selecting the apt strategies, investors maximize their immediate returns in a volatile period and can produce large returns in a short time.

Complexity academic level

The best time to discuss the case is during the completion of options strategies in the course of Derivatives or Portfolio/Investment Management.

Supplementary materials

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Subject code

CSS 1: Accounting and Finance.

Keywords

Acknowledgements

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.

Citation

Singh, V.K. (2018), "Trading derivatives options contracts: the associated risk and potential", , Vol. 8 No. 4. https://doi.org/10.1108/EEMCS-01-2018-0005

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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