Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 08 May 2020

Does Bangladesh Need to be Established Derivatives Markets?

Hasibul Islam, Masud Rana, Nayan Kumar Sarker, Md. Abu Bakor Siddique

Pabna University of Science and Technology, Bangladesh

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10.31014/aior.1992.03.02.226

Pages: 625-636

Keywords: Capital Market, Derivatives Markets, Economic Growth, Financial Instruments

Abstract

Derivatives are very cardinal agreement, not just for the purpose of investors but for the overall economies. They excellently affect the general execution of a nation's economy and along these lines the global economy. The world derivative markets are gigantic and it has developed widely in the last decades in both developed economy and rising economy. Derivative markets protect bonds, currency, equity, and short-term interest rate assets from various risks. Bangladesh is a developing country it has an emerging economy. It is necessary to establish derivative market in Bangladesh. In our article, we discuss about theoretical framework such as different derivative products, benefits, and limitations of derivative markets. We also analyze six countries (Australia, Canada, Hong Kong, India, Japan, and US) derivative annual turnover. We see both exchange-traded derivative turnover and over-the-counter turnover. We find that every countries annual turnover increase in present year as compared to previous year. In the last part of our study, we are recommending some essential requirements sequentially to establish derivative market in Bangladesh.

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