Stock markets today are in phase where regulators as well as exchanges need to evolve new risk management techniques for mitigating risks.the turnover in the indian equity derivative market today is far in excess of these in cash setteld equity segment.in such a situation ,it becomes imperative that regulators and exchanges strive to engender more transperancy and disclosures .they also need to look beyonf traditional risk management measures offered by the conventional value at risk models .
a lot has been spoken of the risk in the derivatives market but little has been done about understanding it better .the first step in this direction then become formulation of a clear definition of risk in this market. a large proportion of risk can be mitigated if risk is defined and understood clearly .the proposed solution envisages utilising idle stocks with investors as a sustitue for the expensive margins that they have to put up with a clearing corporation for trannscting in the derivative market .hence a open solution for mitigate the risk of an investor infuture market is that increase the margins proportionally on the basis of performance of particular stocks & on the liquidity of the stock .do not envolve too many stocks in the derivative markets as it has very limit time for the settelment .
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