financial derivatives market of brazil. outline – derivative market in brazil – derivative users...
TRANSCRIPT
OUTLINE
– Derivative market in Brazil– Derivative users in Brazil– Factors Contributing to the growth of derivatives – Instruments being used in derivative market– Concluding remarks on the derivative market
situation of Brazil– Recommendations
Derivative market in Brazil
• Back in 1970s, futures market traded only in agriculture and mineral commodities.
• In Brazil, BM&F (futures and Commodities exchange) is worth mentioning.
• From BM&F combination with the Sao Paulo stock Exchange(Bovespa), BM&FBOVESPA(Futures, Commodities and Stock Exchange) emerged as the world’s 3rd largest stock exchange.
• The BM&FBOVESPA(Bosla de Valores, Mercandorias & Futuros de Sao Paulo) is an exchange located at Sao Paulo, Brazil.
Factors Contributing to the growth of derivatives
• Globalization• Technological Advancement• Price Volatility• Advances in Financial theory
Types of Contracts
• Forward contracts• Foreign exchange forward• Non-deliveralble forwards• Futures• Options• Flex Options
Recommendations & Suggestions
• Improve transparency & surveillance of OTC derivative
• Use of new risk management models.• Government policies• Supervision, oversight and regulation of
counter parties• Low trading cost and risk distribution