A study on investor awareness and preference towards derivatives trading with special reference to futures and option

The aim of this study is to examine investor awareness and preferences towards derivatives trading, particularly futures and options, in India. The research adopts a quantitative approach, using surveys and structured questionnaires to gather data from individual investors across various age groups, income levels, and experience with derivatives trading. The study finds that while a significant number of investors are aware of derivatives, many lack detailed understanding, especially regarding the risks and complexities involved in futures and options trading. The results indicate that investors with higher levels of financial literacy tend to engage more actively in derivatives trading, particularly in futures, while options remain less popular due to perceived risks and complexities. The study concludes that enhancing investor education and providing clearer, accessible information on derivatives trading could encourage more informed participation and better decision-making in the market. The research emphasizes the need for financial institutions and regulators to focus on increasing awareness and promoting safe trading practices to ensure sustainable growth in India's derivatives market.