Derivatives

[MORENNY]

Are derivatives sold on the NSE? If so, can anyone recommend one.

[olusolakemmy]

Hi morenny,

what are derivatives?
u should be more explicit so that you get more response.
However, NSE only deals with company`s shares or equity.

I dont know if derivative fall under commodity, because there is a comodity market in Abuja, and i heard is also growing fast.

i Hope am able to help and if not am sure this site is more than capable to deal with your request

[Avocado]

MORENNY: presently, no; but there's been talk (and cautions, of course) about the introduction of derivatives on the NSE. The head of the Strategy/Derivative Markets of the NSE, Farouk Oreagba, appears to be strongly against it, with the argument that the cost of establishing it outweights the potential benefits, and also that the cost for introducing derivatives could be better used to run the equity and bond markets. Here're his words:

"In deciding whether or not to introduce derivative products into the Nigerian capital markets, it must be stated that the cost and time required to build a derivatives market cannot be justified if the underlying market has not been firmly established .... In Nigeria at the moment, we are still in the process of creating awareness with regards the equity and bond markets and a lot more will need to be done to create the investor knowledge required for a buoyant derivatives market. The financial and human resources expended in building such a market would be much better spent on building a firm underlying market or not spent at all,"

olusolakemmy: derivatives are financial instruments derived from other assets. You could read more about derivatives here
.

[jazmil]

@olusolakemmy : Do you have any more info on the commodity market in abuja? I've never heard of it.

[olusolakemmy]

Originally Posted by jazmil

@olusolakemmy : Do you have any more info on the commodity market in abuja? I've never heard of it.

Jazmil,
The commodity market was lunch sometimes in feb 2006, it mainly operate in abuja. I realy do not follow the progress, just glance thru once in a while that it comes out in the dailies.

It is a Goverment initiative

[MORENNY]

Originally Posted by Avocado

MORENNY: presently, no; but there's been talk (and cautions, of course) about the introduction of derivatives on the NSE. The head of the Strategy/Derivative Markets of the NSE, Farouk Oreagba, appears to be strongly against it, with the argument that the cost of establishing it outweights the potential benefits, and also that the cost for introducing derivatives could be better used to run the equity and bond markets. Here're his words:



olusolakemmy: derivatives are financial instruments derived from other assets. You could read more about derivatives here
.

Thanks Avocado. I was hoping the NSE traded on them.

[alanbow]

For anybody who is interested, Please see the URL for the commodity market in abuja


http://www.abujacomex.com/

[c kenneths]

I dont really think we are ripe enough for derivatives in our market place.
In a country where hundreds of thousands of people are still asking the question, what are shares all about, to introduce a product like market derivatives will have a negative effect.

Some rich investors will surely benifit, which will make others greedy and thereby start manipulating the markets, which will in turn hurt small investors and their investments.

Such situation will leave a sour taste in the mouth and make people more afraid of the capital markets. This will only erode the progress we have made trying to bring more people into the capital market.

[jazmil]

Exchange Reaffirms Commitment to Derivatives Market

http://www.thisdayonline.com/nview.php?id=78490

[c kenneths]

But on the other hand, we are not afraid of any derivative scare, we can always adjust as usual. This is going on to tell them that if the dare introduce derivatives at this early stage we are going to dare seize it by the scruffles and give it a serious shake down.

In the end we always win.