what is forex derivative losses and what is the impact of this contained by indian stock open market?
Best Answer: Currency: Derivatives are financial instruments whose value changes in response to the change in underlying variables. A financial contract whose value is derived from the performance of assets, interest rates, currency exchange rates, or indexes. Derivative transactions include a far-reaching assortment of financial contracts including structured debt obligations and deposits, swaps, futures, options, caps, floors, collars, forwards and sundry combinations thereof. Numerous accounts of derivatives-related losses experienced by established and reputable firms have raised concerns over the rapid growth of derivatives market. Two of the largest derivatives-related losses to date involved Metallgesellschaft AG of Germany and Barings PLC of England, which both lost over $1 billion. Such incidents often lead to demands for stricter regulation. But a careful study of these incidents suggests no stipulation for sweeping regulatory reform. It does suggest a need for greater international cooperation among regulators, however.
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