Managing Financial Instruments: Impact of Covid-19 Pandemic on Global Derivatives Market
DOI:
https://doi.org/10.5377/reice.v10i20.16019Keywords:
Derivative Financial Instruments, Stock Options, Interest Rate Futures, Commodity Options, Currency FuturesAbstract
Globalization of the economy, instability of interest and exchange rates, significant inflation, and the global crisis in the 1970s have become incentives for the emergence of efficient financial risk management tools. These derivative financial instruments contribute to the improvement of operational, informational, price, valuation, and distribution functional efficiency, thus significantly increasing the efficiency of financial and commodity markets. The derivatives market in the world acts as an indicator of the state of development and trends in both each individual state economy and the global economy as a whole. The purpose of the study is to assess the impact of the COVID-19 pandemic on the state of the global derivatives market. The authors analyze the trend of derivative financial instruments for the period 2019–2021, including the regional aspect. It is concluded that during the pandemic, trading in derivative financial instruments has grown in all types of contracts, except for currency futures, and in all regions. At the same time, the increase in the volume of trading in derivatives observed in the period 2020–2021 is driven by the need to manage risk in an environment of increased uncertainty and volatility caused by the COVID-19 pandemic.
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