The derivatives market is relatively new in Nigeria, growing significantly over the last decade but not yet fully embraced. The Central Bank of Nigeria recently issued guidelines permitting certain derivative instruments to be used as hedging tools in the foreign exchange market. The Nigerian Stock Exchange plans to create an options market by 2013/2014 and a futures market in 2016 to enhance hedging against interest rate and currency exchange risks. These developments lay the foundation for liberalizing the Nigerian capital market and diversifying investment options in the near future.