In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying".

2. Presentation Topic:
Financing International Trade

3. Lecturer of School of Business.
Faculty Member of UITS
University of Information Technology & Sciences

4. Name ID
Saima Sultana 143030100010
Linkon Juwel Tripura 14310153
Md. Habibur Rahman 14310166
Tahmina Akter 14310174

6.  Contract between two or more parties
 Security with a price which dependent on underlying assets.
 Underlying assets are stocks, bonds, commodities, currencies, interest
rates and market indexes.
 Helps to make profit by betting on the future value of assets

7. Derivative market
&
Users
Fig: Users of DMFig: Derivative market

10.  Derivatives contribute to improved market liquidity and increased capacity
of the financial system to effectively price and bear risk.
 Derivatives allow market participants to manage their financial risks more
easily
 Derivatives markets not only support economic and financial efficiency,
but also contribute to improved financial stability since they allow for the
wider dispersion of risks across the financial system and help improve
cross-border capital flows
 Overall, derivatives contribute to a well – functioning capital market and to
a more efficient financial system, one which leads to stronger economic
growth over time

11.  Increase transparency, by providing incremental price information
 Increase security, thanks to clearinghouse
 Because derivatives are designed to transfer risk rather than to transfer
funds, the regulatory framework for derivatives can differ from that of the
stock market
 Allows hedgers to protect their positions and speculators to take leveraged
positions
 A derivatives exchange matches buyers and sellers without taking any
principal positions
 The derivatives clearinghouse guarantees that traders meet their
obligations.

12.  Reduce volatility in capital market needs attention
 Implication of perfect portfolio
 Globalization of Economy
 Deepening Reforms of Financial Business of Bangladesh
 Requirement of Financial Market Development
 Eluding Risks of Participators
 Strengthening Financial Market Functions

13.  As it is the very first time to establish a derivative market in Bangladesh,
an advisory committee can be formed to conduct a feasibility study. This
committee may be represented from all stakeholders and analysts. The
committee may further make an analysis about probable benefit of
derivative market in Bangladesh, current and required capital market
structure, and prepare a comprehensive roadmap for successful
introduction.
 For an efficient derivatives market a liquid financial market is required.
The government must take necessary steps to make the financial market of
Bangladesh highly liquid.
 Restructuring of (BSEC) Bangladesh Security Exchange Commission is
required. Comprehensive inspection of the activities of this organization is
required.

14.  The opinion of stakeholders and making them aware of the derivative
instruments are essential. Seminars ,workshops, training etc. may be
arranged to make such awareness of stakeholders such as speculators,
hedgers, regulators and others.
 Deepening of capital market is required. It can be done by increasing
participants, numbers of shares in the market, attracting more people in the
market, proper governance, ensuring scientific price, stopping the
corruption and manipulation etc.
 Ensuring proper co-ordination between BSEC and secondary and other
markets and ensuring strong regulations.
 Up gradation of infrastructure and sophistication are required. The easy
movement of capital between different market and currencies is essential to
eliminate price discrepancies and efficient functioning of the market.

15. Thanks to all