Participation in Derivative Markets

–          These should be careful control and oversight of those responsible for committing firms to positions in derivative markets.

–          Someone in the organisation should understand enough about these markets to appreciate the risks inherent in a proposed commitment.

–          The potential benefits of participating in derivative markets are very large for many organisations.

–          The most common type of transaction is derivative markets is the hedging of risk.

–          Properly used, derivatives serve to reduce risk.