`Derivatives are like race cars'
In finance, derivatives are financial instruments whose value changes according to the changes in fundamental variables. Just like the Americans have heard about the term `sub-prime' for the last 12 months, Indians too have heard a lot about derivatives for the last month or so. Futures, forwards, options, swaps and what not? Financial products based on such complicated mechanisms will require more transparency.
But while transparency is certainly an issue as is understanding, the onus is also on the taker, that is, the company or the bank on its behalf. Systems and processes then become even more crucial. "It is like a race car, part of the performance comes from the machine and part from the experience and capability of the driver," tells Mr Omer Hevlin, Sales Director (Asia), SuperDerivatives (http://www.superderivatives.com/).