RBI warns of risks from rapid rise in derivative trading volumes

A report by the Reserve Bank of India said that a rapid rise in derivative trading volumes could expose retail investors to sudden movements in markets without proper risk management.

RBI warns that a rapid rise in derivative trading volumes could expose retail investors to sudden movements in markets. (Representative Image)

Credit: PTI file photo

Mumbai: A rapid rise in derivative trading volumes in India could pose several challenges, Reserve Bank of India (RBI) said in its Financial Stability Report released on June 27.

It could expose retail investors to sudden movements in markets without proper risk management and the surge in shorter duration options could lead to more volatility in stock markets, it said.