Publication Details
Abstract
Retail investors’ perception refers to their understanding, attitude and beliefs about financial instruments like derivatives, which influence their investment decisions and risk-taking behavior. Perception of investors is influenced by various factors. The study of retail investors’ perception with regard to equity derivatives is important to understand their market participation and investment choices. Derivatives are viewed as risky and complicated by many retail investors. It negatively effects their participation and engagement in derivatives. The analysis of retail investors’ perception helps in finding the main factors which shape their decision-making. This understanding allows the financial institutions, regulators and policy makers to develop derivatives products which are suitable to them and investors favorable policies. Eventually, the improvement in the perception of retail investors regarding derivatives products can enhance their participation, strengthen the market depth and increase the overall efficiency of financial system. In the present paper, an attempt has been made to study the factors affecting the perception of retail investors towards risk and return in equity derivatives market.