What Determines the Success or Failure of an Exchange-Traded Derivative

Question

Examlex · Accepted Answer

The Answer is The success of derivative contracts depends upon trading volume (or trader interest),which is in turn dependent on price volatility in the underlying security or commodity value. Currency futures were introduced in the early 1970s in response to the collapse of fixed exchange rates as Bretton Woods collapsed. Exchange rates quickly proved themselves very volatile. Interest rate futures were needed once the Federal Reserve stopped targeting interest rates and began targeting non-borrowed reserves in 1979,allowing interest rates to float and interest rate volatility to increase.

What Determines the Success or Failure of an Exchange-Traded Derivative

Definitions: