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Is the Options Market in Romania an Option for Investors?

Author

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  • Ghi?ã-Mitrescu Silvia

    (Ovidius University of Constanta, Faculty of Economic Sciences)

Abstract

The second segment of the derivatives market in Romania, the options contracts has always been the "poor relative" of the futures market. This paper aims to analyze the main features of the options market in Romania in an attempt to determine the necessity and opportunity for its existence in the Romanian capital market landscape. After analyzing the volume, value and the typology of the options contracts traded at Sibiu Stock Exchange in the last decade, we can conclude that we are facing a watershed moment for the options market, the dramatic decrease in the number of contracts traded putting into question the future existence of the market. Although in terms of the types of contracts traded, investors have real alternatives for hedging and speculation, they seem to bypass the options segment and preferred the futures contracts. The explanation for this behavior consists, in our opinion, both in the illiquidity of the market and the lack of financial culture and experience of the investor.

Suggested Citation

  • Ghi?ã-Mitrescu Silvia, 2012. "Is the Options Market in Romania an Option for Investors?," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 1141-1144, Decembre.
    • Handle: RePEc:ovi:oviste:v:xii:y:2012:i:2:p:1141-1144
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    More about this item

    Keywords

    options contracts; Sibex; volume of trades; market liqudity;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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