International Journal on Science and Technology
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Volume 17 Issue 3
July-September 2026
Indexing Partners
Emerging Trends in Financial Derivatives: Innovation, Technology and Risk Management in Modern Financial Markets
| Author(s) | Ms. Veena K, Dr. Shijina A S |
|---|---|
| Country | India |
| Abstract | Abstract In modern financial markets, financial derivatives have become an inseparable part of the financial market because it enables investors, corporate and financial institutions to manage all types of financial risks and increase efficiency and investment opportunities in the financial market. Initially, derivatives were introduced as mere commodities hedging contracts but have since become very complex financial instruments encompassing equity, bond, foreign exchange, interest rate, commodities, credit and digital asset derivatives. The high rate of globalization, innovation of financial products, the development of technology and changing regulatory structures have greatly altered the derivative markets over the past 20 years. Recent advancements like artificial intelligence, blockchain technology, algorithmic trading, derivatives of cryptocurrency and sustainability-linked financial products have transformed how derivatives are constructed, traded and regulated. These advances have enhanced liquidity and transparency in the markets and operational efficiency at the same time posing new difficulties in terms of leverage, market volatility, systemic risk and cybersecurity. The products that have been derived from these have also been increasing in complexity, which has led regulators to further improve governance and increase the transparency of the markets. This is a conceptual article which discusses about the history of financial derivatives, latest technological changes, new market trends and future issues of global derivative markets. The article supports the idea that financial derivatives are vital risk management and portfolio diversification instruments as well as their efficiency over the long term will rely on responsible innovation, adequate regulatory supervision and best practices in risk management that would guarantee financial stability and long-term market growth. |
| Keywords | Financial Derivatives, Risk Management, Algorithmic Trading, Blockchain, Cryptocurrency Derivatives |
| Field | Business Administration |
| Published In | Volume 17, Issue 3, July-September 2026 |
| Published On | 2026-07-07 |
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Crossref DOI prefix of IJSAT is 10.71097/IJSAT
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