Markets in commodity and financial derivatives have become the centerpiece of inexorable denigration since the inception of worldwide recession in mid-2008. Completely clueless about the causes of the breakdown in markets, and ignoring their own misconceived monetary, fiscal, and regulatory policies, governments and regulators are rushing to devise insensitively new legislations to regulate derivative products and markets for trade. In the wake of the present financial crisis and the sluggish growth of the economy, the Indian government too has already banned derivative trading in several commodities, especially because the spectre of inflation is raising its head once more following the failure of the monsoon. Not only may the government tighten the regulatory screws even further, but loud talk is also in the air for setting up a strong single regulator for curbing derivative trading in all commodity and financial markets.

Disappointingly, even after the evolution and development of derivative markets over the past century and a half, misplaced misgivings about these markets abound among government and non-government circles, as also among several economists. Surprisingly, no other economic activity is perhaps so little understood, and so much misconceived, as derivative trading in commodity and financial markets. Speculation is still the most dreaded word, not knowing its critical economic role. It is against this backdrop that the present book seeks to help the lay and the learned, as well as government authorities and economists, to understand the nuances and finesse of derivative markets and their economic functions and services. This book is a collection of essays published by the author over the past few years on diverse issues related to commodity derivative markets.