Derivatives perform two economically-useful purposes: (i) risk shifting, also known as risk management or hedging, and, (ii) price discovery, which is the process of determining the price level for a commodity, asset or other item, based on supply and demand factors. Derivatives provide excellent opportunities to hedge risk for different kinds of participants, importers, export-oriented enterprises etc.
Here, I have particularly in mind our dear exporters, relentless and unabashed champions of sustained depreciation of our Rupee.