Investors are aware of their risk return trade-offs. Therefore, the quest to nullify their share of risk is undertaken with no less passion. Futures market, in these cases come with some proven solutions and prospects to benefit the investors with its offerings.

The basic concept of risk is very simple: In financial terms, it is the potential change in the price of an asset or commodity. Risk denotes both the upside and downside of the price movement. But, we rarely consider the upside movement as risk. In routine life we always use risk to denote the most "undesirable" and that is the "loss". And this commonsense-dictum gets vindicated when we say that people are naturally risk- averters, which only means that people are in for gains but not for losses. This simply means that risk is always used in a negative connotation.

Risk always rests in the future. It is there in everything we do. It is all pervasive and has a profound impact on mankind. Certain risks are known to have only downside but no chance of gain. On the other hand, certain risks are diversifiable while certain others are not. But none of them are said to be extinguishable; at best they can be transferred. Risk retains its fullness, no matter who transfers to whom, who buys from whom or how much of it is bought or sold, until at least it extinguishes on its own.

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