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Is “badla\ trading like derivatives trading?

April 26, 2017badla derivatives trading

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Is “badla\ trading like derivatives trading?

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No. Badla is a mechanism to avoid the discipline of a spot market; to do trades on the spot market but not actually do settlement. The “carryforward” activities are mixed together with the spot market. A well functioning spot market has no possibility of carryforward. Derivatives trades take place distinctly from the spot market. The spot price is separately observed from the derivative price. A modern financial system consists of a spot market which is a genuine spot market, and a derivatives market which is separate from the spot market.