Arts & Humanities Journal|IJAH

Title: An Investigation of The Feasibly of Trading In Derivatives on The Zimbabwe Stock Exchange (ZSE)
Authors: Katize Nothando , Dhliwayo Utton, Gakanje T. Delight , Chigonero Phillis Chipo , Muzerengi Rufora Mandy , Mazanhi Karen and Washington Chiwanza
Volume:7 Issue: 1
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Katize Nothando1 , Dhliwayo Utton2, Gakanje T. Delight3 , Chigonero Phillis Chipo4 , Muzerengi Rufora Mandy5 , Mazanhi Karen6 and Washington Chiwanza7 1,2,3,4,5,6. Researcher, Harare Institute of Technology 7. Lecturer, Harare Institute of Technology
MLA 8 Nothando, Katize, et al. "An Investigation of The Feasibly of Trading In Derivatives on The Zimbabwe Stock Exchange (ZSE)." Int. J. Arts & Humanities, vol. 7, no. 1, Jan.-Feb. 2025, pp. 44-63, doi.org/10.46609/IJAH.2025.v07i01.003. Accessed Jan.-Feb. 2025. APA 6 Nothando, K., Utton, D., Delight, G., Chipo, C., Mandy, M., Karen, M., & Chiwanza, W. (2025, January/February). An Investigation of The Feasibly of Trading In Derivatives on The Zimbabwe Stock Exchange (ZSE). Int. J. Arts & Humanities, 7(1), 44-63. Retrieved from https://doi.org/10.46609/IJAH.2025.v07i01.003 Chicago Nothando, Katize, Dhliwayo Utton, Gakanje T. Delight, Chigonero Phillis Chipo, Muzerengi Rufora Mandy, Mazanhi Karen, and Washington Chiwanza. "An Investigation of The Feasibly of Trading In Derivatives on The Zimbabwe Stock Exchange (ZSE)." Int. J. Arts & Humanities 7, no. 1 (January/February 2025), 44-63. Accessed January/February, 2025. https://doi.org/10.46609/IJAH.2025.v07i01.003.
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Keywords: derivatives, feasibility, probability density distribution, statistical inference
Abstract: The benefits of trading in derivatives to the financial markets and the economy as a whole are well documented in literature yet there is no uptake of trade in these products on ZSE or any indications that it would happen in the foreseeable future. The purpose of this research is to investigate why derivatives are not traded on the Zimbabwe Stock Exchange (ZSE)? What is required for derivatives to be traded on the (ZSE)? View points and experiences of financial market participants were sought through a questionnaire. Respondents were experts in the particular subject matter of study. Data was collected using questionnaires from a target group of brokers, ZSE, insurance companies, asset management companies, other financial institutions and investment portfolio management. Research hypotheses were then tested by a statistical inference procedure. The statistical model used is based on Bayes’ theorem of statistical inference. Having established the statistical validity and reliability of the opinions of respondents, the present scenario and future prospects of trading in derivative on ZSE were interpreted. It was concluded that there is a lucrative market for derivative products. It was also concluded that the current good performance of the ZSE in facilitating trade in stocks could be extended to trade in derivatives and that the operationing environment and the legal and regulatory aspects have to be improved or put in place. Derivatives are important in that they improve overall market scenario through improved price determination processes, information dissemination and portfolio management strategies. Further introduction of stock options, futures and other derivatives will help in aiding the liquidity of the financial markets, increasing the number of investors, reducing the number of risks, and improving the general performances of the markets.
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