THE OPTION'S UTILITY IN RISK MANAGEMENT IN TERMS OF GLOBAL FINANCIAL CRISIS

The whole financial theory is based on the fundamental hypothesis of the rational that agents investing in the financial markets, aim to maximize the utility function of the returns of each of their investments. Previous studies proved that expected return is linearly related to risk and risk tolerance, which means a different opinion about the risk premium of each capital market transaction. In the present conditions of global financial crisis, also partially indicated through the capital market break downs, could options used for hedging be viable alternatives for investment? This paper tries to bring into light possible trends of options on futures volume trading in the Romanian capital market. The results of such study are important in showing the real perceptions of a very sophisticated financial tool in the Romanian financial medium, leading its to conclude that options, which are derivatives highly connected with risk management are not used as they should be by Romanian investors. Therefore, the value of this research paper consists in drawing a forecast of the options volume of trading. The results indicates that role and utility of options in the Romanian financial medium, especially in times of global crisis, is not highly value.