The use of derivates for risk management in Lithuania

Abstract

The paper deals with the problem of risk management in Lithuanian enterprises and financial institutions. The use of derivatives over the past few years has literally exploded all over the world. Forwards, futures, options and swaps, and various combinations of these fundamental derivatives are used to manage or reduce various kinds of risk and in some cases to increase returns. This fact highlights the advantages of derivative securities in the process of risk management. In Lithuania these possibilities of risk management are not used properly. So the main purpose of the paper is to highlight the main problems of the use of derivatives in our country and to suggest the ways of its solution.