Analysis of the OTC derivatives and their use in risk management

This bachelor thesis deals with the over-the-counter (OTC) derivatives. It discusses especially the development of their trade in the world and the possibility of using in risk management. The introductory part defines the basic concepts associated with derivatives, describes their history, classification and methods of statistical reporting. It briefly introduces the basic types of derivatives and the primary motives for using. The second part analyses developments of the OTC derivatives markets since 1998 to the present, including a comparison with the stock exchange markets. The content is also a detailed view of the break-even period before and after the outbreak of the global financial crisis. The last part is devoted to hedge risks through OTC derivatives. It Includes introduction to hedge accounting in terms of czech and international financial accounting and reporting standards and the conclusion is supplemented by specific examples of fair value and cash flows hedges