Overview of Indian Derivative Market:
Dberivative market was created by BSE in india.A first Exchange traded index derivative was launch on 9th june 2000.Inaguration was done by Prof. JR Verma,member of SEBI and Chairman of the committee .
As the peroduct innovation going on BSE introduce index option on Sensex on june1,2001.After that stock option were introduce on 9th july 2001 and single Stock future were introduce on 9th july 2002.
BSE also introduce 'long dated option' on SENSEX on febraury 29, 2008 with the expiry of upto 3 yrs.
Currency Derivatives:
On 1st october ,2008 BSE launch it's currency Derivative segment in Rupee-Dollar currency future segment.
It's main aim is to easy ecess, increase transperancy,efficient price discovery,better counterparty credit risk management,wider participation and reduce transaction cost.
Future on BOLT:
BSE re-launch it's Derivative segment by enabling trading of index and Stock Futures on it's BOLT terminal.
The main aims of this change is to provide platform for the members to trade in equity derivatives.
Why SENSEX future:
a) SENSEX shown less volatility as compare to other indices and at the same times give return same as return given by other indices.
b) SENSEX is use widely by describing the mood of indian stock market because of it's long history and widely acceptance.It also make attractive index based product like index fund, Future & Option and Exchange trader fund.
c)SENSEX is a broad based market index and reflect market trend more rationally and take into consideration only those share which are available for the trading in the market.
DERIVATIVES:
Derivatives is a kind of instruments whose values are derived from the value of underlying,which can be Commodity,precious metal,Currency,Bonds,Stock ect.Most common examples of derivatives are Forward,Future,Option and Swaps.
1. Forward Contract:It is a type of contract between two parties, where settlement take place at some future date at price specified today.
Some features of Forward contracts are:
1.1 Each contract consists of counterparty risk.
1.2 Each contract has unique in term of assets types,contract size,expiry date and assets quality.
1.3 Contracts has to be settle on expiry date.
2.Futures: These are a types of contract traded on exchanges to buy and sell the financial instruments or Physical commodities for future delivery at an agreed price.
Future on BOLT:
BSE re-launch it's Derivative segment by enabling trading of index and Stock Futures on it's BOLT terminal.
The main aims of this change is to provide platform for the members to trade in equity derivatives.
Why SENSEX future:
a) SENSEX shown less volatility as compare to other indices and at the same times give return same as return given by other indices.
b) SENSEX is use widely by describing the mood of indian stock market because of it's long history and widely acceptance.It also make attractive index based product like index fund, Future & Option and Exchange trader fund.
c)SENSEX is a broad based market index and reflect market trend more rationally and take into consideration only those share which are available for the trading in the market.
DERIVATIVES:
Derivatives is a kind of instruments whose values are derived from the value of underlying,which can be Commodity,precious metal,Currency,Bonds,Stock ect.Most common examples of derivatives are Forward,Future,Option and Swaps.
1. Forward Contract:It is a type of contract between two parties, where settlement take place at some future date at price specified today.
Some features of Forward contracts are:
1.1 Each contract consists of counterparty risk.
1.2 Each contract has unique in term of assets types,contract size,expiry date and assets quality.
1.3 Contracts has to be settle on expiry date.
2.Futures: These are a types of contract traded on exchanges to buy and sell the financial instruments or Physical commodities for future delivery at an agreed price.
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