Dow Jones and S & P 500 futures starts trading on the National Stock Exchange (NSE) from August 29, 2011
Dow Jones and S & P 500 futures started trading on the National Stock Exchange (NSE) from August 29, 2011
Indian investors can now widen their portfolios, spread risks and avail growth prospects of multinational companies. They have the choice to hedge large portfolios in both Dow Jones and S & P 500 futures, and options on the S & P 500 in Indian rupees.
This is the first time that derivative contract on global indices have been launched in the country. It is also for the first time that futures contracts on the S & P 500 are listed on an exchange outside the United States.
As the rupee is not fully convertible yet, Indian investors cannot trade directly in bourses overseas. Thus the contracts will be rupee-denominated. S & P is an index of 500 leading companies while Dow Jones Industrial Average comprises of 30 most liquid companies.
The contract size for S & P 500 futures are in the multiple of 250 units while Dow Jones futures index will have contract size in multiple of 25 units. To encourage participation by investors, the NSE has decided not to levy any transaction charges on trades done till February-end 2012.
The NSE will launch three serial monthly contracts as well as quarterly expiry contracts ending June, September and December. Foreign institutional investors and non-resident Indians cannot trade. The quantity freeze has been set at 15,000.
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