Kalaivani Pandian Learner, Trader and Programmer. Worked as a Telecom Engineer in the past now a Growth Hacker @marketcalls. Interested in Quant strategies and Trading Analysis Softwares.

NSE and BSE to launch 6-Year and 13-Year Government Bonds – Interest Rate Futures

1 min read

New Interest Rate Futures of 6-year and 13-year government bonds to be launched and available for trading on NSE and BSE exchanges from July 31,2015 onwards.

In simple words,Interest rate futures is a future contract with an underlying instrument that pays interest . Interest Rate Futures (IRFs) is a contract between a buyer and a seller for future delivery of an interest-bearing security such as government bonds. In general Interest rate futures use the inverse relationship between interest rates and bonds to hedge against the risk of rising interest rates due to reserve bank policy ,imbalance in supply-demand chain and the type of loans.

History of Interest Rate Futures

NSE Interest Rate Futures History

 
It should be noted that NSE, BSE, MCX-SX started offering 10 Year IRF Futures from Jan 2014 onwards

The newly announced 6-year contract is based on 8.27% central government security having maturity on June 09,2010 and 13-year government bond is based on 7.88% having maturity on March 19,2030. Both the bonds have a contract cycle of three serial monthly contracts followed by three quarterly contracts as March/June/September/December which can be traded from Monday to Friday 9 AM to 5 PM.

Mutual Funds, FIIs, banks and primary dealers, speculators,corporate investors and individuals can participate in Interest rate futures market. Recently in May 2015 10-year government bond having maturity on 2025 had been announced and traded on the exchanges.

Contract specification for IRF contract on 6-year security Contract specification for IRF contract on 13-year security
Instrument Name FUTIRC FUTIRC
Symbol 827GS2020 – futures contracts based on 8.27% 788GS2030 – futures contracts based on 7.88%
 Expiry Date Last thursday of the month  Last thursday of the month
 Market Type  Normal market ‘N’   Normal market ‘N’
 Permitted Lot size  Rs. 2 Lakhs face value of GOI securities equivalent to 2000 units  Rs. 2 Lakhs face value of GOI securities equivalent to 2000 units
 Contract value  Quoted price * 2000   Quoted price * 2000
Base Price Theoretical price on the first day of the contract,on all other days daily settlement price of the contract Theoretical price on the first day of the contract,on all other days daily settlement price of the contract
Normal Trading Hours Monday to Friday 9:00AM to 5:00PM Monday to Friday 9:00AM to 5:00PM
Kalaivani Pandian Learner, Trader and Programmer. Worked as a Telecom Engineer in the past now a Growth Hacker @marketcalls. Interested in Quant strategies and Trading Analysis Softwares.

NSE to discontinue NSE NOW Trading Platform Instead Offering…

Back in 2008 NSE started offering NSE NOW as a digital trading platform to all its members or brokers. NSE NOW has been a...
Aniket Kale
58 sec read

Things to Know About Physical Settlement for 46 Scrips…

SEBI in their circular has mandated compulsory delivery of F&O position open on expiry of these 46 stocks for July expiry. Currently, traders leave...
Rajandran R
49 sec read

Top 10 Things You Need to Know about India…

The India INX or International Exchange is a wholly owned subsidiary of BSE Ltd located in GIFT City (Gujarat). The exchange was inaugurated by...
Rajandran R
1 min read

Leave a Reply

Get Notifications, Alerts on Market Updates, Trading Tools, Automation & More