Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Now trade in S&P 500 and Dow Jones Derivatives

3 min read

The National Stock Exchange (NSE) would be launching derivatives based on S&P and Dow Jones indices from 29 Aug, 2011.The National Stock Exchange (NSE) would be offering derivatives based on the S&P 500 and Dow Jones Industrial Average (DJIA) equity indices. These would be launched on Monday, 29 Aug, 2011. Derivative contracts based on global indices are being launched in India for the first time.


 
Details of the derivatives

-Futures contracts for S&P 500 and DJIA
-Options for S&P 500
-The derivative contracts would be in Indian rupees
-Trading would be limited to Indian residents only – FIIs and NRIs can not participate
-There would be 3 monthly expiry derivative contracts for 3 consecutive months, and 3 quarterly expiry contracts with a March / June / September / December cycle
-The contracts will expire on the third Friday of the expiry month
-NSE would be waiving off the transaction charges on these derivatives till 29 February, 2012

Benefits of trading the S&P and Dow Jones derivatives

-You would be able to invest (or speculate – depending on how you look at it) directly in top US equity indices – right here in India
-Trading would be in Indian rupees, so there is no foreign exchange risk
-Trading would be during Indian trading hours
-Opportunity for you to diversify based on geography
-There is no upper limit on investment since these derivative contracts are denominated in Indian rupees

 

Dow Jones Industrial Average –  Contract Specification

NSE Contract Specifications
Ticker Symbol DJIA
Contract Size 25 units
Notional value Contract size multiplied by the index level (For example: if the current index value is 10000 then the notional value would be 10000 x 25 = Rs. 2,50,000)
Tick Size 2.50
Trading Hours As in equity derivative segment
Expiry Date 3rd Friday of the respective contract month. In case third Friday is a holiday in USA or in India the contract shall expire on the preceding business day
Contract months 3 serial monthly contracts and 3 Quarterly expiry contracts in the Mar-Jun-Sep-Dec cycle
Daily Settlement Price Last half hour’s weighted average price
Final Settlement Price All open positions at close of last day of trading shall be settled to the Special Opening Quotation (SOQ) of the DJIA Index on the date of expiry. ( http://www.cmegroup.com/trading /equity-index/files/SOQ.pdf)
Final Settlement Procedure Final settlement will be Cash settled in INR based on final settlement price
Final Settlement day All open positions on expiry date shall be settled on the next working day of the expiry date (T+1)
Position Limits The Trading Member/Mutual Funds position limits as well as the disclosure requirement for clients is same as applicable in case of domestic stock index derivatives

S&P 500 Futures – Contract Specification

Ticker Symbol S&P500
Contract Size 250 units
Notional value Contract size multiplied by the index level (For example: if the current index value is 1000 then the notional value would be 1000 x 250 = Rs. 2,50,000)
Tick Size 0.25
Trading Hours As in equity derivative segment
Expiry Date 3rd Friday of the respective contract month. In case third Friday is a holiday in USA or in India the contract shall expire on the preceding business day
Contract months 3 serial monthly contracts and 3 Quarterly expiry contracts in the Mar-Jun-Sep-Dec cycle
Daily Settlement Price Last half hour’s weighted average price
Final Settlement Price All open positions at close of last day of trading shall be settled to the Special Opening Quotation (SOQ) of the S&P 500 Index on the date of expiry. (http://www.cmegroup.com/trading /equity-index/files/SOQ.pdf)
Final Settlement Procedure Final settlement will be Cash settled in INR based on final settlement price
Final Settlement day All open positions on expiry date shall be settled on the next working day of the expiry date (T+1)
Position Limits The Trading Member/Mutual Funds position limits as well as the disclosure requirement for clients is same as applicable in case of domestic stock index derivatives

S&P Option Contract Specification

Ticker Symbol S&P500
Contract Size 250 units
Tick Size 0.05
Trading Hours As in equity derivative segment
No. of strikes/strike intervals 12-1-12 strikes with 5 point interval and further 4-4 strikes of 10 point interval.
Expiry Date 3rd Friday of the respective contract month. In case third Friday is a holiday in USA or in India the contract shall expire on the preceding business day.
Contract months 3 serial monthly contracts and 3 Quarterly expiry contracts in the Mar-Jun-Sep-Dec cycle
Option Type The options contracts shall be European styled which can be exercised only on the expiration date
Daily Settlement Price Daily premium settlement
Final Settlement Price All open positions at close of last day of trading shall be settled to the Special Opening Quotation (SOQ) of the S&P 500 ndex on the date of expiry (http://www.cmegroup.com /trading/equity-index/files/SOQ.pdf)
Final Settlement Procedure Final settlement will be Cash settled in INR based on final settlement price. long positions of in-the money contracts shall be assigned to open short positions in option contracts.
Final Settlement day All open positions on expiry date shall be settled on the next working day of the expiry date (T+1)
Position Limits The Trading Member/Mutual Funds position limits as well as the disclosure requirement for clients is same as applicable in case of domestic stock index derivatives.
Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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6 Replies to “Now trade in S&P 500 and Dow Jones Derivatives”

  1. if the trading is during indian trading hours how can one trade as dow opens after indian trading hours?

  2. Can I Trade S&P 500 and Commodities in MetaTrader4 Application. If yes, can you please name some of the reliable traders so that I can open account with them.

  3. Hi
    Can I Trade S&P 500 and Commodities in MetaTrader4 Application. If yes, can you please name some of the reliable traders so that I can open account with them.

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