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. |
Related Readings and Observations
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if the trading is during indian trading hours how can one trade as dow opens after indian trading hours?
@Satheesh
During indian trading hours only speculation trading is possible.
fees required to trade in dji
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.
Hello,
How indians can trade directly nasdaq and dowjones, where to open an account.
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.