Total turnover of interest rate futures on the three major stock exchanges surged 54.4 per cent to Rs 39,817 crore in November compared to the previous month.

The total trading value of IRF on BSE, NSE and MCX-SX stood at Rs 25,785 crore in October 2014, according to the exchanges’ data.

The volume of IRF contracts traded on the bourses also climbed by over 52 per cent to 19.58 lakh last month. In October, the number of contracts traded was 12.84 lakh.

An IRF is a contract between a buyer and a seller agreeing to the future delivery of any interest-bearing asset such as government bonds. The contract was launched on the three exchanges in January this year.

The National Stock Exchange (NSE) had the largest share (92.6 per cent) in total turnover at Rs 36,875 crore for November. The exchange witnessed a trade value of Rs 23,826 crore in October.

The BSE recorded a turnover of Rs 2,919.14 crore in November against Rs 1,954 crore in October.

Trading in IRF on MCX-SX witnessed improvement last month. Its turnover in the category rose to Rs 22.65 crore in November from Rs 5 crore in October.

In terms of volumes, more than 18 lakh contracts were traded on the NSE last month, while on BSE IRF, the volumes stood at 1.43 lakh. Only 116 contracts were traded on MCX-SX during last month.

Banks, primary dealers, mutual funds, insurance companies, FIIs, corporates, brokers as well as retail investors trade in this product.

The cash-settled IRFs provide market participants with a better option to hedge risks arising from fluctuation in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.

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