The National Stock Exchange will launch a futures contract on crude oil for trading from Friday.
It has signed an agreement with ICIS, a leading global market information provider for the energy and petrochemical markets, to license its BFOE (Brent-Forties-Oseberg-Ekofisk) market data.
As part of the daily compilation of the index, NSE has licensed ICIS BFOE assessment data, which is produced five times a day in accordance with established ICIS methodologies. The ICIS BFOE assessment data complies with the standards and principles set by the International Organisation of Securities Commissions. This data is audited annually; the most recent audit taking place in October 2018.
NSE will launch two cash settled futures product – 100 barrel Brent Crude Oil Futures and 10 barrels Brent Crude Oil Mini Futures.
The trading period for both the futures will be between Monday to Friday. The trading session would be 9 AM to 11:30 PM.
The initial margin on this contract would be minimum four per cent.
In the commodity derivatives segment, NSE had earlier launched futures contracts in gold and silver. The exchange has also received SEBI approval to launch futures contracts in copper.
Vikram Limaye, Managing Director, NSE, said that being the third largest global consumer of crude oil after the United States and China, India required an efficient hedging mechanism and the new crude contract will provide an opportunity to market participants to hedge their risk.