Comments
Indian investors would soon be able to trade US equities — that too without having to keep awake all night or having to buy dollars.
The National Stock Exchange (NSE) has received the Securities and Exchange Board of India's (SEBI) nod to start trading S&P 500 and Dow index futures. That would give an opportunity for investors here to buy and sell GE, Microsoft or Google, albeit indirectly, by way of investing in indices that are based on these bellwether stocks.
Moreover, the future contracts on the S&P 500 and the Dow Jones Industrial average (DJIA) to be traded in NSE would be rupee denominated. Also, the trades are to take place in Indian trading hours. In other words, there is neither any currency risk on account of adverse dollar-rupee movements nor the requirement of having to wait for the US markets to open to place trades.
The S&P 500 and DJIA are two of the world's most followed indices, being considered as barometers of the US equity markets.
NSE is looking to introduce the future contracts on these two US equity indices along with the options contracts of S&P in about a month's time, sources said. The exchange is, however, yet to obtain the capital market regulator's approval to start trading in options contracts of S&P. “NSE will wait for the approval so that all the contracts can be launched simultaneously,” the sources added.
The contract size in the case of S&P 500 Index futures will be 250 units. For DJIA Index futures, the contract size will be 25 units. As for contract months, it will be four quarterly expiry contracts in the Mar-Jun-Sep-Dec cycle. The expiry date would be the third Friday of the respective contract month. In case the third Friday is a holiday in the US or in India, the contract would expire on the preceding business day.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.