12,106.90-62.95
Stock Analysis, IPO, Mutual Funds, Bonds & More

NSE launches interest rate options on 10-year G-Secs

Participation was observed from more than 50 members, the exchange said in a release.

ETMarkets.com|
Dec 09, 2019, 08.17 PM IST
0Comments
NSE-Site-Website-1200
The unit of trading is Rs 2 lakh face value of G-Sec, corresponding to 2,000 units.
Mumbai: Leading stock exchange NSE on Monday launched interest rate options on 10-year G-sec, and witnessed turnover of 5,926 contracts.

Participation was observed from more than 50 members, the exchange said in a release.

“Interest rate options will provide institutional investors the ability to manage risk through a non-linear product which is otherwise not available to them. Market participants can use options to trade and hedge interest rate risk on a transparent platform,” said Vikram Limaye, MD & CEO of NSE.

Interest rate options are based on the underlying G-Sec 10-year bonds - the 7.26 per cent 2029 bond and the 6.45 per cent 2029 bond.

The unit of trading is Rs 2 lakh face value of G-Sec, corresponding to 2,000 units. The order quotation is the premium quoted as the price of G-Sec and the tick size is Rs 0.0025.

The options contracts available are European Call & Put Options with minimum 8 in-the-money, 8 out-of-the-money and 1 near-the-money strike prices and a strike interval of Rs 0.25.

The contracts will be available for 3 serial monthly contracts followed by 3 quarterly contracts of the cycle March/June/September/December. The contract expiry is on the last Thursday of the expiry month and will be cash settled.

Currently, interest rate futures are available on 7 G-sec bonds as the underlying, for residual maturity ranging from 4 years to 15 years. The contracts are available for 3 Serial months followed by 3 quarterly contracts of the cycle March/June/September/December. The contract expiry is on the last Thursday of the expiry month and will be cash settled.

An average daily turnover of around Rs 1,480 crore is observed in the current financial year on NSE.

Also Read

NSE to introduce trading in interest rate options from Dec 9

BSE launches India’s first interest rate options

RBI introduces rupee interest rate options

Interest rate options in India from Jan 31: RBI

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service