Indian bourses shine in derivatives

Why is it in the news?
  • According to the latest report by the World Federation of Exchanges (WFE) and the International Options Market Association (IOMA), the National Stock Exchange (NSE) and the BSE accounted for 96% of the currency derivatives trading in the Asia-Pacific region in 2018. 
  • Further, the NSE was the global leader in terms of volume of trading of index options and eighth in single stock options in the calendar year 2018.
  • The year also saw India’s largest bourse being ranked second in the volume of single stock futures contracts.
More in the news
  • In the currency derivatives segment, the NSE and the BSE together account for 96% of such derivatives volume in the Asia-Pacific region.
  • The two Indian exchanges occupy the top two ranks with nearly 211 crore contracts traded in 2018.
  • Further, the BSE registered the second-highest volume growth in the year at 70% — second only to 84% of Singapore Exchange.
  • In commodities as well, an India exchange is featured among the top 10 globally.
  • In 2018, the Multi Commodity Exchange of India (MCX) was ranked eighth globally with a little over 23 crore contracts traded while registering a 16% rise during the year.
  • In India, MCX is the biggest commodity bourse with a market share of more than 90%.
  • Currency Derivatives:
    (1) A currency future, also known as FX future, is a futures contract to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date.
    (2) On NSE the price of a future contract is in terms of INR per unit of other currency e.g. US Dollars.
    (3) Currency future contracts allow investors to hedge against foreign exchange risk. Currency Derivatives are available on four currency pairs viz. US Dollars (USD), Euro (EUR), Great Britain Pound (GBP) and Japanese Yen (JPY).
    (4) Cross Currency Futures & Options contracts on EUR-USD, GBP-USD and USD-JPY are also available for trading in Currency Derivatives segment.
Source
The Hindu, NSE.
 
 
 
 
Posted by Jawwad Kazi on 16th Apr 2019
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