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INTERESTING FACTS ABOUT INDIA's EQUITY DERIVATIVES MARKET (NSE)
Authored On: 27-Sep-15
Last Modified: 27-Sep-15
About. . .
The article details about interesting facts about of India's Equity Derivatives Markets at National Stock Exchange Of India. Investors should use this article as starting point to explore opportunities for them.
Best among the best talents - may it be financial analysts, may it be accountants, may it be technologist or may it be traders! Derivative markets continue to attract the best talent world-wide. Such is the allure and opportunities of derivative markets!
Of course, the opportunities also mean high risk reward ration and it also means higher losses in failed or misplaced strategies. So while traders and investors going into derivative markets need to be extra cautious and extra knowledgeable, so also is the need on their parts for financial discipline.
India's equity derivative markets at NSE provide great opportunities for investors to hedge their equity holdings and also to trade additionally for profits. Here are some of interesting facts about NSE's equity derivatives markets.
In world-wide ranking of equity derivatives markets, NSE India ranks in first three in categories of stock futures, equity index options and equity index futures - in terms of number of contracts traded daily.
In Asia-Pacific region, when the volumes in other exchanges elsewhere are on decline, there is noticeable growth in contracts in equity derivatives in NSE India.
Equity derivative markets continue to attract all - foreign portfolio managers, domestic institutional investors and retail investors alike!!
NSE's European style Options provide flexible ways to hedge the equity portfolio on shorter or longer terms.
NSE's remarkable track record of impressive innovations on new derivative products including those in currency derivatives, up gradation of hardware & software for speeding of trading, introduction of Algorithmic Trading keeps continued interest of institutional investors, thus providing liquidity and growth
NSE's futures contracts based on Dow Jones Industrial Average and S&P500 provide flexible ways for Indian market participants to place derivative bets on these two prominent US indexes without having to worry on current movement side effects.
NSE's portal gives near-real-time graphs of all derivatives contracts, Option Chains and end of the day archives of the daily summary data. In world-wide markets, retail investors often see these facilities and features missing, thus the privilege is retained only by deep-pocketed institutional investors. However, with NSE's said features, retail investors can always be on top of their decision making
Interests of foreign exchanges on growth and innovation as well as continued interest of NSE to collaborate with foreign exchanges for mutual benefits is a win-win situations for exchanges on both sides of border and hence for retail investors alike.
Summary
Derivative markets are very risky and retail investors should avoid entering into it unless having several years of stock market experience. However, those having high valued equity portfolio can find ways to hedge their equity folio using NSE's derivative markets. Trading in derivatives always should be in consultation with your financial advisors and only after considerable understanding of the markets over the years.