Friday, August 26, 2011

Trade in US indices from India | American Share market in india

Trade in US indices from India:

Indian Traders will be able to bet on US indices sitting on their desks here from next week.The National Stock Exchange (NSE) is set to launch equity derivative contracts on Americas main indices S&P 500 and Dow Jones Industrial Average (DJIA) from Monday.The bourse will offer futures and options (F&O ) contracts on S&P 500 while only futures contracts on Dow.

There will be monthly and quarterly contracts on both these indices that will expire on the third Friday of the expiry month,the NSE said.The exchanges derivative products on Indian securities expire on the last Thursday of every month.For S&P futures and options contracts,the lot size will be 250 units while it will be 25 for Dow futures.

This means if the S&P index is at 1000,the notional value of a lot would be.2,50,000.The NSE will not impose transaction charges on these contracts done till February 29,2012,in its attempts to drive trader participation in them.But analysts feel these products may take some time to take off in a big way.

Big traders will come in only once liquidity improves, said Siddarth Bhamre,head-derivatives,Angel Broking.NSE officials have been meeting brokers,of late,on how to boost participation in these products,said market sources.These products will interest savvy traders,who have been unable to participate in derivatives contracts on overseas bourses,because of the Reserve Bank of Indias restrictions,analysts said.The central bank,which allows Indian investors to invest up to $200,000 in overseas assets,does not allow to bet on derivatives overseas without buying the underlying.Once volumes go up,smart traders will go for pair trades involving Indian and US contracts here, Bhamre said.

Source: economic times