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A futures contract is a forward contract, which is traded on an Exchange. NSE commenced trading in futures on individual securities on November 9, 2001. The futures contracts are available on 211 securities stipulated by the Securities & Exchange Board of India (SEBI). (Selection criteria for securities)
NSE defines the characteristics of the futures contract such as the underlying security, market lot, and the maturity date of the contract. The futures contracts are available for trading from introduction to the expiry date.
The security descriptor for the futures contracts is:
Market type : N
Instrument Type : FUTSTK
Underlying : Symbol of underlying security
Expiry date : Date of contract expiry
Instrument type represents the instrument i.e. Futures on Index.
Underlying symbol denotes the underlying security in the Capital Market (equities) segment of the Exchange
Expiry date identifies the date of expiry of the contract
Futures contracts are available on
216 securities stipulated by the Securities & Exchange Board of India (SEBI). These securities are traded in the Capital Market segment of the Exchange.
Futures contracts have a maximum of 3-month trading cycle - the near month (one), the next month (two) and the far month (three). New contracts are introduced on the trading day following the expiry of the near month contracts. The new contracts are introduced for a three month duration. This way, at any point in time, there will be 3 contracts available for trading in the market (for each security) i.e., one near month, one mid month and one far month duration respectively.
Futures contracts expire on the last Thursday of the expiry month. If the last Thursday is a trading holiday, the contracts expire on the previous trading day.
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The value of the futures contracts on individual securities may not be less than Rs. 2 lakhs at the time of introduction for the first time at any exchange. The permitted lot size for futures contracts & options contracts shall be the same for a given underlying or such lot size as may be stipulated by the Exchange from time to time.
The price step in respect of futures contracts is Re.0.05.
Base price of futures contracts on the first day of trading (i.e. on introduction) would be the theoretical futures price. The base price of the contracts on subsequent trading days would be the daily settlement price of the futures contracts.
There are no day minimum/maximum price ranges applicable for futures contracts. However, in order to prevent erroneous order entry by trading members, operating ranges are kept at +/- 20 %. In respect of orders which have come under price freeze, members would be required to confirm to the Exchange that there is no inadvertent error in the order entry and that the order is genuine. On such confirmation the Exchange may approve such order.
Orders which may come to the exchange as a quantity freeze shall be based on the notional value of the contract of around Rs.5 crores. Quantity freeze is calculated for each underlying on the last trading day of each calendar month and is applicable through the next calendar month. In respect of orders which have come under quantity freeze, members would be required to confirm to the Exchange that there is no inadvertent error in the order entry and that the order is genuine. On such confirmation, the Exchange may approve such order. However, in exceptional cases, the Exchange may, at its discretion, not allow the orders that have come under quantity freeze for execution for any reason whatsoever including non-availability of turnover / exposure limits.
· Regular lot order
· Stop loss order
· Immediate or cancel
· Spread order
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Last updated on May 21, 2012.
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