Derivative Market

IOSR Journal of Economics and Finance (IOSR-JEF)
e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 3, Issue 3. (Mar-Apr. 2014), PP 25-42

www.iosrjournals.org
A Study of Derivatives Market in India and its Current Position

in Global Financial Derivatives Markets
Ms. Shalini H S1, Dr. Raveendra P V2
1
Department of MBA, Krupanidhi School of Management, Bangalore, Karnataka, India.

2
Department of MBA, M.S.R.I.T, Bangalore, Karnataka, India.
Abstract: The past decade has witnessed the multiple growths in the volume of international trade and business
due to the wave of globalization and liberalization all over the world. As a result, the demand for the
international money and financial instruments increased significantly at the global level. In this respect, change
in exchange rates, interest rates and stock prices of different financial markets have increased the financial risk
to the corporate world. Adverse changes in the macroeconomic factors have even threatened the very survival of
business world. It is therefore essential to develop a set of new financial instruments known as derivatives in the
Indian financial markets, to manage such risk. The basic purpose of these instruments is to provide
commitments to prices for future dates for giving protection against adverse movements in future prices, in
order to reduce the extent of financial risks. Today, the financial derivatives have become increasingly popular
and most commonly used in the world of finance. This has grown with a phenomenal speed all over the world
that now it is called as the derivatives revolution. In India, the emergence and growth of derivatives market is
relatively a recent phenomenon. Since its inception in June 2000, derivatives market has exhibited exponential
growth both in terms of volume and number of contract traded. The market turnover has grown from Rs.2365
Cr. in 2000-2001 to Rs. 26444804.86 Cr. in 2013-14. Within a short span of twelve years, derivatives trading in
India has surpassed cash segment in terms of turnover and number of traded contracts. The passed study
encompasses in its scope, history, concept, definition, types, features, regulation, market, trend, growth, Future
prospects and challenges of derivatives in India and status of Indian derivatives market vis--vis global
derivative market.
Keywords: Bombay stock exchange, Derivatives, Exchange rate, Forward, Futures, National stock exchange,
Notional value underlying asset, Options, Risk management, Swaps.
I. Introduction
The most significant milestone in financial innovation is achieved with the issuance and trading of
derivatives. Along with this positive element, the proponents of derivatives also admit that this term arouses
more controversies and most people look at them with suspicion and few would believe that they do contribute
to the societys welfare. But the matter of fact is that derivatives are a standard risk management tool that
enables risk- sharing and facilitates the efficient allocation of capital to productive investment activities. In this
study, we will try and examine the veracity of a few misconceptions that surround derivatives along with their
economic benefits.
The present study attempts to discuss the genesis of derivatives trading by tracing its historical
development, types, regulation and policy developments, trend & growth, future prospects and challenges of
derivative market in India.
II. Methodology
The study is organized into five sections. Section - I deals with the concept, features, definition, types
and classification of derivatives. Section - II has been devoted to a discussion of evolution and growth of
derivatives market, and regulation and policy development. Section - III discusses the statistical information
(data). Section - IV discusses the status of Indian derivative market visa-vis global derivative market. The last
Section - V specifies summary and concluding remarks.
SECTION-I
Concept of Financial Derivatives: At present the Indian stock markets are not having any risk hedged
instruments that would allow the investors to manage and minimize the risk. In industrialized countries apart
from money market and capital market securities, a variety of other securities known as derivatives have now
become available for investment and trading. The derivatives originate in mathematics and refer to a variable
which has been derived from another variable. A derivative is a financial product which has been derived from
another financial product or commodity. The derivatives do not have independent existence without underlying
product and market. Derivatives are contracts which are written between two parties for easily marketable
25 | Page
A Study of Derivatives Market in India and its Current Position in Global Financial Derivatives
assets. Derivatives are also known as deferred delivery or deferred payment instruments. Since financial
derivatives can be created by means of a mutual agreement, the types of derivative products are limited only by
imagination and so there is no definitive list of derivative products.
A derivative is a financial product which has been derived from another financial product or commodity.
D.G. Gardener defined the derivatives as A derivative is a financial product which has been derived from
market for another product.
The securities contracts (Regulation) Act 1956 defines derivative as under section 2 (ac). As per this
Derivative includes
(a) a security derived from a debt instrument, share, loan whether secured or unsecured, risk instrument or
contract for differences or any other form of security.
(b) a contract which derived its value from the price, or index of prices at underlying securities.
The above definition conveys that the derivatives are financial products. Derivative is derived from another
financial instrument/ contract called the underlying. A derivative derives its value from underlying assets.
Accounting standard SFAS133 defines a derivative instrument is a financial derivative or other contract which
will comprise of all three of the following characteristics:
(i) It has one or more underlying asset, and one or more notional amount or payments provisions or both. Those
terms determine the amount of the settlement or settlements.
(ii)
It requires no initial net investment or an initial net investment that is smaller than would be required
for other types of contract that would be expected to have a similar response to changes in market factors.
(iii)
Its terms require or permit net settlement. It can be readily settled net by a means outside the contract or
it provides for delivery of an asset that puts the recipients in a position not substantially different from net
settlement.
From the aforementioned, derivatives refer to securities or to contracts that derive from another whose value
depends on another contract or assets. As such the financial derivatives are financial instrument whose prices or
values are derived from the prices of other underlying financial instruments or financial assets. The underlying
instruments may be an equity share, stock, bond, debenture, Treasury bill, foreign currency or even another
derivative asset.
Hence, financial derivatives are financial instruments whose prices are derived from the prices of other financial
instruments.
As defined above, its value is entirely derived from the value of the underlying asset. The underlying asset can
be securities, commodities, bullion, currency, livestock or anything else. In other way the underlying asset may
assume many forms:
(i) Commodities including grain, coffee beans, orange juice;
(ii) Precious metals like gold & silver;
(iii) Foreign exchange rates or currencies;
(iv) Bonds of different types, including medium to long term negotiable debt, securities issued by governments,
companies etc;
(v) Shares and share warrants of companies traded on recognized stock exchanges and stock index;
(vi) Short term securities such as T-bills;
(vii) Over the counter (OTC) money market products such as loans or deposits.
MAJOR PLAYERS IN THE FINANCIAL DERIVATIVES TRADING
There are three major players in the financial derivatives trading:
1. Hedgers: Hedgers are traders who use derivatives to reduce the risk that they face from potential movements
in a market variable and they want to avoid exposure to adverse movements in the price of an asset. Majority of
the participants in derivatives market belongs to this category.
2. Speculators: Speculators are traders who buy/sell the assets only to sell/buy them back profitably at a later
point in time. They want to assume risk. They use derivatives to bet on the future direction of the price of an
asset and take a position in order to make a quick profit. They can increase both the potential gains and potential
losses by usage of derivatives in a speculative venture.
3. Arbitrageurs: Arbitrageurs are traders who simultaneously buy and sell the same (or different, but related)
assets in an effort to profit from unrealistic price differentials. They attempts to make profits by locking in a
riskless trading by simultaneously entering into transaction in two or more markets. They try to earn riskless
profit from discrepancies between futures and spot prices and among different futures prices.
USES OF FINANCIAL DERIVATIVES
Derivatives are supposed to provide some services and these services are used by investors. Some of
the uses and applications of financial derivatives can be enumerated as following:
26 | Page
1. Management of risk: One of the most important services provided by the derivatives is to control, avoid, shift
and manage efficiently different types of risk through various strategies like hedging, arbitraging, spreading etc.
Derivative assist the holders to shift or modify suitable the risk characteristics of the portfolios. These are
specifically useful in highly volatile financial conditions like erratic trading, highly flexible interest rates,
volatile exchange rates and monetary chaos.
2. Price discovery: The important application of financial derivatives is the price discovery which means
revealing information about future cash market prices through the future market. Derivative markets provide a
mechanism by which diverse and scattered opinions of future are collected into one readily discernible number
which provides a consensus of knowledgeable thinking.
3. Liquidity and reduce transaction cost : As we see that in derivatives trading no immediate full amount of the
transaction is required since most of them are based on margin trading. As a result, large number of traders,
speculators, arbitrageurs operates in such markets. So, derivatives trading enhance liquidity and reduce
transaction cost in the markets of underlying assets. Measurement of Market: Derivatives serve as the
barometers of the future trends in price which result in the discovery of new prices both on the spot and future
markets. They help in disseminating different information regarding the future markets trading of various
commodities and securities to the society which enable to discover or form suitable or correct or true
equilibrium price in the markets. As a result, the assets will be in an appropriate and superior allocation of
resources in the society.
4. Efficiency in trading: Financial derivatives allow for free trading of risk components and that leads to
improving market efficiency. Traders can use a position in one or more financial derivatives as a substitute for a
position in underlying instruments. In many instances, traders find financial derivatives to be a more attractive
instrument than the underlying security. This is mainly because of the greater amount of liquidity in the market
offered by derivatives as well as the lower transaction costs associated with trading a financial derivative as
compared to the costs of trading the underlying instruments in cash market.
5. Speculation and arbitrage: Derivatives can be used to acquire risk, rather than to hedge against risk. Thus,
some individuals and institutions will enter into a derivative contract to speculate on the value of the underlying
asset, betting that the party seeking insurance will be wrong about the future value of the underlying asset.
Speculators look to buy an asset in the future at a low price according to a derivative contract when the future
market price is high, or to sell an asset in the future at a high price according to derivative contract when the
future market price is low. Individual and institutions may also look for arbitrage opportunities, as when the
current buying price of an asset falls below the price specified in a futures contract to sell the asset.
6. Hedging : Hedge or mitigate risk in the underlying, by entering into a derivative contract whose value
moves in the opposite direction to their underlying position and cancels part or all of it out. Hedging also occurs
when an individual or institution buys an asset and sells it using a future contract. They have access to the asset
for a specified amount of time, and can then sell it in the future at a specified price according to the futures
contract of course; this allows them the benefit of holding the asset.
7.
Price stabilization function: Derivative market helps to keep a stabilizing influence on spot prices by
reducing the short term fluctuations. In other words, derivatives reduce both peak and depths and lends to price
stabilization effect in the cash market for underlying asset.
8.
Gearing of value: Special care and attention about financial derivatives provide leverage (or gearing),
such that a small movement in the underlying value can cause a large difference in the value of the derivative.
9.
Develop the complete markets : It is observed that derivative trading develop the market towards
complete markets complete market concept refers to that situation where no particular investors be better of
than others, or patterns of returns of all additional securities are spanned by the already existing securities in it,
or there is no further scope of additional security.
10.
Encourage competition : The derivatives trading encourage the competitive trading in the market,
different risk taking preference at market operators like speculators, hedgers, traders, arbitrageurs etc. resulting
in increase in trading volume in the country. They also attract young investors, professionals and other experts
who will act as catalysts to the growth of financial market.
12.
Other uses : The other uses of derivatives are observed from the derivatives trading in the market that
the derivatives have smoothen out price fluctuations, squeeze the price spread, integrate price structure at
different points of time and remove gluts and shortage in the markets. The derivatives also assist the investors,
traders and managers of large pools of funds to device such strategies so that they may make proper asset
allocation increase their yields and achieve other investment goals.
TYPES AND CLASSIFICATION OF DERIVATIVES
There are many ways in which the derivatives can be categorized based on the markets where they
trade, based on the underlying asset and based on the product feature etc. some ways of classification are
following:
27 | Page
(1) On the basis of linear and non-linear: On the basis of this classification the financial derivatives can be
classified into two big class namely linear and non-linear derivatives:
(a) Linear derivatives: Those derivatives whose Over-the-counter (OTC) traded derivative: These values
depend linearly on the underlyings value are called linear derivatives. They are following:
(i)
Forwards
(ii)
Futures
(iii)
Swaps
(b) Non-linear derivatives: Those derivatives whose value is a non-linear function of the underlying are called
non-linear derivatives. They are following:
(i) Options
(ii) Convertibles
(iii) Equity linked bonds
(iv) Reinsurance
(2) On the basis of financial and non-financial: On the basis of this classification the derivatives can be
classified into two category namely financial derivatives and non-financial derivatives.
(a) Financial derivatives: Those derivatives which are of financial nature are called financial derivatives. They
are following:
(i)
(ii)
(iii)
(iv)
Forwards
Futures
Options
Swaps
The above financial derivatives may be credit derivatives, forex, currency fixed-income, interest, insider trading
and exchange traded.
(b) Non-financial derivatives: Those derivatives which are not of financial nature are called non-financial
derivatives. They are following:
(i)
(ii)
(iii)
(iv)
Commodities
Metals
Weather
Others
(3)
On the basis of market where they trade: On the basis of this classification, the derivatives can be
classified into three categories namely; OTC traded derivatives, exchange-traded derivative and common
derivative. Derivative contracts are traded (and privately negotiated) directly between two parties, without going
through an exchange or other intermediary. The OTC derivative market is the largest market for derivatives and
largely unregulated with respect to disclosure of information between parties. They are following:
(i)
Swaps
(ii)
Forward rate agreements
(iii)
Exotic options
(iv)
Other exotic derivative
(b)
Exchange traded derivative: Those derivative instruments that are traded via specialized derivatives
exchange of other exchange. A derivatives exchange is a market where individual trade standardized contracts
that have been defined by the exchange. Derivative exchange act as an intermediary to all related transactions
and takes initial margin from both sides of the trade to act as a guarantee. They may be followings:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Futures
Options
Interest rate
Index product
Convertible
Warrants
Others
28 | Page
(c) Common derivative: These derivatives are common in nature/trading and classification. They are following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Forwards
Futures
Options
Binary options
Warrant
Swaps
The various types of financial derivatives based on their different properties like, plain. Simple or straight
forward, composite, joint or hybrid, synthetic, leveraged, mildly leveraged, customized or OTC traded,
standardized or organized exchange traded, regulated and unregulated etc. are available in the market.
Derivatives
Commodity
Financial
Basic FD/ FI
Complex
FD/ FI
Futures
Forwards
Options
Warrants and
convertibles
Swaps and
Swaptions
Exotic Non
standard
options
Figure 1: Classification of derivatives

Classification of derivatives contracts in India:
The Indian financial market woke up to the new generation of financial instrument and the Indian derivatives
markets Odyssey in modern times commenced with FOREX derivatives in 1997 has also seen the introduction
of many derivatives on different underlying. Currently the following contracts are allowed for trading in Indian
markets:
Figure 2: Derivative contracts traded in India

FORWARD CONTRACT
A forward contract is a customized contract between the buyer and the seller where settlement takes place on a
specific date in future at a price agreed today. In case of a forward contract the price which is paid/ received by
the parties is decided at the time of entering into contract. It is simplest form of derivative contract mostly
entered by individual in day to day life.
The holder of a long (short) forward contract has an agreement to buy (sell) an asset at a certain time in the
future for a certain price, which is agreed upon today. The buyer (or seller) in a forward contract:
29 | Page
Acquires a legal obligation to buy (or sell) an asset (known as the underlying asset)
At some specific future date (the expiration date)
At a price (the forward price) which is fixed today.
The basic features of a contract are given in brief here as under:

1. Forward contracts are bilateral contracts, and hence, they are exposed to the counter party risk. There is risk
of non-performance of obligation either of the parties, so these are riskier than to futures contracts.
2.
Each contract is custom designed, and hence, is unique in terms of contract size, expiration date, the asset
type, quality etc.
3.
In forward contract, one of the parties takes a long position by agreeing to buy the asset at a certain
specified future date. The other party assumes a short position by agreeing to sell the same asset at the
same date for the same specified price. A party with no obligation offsetting the forward contract is said to
have an open position. A party with a close position is, sometimes, called a hedger.
4.
The specified price in a forward contract is referred to as the delivery price. The forward price for a
particular forward contract at a particular time is the delivery price that would apply if the contract were
entered into at that time. It is important to differentiate between the forward price and the delivery price.
Both are equal at the time the contact is entered into. However, as time passes, the forward price is likely
to change whereas the delivery price remains the same.
5.
In the forward contract, derivative asset can often be contracted from the combination of underlying assets;
such assets are often known as synthetic assets in the forward market.
6.
In the forward market, the contract has to be settled by delivery of the asset on expiration date. In case the
party wishes to reverse the contract, it has to compulsory go to the same counter party, which may
dominate and command the price it wants as being in a monopoly situation.
7.
In a forward contract, covered party or cost of carry relations are relation between the prices of forward
and underlying assets.
8.
Forward contract are very popular in foreign exchange market as well as interest rate bearing instruments.
Most of the large and international banks quote the forward rate through their forward desk lying within
their foreign exchange trading room. Forward foreign exchange quotes by these banks are displayed with
the spot rates.
III. Futures Contracts

Futures contract is an agreement between two parties to buy or sell a specified quantity of an asset at a
specified price and at a specified time and place. Future contracts are normally traded on an exchange which sets
the certain standardized norms for trading in futures contracts. The features of a futures contract may be
specified as follows:
1.
Futures are traded only in organized exchanges.
2.
Futures contract required to have standard contract terms.
3.
Futures exchange has associated with clearing house.
4.
Futures trading required margin payment and daily settlement.
5.
Futures positions can be closed easily.
6.
Futures markets are regulated by regulatory authorities like SEBI.
7.
The futures contracts are executed on expiry date.
8.
The futures prices are expressed in currency units, with a minimum price movement called a tick size.
The quality of positive economic theory explains about its ability with precision clarity and simplicity. The main
characteristics of futures explained by a good economic theory are as follows:
1.
There are a limited number of actively traded products with futures contracts.
2.
The trading unit is large and indivisible.
3.
It has no more than maturity of 3 months.
4.
The success ratio of new contract is about 25% in the world financial markets.
5.
Futures are seldom used by farmers.
6.
There are both commercial and non-commercial users of futures contract in interest rates and foreign
exchange.
7.
The main use of the future by the commercial users is to hedge corresponding cash and forward
positions.
8.
The positions of the non-commercial users take almost entirely speculative positions.
In foreign exchange futures, the positions of the commercials users are unbalanced.
30 | Page
There are different types of contracts in financial futures which are traded in the various futures market of the
world. The followings are the important types of financial futures contract:
1.
Stock future or equity futures
2.
Stock index futures
3.
Currency futures
4.
Interest rate futures
OPTIONS CONTRACTS
Options are derivative contract that give the right, but not the obligation to either buy or sell a specific
underlying security for a specified price on or before a specific date. In theory, option can be written on almost
any type of underlying security. Equity (stock) is the most common, but there are also several types of nonequity options, based on securities such as bonds, foreign currency, indices or commodities such as gold or oil.
The person who buys an option is normally called the buyer or holder. Conversely, the seller is known as the
seller or writer. Again we can say An option is a particular type of a contract between two parties where one
person gives the other person the right to buy or sell a specific asset at a specified price within a specified time
period. Today, options are traded on a variety of instruments like commodities, financial assets as diverse as
foreign exchange, bank times deposits, treasury securities, stock, stock indexes, petroleum products, food grains,
metals etc. The main characteristics of options are following:
1.
Options holders do not receive any dividend or interest.
2.
Option yield only capital gains.
3.
Options holder can enjoy a tax advantages.
4.
Options are traded on OTC and in all recognized stock exchanges.
5.
Options holders can control their rights on the underlying assets.
6.
Options create the possibility of gaining a windfall profit.
7.
Options holder can enjoy a much wider riskreturn combinations.
8.
Options can reduce the total portfolio transaction costs.
9.
Options enable with the investors to gain a better returns with a limited amount of investment.
A call which is the right to buy shares under a negotiable contract and which do not carry any obligation. The
buyers have the right to receive the delivery of assets are known as call option.
In this option the owner has the right to sell the underlying asset under the negotiable contract. Put option holder
has the right to receive the payment by surrendering the asset.
The writer of an option is a stock broker, member or a security dealer. The buyer of an option pays a price
depending on the risk of underlying security and he as an investor or a dealer or trader.
The basic features of options or followings:
1.
The option is exercisable only by the owner namely the buyer of the option.
2.
The owner has limited liability.
3.
Owners of options have no voting rights and dividend right.
4.
Options have high degree of risk to the option writers.
5.
Options involving buying counter positions by the option sellers.
6.
Flexibility in investors needs.
7.
No certificates are issued by the company.
8.
Options are popular because they allow the buyer profits from favorable movement in exchange rate.
Options can be classified into different categories like:
(i)
Call options
(ii)
Put options
(iii)
Exchange traded options
(iv)
OTC traded options
(v)
American options
(vi)
European options
(vii)
Commodity options
(viii)
Currency options
(ix)
Stock options
(x)
Stock Index options
SWAPS CONTRACT
A swap is an agreement between two or more people or parties to exchange sets of cash flows over a
period in future.
Swaps are agreements between two parties to exchange assets at predetermined intervals. Swaps are generally
customized transactions. The swaps are innovative financing which reduces borrowing costs, and to increase
31 | Page
control over interest rate risk and FOREX exposure. The swap includes both spot and forward transactions in a
single agreement.
Swaps are at the centre of the global financial revolution.
Swaps are useful in avoiding the problems of unfavorable fluctuation in FOREX market. The parties that agree
to the swap are known as counter parties. The two commonly used swaps are interest rate swaps and currency
swaps.
Interest rate swaps which entail swapping only the interest related cash flows between the parties in the same
currency.
Currency swaps entail swapping both principal and interest between the parties, with the cash flows in one
direction being in a different currency than the cash flows in the opposite direction.
SECTION II
HISTORICAL DEVELOPMENT OF DERIVATIVE MARKET IN INDIA
The origin of derivatives can be traced back to the need of farmers to protect themselves against
fluctuations in the price of their crop. From the time it was sown to the time it was ready for harvest, farmers
would face price uncertainty. Through the use of simple derivative products, it was possible for the farmer to
partially or fully transfer price risks by locking-in asset prices. These were simple contracts developed to meet
the needs of farmers and were basically a means of reducing risk.
Derivative markets in India have been in existence in one form or the other for a long time. In the area of
commodities, the Bombay Cotton Trade Association started future trading way back in 1875. This was the first
organized futures market. Then Bombay Cotton Exchange Ltd. in 1893, Gujarat Vyapari Mandall in 1900,
Calcutta Hesstan Exchange Ltd. in 1919 had started future market. After the country attained independence,
derivative market came through a full circle from prohibition of all sorts of derivative trades to their recent
reintroduction. In 1952, the government of India banned cash settlement and options trading, derivatives trading
shifted to informal forwards markets. In recent years government policy has shifted in favour of an increased
role at market based pricing and less suspicious derivatives trading. The first step towards introduction of
financial derivatives trading in India was the promulgation at the securities laws (Amendment) ordinance 1995.
It provided for withdrawal at prohibition on options in securities. The last decade, beginning the year 2000, saw
lifting of ban of futures trading in many commodities. Around the same period, national electronic commodity
exchanges were also set up. The more detail about evolution of derivatives are shown in table No.1 with the help
of the chronology of the events.
A Chronology of events: Financial Derivatives in India:
Sl. No.
Progress Date
1952
1953
1956
1969
1972
1980
1983
8
9
1992
1993
10
1994
11
1995
12
14th Dec. 1995
Progress of Financial
Derivatives
Enactment of the forward
contracts (Regulation) Act.
Setting up of the forward market
commission.
Enactment of Securities Contract
Regulation Act 1956
Prohibition of all forms of
forward trading under section 16
of SCRA.
Informal carry forward trades
between two settlement cycles
began on BSE.
Khuso Committee recommends
reintroduction of futures in most
commodities.
Govt. amends bye-laws of
exchange of Bombay, Calcutta
and Ahmedabad and introduced
carry forward
trading in
specified shares.
Enactment of the SEBI Act.
SEBI Prohibits carry forward
transactions.
Kabra Committee recommends
futures trading in 9 commodities.
G.S.
Patel
Committee
recommends
revised
carry
forward system.
NSE asked SEBI for permission
to trade index futures
32 | Page
13
1996
14
18th Nov. 1996
15
11th May 1998
16
1st June 1999
17
7th July 1999
18
24th May 2000
19
25th May 2000
20
9th June 2000
21
12th June 2000
22
31st Aug. 2000
23
24
1st June 2001

Jun 2001
25
26
27
July 2001
9th July 2001
July 2001
28
29
1st Nov. 2001

Nov. 2001
30
9th Nov. 2001
31
June 2003
32
Aug. 2003
33
34
13th Sep. 2004

June 2005
35
Dec. 2006
36
June 2007
37
Oct. 2007
38
1st Jan. 2008
39
1st Jan. 2008
40
3rd March 2009
41
NA
42
29th Aug. 2008
43
44
Aug. 2008
1st Oct. 2008
45
10th Dec. 2008
46
Aug. 2009
47
7th Aug. 2009
48
18th Dec. 2009
Revised system restarted on

BSE.
SEBI setup LC Gupta committee
to draft frame work for index
futures
LC Gupta committee submitted
report
Interest rate swaps/forward rate
agreements allowed at BSE
RBI gave permission to OTC for
interest rate swaps/forward rate
agreements
SIMEX chose Nifty for trading
futures and options on an Indian
index
SEBI gave permission to NSE &
BSE to do index futures trading
Equity derivatives introduced at
BSE
Commencement of derivatives
trading (index futures) at NSE
Commencement
of
trading
futures & options on Nifty at
SIMEX
Index option launched at BSE
Trading on equity index options
at NSE
Trading at stock options at NSE
Stock options launched at BSE
Commencement of trading in
options on individual securities
Stock futures launched at BSE
Commencement of trading in
futures on individual security
Trading of Single stock futures
at BSE
Trading of Interest rate futures at
NSE
Launch of futures & options in
CNX IT index
Weekly options of BSE
Launch of futures & options in
Bank Nifty index
'Derivative Exchange of the Year
by Asia risk magazine
NSE launches derivatives on
Nifty Junior & CNX 100
NSE launches derivatives on
Nifty Midcap -50
Trading of Chhota (Mini) Sensex
at BSE
Trading of mini index futures &
options at NSE
Long term options contracts on
S&P CNX Nifty index
Futures & options on sectoral
indices ( BSE TECK, BSE
FMCG, BSE Metal, BSE
Bankex & BSE oil & gas)
Trading of currency futures at
NSE
Launch of interest rate futures
Currency derivative introduced
at BSE
S&P CNX Defty futures &
options at NSE
Launch of interest rate futures at
NSE
BSE-USE form alliance to
develop currency & interest rate
derivative markets
BSE's new derivatives rate to
33 | Page
49
Feb. 2010
50
Apr. 2010
51
July 2010
52
Oct. 2010
53
Oct. 2010
54
July 2011
55
Aug. 2011
56
Sep. 2011
57
30th March 2012
58
29th November
2013
lower transaction costs for all

Launch of currency future on
additional currency pairs at NSE
Financial derivatives exchange
award of the year by Asian
Banker to NSE
Commencement trading of S&P
CNX Nifty futures on CME at
NSE
Introduction of European style
stock option at NSE
Introduction of Currency options
on USD INR by NSE
Commencement of 91 day GOI
trading Bill futures by NSE
Launch of derivative on Global
Indices at NSE
Launch of derivative on CNX
PSE & CNX infrastructure
Indices at NSE
BSE launched trading in
BRICSMART
indices
derivatives
BSE
launched
currency
derivative segment
REGULATION OF DERIVATIVES TRADING IN INDIA

The regulatory frame work in India is based on L.C. Gupta Committee report and J.R. Varma
Committee report. It is mostly consistent with the international organization of securities commission (IUSCO).
The L.C. Gupta Committee report provides a perspective on division of regulatory responsibility between the
exchange and SEBI. It recommends that SEBIs role should be restricted to approving rules, bye laws and
regulations of a derivatives exchange as also to approving the proposed derivatives contracts before
commencement of their trading. It emphasizes the supervisory and advisory role of SEBI. It also suggests
establishment of a separate clearing corporation.
DERIVATIVES MARKET IN INDIA
In India, there are two major markets namely National Stock Exchange (NSE) and Bombay Stock
Exchange (BSE) along with other Exchanges of India are the market for derivatives. Here we may discuss the
performance of derivatives products in Indian market.
DERIVATIVE PRODUCTS TRADED AT BSE
The BSE started derivatives trading on June 9, 2000 when it launched Equity derivatives (Index
futures-SENSEX) first time. It was followed by launching various products which are shown in table no.2. They
are index options, stock options, single stock futures, weekly options, stocks for: Satyam, SBI, Reliance
Industries, Tata Steel, Chhota (Mini) SENSEX, Currency futures, US dollar-rupee future and BRICSMART
indices derivatives. The table No.2 summarily specifies the derivative products and their date of introduction at
BSE.
Sl. No.
1
Date
of
commencement
9th June 2000
1st June 2001
9th July 2001
9th Nov. 2002
5
6
7
13th Sep. 2004

1st Jan. 2008
NA
1st Oct. 2008
30th March 2012
Derivatives products
Equity
derivatives
(Index
futures - SENSEX)
Index Options S&P CNX
Nifty
Stock options launched (Stock
option on 109 stocks)
Stock futures launched (Stock
futures on 109 Stocks)
Weekly options on 4 Stocks
Chhota (mini) SENSEX
Futures options on sectoral
indices (namely BSE TECK,
BSE FMCG, BSE metal, BSE
Bankex & BSE oil & gas)
Currency derivative introduced
(currency futures on US Dollar)
Launched BRICSMART indices
derivatives
34 | Page
Source: Compiled from BSE website
DERIVATIVE PRODUCTS TRADED AT NSE

The NSE started derivatives trading on June 12, 2000 when it launched Index Futures S & P CNX
Nifty first time. It was followed by launching various derivative products which are shown in table no.3. They
are index options, stock options, stock future, interest rate, future CNX IT future and options, Bank Nifty futures
and options, CNX Nifty Junior futures and options, CNX100 futures and options, Nifty Mid Cap-50 future and
options, Mini index futures and options, Long term options. Currency futures on USD-rupee, Defty future and
options, interest rate futures, SKP CNX Nifty futures on CME, European style stock options, currency options
on USD INR, 91 days GOI T.B. futures, and derivative global indices and infrastructures indices. The table no.3
presents a description of the types of derivative product traded at NSE and their data of introduction at NSE.
Sl. No.
1
Introduction date
12th June 2000
4th June 2001
2nd July 2001
9th Nov. 2001
23rd June 2003
29th Aug. 2003
13th June 2005
1st June 2007
1st June 2007
10
5th Oct. 2007
11
1st Jan. 2008
12
3rd March 2008
13
29th Aug. 2008
14
10th Dec. 2008
15
Aug. 2009
16
Feb. 2009
17
July 2010
18
Oct. 2010
19
Oct. 2010
20
July 2011
21
Aug. 2011
22
Sep. 2011
Derivative Products
Index futures
S&P CNX Nifty
Index Options
S&P CNX Nifty
Stock options on
233 stocks
Stock futures on
233 stocks
Interest rate futures
T. Bills & 10
years Bond
CNX IT futures &
options
Bank Nifty futures
& options
CNX Nifty Junior
Futures & Options
CNX 100 futures &
options
Nifty midcap 50
futures & options
Mini index futures
& options S&P
CNX Nifty Index
Long term options
contracts on S&P
CNX Nifty Index
Currency futures on
US Dollar Rupee
S&P CNX Defty
Futures & options
Launch of Interest
rate futures
Launch of currency
futures
on
additional currency
pair
S&P CNX Nifty
futures on CME
Introduction
of
European
style
stock options
Introduction
of
Currency options
on USD INR
start 91 day GOI
Treasury
Billfutures
Launch
of
derivatives
on
global indices
Launch
of
derivatives on CNX
PSE
&
CNX
Infrastructure
indices
35 | Page
Source: Compiled from NSE website
GROWTH OF INDIAN DERIVATIVES MARKET

The NSE and BSE are two major Indian markets have shown a remarkable growth both in terms of
volumes and numbers of traded contracts. Introduction of derivatives trading in 2000, in Indian markets was the
starting of equity derivative market which has registered on explosive growth and is expected to continue the
same in the years to come. NSE alone accounts 99% of the derivatives trading in Indian markets. Introduction of
derivatives has been well received by stock market players. Derivatives trading gained popularity after its
introduction in very short time.
If we compare the business growth of NSE and BSE in terms of number of contracts traded and
volumes in all product categories with the help of table no.4, table no.5 and table no.12 which shows the NSE
traded 636132957 total contracts whose total turnover is Rs.16807782.22 cr in the year 2012-13 in futures and
options segment while in currency segment in 483212156 total contracts have traded whose total turnover is
Rs.2655474.26 cr in same year.
In case of BSE the total numbers of contracts traded are 150068157 whose total turnover is
Rs.3884370.96 Cr in the year 2012-13 for all segments. In the above case we can say that the performance of
BSE is not encouraging both in terms of volumes and numbers of contracts traded in all product categories. The
table no.4, table no.5 and table no.12 summarily specifies the updated figures since 2003-04 to 2012-13 about
number of contracts traded and total volumes in all segments.
Year
2013-2014
2012-2013
2011-2012
2010-2011
2009-2010
2008-2009
2007-2008
2006-2007
2005-2006
2004-2005
2003-2004
2002-2003
2001-2002
2000-2001
Total No. of Contracts

911118963
1131467418
1205045464
1034212062
679293922
657390497
425013200
216883573
157619271
77017185
56886776
16768909
4196873
90580
Total Turnover (Rs. Cr.)

26444804.86
31533003.96
31349731.74
29248221.09
17663664.57
11010482.20
13090477.75
7356242
4824174
2546982
2130610
439862
101926
2365
Average Daily Turnover (Rs. Cr.)

155557.68
126638.57
125902.54
115150.48
72392.07
45310.63
52153.30
29543
19220
10107
8388
1752
410
11
Source: Compiled from NSE website.

Table 5: Business growth of NSE in CD Segment
Year
2013-2014
2012-2013
2011-2012
2010-2011
2009-2010
2008-2009
Total Number of Contracts

54,88,48,391
95,92,43,448
97,33,44,132
74,96,02,075
37,86,06,983
3,26,72,768
Total Turnover (Rs. Crs)

32,94,408.65
52,74,464.65
46,74,989.91
34,49,787.72
17,82,608.04
1,62,272.43
Average Daily Turnover (Rs. Crs)

19,727.00
21,705.62
19,479.12
13,854.57
7,427.53
1,167.43
Source: Compiled from NSE website.

SECTION III
Statistical data (Information):This section contains the statistical data or information about Indian derivatives
markets namely: product wise turnover of FO segment at NSE, product wise turnover of CD segment at NSE,
Number of contract traded at NSE in FO segment, number of contracts traded at NSE in CD segment, Average
daily transaction at NSE in FO segment, average daily transactions at NSE in CD segment, Product wise
turnover of futures at BSE, product wise turnover of options at BSE, number of contract traded at BSE in future
segment, number of contract, traded at BSE in option segment and average daily transaction at BSE in all
segments.
After analyzing the data given in table no.6, 7, 8, 9, 10, 11, 13, 14, 15, 16, and 17) we can say that they
are encouraging growth and developing. Industry analyst feels that the derivatives market has not yet, realized
its full potential in terms of growth and trading. Analyst points out that the equity derivative market on the NSE
and BSE has been limited to only four product Index-futures, index options and individual stock future and
options, which in turn are limited to certain select stock only.
36 | Page
Table No. 6: Product wise turnover at NSE

Year
Index Futures
Turnover
( cr.)
Stock Returns
Turnover
( cr.)
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
2176314.26
2527130.76
3577998.41
4356754.53
3934388.67
3570111.40
3820667.27
2539574
1513755
772147
554446
43952
21483
2365
3203112.18
4223872.02
4074670.73
5495756.70
5195246.64
3479642.12
7548563.23
3830967
2791697
1484056
1305939
286533
51515
-
Index Options
Notional
Turnover
( cr.)
19462635.85
22781574.14
22720031.64
18365365.76
8027964.20
3731501.84
1362110.88
791906
338469
121943
52816
9246
3765
-
Stock Options
Notional
Turnover
( cr.)
1602742.62
2000427.29
977031.13
1030344.21
506065.18
229226.81
359136.55
193795
180253
168836
217207
100131
25163
-
Total
Turnover
( cr.)
26444804.86
31533003.96
31349731.74
29248221.09
17663664.57
11010482.20
13090477.75
7356242
4824174
2546982
2130610
439862
101926
2365
Average
Daily
Turnover
( cr.)
155557.68
126638.57
125902.54
115150.48
72392.07
45310.63
52153.30
29543
19220
10107
8388
1752
410
11

Table No. 7: Product wise Turnover of CD Segment at NSE
Year
Currency Futures
Turnover
( cr.)
Currency Options
Notional Turnover
( cr.)
Total Turnover
( cr.)
Average Daily
Turnover
( cr.)
2013-2014
2012-2013
2011-2012
2010-2011
2009-2010
2008-2009
23,66,882.14
37,65,105.33
33,78,488.92
32,79,002.13
17,82,608.04
1,62,272.43
9,27,526.51
15,09,359.32
12,96,500.98
1,70,785.59
-
32,94,408.65
52,74,464.65
46,74,989.91
34,49,787.72
17,82,608.04
1,62,272.43
19,727.00
21,705.62
19,479.12
13,854.57
7,427.53
1,167.43
Table 8: Number of Contract traded at NSE in FO Segment
2013-14
Index Futures
No. of
contracts
75537352
Stock Futures
No. of
contracts
116676854
Index Options
No. of
contracts
663033020
Stock
Options No.
of contracts
55871737
2012-13
96100385
147711691
820877149
66778193
1131467418
2011-12
146188740
158344617
864017736
36494371
1205045464
2010-11
165023653
186041459
650638557
32508393
1034212062
2009-10
178306889
145591240
341379523
14016270
679293922
2008-09
210428103
221577980
212088444
13295970
657390497
2007-08
156598579
203587952
55366038
9460631
425013200
2006-07
81487424
104955401
25157438
5283310
216883573
2005-06
58537886
80905493
12935116
5240776
157619271
2004-05
21635449
47043066
3293558
5045112
77017185
2003-04
17191668
32368842
1732414
5583071
56886776
2002-03
2126763
10676843
442241
3523062
16768909
2001-02
1025588
1957856
175900
1037529
4196873
2000-01
90580
90580
Year
Total No. of
contracts
911118963
Source: Compiled from NSE Website

Table 9: Number of Contract traded at NSE in CD Segment
Year
2013-2014
2012-2013
Currency Futures No.

of contracts
39,00,52,130
68,41,59,263
Currency Options
No. of contracts
15,87,96,261
27,50,84,185
Total No. of
contracts
54,88,48,391
95,92,43,448
37 | Page
2011-2012
2010-2011
2009-2010
2008-2009
70,13,71,974
71,21,81,928
37,86,06,983
3,26,72,768
27,19,72,158
3,74,20,147
-
97,33,44,132
74,96,02,075
37,86,06,983
3,26,72,768

Table 10: Average daily transaction at NSE in FO Segment
Year
Total No. of
contracts
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
1279243623
1131467418
1205045464
1034212062
679293922
657390497
425013200
216883573
157619271
77017185
56886776
Total Turnover
( cr.)
Average Daily
Turnover (Rs.
Cr.)
151532.59
126638.57
125902.54
115150.48
72392.07
45310.63
52153.30
29543
19220
10107
8388
38034680.30
31533003.96
31349731.74
29248221.09
17663664.57
11010482.20
13090477.75
7356242
4824174
2546982
2130610

Table 11: Average Daily transaction at NSE in CD Segment
Year
Total No. of
contracts
Total
Turnover
( cr.)
2013-2014
2012-2013
2011-2012
2010-2011
2009-2010
2008-2009
47,83,01,579
68,41,59,263
70,13,71,974
71,21,81,928
37,86,06,983
3,26,72,768
29,40,885.92
37,65,105.33
33,78,488.92
32,79,002.13
17,82,608.04
1,62,272.43
Average
Daily
Turnover
(Rs. Cr.)
16,444.73
21,705.62
19,479.12
13,854.57
7,427.53
1,167.43

Table 12: Business growth at BSE in all segments
2013-14
2012-13
2011-12
2010-11
7503405
150068157
32222825
5623
19421854.8
3884370.96
808475.99
154.33
Average Daily
Turnover (Rs
Cr)
308283.4
30828.34
3246.89
0.61
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
9028
496502
7453371
1781220
203
531719
143224
234.06
11774.83
242308.41
59006.62
8.78
16112.32
5021.81
1.04
48.46
965.37
259.94
0.14
77.09
81.00
Year
Total Turnover
(Rs Cr)
Total Contracts
Trading
Days
247
241
249
255
224
243
251
227
61
209
62
Source: Compiled from BSE Website

Table 13: Product wise turnover of futures at BSE
Year
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
Index
Futures
Turnover
(Rs Cr)
215647.78
194188.65
178448.83
154.08
96.00
11757.22
234660.16
55490.86
5.00
Equity
Futures
Turnover
(Rs. Cr.)
32560.80
21390.60
10215.70
0.00
0.30
8.49
7609.24
3515.50
0.49
Trading
Days
247
241
249
255
224
243
251
227
61
38 | Page
2004-05
2003-04
13599.66
3082.63
212.85
1680.34
209
62
Table 14: Product wise turnover of option at BSE

Year
Index option
Call Turnover
(Rs. Cr.)
Index Option
Put Turnover
(Rs. Cr.)
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
17680872.23
1967091.23
200089.57
0.00
137.76
6.11
31.00
0.06
3.20
1470.61
0.00
9063791.85
1812758.37
418252.79
0.25
0.00
3.01
7.66
0.00
0.00
826.62
0.00
Equity
Option Call
Turnover
(Rs. Cr.)
1487.98
1367.87
1277.27
0.00
0.00
0.00
0.21
0.16
0.09
2.08
139.07
Equity
option Put
Turnover
(Rs. Cr.)
298.54
245.32
191.82
0.00
0.00
0.00
0.14
0.04
0.00
0.50
119.77
Trading days
247
241
249
255
224
243
251
227
61
209
62

Table 15: Number of contracts traded at BSE in Future segment
Year
Index Futures
Contracts
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
42440004
14146668
7073334
5613
3744
495830
7157078
1638779
89
44630
103777
Equity
Futures
Contracts
1958052
652684
326342
0
8
299
295117
142433
12
6725
33437
Trading Days
247
241
249
255
224
243
251
227
61
209
62

Table 16: Number of contracts traded at BSE in Options Segment
Year
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
Index Options Call

Contracts
28387467
14413028
7206514
0
5276
251
951
2
100
48065
0
Index Options Put

Contracts
278474689
143044388
17569130
10
0
122
210
0
0
27210
0
Equity Options Call

Contracts
5425
3498
39848
0
0
0
9
5
2
72
3466
Equity Options Put

Contracts
39584
15314
7657
0
0
0
6
1
0
17
2544
Trading
Days
247
241
249
255
224
243
251
227
61
209
62

Table 17: Average Daily Turnover at BSE in all segment
Year
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
Total
Contracts
Total
Turnover
(Rs. Cr.)
698497492
300067817
32222825
5623
9028
496502
7453371
127464748
6884370.9
808475.99
154.33
234.06
11774.83
242308.41
Average
Daily
Turnover
(Rs. Cr.)
128344.60
60828.43
3246.89
0.61
1.04
48.46
965.37
Tra
ding
Day
s
247
241
249
255
224
243
251
39 | Page
2006-07
2005-06
2004-05
2003-04
1781220
203
531719
143224
59006.62
8.78
16112.32
5021.81
259.94
0.14
77.09
81.00
227
61
209
62

SECTION IV
Status of Indian derivatives market vis--vis global derivatives market
The derivative segment has expanded in the recent years in substantial way both globally as well as in the Indian
capital market. The figures revealed by "world federation of exchanges (WFE)" website to compare the trading
figures of 14 selected stock exchanges of America (four exchanges), Asia Pacific (seven exchanges) and EAME
(three exchanges) region. Which are summarily specifies in Table No.18, Table No.19, Table No.20 and Table
No.21 related to the number of contracts traded and notional value since 2003 to 2012. These tables show the
Indian segment has expanded phenomenally as compared to the global segment. The Notional value of NSE
options is 354648.1941 lakhs USD and number of contracts are 67458468 and the notional value at NSE futures
is 39228.38563 lakhs USD and number of contracts are 7815624 in 2012 which are so more in compare of 2003.
These figures are displaying a more than six to seven times increase over the 10 years period. In case of BSE,
the notional value of BSE options is 56993.49322 lakhs USD and number of contracts are 10937357 and the
notional value of BSE future is 856.1076879 lakhs USD and number of contracts are 163740 upto Sep. 2012 at
global level the increase is less. While Korea, NYSE Euronext (Europe). Hongkong, Tokyo are growing fast in
global level, other exchanges are also following at global level which are shown in followings tables:
Table 18: Global trend in Notional value of futures trading (Unit of currency: 000000 USD)
Table 19: Global trends in Number of contracts traded in future trading
Table 20: Global trend in National value of Option Trading (Currency: 000000 USD)
40 | Page
Table 21: Global trend in Number of contract traded in options trading
SECTION V
Summary and Conclusion
Financial derivatives have earned a well deserved extremely significant place among all the financial
instruments (products), due to innovation and revolutionized the landscape. Derivatives are tool for managing
risk. Derivatives provide an opportunity to transfer risk from one to another. Launch of equity derivatives in
Indian market has been extremely encouraging and successful. The growth of derivatives in the recent years has
surpassed the growth of its counterpart globally.
The Notional value of option on the NSE increased from 1195.691178 lakhs USD in 2003 to 354648.1941 lakhs
USD in 2012 and notional value of NSE futures increased from 14329.35627 lakhs USD in 2003 to
39228.38563 lakhs USD in 2012. India is one of the most successful developing country in terms of a vibrate
market for exchange-traded derivatives. The equity derivatives market is playing a major role in shaping price
discovery. Volatility in financial asset price, integration of financial market internationally, sophisticated risk
management tools, innovations in financial engineering and choices at risk management strategies have been
driving the growth of financial derivatives worldwide, also in India. Finally we can say there is big significance
and contribution of derivatives to financial system.
References:
[1].
A. Vashishtha, S. Kumar, "Development of financial derivatives market in India-a case study", www.eurojounals.com (accessed on
20 February, 2014)
[2]. B. Brahmaiah and Rao P. Subba, "Financial futures and option", 1st ed., Himalaya Publishing House, New Delhi, 1998, PP.25-147.
[3]. D. Vasant, "The Indian financial system and development", 4th ed., Himalaya Publishing House, New Delhi, 2012, PP.398-412, 645677.
[4]. John C. Hull, "Futures and options markets", 2nd ed., PHI Learning Private Ltd., New Delhi, 2009, PP.1-169.
[5]. M. Gurusamy, and J. Sachin, "Financial derivatives", 1st ed., Ramesh Book Depot, New Delhi, 2009-10, PP.1.01-5.10.
[6]. M. Ranganatham and R. Madhumathi, "Security analysis and portfolio management", 1st ed., Pearson education, New Delhi, 2011,
PP.723-730.
[7]. N.P. Tripathy, "Financial Services", 3rd Pr., PHI Learning Pvt. Ltd., New Delhi, PP.261-282.
[8]. R.P. Rustagi, "Investment analysis and portfolio management", 1st ed., Sultan Chand & Sons, New Delhi, 2007, PP.459-596.
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derivatives.ppt. (accessed on February 20, 2014)
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42 | Page

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IOSR Journal of Economics and Finance (IOSR-JEF)

e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 3, Issue 3. (Mar-Apr. 2014), PP 25-42

A Study of Derivatives Market in India and its Current Position

Department of MBA, Krupanidhi School of Management, Bangalore, Karnataka, India.

Figure 1: Classification of derivatives

Figure 2: Derivative contracts traded in India

The basic features of a contract are given in brief here as under:

III. Futures Contracts

14th Dec. 1995

18th Nov. 1996

11th May 1998

1st June 1999

7th July 1999

24th May 2000

25th May 2000

9th June 2000

12th June 2000

31st Aug. 2000

1st June 2001

1st Nov. 2001

9th Nov. 2001

13th Sep. 2004

1st Jan. 2008

1st Jan. 2008

3rd March 2009

29th Aug. 2008

10th Dec. 2008

7th Aug. 2009

18th Dec. 2009

Revised system restarted on

30th March 2012

lower transaction costs for all

REGULATION OF DERIVATIVES TRADING IN INDIA

1st June 2001

9th July 2001

9th Nov. 2002

13th Sep. 2004

1st Oct. 2008

30th March 2012

DERIVATIVE PRODUCTS TRADED AT NSE

4th June 2001

2nd July 2001

9th Nov. 2001

23rd June 2003

29th Aug. 2003

13th June 2005

1st June 2007

1st June 2007

5th Oct. 2007

1st Jan. 2008

3rd March 2008

29th Aug. 2008

10th Dec. 2008

GROWTH OF INDIAN DERIVATIVES MARKET

Total No. of Contracts

Total Turnover (Rs. Cr.)

Average Daily Turnover (Rs. Cr.)

Source: Compiled from NSE website.