BSE created history on June 9, 2000 by launching the first Exchange-traded Index Derivative Contract in India i.e. futures on the capital market benchmark index - the BSE Sensex. The inauguration of trading was done by Prof. J.R. Varma, member of SEBI and Chairman of the committee which formulated the risk containment measures for the derivatives market.
In sequence of product innovation, BSE commenced trading in Index Options on Sensex on June 1, 2001, Stock Options were introduced on 31 stocks on July 9, 2001 and Single Stock Futures were launched on November 9, 2002.
For a List of Futures & Options Underlying Asset click below :
Long Dated Options
BSE also introduced 'Long Dated Options' on its flagship index - Sensex® -on February 29, 2008, whereby the Members can trade in Sensex Options contracts with an expiry of up to 5 years.
Currency Derivatives :
Going ahead, on October 1, 2008 BSE launched its currency derivatives segment in dollar-rupee currency futures as the exchange traded currency futures contracts facilitate easy access, increased transparency, efficient price discovery, better counterparty credit risk management, wider participation and reduced transaction costs.
Futures on BOLT
BSE re-launched its Derivatives Segment by enabling trading of Index and Stock Futures on its BOLT Terminal. The change was in response to requests from trading members for a common front end from which equities and equity derivatives could be traded. The change will enable a trader to trade in cash Securities and futures products through BOLT TWS/ IML while Option products would continue to trade through the DTSS TWS/DIML. The risk management and settlement of futures and option trades will continue to take place on DTSS.
Why SENSEX Futures
There are many reasons why SENSEX® futures makes sense:
- SENSEX® as compared with other indices shows less volatility and at the same time gives returns equivalent to the returns given by the other indices.
- SENSEX® is widely used to describe the mood in the Indian stock market. Because of its long history and wide acceptance, no other index matches the BSE SENSEX® in reflecting market movements and sentiments and it makes an attractive underlying for index-based products like Index Funds, Futures & Options and Exchange Traded Funds.
- SENSEX® is truly investible as it is the only broad based index in India that is "free float market capitalization weighted", which reflects the market trends more rationally and takes into consideration only those shares that are available for trading in the market.
It may be noted that in addition to the SENSEX®, five sectoral indices belonging to the 90/FF series are also available for trading in the Futures and Options Segment of BSE Limited. The term '90 /FF' means that the indices cover 90% of the market capitalisation of the sector to which the index belongs and is thus well representative of that sector. Also, FF stands for free float - i.e. the indices are based on the globally followed standard of free float market capitalisiation methodology.
The five sectoral indices that are presently available for F&O are BSE TECK, BSE FMCG, BSE Metal, BSE Bankex and BSE Oil & Gas.