The Bombay Stock Exchange, National Stock Exchange of India launch mini contracts in index derivatives

28 December 2007

Mumbai: The Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) will introduce mini derivative (futures and options) contract Sensex and the S&P CNX Nifty index, respectively, in the New Year.

To mini contracts aim to attract retail investors into the ever-growing derivatives market. The BSE will launch 'Sensex mini derivatives contracts' from 1 January 2008.

The small size of the contract would help woo retail investors as there would be comparatively lower capital outlay, trading costs, more precise hedging and flexible trading, BSE said in a release.

The mini derivative contract on indices (Sensex and Nifty) will have a minimum contract size of Rs1 lakh to begin with.

The introduction of mini derivative contracts follows the recommendations of the Derivatives Market Review Committee (DMRC) headed by M. Rammohan Rao.

The mini derivatives contracts would be in market lots of five. The security symbol for Sensex mini contracts would be MSX and would be available for one, two and three months along with weekly options.