Trading in volatility index futures to kick off tomorrow

To help investors hedge near-term volatility risks in their equity portfolio, the National Stock

RELATED ARTICLES

Exchange will launch its futures contracts on India VIX called 'NVIX' from tomorrow.

The NVIX contracts would be available in the existing futures and options segment on the NSE as well as for all existing investors in the segment to transact in it.

The exchange is aiming to tap into domestic institutional investor demand for equity futures and options.

In order to encourage active participation, the NSE has announced rebate ranging between 10 per cent and 40 per cent in transaction charges in respect of trades done in futures contracts on India VIX.

This rebate structure would be effective from tomorrow and would till March 31, 2014.

The exchange further said "based on the performance of the contract, the rebate structure shall be reviewed."

The NSE said if daily turnover in NVIX Futures reaches up to Rs 25 crore, it would provide a 10 per cent reduction in transaction fee.

In case, the daily turnover increased in the range of over Rs 25 crore to up to Rs 100 crore, then there would be 25 per cent cut in transaction charges. If turnover crosses Rs 100 crore mark, a 40 per cent reduction in transaction charges would be given.

The contract symbol for NVIX would be IndiaViX and three weekly contracts would be made available for trading.

The contracts would expire every Tuesday and the contract value would be minimum Rs 10 lakh.

The NSE, which constructed India VIX, started disseminating India VIX index in 2009.

India VIX indicates the investor's perception of the market's volatility in the near term. The index depicts expected market volatility over the next 30 calendar days.

A high India VIX value would suggest that the market expects significant increase in volatility, while a low value indicates the reverse. India VIX and Nifty has a negative correlation.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • India must take the UN’s lead in recognising gay rights

    In what has by now become a matter of course, our judiciary again demonstrated that it is miles ahead of our government in terms of staying in tune wi

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

Today's Columns

Urs Schoettli

Lee’s legacy will always guide Singapore

LEE Kuan Yew, the father of modern Singapore, died last ...

Rajgopal Nidamboor

Forget the past and embrace the present

It is all right to believe that one should always ...

Bubbles Sabharwal

Relationships and bitter realities

It’s a tangled web we spin The relationships we make, break ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture