Leading stock exchanges BSE and NSE will introduce new interest rate
futures (IRFs) contract on Friday July 31,2015 with the newly launched 6-year and
13-year government bonds maturing in 2020 and 2030 as its underlying.
IRF contract based on 8.27 per cent central government security maturing on June 9, 2020, while another IRF contract based on 7.88 per cent government bond maturing on March 19, 2030, will be made available for trading from July 31 this year, the exchanges said in separate circulars.
An IRF contract is "an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed on Thursday."
The cash-settled IRFs provide market participants with the option to hedge risks arising from fluctuations in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.
The IRF market gets participation from retail investors, trading houses, FIIs and other institutions
IRF contract based on 8.27 per cent central government security maturing on June 9, 2020, while another IRF contract based on 7.88 per cent government bond maturing on March 19, 2030, will be made available for trading from July 31 this year, the exchanges said in separate circulars.
An IRF contract is "an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed on Thursday."
The cash-settled IRFs provide market participants with the option to hedge risks arising from fluctuations in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.
The IRF market gets participation from retail investors, trading houses, FIIs and other institutions
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