India gets single-stock futures

The Mumbai Stock Exchange (BSE) launched 31 single-stock futures at the end of last week in an attempt to boost derivatives products available on the exchange.

Having received approval from the Securities and Exchange Board of India (SEBI), the BSE expects the new futures contracts will inject much needed liquidity into the Indian capital markets. “We believe the introduction of single-stock futures will attract all market participants to trade actively, which will in turn enhance the liquidity on our exchange,” said A N Joshi, executive director at the BSE.

The BSE launched 31 single-stock options in July and it is hoped that the addition of the new futures contracts will improve hedging and arbitrage opportunities on the exchange, Joshi added. Among the 31 underlying stocks on which the single-stock futures will be based are Infosys Technologies, State Bank of India, Tata Tea and Hindustan Lever. The contracts for the new futures will be available for one-, two- and three-month maturities. They will be cash settled.