Derivatives market turnover in India

Derivatives market in India is mainly in two categories: index derivatives & stock derivatives. Index derivatives includes futures and options contracts based on the benchmark index, the most famous of them being Nifty - 50 index. The trading of contracts with Nifty-50 as underlying is done through NSE and the contract size is 50. With a value of Nifty at 6250 this sums to a contract size of 312500 rupees. There are three types of contracts depending on the settlement date: 1 , 2 , 3 month contracts. The contracts expiry date is set on thursday of the last week of each month, and a new contract is initiated on the next trading day.

The derivatives trading in India was started by NSE in June 2000 with the introduction of Nifty Futures. Index options were introduced one year later in June 2001. Since then the turnover in index based derivatives in NSE has grown several times. The following graph shows the turnover trend in NSE index derivatives (futures and options)