Mumbai: The National Stock Exchange (NSE) on Thursday began trading of derivative contracts on UK's FTSE 100, clocking first-day turnover of nearly Rs 500 crore.
Marking its' debut in India, the derivative contracts of UK's FTSE 100 index, the key index of the London Stock Exchange (LSE), began trading at NSE on Thursday.
At the close, the traded value of derivative contracts on FTSE 100 was nearly 500 crore, NSE said in a statement.
A total of around 18,000 contracts were traded in the derivative contracts of the index it added.
Futures contracts, forward contracts and options are the most common types of derivatives, generally used as an instrument to hedge risk from an underlying asset.
The FTSE 100 index, informally called the 'footsie', is a share index of the stocks of the 100 companies listed on the LSE with the highest market value. The index has given returns of 17.8 percent on investment over three years. The index constitutes 85.6 percent of UK's equity market capitalisation.
"Trading in derivatives on FTSE 100 will enable investors to take exposure to UK markets with complete ease. It helps in portfolio diversification, which yields higher returns and poses a lower risk, than any individual investment found within the portfolio," NSE said.
NSE has waived transaction fees for trading on the indice till November 2, 2012 to encourage active participation in the contracts.
In addition to the transaction fee waiver, the NSE has also announced a Liquidity Enhancement Scheme (LES) for trading on the index.
The incentives would be paid only if the average daily traded value (the total of the traded value for futures on FTSE 100 and notional value for FTSE 100 options) in that month is at least Rs 35 crore.
The contracts are rupee denominated, so an investor would not face any currency risk. NSE has said that all the member brokers of its equity derivatives segment will be able to trade in these derivatives through existing infrastructure.
The FTSE 100 derivative launch, spearheaded by the London Stock Exchange Group (LSEG), FTSE and NSE, is part of FTSE's global reach and NSE's commitment to further develop the Indian securities market.
Last month, NSE had announced that it has received regulatory approval, to start trading futures and options contracts, based on FTSE 100.



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