National Stock Exchange (NSE) has widened its horizon with the launch of Future & Option contracts on FTSE 100. Financial times Stock Exchange (FTSE), is a UK based index series, representing the   performance of companies listed on London Stock Exchange. FTSE 100 is actually an index given by company, FTSE, which itself contains of 100 companies. FTSE is actually FTSE Group, a 50/50 ownership of Financial Times and the London Stock Exchange.  FTSE 100 is an index comprising of 100 largest blue-chip companies listed on London Stock Exchange, indicating the performance of all major capital and industry segments of the UK equity market.

Advantages of FTSE 100 being available on NSE:

An investment in any foreign asset class is subject to restrictions and limitations as specified by RBI from time to time. The transaction cost as per direct investment is concerned is very high and can also lead to foreign currency risks. Introduction of derivatives on FTSE 100 on NSE will help investors to trade in UK market without any difficulty.

1)    Diversification of portfolio, internationally

2)    Contracts are rupee denominated hence, devoid of currency risks

3)    Hedging against foreign portfolio

4)    Trading on the basis of news from UK market

5)    Indian trading platform and timing, i:e, 9.15 AM-3.30 PM

6)    Higher exposure limit

7)    No transaction charges imposed on transactions done till 02 Nov, 2012

8 )    No added documents or formalities required for present F&O investors

5 facts about FTSE 100

1)    It consist of 100 largest UK listed blue chip companies

2)    Ensures 17.8% on an investment done for 3 a period of years

3)    It consist of 85.6% of UK’S equity market capitalization

4)    Consist of  8.21% of world’s equity market capitalisation

5)    70% of FTSE 100 denoted by MNS’s

6)    This facility is not available for NRI investors

Products details on FTSE 100

Contract Type Futures on FTSE 100 Index Option on FTSE 100 Index
     
Lot size 50 50
Strike price interval NA 100
Tick size 1.00 0.05
Market timing 9.15 AM-3.30 PM 9.15 AM-3.30 PM
Contract Months 3 Monthly and 3 Quarterly 3 Monthly and 3 Quarterly
Exercise Procedure - European
Expiration Date & Time 3rd Friday of the month

2:45 pm or 3:30 pm

3rd Friday of the month

2:45 pm or 3:30 pm

Settlement at expiration On the basis of exchange delivery settlement price( calculated on the basis of intra-day auction prices conducted at LSE)

NSE-FTSE 100 was launched yesterday i: e, on 3rd May, 2012 on Indian trading platform. On the first day itself it crossed a trading volume of Rs. 500crore. The total number of derivatives contracts on FTSE 100 was above 17,600, receiving an extra-ordinarily participative response from investors all-over the country.

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