New interest rate futures (IRFs) contracts based on six-year and 13-year tenure government bonds made their debut on capital markets today with trading worth Rs 477.40 crore on the NSE.
The new IRF contract on 6-year government of India bond bearing 8.27 per cent interest and maturing in 2020, opened at Rs 101.20.
The 13-year government security bearing 7.88 per cent interest and maturing in 2030 opened at Rs 99.15, on the National Stock Exchange (NSE), according to its statement.
At the end of the day, total trading in the IRF segment at NSE stood at Rs 1,887.37 crore of which these two contracts accounted for Rs 477.40 crore, the statement said.
"Among the two contracts that started today, trading in 7.78 contract was higher, with a day end open interest standing at 6,220 contracts," the statement said.
With the latest IRF contracts, four different interest bearing government securities are traded now traded on the NSE platform as underlying, the statement said.
An Interest Rate Futures contract is an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed today. An IRF contract can be used by any people to offset the risk associated with the interest rate movements.
According to NSE Business Development (Currency and Debt Markets) chief Huzan Mistry, six-year and 13-year tenure bond futures "give market participants access to different points on the yield curve".
"Regulators have permitted us to provide futures across the entire spectrum of the yield curve from 91D t-bills to 15 years, which is exciting. This will help in further developing the Interest Rate Derivatives market which we believe is still in a very nascent stage in India," he said.
In July, average daily trading in IRF contracts stood at Rs 2,246 crore at NSE, the statement said.
