Rise and Fall of Interest Rate Futures in Indian Derivative Market

International Journal of Financial Management Volume 5 Issue 1 January 2015

12 Pages Posted: 4 Jun 2019

Date Written: February 10, 2014

Abstract

Derivative products are popular financial instruments to hedge against the risk associated with the underlying. Interest rate derivatives are the most traded and widely accepted derivative instrument in the international market. But this product is not popular in Indian derivative market. In 1999, the Over the counter (OTC) interest rate derivative products introduced in Indian derivative market. This product was successful in terms of volumes. To overcome the drawbacks of the OTC derivative market, Indian financial market introduced exchange-traded interest rate derivative in 2003, 2009 and 2014. While two times (in 2003 and 2009) this product failed, in the third time (in 2014) the initial volumes are sharply declining in three exchanges viz. MCX-SX, NSE, and BSE. In this backdrop, this study attempts to analyse the past, present, and future of interest rate futures in the Indian derivative market using the volumes, values and the open interest of Interest rate derivatives for three exchanges.

Keywords: Derivatives, Interest Rate Futures, Exchange Traded Interest Rate Futures

JEL Classification: C58, G12, G13

Suggested Citation

Panda, Dr. Pradiptarathi and Thiripalraju, Dr. M., Rise and Fall of Interest Rate Futures in Indian Derivative Market (February 10, 2014). International Journal of Financial Management Volume 5 Issue 1 January 2015, Available at SSRN: https://ssrn.com/abstract=2393303 or http://dx.doi.org/10.2139/ssrn.2393303

Dr. Pradiptarathi Panda (Contact Author)

NISM, Mumbai India ( email )

SEBI Road
Rasayani, Plot No- IS 1 and IS 2
Navi Mumbai, Maharashtra Plot no- I
India

HOME PAGE: http://www.nism.ac.in

Dr. M. Thiripalraju

affiliation not provided to SSRN ( email )

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