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March 17, 2001
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Money > Business Headlines > Report March 17, 2001 |
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BSE steps up initial futures margin to 14 per centSangita Shah The Bombay Stock Exchange (BSE) increased the initial margin on the index futures trade to 14 per cent with immediate effect. The increase is 50 per cent higher than the nine-per cent rate till Thursday. Increase in the rate of initial margin has inflated the cost of undertaking a contract. Though the margins are released after the positions are squared off, the hike has put the hedgers at a disadvantage. The hike in initial margin has come at a time when the investors can be lured to the derivatives trading easily as the cash markets are witnessing high volatility. The increase in margins impacted the volumes on the exchange with the daily number of contracts witnessing a sharp slump. The volumes in the current near month Sensex March contract slumped to 92 against 395 in Nifty March series. According to Vineet Bhatnagar, managing director, Refco-Sify Securities India, index futures under the current scenario of ban on naked short sales in spot transactions is an opportune moment for speculators. A speculator could sell index futures to benefit from the prevailing bear trend. Volumes on index futures have dried up with the shrinking cash market.
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