BSE to launch new derivative product `cash-future spread’: report
28 Jul 2012
The Bombay Stock Exchange (BSE) is introducing a new derivative product 'cash-future spread' (CFS) to de-risk arbitrage between the future and cash segments of stock.
Trial runs for the CFS will start from 1 August and the product will be available, for all stocks, in BSE's derivative segment from 6 August, a PTI report quoting its interim CEO Ashishkumar Chauhan as saying.
CFS is the first of its kind to be traded on the BSE, the official added.
''Having a single product for cash-future trade that eliminates execution risk has an interesting outcome for investors by offering them an interest rate type of product. It will be launched on August 6,'' the agency quoted Chauhan as saying.
Chauhan was speaking at a road-show in Ahmedabad, ahead of the launch.
''Currently, it is usually done by way of doing cash and futures trades separately, but there is a sort of an execution risk there when you trade in such a way,'' he said.
