Page 217 - DCOM510_FINANCIAL_DERIVATIVES

Financial Derivatives

Notes Stock Options, Stock Futures, and futures on global indices such as S&P 500 and DJIA.
NSE’s Currency Derivatives segment provides the trading of currency futures contracts on
the USD-INR, which commenced on August 29, 2008. In February 2010, trading in additional
pairs such as the GBP-INR, the EUR-INR, and the JPY-INR was allowed, while USD-INR
currency options were allowed for trading on October 29, 2010. The interest rate futures
trade on the currency derivatives segment of the NSE, and they were allowed for trading
on August 31, 2009.

Table 1: Market Segments on the NSE for 2010-2011—Selected Indicators

Source: SEBI, NSE
For CM segment, the number of securities traded is provided; for Equity F&O and currency
F&O, the number of contracts available for trading as of March 2011 is provided.
Once again, the NSE registered as the market leader, with 85.68 percent of total turnover
(volumes in cash market, equity derivatives, and currency derivatives) in 2010–2011. NSE
proved itself the market leader, contributing a share of 76.36 percent in equity trading and
nearly 100 percent share in the equity derivatives segment in 2010–2011 (Table).

Technology and Application Systems in NSE
Technology has been the backbone of the NSE. Providing the services to the investor
community and the market participants using technology at the cheapest possible cost has
been its main thrust. NSE chose to harness technology to create a new market design. The
Exchange believes that technology provides the necessary impetus for an organisation to
retain its competitive edge and to ensure timeliness and satisfaction in customer service.
In recognition of the fact that technology will continue to redefine the shape of the securities
industry, NSE stresses on innovation and sustained investment in technology to remain
ahead of competition. The NSE is the first exchange in the world to use satellite
communication technology for trading. It uses satellite communication technology to
energise participation from about 2,100+ VSATs from nearly 174 cities spread across the
country.
NSE’s trading system, called the National Exchange for Automated Trading (NEAT), is a
state-of-the-art client-server based application. At the server end, all trading information
is stored in an in-memory database to achieve minimum response time and maximum
system availability for users. It has an uptime record of 99.999 percent. For all trades
entered into the NEAT system, there is a uniform response time in the range of milliseconds.
NSE has been continuously undertaking capacity enhancement measures in order to
effectively meet the requirements of the increasing number of users and the associated
trading loads.
NSE’s Internet Based Information System (NIBIS) has also been put in place for online real-
time dissemination of trading information over the Internet. As part of its business
continuity plan, the NSE has established a disaster back-up site at along with its entire
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