Page 31 - DCOM510_FINANCIAL_DERIVATIVES

Financial Derivatives

Notes Order Retention Type (GFD/GTD/GTC):
Good For Day (GFD): The lifetime of the order is that trading session.
Good Till Date (GTD): The life of the order is till the number of days as specified by the
Order Retention Period.
Good Till Cancelled (GTC): The order if not traded will remain in the system till it is
cancelled or the series expires, whichever is earlier.

Order Retention Period (in calendar days): This field is enabled only if the value of the
previous attribute is GTD. It specifies the number of days the order is to be retained.

Protection Points: This is a field relevant in Market Orders and Stop Loss orders. The
value enterable will be in absolute underlying points and specifies the band from the
touchline price or the trigger price within which the market order or the stop loss order
respectively can be traded.
Risk Reducing Orders (Y/N): When a Member’s collateral falls below 50 lacs, he will be
allowed to put only risk reducing orders and will not be allowed to take any fresh positions.
It is not essentially a type of order but a mode into which the Member is put into when he
violates his collateral limit.

!
Caution A Member who has entered the risk-reducing mode will be allowed to put only
one risk reducing order at a time.

2.3.2 Comparison between NSE and BSE

There are two camps of thought with regard to preference of either the BSE or NSE:
1. One which had brokers highly recommending the NSE and
2. The other which had brokers taking a neutral stance.

Essentially, those brokers who have started business over the past few years tend to
enthusiastically praise the NSE for its transparency, decent risk controls and simple settlement
mechanism. They also claim that since the NSE is never and not bound by traditions or vested
interests, it has brighter prospects for the future, especially with regard to quicker and further
technological advancements.

Self Assessment

Fill in the blanks:
7. The Security Symbol for SENSEX Mini Contracts is……………………….
8. The DTSS is designed to allow trading on a …………………..basis.

9. ……………………….is an order that becomes a limit order only when the market trades at
a specified price.

2.4 NIFTY

The S & P CNX Nifty is a market capitalisation index based upon solid economic research. It was
designed not only as a barometer of market movement but also to be a foundation of the new

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