Abstract: Financial Equity derivatives trading started on June 9, 2000 with beginning of stock index futures by Bombay Stock Exchange (BSE) National Stock Exchange (NSE) as well commenced zits trading on 12 June, 2000 based on S&P Nifty. Consequently, new products like stock futures on individual securities, index options and options on being securities were introduced. This study tries to examine the impact of derivatives trading on the stock market volatility of BSE- 30 Index it also examines the behavior of volatility index to see whether the market wide volatility has declined over the sample period. Advance, surrogate indices like BSE-30 Index pre and post second-hand to assess whether the introduction of derivatives for every se has been instrumental or the volatility has plummeted in line up with general fall in market wide volatility. The results recognized that introduction of pre and post have negligible or no effect on the volatility as evident from Descriptive Statistics model. When replacement index taken into consideration BSE-30 Index showed decline in volatility at the same time as BSE Sensex exhibited rise in volatility.
Keywords: Derivative Trading, 2000 based on S&P Nifty, consideration BSE-30 Index.
Title: Effect of Index Derivative Trading on Indian Stock Market: A Comparison of Pre and post Introduction period
Author: R. Kannan, Dr. T. Sivashanmuguam
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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