INR-USD Futures and Options Contracts launched by Finance Minister
On May 9, 2020, the Union Finance Minister Smt Nirmala Sitaraman launched the INR-USD Futures and Options contracts in the BSE and NSE platforms. They were launched at the GIFT International Financial Service Centre (IFSC) in Gandhinagar, Gujarat through video conference.
Significance
The contracts have been launched to increase economic activity and employment in the country. A significant market share of India has moved to other International financial Centres in the last decade. The move will help to bring back those businesses back to India.
In Addition, the world-class business environment at the GIFT IFSC will help to bring in larger global participation.
What is Future and Option?
Future and Options are financial products that allow investors to buy or sell shares at specific price by a specific date.
Options contract give the right to buy or sell the shares at any time till the validity of the contract exists. Under Futures contract, a buyer and seller can buy or sell only on specific future date.
Types of Option
There are two types of Option. The Call Option is used to buy a stock at the strike price and put option is used to sell a stock at a specific price.
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Month: Current Affairs - May, 2020