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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