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Basic Principles of Trading and Hedging and Information on Index Futures ( with Reference to the Bse Model)

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Submitted By jaipatel7
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BASIC PRINCIPLES OF TRADING AND HEDGING AND INFORMATION ON INDEX FUTURES ( WITH REFERENCE TO THE BSE MODEL)

Group members :
Nishma Mehta- 68
Navti Narang- 72
Jaikrishna Patel- 80
Miloni Shah- 100
Nidhi Shah- 102
Karishma Kotian- 120

TRADING Trading Rules
The Derivatives Trading at BSE takes place through a fully automated screen-based trading platform called DTSS (Derivatives Trading and Settlement System).The DTSS is designed to allow trading on a real-time basis. In addition to generating trades by matching opposite orders, the DTSS also generates various reports for the member participants. Order Matching Rules
Order Matching takes place after order acceptance wherein the system searches for an opposite matching order. If a match is found, a trade is generated. The order against which the trade has been generated is removed from the system. In case the order is not exhausted further matching orders are searched for and trades generated till the order gets exhausted or no more match-able orders are found. If the order is not entirely exhausted, the system retains the order in the pending order book. Matching of the orders is in the priority of price and timestamp. A unique trade-id is generated for each trade and the entire information of the trade is sent to the relevant Members. Order Conditions
The derivatives market is order driven i.e. the traders can place only orders in the system.
Following are the order types allowed for the derivative products. These order types have Characteristics similar to the ones in the cash market.
• Limit Order: An order for buying or selling at a limit price or better, if possible .Any unexecuted portion of the order remains as a pending order till it is matched or its duration expires.
• Market Order: An order for buying or selling at the best price prevailing in the market at the time of submission of...

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