They feel, this being the game of margins, is more vulnerable to manipulations. The Impact On Cash Group Introduction of index futures will lower transaction cost and provide depth and liquidity in the market. The ease of entering into and exiting from the market will increase volumes in the long run. This would also open avenues for overseas mutual funds which were reluctant to take market risk without adequate risk hedging facilities. However, the market expects that volumes and volatility in the cash market may increase in the short run.
Analysts feel that the Indian market already has some traits of futures market.
In India, leaving out a few stocks which are in rolling settlement, the cash group in equities has a trading cycle of one week. Whereas in futures, the same may extent to one to three months. Therefore, the real impact of futures would come after the introduction of rolling settlement across the board. For comments and feedback send Email . Reproduction in whole or in part without written permission is prohibited.