Mini index derivatives from Jan 1

The BSE will launch Sensex mini derivatives contracts from January 1, 2008 in a market lot of five, for the first time in India. 8220;The small size of the contract would be attractive for retail investors as there would be comparatively lower capital outlay, lower trading costs, more precise hedging and flexible trading. The security symbol for Sensex mini contracts will be MSX. The contract is available for one, two 038; three months along with weekly options,8221; it said. 8220;It is a step to encourage and enable small investors to mitigate risk and enable easy access to India8217;s most popular index 8212; Sensex 8212; through futures 038; options,8221; the BSE said.

Sebi decided to introduce mini derivative contract on Index Sensex and Nifty following the recommendation of the Derivatives Market Review Committee DMRC headed by Prof M Rammohan Rao. To begin with, the mini derivative contract on Index Sensex and Nifty should have a minimum contract size of Rs 1 lakh at the time of its introduction in the market. The existing risk containment and other measures applicable for existing exchange traded equity Index derivative contracts should be extended to the mini derivative contract on Index, Sebi said.