New Stock Exchange Products


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New Stock Exchange Products

  1. 1. Abhirup Das Vinod Gupta School of Management, IIT-KGP 4-Aug-10 Abhirup Das
  2. 2. Dollex <ul><li>Launched by BSE DOLLEX-30 on 25 th July 2001 with same base year and base value as Sensex </li></ul><ul><li>One value reflects the changes in both the stock prices and the foreign exchange variation. </li></ul><ul><li>Would help foreign investors measure their 'real returns' after providing for exchange rate fluctuations. </li></ul><ul><li>Calculated daily at the end of the trading session taking into consideration that day's Re/$ reference rate. </li></ul>Source: Formula: <ul><li>Further steps: Introduced Dollex-100 on 22 May 2006 </li></ul>
  3. 3. BSE IPO Index <ul><li>Launched on 24 August 2004 with 45 companies with a criterion of </li></ul><ul><li>at least 10 scripts any time </li></ul><ul><li>Basic purpose to track primary market conditions with respect </li></ul><ul><li>to secondary market </li></ul><ul><li>The index will measure growth in investor wealth for a period </li></ul><ul><li>of two years after the listing of a firm. </li></ul><ul><li>The performance of newly listed stocks is highly dependent </li></ul><ul><li>on the state of the entire market. BSE IPO index and the BSE 100 </li></ul><ul><li>index are seen moving in tandem in the chart alongside. But it </li></ul><ul><li>will help investors to get a fair idea on how the primary market </li></ul><ul><li>has rewarded them in comparison to the secondary market. </li></ul><ul><li>For instance, the Sensex has given a return of 179.83% since </li></ul><ul><li>May 3, 2004, compared with 94.75% return given by the BSE </li></ul><ul><li>IPO index. </li></ul>Source : Indian Express 4-Aug-10 Abhirup Das
  4. 4. India VIX <ul><li>Volatility is defined as &quot;rate and magnitude of changes in prices” and in finance often referred to as risk. </li></ul><ul><li>Volatility Index is a measure of market’s expectation of volatility over the near term by studying the amount by which an underlying Index is expected to fluctuate. </li></ul><ul><li>Chicago Board of Options Exchange (CBOE) was the first to introduce the volatility index for the US markets in 1993 based on S&P 100 Index option prices. </li></ul><ul><li>India VIX is a volatility index computed by NSE based on the order book of NIFTY Options.India VIX indicates the investor’s perception of the market’s volatility in the near term i.e. it depicts the expected market volatility over the next 30 calendar days. </li></ul><ul><li>It would give a lot of security to investors and traders, who face uncertainty, because the new product will empower them with better information and foresight. They will use the product to hedge their portfolios against the risk arising out of volatility </li></ul>4-Aug-10 Abhirup Das