This document provides information on contract specifications for various derivatives including futures and options contracts on indices, individual stocks, and commodities. It discusses key details of contracts like the underlying asset, expiry dates, price bands, permitted lot sizes, and more. It also provides context on the Forward Markets Commission (FMC) in India, its roles and functions in regulating commodity futures markets, and the benefits it provides. Finally, it summarizes the rationale for merging the FMC with the securities market regulator SEBI.

1. RISK MANAGEMENT
PRESENTATION ON
CONTRACT SPECIFICATIONS AND WORKING OF FMC
EXAMPLES OF CONTRACT OF FEW STOCKS,
COMMODITIES, INDICES ETC
Prepared By: Submitted To:
SUBMITTED TO:
DEPARTMENT OF BUSINESS ADMINISTRATION
M.K.BHAVNAGAR UNIVERSITY

2. CONTRACT SPECIFICATIONS
The Financial Times Stock Exchange 100 Index, also called the
FTSE 100 Index, FTSE 100, FTSE, or, informally, the "Footsie" is a
share index of the 100 companies listed on the London Stock
Exchange with the highest market capitalization.
The index is maintained by the FTSE Group, a subsidiary of the
London Stock Exchange Group.
Global Indices Derivatives - Contracts Specifications
FTSE 100

3. CONTRACT SPECIFICATIONS
EQUITY DERIVATIVES :
Parameter Index
Futures
Index
Options
Futures on
Individual
Securities
Options
on
Individual
Securities
Long Term
Index
Options
Underlying 7 indices 7 indices 209
securities
209
securities
Nifty 50

4. CONTRACT SPECIFICATIONS
SECURITY DESCRIPTOR :
Instrument FUTIDX OPTIDX FUTSTK OPTSTK OPTIDX
Underlying
Symbol
Symbol of
Underlying
Index
Symbol of
Underlying
Index
Symbol of
Underlying
Index
Symbol of
Underlying
Index
NIFTY
Expiry Date
DD-MMM-
YYYY
DD-MMM-
YYYY
DD-MMM-
YYYY
DD-MMM-
YYYY
DD-MMM-
YYYY
Option Type - CE / PE - CE / PE CE / PE
Strike Price - Strike Price - Strike Price Strike Price

5. CONTRACT SPECIFICATIONS
Trading Cycle
3 month trading cycle - the near month (one), the next
month (two) and the far month (three)
Three
quarterly
expiries
(March, June,
Sept & Dec
cycle) and
next 8half
yearly expiries
(Jun, Dec
cycle)
Expiry Day
Last Thursday of the expiry month. If the last Thursday is a trading
holiday, then the expiry day is the previous trading day.
Strike Price
Intervals
- Depending
on
underlying
price
- Depending
on
Underlying
volatility*
Depending
on
underlying
price

6. CONTRACT SPECIFICATIONS
Permitted
Lot Size
Underlying
specific
Underlying
specific
Underlying
specific
Underlying
specific
Underlying
specific
Price Steps Rs.0.05 Rs.0.05 Rs.0.05 Rs.0.05 Rs.0.05
Price Bands
Operating
range of 10%
of the base
price
A contract
specific price
range based
on its delta
value is
computed
and updated
on a daily
basis
Operating
range of 10%
of the base
price
A contract
specific price
range based
on its delta
value is
computed
and updated
on a daily
basis
A contract
specific price
range based
on its delta
value is
computed
and updated
on a daily
basis

7. FMC (FORWARD MARKET COMMISSION)
The Forward Markets Commission (FMC) is a statutory body
set up under the Forward Contracts (Regulation) Act, 1952. It
functions under the administrative control of the Department of
Economic Affairs, Ministry of Finance since September 2013.
FMC has its headquarters at Mumbai and one regional office
at Kolkata. The Commission comprises of a Chairman, and two
Members. It is organized into five administrative divisions to
carry out various tasks. However, subsequent to the passing of
Finance Act 2015 and a notification to this effect, FMC ceased to
exist and the responsibility of regulating commodity markets
have been given to the securities market regulator, SEBI.

8. FMC (FORWARD MARKET COMMISSION)
There are 22 exchanges including six 'national level' exchanges
which have been recognized for conducting futures/forward
trading in India. The major national exchanges are (I) Multi-
commodity Exchange of India Limited (MCX) Mumbai, (ii)
National Commodity and Derivatives Exchange Limited(NCDEX),
Mumbai and (iii) National Multi-commodity Exchange of India
Limited(NMCE) Ahmedabad. These on-line national commodity
exchanges have been organized for conducting forward/futures
trading activities in all commodities, to which section 15 of the
Forward Contracts (Regulation) Act, 1952 is applicable, and
other commodities subject to the approval of the Forward
Markets Commission.

9. ROLE OF FMC
Forward Markets Commission provides regulatory oversight in
order to ensure financial integrity, market integrity and to protect
& promote interest of consumers /non-members.
The Forward Markets Commission performs the role of a market
regulator. After assessing the market situation and taking into
account the recommendations made by the Board of Directors of
the Commodity Exchange, the Commission approves the rules and
regulations of the Exchange in accordance with which trading is to
be conducted.
It accords permission for commencement of trading in different
contracts, monitors market conditions continuously and takes
remedial measures wherever necessary by imposing various
regulatory measures.

10. COMMODITIES TRADED ON THESE EXCHANGES COMPRISE:
Edible oilseeds: Groundnut, mustard seed, cotton seed,
sunflower, rice bran oil, soy oil, etc.
Food grains: Wheat, gram, dals, bajra, maize etc.
Metals: Gold, silver, copper, zinc etc.
Spices: Turmeric, pepper, jeera etc.
Fibres: Cotton, jute, etc.
Others: Gur, rubber, natural gas, crude oil etc.

11. FUNCTIONS OF FMC
To advise the central government in respect of the recognition
or the withdrawal of recognition from any association.
To advise the central government in respect of issues arising
out of the administration of the Forward Contracts (Regulation)
Act 1952.
To keep forward markets under observation and to take such
action in relation to them, as it may consider necessary, in
exercise of the powers assigned to it under the Act.
To make recommendations to improve the organisation and
working of forward markets;

12. POWERS OF THE FMC COMMISSION
The Commission shall, in the performance of its functions, have all
the powers of a civil court under the Code of Civil Procedure, 1908 (5
of 1908), while trying a suit in respect of the following matters,
namely:
(a) Summoning and enforcing the attendance of any person and
examining him on oath;
(b) requiring the discovery and production of any document;
(c) receiving evidence on affidavits;
(d) requisitioning any public record or copy thereof from any office;
(e) any other matters which may be prescribed.
The powers of approving memorandum and articles of association
and Bye-laws; powers to direct to make or to make articles (Rules) or
Byelaws; powers to suspend governing body of recognized
association, and, powers to suspend business of recognized
association.

13. BENEFITS OF FMC
FMC PROVIDE BENEFITS TO TWO MAJOR PARTIES :
1. Farmers
2. Other Stakeholders

14. WHY FMC IS MERGED WITH SEBI ?
Budget 2015: Proposal to merge Forward Markets Commission
with Sebi to add teeth to commodities market regulation:
Budget 2015 proposals merger of commodity futures market
regulator Forward Markets Commission (FMC) with stock
market watchdog Securities and Exchange Board of India (Sebi),
a move intended to strengthen regulation of the 11-year
commodities market, facilitate domestic and foreign
institutional participation and launch of new products like
options.
The merger of FMC with Sebi will strengthen regulation of
commodity forward markets and reduce wild speculation.

15. 1.Example of NIFTY IT future contract

16. 2. stock
Example of ICICI bank future contract

17. 2. Stock
Example of HDFC bank future contract

18. 3.Commodities
examples of cotton future contract

19. 3.Commodities
examples of dhaniya future contract