Single stock futures-efficient, cheap and simple

Abstract

To analyze the reasons for popularity of Single Stock Futures in India vis-à-vis rest of the world with special focus on the US financial market and analyze the framework and settings of market under which this product is operating.

The Single Stock Futures (SSFs) trading began in India on 9th Nov, 2001. It was already being traded in several other countries like Australia, Japan, London and Spain. After the settlement of Shad Johnson accord by the passing of US Commodity Futures Modernization Act (CFMA), SSF trading began in US market on 8th Nov, 2002. The most intriguing thing about this product is that it has failed or has received a lukewarm response in most of the mature markets like US and Hong Kong while it has been a great success in India. The project tries to identify the key drivers which led to the overwhelming response by the Indian stock market and study the implications of structural differences in SSF in US and Indian market.