Index Futures
This query is : Resolved
Pankaj Gupta
(Querist)
13 January 2008
Dear Sir/Ma'am,
If the current price of a share is Rs. 100/- (Beta 1.1 with Sensex) and a person has purchased 1000 shares. How can he perfectly hedge the situation by selling index futures. Index futures is avialble at 4500 index points and one contract of futures comprises at 50 units.
My major concern in this question is how to compute the value of one unit of index.
Pls. do reply and advise me on calculation of value of one unit of index.
Regards
Pankaj Gupta
If the current price of a share is Rs. 100/- (Beta 1.1 with Sensex) and a person has purchased 1000 shares. How can he perfectly hedge the situation by selling index futures. Index futures is avialble at 4500 index points and one contract of futures comprises at 50 units.
My major concern in this question is how to compute the value of one unit of index.
Pls. do reply and advise me on calculation of value of one unit of index.
Regards
Pankaj Gupta
Reetika Goel
(Expert)
13 April 2008
no.of contracts = 1000*1.1/50=22
value of index=22*4500
value of one unit=22*4500/22
value of index=22*4500
value of one unit=22*4500/22
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