What is IRF?

An Interest Rate Futures contract is "an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed today." The underlying security for Interest Rate Futures is either Government Bond or T-Bill. Exchange traded Interest Rate Futures on NSE are standardized contracts based on 6 year, 10 year and 13 year Government of India Security and 91 Dated Treasury Bills issued by the Central Government. All futures contracts available for trading on NSE &BSE  are cash settled.

Product Specification:
  • Underlying is the GOI Securities with a residual maturity of 4-8; 8-11 & 11-15 years.
  • Unit of Trading is 1 lot (which is equal to 2000 bonds of face value 2 lacs)
  • Quotation is on Price based (derived from the underlying clean price)
  • Trading Hours – Monday to Friday (9AM to 5PM)
  • Contract Expiry – Last Thursday of the month
  • Margin range from 2 to 5%
  • Daily MTM Settlement on T+1 in cash based on daily settlement price

Advantages of IRF

  • Cash settled futures contract
  • Contract based on a single GOI security
  • Easier and cheaper access to rates trading
  • Centralized clearing supported by guaranteed settlement
  • Useful to all types of investors
  • Low transaction cost


Interest Rate Future is a contract between a buyer and seller which agrees to future delivery of an asset that bears interest. This ensures that the price of the interest bearing asset is locked in for a future date. IRFs can be bought or sold as per your expectations of rising or decreasing interest rates. This proves an excellent instrument in hedging. It helps as an investment and trading instrument in diversifying your portfolio.

Benefits of Interest Rate Futures

  1. Hedging All types of investors are exposed to interest rate risk. Interest rate exposure can be hedged by taking an opposite position in IRF to offset a loss (gain) in underlying exposure with potential gain (loss) in the IRF.
  2. Easily AccessibleIRF can be availed and invested in by any and all types of investors. With a small margin an investor can take a exposure in the Government Bonds which are traded in the IRF segment.
  3. No Securities Transaction Tax (STT)Since there’s no STT involved, it makes hedging an efficient process.
  4. Transparent TradingSince it involves the airing of process in real time, it is completely transparent.
  5. Cash Settlement An investor need not to take a delivery of the government bonds in the IRF segment as the product carries a compulsory cash settlement process.
  6. Low Risk Since it is a debt product it carries lower risk.

Why invest with us?

GEPL’s IRF team consistently tracks interest rate movements based on strong fundamental and technical analysis. Supported by research, there are regular views and trading calls offered to investors proactively. The team also tracks IRF contracts held by investors and advice exit strategies based on market view. A strong support team is an added advantage to investors. We ensure periodic reports generation, margin calls, and maturity reminders to investors.

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