The Sensex futures, which began trading on the Chicago-based US Futures Exchange on April 4, are off to a slow start.
The subdued beginning is partly due to a market slowdown and also because of the nature of the product, said market experts.
Since it began trading last month, it has registered a daily average of 84.3 contracts, with a total of 1,686 contracts having been traded so far.
The open interest, which refers to contracts that have not yet been squared off, has been steadily increasing, according to the data from the USFE website.
Experts feel that as the Indian markets are closed when the global markets are trading, it is difficult for traders to take a call on the Sensex.
The Sensex futures on USFE are traded 23 hours a day and with markets moving by as much as a thousand points within a single trading session, it will take investors with deep pockets to invest in the product.
"In Asia, the Nifty is traded on Simex (Singapore Exchange) and since it is in the same time zone, people are more comfortable with it," said Deven Choksey, managing director, KR Choksey Securities.
Another reason for the lukewarm start is that the contracts are settled by cash. Experts felt that if the quantum of trading has to increase, the product must be settled by delivery. Transaction costs are not such a big factor currently, they pointed out.
The value of the SGX Nifty (Nifty futures traded on the Singapore Exchange) had risen from Rs 1,130 crore (Rs 11.3 billion) to Rs 1,580 crore (Rs 15.8 billion) after the Securities and Exchange Board of India imposed curbs on participatory notes (P-notes) investment last October.
During the same period, the OI of NSE's Nifty futures fell from Rs 19,000 crore (Rs 190 billion) to Rs 18,070 crore (Rs 180.7 billion), according to an Edelweiss Securities study.