Why is the cash market in India said to have futures-style settlement?
In a true cash market, when a trade takes place today, delivery and payment would also take place today (or a short time later). Settlement procedures like T+3 would qualify as cash markets” in this sense, and of the equity markets in the country, only OTCEI is a cash market by this definition. For the rest, markets like the BSE or the NSE are classic futures market in operation. NSE’s equity market, for example, is a weekly futures market with tuesday expiration. When a person goes long on thursday, he is not obligated to do delivery and payment right away, and this long position can be reversed on friday thus leaving no net obligations with the clearinghouse (this would not be possible in a T+3 market). Like all futures markets, trading at the NSE is centralised, the futures markets are quite liquid, and there is no counterparty risk.
