Education Series on Derivative Contracts
Options trading in the Indian Equity Market:
Options on stock indices commenced on June,4,2001 in the Futures &
Option (F&O) segment of the National Stock Exchange and subsequently
in the Stock Exchange, Mumbai.
Index Options can be defined as contracts on which the underlying
asset is a stock index. These option contracts give us the right to buy
or sell equity indices as per the contract terms such as strike
price, expiry date etc and the transaction will be settled in cash
because index can not be handed over from person to person.
Currently,index options are available on the S&P CNX Nifty of the NSE
and on the Sensex(BSE 30)of the Stock Exchange, Mumbai.
Besides index options,equity options or stock options are also
commenced on July,2,2001 and option trading is available on 31
individual stocks.The list is the same as those stocks on which Stock
Futures are available and it has already been covered.