National Stock Exchange of India limited (NSE) has received permission from Securities and Exchange Board of India (SEBI) to launch weekly options on NIFTY 50 Index.
NIFTY 50 weekly options will have seven consecutive weekly expiry contracts (excluding the week where monthly contracts expire). On expiry of a weekly contract, exchange shall introduce next weekly contract on rolling basis. The existing three monthly options contracts, three quarterly and eight semi-annual option contracts will also continue to be available. The contracts shall expire on Thursday of every week. In case the Thursday is a trading holiday, the previous trading day shall be the expiry/last trading day. The strike interval for the weekly options will remain the same as monthly contracts.
Mr. Vikram Limaye, MD & CEO of NSE, said, “With the successful launch of weekly options on the NIFTY BANK index, there was demand from the market participants for a similar product variant of the NIFTY 50 index. The weekly options on NIFTY 50 index provides an additional hedging tool for market participants to manage the portfolio risk more effectively.”
NSE recently launched weekly options in the currency derivatives segment on the USDINR currency pair. In 2016, NSE had launched weekly options in the equity derivatives segment on the NIFTY BANK Index. Both product variants have seen widespread acceptance amongst market participants.
NSE is currently evaluating readiness of market participants for the product launch and shall announce a launch date shortly.