BSE Derivatives Weekly Options registered encouraging volumes at its maiden opening today. The Weekly Options are launched on 5 underlyings namely, capital market benchmark SENSEX and also four other viz., Satyam, Reliance, SBI and TISCO.

This new product was launched by BSE after SEBI approved its introduction on account of its USP for individual investors, viz., lower premium and shorter maturity.

On the first day of the launch, volumes at BSE Derivatives registered around Rs.35 crores of which over Rs.3.75 crores was on account of weekly options and the balance came from SENSEX Futures. The maximum interest in Weekly SENSEX Options was visible in the one week September 17 call at a strike price of Rs. 5400/-, which indicates bullish expectations for the market’s weekly closing.

Market participants have welcomed this new product and are enthusiastic to take advantage of the lower entry cost in terms of smaller premiums.

This is for the first time BSE has offered a product with differentiation than the existing products in the Derivatives segment. Till now, the stock and index options are available for near, middle and far contract month series. In order to cater to a demand for shorter maturity options, it has been decided to launch Weekly series (normally Monday to Friday) in addition to the existing series. This product will be offered for one week and two week duration with expiration on Friday.

Benefits of Weekly Stock and Index Option Contracts:

• Weekly Options will command lower premiums due to shorter maturity. Thus the weekly stock options will cost less than the monthly options.
• On account of low cost, the liquidity will improve as more participants would come in.
• It will in turn lead to better price discovery and improvement in market depth.
• The market participants would be able to take a short-term view in the underlying also.
• Weekly Stock and Index Options would provide market participants short term insurance for their short-term portfolio.