Sebi clears BSE’s weekly options plan

The Securities and Exchange Board of India (Sebi) has cleared a plan for weekly equity options for equity derivatives products — index ...

The Securities and Exchange Board of India (Sebi) has cleared a plan for weekly equity options for equity derivatives products — index options and stock options — proposed by The Stock Exchange, Mumbai (BSE). The new products are likely to be launched in September.

Confirming the development, a top Sebi official said: ‘‘We have cleared the weekly stock options product proposed by the BSE’’.

In a move to resurrect its near-dead futures and options (F&O) business, the country’s oldest exchange has planned to introduce weekly stock options product.

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Currently, the F&O turnover of BSE is virtually zero compared with the Rs 7,497 crore F&O turnover on the National Stock Exchange (NSE), on Friday.

To start with, the market regulator has permitted BSE to introduce stock option contracts in 10 stocks, which includes a Sensex option. All these are currently part of the BSE’s monthly F&O segment.

A senior BSE official said: ‘‘We will probably start the weekly stock options product from September. To begin with, we would be issuing two contracts — one weekly settlement series and the second fortnightly series, in the index options and stock options product’’.

However, after the settlement of the first weekly option series, BSE will issue options contract (both index options and stock options) every Monday and the cycle for all these options contracts would be for two weeks.

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The weekly stock options are expected to narrow down the premium currently prevailing in the monthly contracts.

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