SEBI plans options trading by Diwali

It was also decided that writing of options would not be restricted to only specific category of investors. As a result, any short positions on options would be subject to stringent margining. Options on index would have maximum maturity of three months with minimum 3 quot;strikesquot; in the money, near the money and out of the money. A strike in option parlance means the price at which the writer of options is willing to make a contract.

The committee also reviewed the progress of index futures market and of the steps being taken to facilitate the participation of FIIs and MFs. At its first meeting the technical group on derivatives had indicated that new derivative products would be introduced in phases by the end of the current year once the necessary infrastructure for the products are established by BSE and NSE. Other products on the anvil are options on individual stocks and covered warrants.