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June 2, 2001
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Money > Business Headlines > Report June 2, 2001 |
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Rs 54 million options trades on Day 1BS Bureau The Bombay Stock Exchange on Friday launched index options on its sensitive index. At the end of the day, 150 options trades were done, with a cumulative value of Rs 54 million. The first trade of 1 Sensex Call options of the June series was done between Emkay Share & Stock Brokers as the option writer and Dimensional Securities as the buyer, at a strike price of 3600 with a premium of 95 sensex points. This translates to a transaction value of Rs 9500 (premium multiplied by 100). If the closing value of the sensex on the last Thursday of June is 4000 and the buyer wishes to exercise the "In the Money" Call option, the option writer will have to pay Rs 40,000 (difference between the settlement value 4000 & strike 3600 multiplied by 100), to the buyer. According to Sebi guidelines, there are three expiration months available at any time. Thus, Sensex Call & Put options contracts are available with one, two & three month maturity. Options contracts expiring in the month of June, July & August will be available for trading. A contract expires on the last Thursday of the contract month. So, for June options, the expiry date will be June 28, 2001. Speaking at the inauguration, BSE executive director AN Joshi said, "The exchange endeavours to provide the best international practices & systems for trading in derivatives products to members, bringing them in league with their counterparts across the globe. The exchange is actively imparting training and creating awareness about derivatives amongst market participants, to strengthen the derivatives market in the country." Options on sensex are premium style European options where the options contract would be exercised only on the day of expiry. Powered by YOU MAY ALSO WANT TO READ:
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