Weekly prop for BSE derivatives

The newly introduced weekly options have provided a new lease of life to the Bombay Stock Exchange's derivatives segment, which was moribund over the past few months.

After the launch of the weekly options, the BSE's derivatives segment reported a total turnover of Rs 323.09 crore for the week ended September 17, 2004.

Volumes in the derivatives segment has been zero over the past few months. On a daily basis, the weekly index option reported the largest volume of Rs 36.47 crore on September 17, 2004, indicating renewed interest for the short term maturity option.

The options, available on 5 underlyings "" Sensex, Satyam, Reliance Industries, State Bank of India and Tata Steel "" are offered for one week and two week duration. Options expire on Friday.

According to the data available from the exchange, only the Sensex option has witnessed interest in the first week, registering a total turnover of Rs 72.77 crore, while the four individual stock options have not registered any volumes.

BSE sources said since the index option has market makers, it has been able to catch investor fancy. Among the futures, the index futures reported a volume of Rs 250 crore in the first week. The volumes in the Sensex futures before the launch of the weekly option was virtually nil at the BSE.

A senior BSE official said " The outlook looks positive and the investors are gradually increasing the participation in the weekly option. It has definitely helped us to leverage our derivatives product for the monthly contracts." Nearly 50 active brokers have participated in the weekly option market in the first week, the official added.