The BSE on Monday started the trading of government bonds-based interest rate options, according to the exchange.
"BSE launched interest rate futures in January 2014, which have an average market share of 40 per cent and has now expanded its offerings in interest rate derivatives with the launch of options," the bourse said in a release.
The bourse is the first and only exchange to provide trading of interest rate options, it said.
"An interest rate option is a financial derivative contract whose value is based on rupee interest rates," it said.
These will be part of interest rate derivatives in the currency derivatives segment, and the contracts currently available for trading are based on the underlying government securities, the release added.
The bourse further said interest rate options provide for an efficient tool for managing interest rate risk and exposure through hedging.