BSE weekly options on select scrips

The Bombay Stock Exchange (BSE) will be launching weekly options contracts on select scrips and the Sensex from September 13.

The weekly options series will be initially available for trading for the Sensex and four frontline stocks: Reliance Industries, Satyam Computer, State Bank of India and Tata Steel.

This is in addition to the three monthly (near, middle and far) series which would continue to be offered for trading, a notice posted on the BSE website said.

BSE officials said that at the time of introduction, a one-week option series and a two-week option series will be introduced.

Thus, at any point in time, a one-week and a two-week options contract would be available for trading. The BSE notice said that the one and two week options will commence from September 13, 2004, and will expire on September 17, 2004 and September 24, 2004 respectively.

On September 20, 2004 another two-week maturity option will commence which will expire on October 1, 2004 and so on.

With the introduction of weekly options, a weekly series (5 days) and a two-weekly series (12 days) will always be available for trading on every Monday for participants with a short-term view of the market.

Sources said the regulator had given the nod to BSE to introduce the new product to help it attract market participation which is almost non-existent as of now.

Market participants were happy that the BSE was introducing weekly options but were sceptical that this would drive up volumes on the BSE derivatives segment which has reported extremely low trading volumes so far.

A dealer with a local brokerage said," Most of the volumes are anyways in the futures segment."