BSE to launch F&O contracts in Sensex 50 index

DSIJ Intelligence / 03 Mar 2017

BSE to launch F&O contracts in Sensex 50 index

BSE is going to introduce Futuresand Options (F&O) contracts on its Sensex 50 index from March 14. S&P BSE Sensex 50 index measures the performance of the 50 largest and liquidcompanies listed on the BSE. 

BSE is going to introduce Futuresand Options (F&O) contracts on its Sensex 50 index from March 14. S&P BSE Sensex 50 index measures the performance of the 50 largest and liquidcompanies listed on the BSE. BSE to start three Futures and Options monthlyseries i.e. March, April and May.

An option gives the buyer theright, but not the obligation to buy (or sell) a certain asset at a specificprice at any time during the life of the contract. A futures contract providesthe buyer the obligation to purchase a specific asset; and the seller to selland deliver that asset at a specific future date, unless the holder's positionis closed prior to expiration.

BSE has launched BSE 50 index inDecember 2016. The index covers over 50 per cent of total market capitalisationof BSE listed companies. The objective of starting the index is to provide a moreeffective tool for institutional and retail investors' growing needs.

The stock price of BSE declined1.1 per cent in early trade,and is trading at Rs 907.1 on an intraday basis.

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