With its recent launch in Weekly options on NIFTY and CURRENCY, NSE plans to launch weekly options on stocks in Equity Derivatives Segment probably within one or two weeks. So far it has released a circular where it has clearly specified on the clearing mechanism of the weekly equity contracts to be same as that of the other F&O contracts. Although the main idea behind this is to infuse liquidity into the equity derivatives segment. So far the exchange had Options only for the expiry of the month which kept the retail investors far away from entering into the options segment as more risk with less reward was being visible.
Although it will be too early to comment on the optimism of effect of the launch but the pre-effects are mostly on the positive side before the launch. It can be well said that the free fall of stocks on uncertain and unknown news can be limited with the launch of weekly stock options. Besides those traders who wish to profit from the results season volatility are the one’s who might find this scheme to be fruitful for them.
Talking about the contract specifications, these are more likely to be the same as of the monthly contracts with all trading parameters such as tick size, lot size, price bands, trading hours to be the same. The expiry of such contracts would be on every Thursday and if Thursday turns out to be a holiday the expiry would be one day prior to the expiry.