The National Stock Exchange (NSE) on Tuesday said it had received approval from the Securities and Exchange Board of India (SEBI) to launch weekly options on Nifty 50 index. This will provide a hedging tool to market participants to be able to manage their portfolio risk more efficiently.
The exchange said it was evaluating the readiness of the market participants before the product launch and will announce a date for the product launch shortly.
"With the successful launch of weekly options on the Nifty bank index, there was demand from the market participants for a similar product variant of the Nifty 50 index. The weekly options on Nifty 50 index provides an additional hedging tool for market participants to manage the portfolio risk more effectively," said Vikram Limaye, Managing Director and Chief Executive Officer, NSE.
The Nifty 50 weekly options will have seven consecutive weekly expiry contracts, excluding the week where monthly contracts expire. When a weekly contract expires, the exchange will introduce the next weekly contract on a rolling basis. The existing three monthly options contracts, three quarterly and eight semi-annual option contracts will continue to be available.
The contracts will expire on Thursday of every week. In case Thursday is a trading holiday, the previous trading day will be the expiry or the last trading day.
In 2016, NSE had launched weekly options in the equity derivatives segment on the Nifty Bank index.
With inputs from PTI