Active Stocks
Wed Apr 24 2024 15:59:54
  1. Tata Steel share price
  2. 165.50 2.73%
  1. NTPC share price
  2. 351.25 1.25%
  1. Power Grid Corporation Of India share price
  2. 290.00 1.75%
  1. Infosys share price
  2. 1,431.85 -0.68%
  1. ITC share price
  2. 428.85 -0.08%
Business News/ Market / Stock-market-news/  BSE, NSE to give ‘do not exercise’ option in equity derivatives
BackBack

BSE, NSE to give ‘do not exercise’ option in equity derivatives

BSE and NSE have decided to provide trading members the option to not exercise certain options contracts in the equity derivatives segment

The stock exchanges will launch the new facility, to be provided on index options and stock options contracts, from 31 August, 2017. Photo: MintPremium
The stock exchanges will launch the new facility, to be provided on index options and stock options contracts, from 31 August, 2017. Photo: Mint

New Delhi: Providing more leeway, leading exchanges BSE and the National Stock Exchange (NSE) will provide trading members the option to not exercise certain options contracts in the equity derivatives segment.

The new facility, to be provided on index options and stock options contracts, will begin from 31 August, 2017. The move will help brokers and traders.

Currently, all open long positions across ‘in-the-money’ options contracts are automatically exercised and cash settled after end of trading session on expiry day.

In separate circulars, the exchanges said that buyer of option can indicate a choice not to exercise in-the-money open long positions on the expiry day.

In ‘in-the-money’ category, option contracts can be exercised in a bid to purchase its underlying share for lower than the prevailing market price or to sell its underlying stock for higher than the current market price.

Under the new system, trading members will have to provide response as ‘N’ against position which they do not want to exercise. They will have 30 minutes time window to submit ‘do not exercise’ option. This window would be available from 4:30pm to 5pm on the day of expiry of these contracts.

It would be applicable for monthly as well as weekly contracts or as per timings as announced from time to time, the exchanges said.

If members do not provide any response within the cut-off time, or if the information provided by member is incomplete, then such client-contract-long positions would be automatically exercised, they added.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 22 Aug 2017, 09:46 PM IST
Next Story footLogo
Recommended For You