Now trade in quarterly option contracts in Bank Nifty

There will be three quarterly expiries i.e. March, June, Sept & Dec cycle within the maximum maturity of 12 months

Kumar Shankar Roy Oct 6, 2020

NSE logoThe National Stock Exchange (NSE) has introduced quarterly options contracts on Nifty Bank Index, giving traders an added flexibility to take longer bets on the highly volatile but lucrative Bank Nifty index. The quarterly options contracts will be available for trading from October 30, 2020 onwards.

As you may be aware, options are contractual rights (not obligation) of the option buyer and obligatory duty of option seller. The Bank Nifty option contracts are cash-settled. Bank Nifty options contract derive their value from the Bank Nifty Index (underlying asset).

The new-introduced option contracts will come in three quarterly expiries i.e. March, June, September & December cycle, within the maximum maturity of 12 months.

The quarterly option contracts, that come in Call European (CE) and Put European (PE) variants, are in addition to existing 7 weekly & 3 monthly options contracts on Bank Nifty index.

The strike scheme will follow the method for quarterly and half-yearly index options contract. Based on the current index level, the applicable strike scheme will be 5 1 5 (5 In-the-Money, 1 At-theMoney, 5 Out-of-the-Money). Based on the current index level, the applicable strike interval will be 1000.

The lot size of the quarterly contracts will be same as the monthly contracts, and tick size will be Rs 0.05.

From October 30, 2020, three quarterly options will be available for trading with March 25-2021, June 24-2021 and September 30-2021 expiry dates.

The quarterly Bank Nifty options will expire on the last Thursday of the expiring month. In case, the Thursday is a trading holiday, the previous trading day will be the expiry/last trading day. All contracts will expire at the normal market closing time on the expiry day or such other time as decided by exchange.


Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at kumarsroy@rupeeiq.com.

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