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BSE launches SENSEXmini derivatives contracts

Filed under Stock Market January 12, 2008 at 12:02 pm

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For the first time in India, Bombay Stock Exchange offers mini Futures and Options contracts on the leading Indian equity Index ‘SENSEX ‘ for retail investors to participate in the ever growing Derivatives market. The SENSEX is the barometer of the Indian Capital Markets and widely tracked in the global financial markets.

  • Since mini futures and options have market lot of FIVE, lower capital outlay and lower trading costs.
  • Smaller size allows for more precise hedging and flexible trading.
  • Possible arbitrage between existing SENSEX Futures (bigger market lot) & SENSEX mini Futures (market lot 5).
  • SENSEX constitutes 30 leading companies of diverse industries covering 12 broad     sectors of the Indian economy. Provides macro view of economy to retail as well as institutional investors.
  • The SENSEX has risen in value by more than 585% since its low in May 2003.
  • The value of SENSEX has risen by over 38% since May 31, 2007 and has crossed 20,000 on numerous occasions.
  • The constituents of SENSEX account for around 42% of the total BSE market capitalisation as on December 13, 2007.
Parameter Index
Futures		 Index
Options
     
Security Name Sensex Mini Futures Sensex Mini Options
Security Symbol MSX MSX
Underlying SENSEX SENSEX
Market Lot 5 5
Exercise Style - European
Contract Period 1, 2 & 3 months 1, 2 & 3 months & 1, 2 weeks
Tick size 0.05 i.e. 5 paisa 0.05 i.e. 5 paisa
Price Quotation In index points (SENSEX) In index points (SENSEX)
No. of Strike Prices - Shall have a minimum of 3 strikes (1 in the
money, 1 near the money, 1 out of the money).
Strike Price Interval - Same as for existing contracts
Trading Hours 9:55 a.m. to 3:30 p.m. 9:55 a.m. to 3:30 p.m.
Last Trading/Expiration Day Last Thursday of the contract month. If it
is a holiday, then the immediately preceding business day.Note: Business
day is a day during which the underlying equity market is open for
trading.		 Same as futures
Final Settlement Cash Settlement. On the last trading day,
the final settlement price of the expiring futures contract would be based
on the closing value of the underlying SENSEX.The following algorithm is
currently being used for calculating closing value of the individual
scrips including the scrips constituting BSE SENSEX in the Equity Segment:
• Weighted average price of all the trades in the last thirty minutes of
the continuous trading session.
• If there are no trades during the last thirty minutes, then the last
traded price in the continuous trading session would be taken as the
official closing price.		 Same as futures
 
Exercise Notice Time - It would be a specified time (Exercise
Session) on the last trading day of the contract. All in-the money options
by certain specified ticks would be deemed to be exercised on the day of
expiry.
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