Stock exchange BSE said on Wednesday that it will change the expiration day of its weekly equity derivatives contracts to Mondays, from Thursdays at present. Currently, the weekly derivatives contracts (futures and options) expire on Thursdays, while the monthly contracts are valid till the end of session on the last Thursday of each month. The new scheme of weekly derivatives contracts will take effect from June 29, BSE said in a statement. All other contracts – other than weekly contracts – will continue to expire on last Thursday of the month.
A derivative contract is a financial instrument whose value is derived from an underlying asset. The price of an equity derivative contract, for example, moves in tandem with the underlying stock or equity index.
The move is aimed at bringing innovative products for market participants, BSE added.
BSE will also introduce a liquidity enhancement scheme in the equity derivatives segment for the S&P BSE Sensex 50 index. With effect from July 1, this will be applicable to weekly as well as monthly futures and options contracts based on Sensex 50, according to BSE.
“We are excited about the launch of weekly contracts expiring on Monday coupled with the introduction of LES in the equity derivatives segment for S&P BSE SENSEX 50,” said Shri Sameer Patil, chief business officer, BSE.
“We are sure that this product shall gain wider participation and acceptance among all market participants due to its unique product offering,” he added.
Not to be confused with the S&P BSE Sensex benchmark index, the S&P BSE Sensex 50 index gauges the performance of top 50 largest and liquid stocks in the S&P BSE LargeMidCap, whereas the S&P BSE Sensex measures the performance of 30 largest, most liquid and financially sound listed companies in the key sectors of the country’s economy.