The Bombay Stock Exchange will introduce futures and options (F&O)contracts on Bharat-22 index from September 3.
Bharat-22 index, comprising the shares of 22 companies, is a blend of shares of key central public sector enterprises, public sector banks and blue chip private companies like Larsen & Toubro (L&T), Axis Bank and ITC.
The other companies that are part of the index are -- ONGC, IOC, SBI, BPCL, Coal India, Nalco, Bharat Electronics, REC, Power Finance Corp, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, Power Grid Corporation, NLC India, Indian Bank and Bank of Baroda.
“The exchange shall introduce futures and options contracts on S&P BSE Bharat-22 Index in equity derivatives segment with effect from September 3, 2018,” BSE said in a circular.
At present, there are over 200 securities available in the F&O segment for trade. Recently, several stocks have been added in the segment.
Derivative in financial markets typically refers to a forward, future, option or any other hybrid contract of pre-determined fixed duration, linked for the purpose of contract fulfilment to the value of a specified real or financial asset or to an index of securities.
Broadly, there are two types of derivative contracts -- futures and options. A futures contract means a legally binding agreement to buy or sell the underlying security at a future date, while options contract gives the buyer or holder of the contract the right (but not the obligation) to buy or sell the underlying asset at a predetermined price within or at the end of a specified period.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.