Options trading in the Indian Equity Market:

Index Options

Options on stock indices commenced on June,4,2001 in the Futures & Option (F&O) segment of the National Stock Exchange and subsequently in the Stock Exchange, Mumbai.

Index Options can be defined as contracts on which the underlying asset is a stock index. These option contracts give us the right to buy or sell equity indices as per the contract terms such as strike price, expiry date etc and the transaction will be settled in cash because index can not be handed over from person to person.

Currently,index options are available on the S&P CNX Nifty of the NSE and on the Sensex(BSE 30)of the Stock Exchange, Mumbai.

Equity Options

Besides index options,equity options or stock options are also commenced on July,2,2001 and option trading is available on 31 individual stocks.The list is the same as those stocks on which Stock Futures are available and it has already been covered.