Interesting I got this piece from ET full article link is attached...
For the benchmark indices like Nifty 50 and Bank Nifty, we have monthly options as well as weekly options that expire every Thursday. While for monthly options, we have futures but for weeklies, we don’t have any future. So, what are the weekly options based on - is it based on the spot or is it based on the monthly future? The answer is none of the two. Instead, they are based on something known as synthetic (or implied) futures. This synthetic future is something that isn’t actually traded but rather reverses calculated from options pricing.
https://economictimes.indiatimes.co...ofinterest&utm_medium=text&utm_campaign=cppst
For the benchmark indices like Nifty 50 and Bank Nifty, we have monthly options as well as weekly options that expire every Thursday. While for monthly options, we have futures but for weeklies, we don’t have any future. So, what are the weekly options based on - is it based on the spot or is it based on the monthly future? The answer is none of the two. Instead, they are based on something known as synthetic (or implied) futures. This synthetic future is something that isn’t actually traded but rather reverses calculated from options pricing.
https://economictimes.indiatimes.co...ofinterest&utm_medium=text&utm_campaign=cppst