Bank Nifty - Quarterly Option Contracts - New Opportunities


Hello Friends

As you all might be aware, NSE has started quarterly option contracts on Bank Nifty as well. The details are as follows -

The National Stock Exchange (NSE) has introduced quarterly options contracts on Nifty Bank Index, giving traders an added flexibility to take longer bets on the highly volatile but lucrative Bank Nifty index. The quarterly options contracts will be available for trading from October 30, 2020 onwards.

As you may be aware, options are contractual rights (not obligation) of the option buyer and obligatory duty of option seller. The Bank Nifty option contracts are cash-settled. Bank Nifty options contract derive their value from the Bank Nifty Index (underlying asset).

The new-introduced option contracts will come in three quarterly expiries i.e. March, June, September & December cycle, within the maximum maturity of 12 months.

The quarterly option contracts, that come in Call European (CE) and Put European (PE) variants, are in addition to existing 7 weekly & 3 monthly options contracts on Bank Nifty index.

The strike scheme will follow the method for quarterly and half-yearly index options contract. Based on the current index level, the applicable strike scheme will be 5 1 5 (5 In-the-Money, 1 At-theMoney, 5 Out-of-the-Money). Based on the current index level, the applicable strike interval will be 1000.

The lot size of the quarterly contracts will be same as the monthly contracts, and tick size will be Rs 0.05.

From October 30, 2020, three quarterly options will be available for trading with March 25-2021, June 24-2021 and September 30-2021 expiry dates.

The quarterly Bank Nifty options will expire on the last Thursday of the expiring month. In case, the Thursday is a trading holiday, the previous trading day will be the expiry/last trading day. All contracts will expire at the normal market closing time on the expiry day or such other time as decided by exchange.

This will give us new opportunities to trade Bank Nifty Options with longer term views. Although the liquidity would be an issue. Not sure if these will start to get widely traded or not.

What do you guys think about these Quarterly Options? And has anyone traded into the Nifty Quarterly Options ever, which have been available since a long time?



Just as @Tejas Khoday has mentioned, NSE has waived off transaction charges in it for increasing the trading activity.

NSE waives off Transaction charges for Quarterly Options on Bank Nifty

NSE has announced the introduction of trading in Quarterly Options contracts on the Nifty Bank Index. To encourage active participation they've decided to waive off transaction charges on the trades done in Quarterly Options contracts on the Nifty Bank Index in the Future & Options segment of the Exchange from October 30, 2020, till March 31, 2021. Circular Ref. No: 12/2020
It'll mostly lead to the further consolidation of options trading volumes on Bank Nifty. Other indices are on the backburner?

Do you think this incentive is enough to make the traders shift to this longer duration contract?


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