DETAILED CONTRACT SPECIFICATIONS FOR STOCK OPTIONS:
- Underlying : Individual Securities available for trading in the cash market.
- Exchange of Trading : National Stock Exchange of India Limited.
- Security Descriptor : N OPTSTK
- Style of Option : American.
- Strike Price Interval : As specified by the exchange.
- Contract Size : As specified by the exchange, Minimum value of Rs.2 lakh.
- Price Steps : Re. 0.05.
- Price Bands : Not applicable.
- Trading Cycle : The options contracts will have a maximum of three month trading cycle – the near month (one), the next month (two), and the far month (three). New contract will be introduced on the next trading day.
- Expiry Date : The last Thursday of the expiry month or the previous trading day i f the last Thursday is a trading holiday.
- Settlement Basis : Daily settlement on T+l basis and final option exercise settlement on T+3 basis.
- Daily Settlement Price : Premium value (net).
- Final Settlement Price : Closing price of underlying on exercise day or expiry day.
- Settlement Day : Last Trading Day.
CRITERIA FOR STOCKS AND INDEX ELIGIBILITY FOR TRADING ELIGIBILITY CRITERIA OF STOCKS
- The Stock is chosen from amongst the top 500 stocks in terms of average daily market capitalization and average daily traded value in the previous six months on a rolling basis.
- The Stock’s median quarter-sigma order size over the last six months should be not less than Rs.l lakh. For this purpose, at stock’s quarter-sigma order size should mean the order size (in value terms) required to cause a change in the stock price equal to one-quarter of a standard deviation.
- The Market vide position limit in the stock should not be less than Rs.50 crore. The market wide position limit (number of shares) is valued taking the closing prices of stocks in the underlying cash market on the date of expiry of contract in the month. The market wide position limit of open position (in terms of the number of underlying stock) on futures and options contracts on a particular underlying stock should be lower of:
(a) . 30 times the average number of shares traded daily, during the previous calendar month, in the relevant underlying security in the underlying segment or
(b) . 20 % of the number of shares held by non-promoters in the relevant underlying security i.e., free-float holding.
4. If an existing security fails to meet the eligibility criteria for three months consecutively, then no fresh month contract will be issued on that security.
5. However, the existing unexpired contracts can be permitted to trade till expiry and new strikes can also be introduced in the existing contract months.
For unlisted companies coming out with initial public offering, if the net public offer is Rs.500 crores or more, then the exchange may consider introducing stock options and stock futures on such stocks at the time of its listing in the cash market.
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