BSE Introduces Trading in Delivery-based Stock Futures & Options Contracts
The Bombay Stock Exchange is pleased to inform all trading members that it has decided to provide Trading facility in Delivery-based Stock Futures & Options Contractsin BSE’s Equity Derivatives segment.
Delivery-based Stock Futures & Options contracts
Effective February 1, 2011, trading on all existing single stock futures & options contracts expiring on or after April 13*, 2011 will be delivery-based. All single stock futures & options contracts expiring on February 10, 2011 & March 17, 2011 will continue to be cash settled. There will be no change in other contract specifications like contract size, strike intervals, number of strikes for options, expiry day, and calculation of settlement price. Final settlement will be on expiry + 3 business days.
Important to Note:
· Single Stock Futures Contracts: All open positions at expiry will result in delivery obligations.
· Single Stock Options Contracts: Exercise of all open positions will be solely at the discretion of the buyer on the expiry day. In other words, there will be no automatic exercise of these contracts on expiry day. The exercise procedure will be triggered on receipt of exercise notice from the trading member (TM) of the client during the time window provided on the expiry day, from 9:00am – 4:30pm.
· On expiry / exercise of delivery-based stock derivatives contracts, the risk management framework of the cash segment shall be applicable.
The risk management framework, settlement process and relevant file formats for settlement of all single stock futures & options contracts are available in the separate circular. Please refer to Annexure 1 for list of underlying assets available in BSE’s Equity Derivatives segment as of January 31, 2011 & Annexure 2 for contract specifications of single stock futures & options.