BSE weekly options begin well

The Bombay Stock Exchange's (BSE) derivatives weekly options registered encouraging volumes on debut on Monday. The options are launched on 5 underlyings "" Sensex, Satyam, Reliance, SBI and Tata Steel.

Volume in the BSE derivatives was around Rs 35 crore of which over Rs 3.75 crore was on account of weekly options and the rest from Sensex futures.

The maximum interest within the Sensex options was for the September 17 call at a strike price of Rs 5,400. This indicates bullish expectations for the market's weekly closing. Open interest in Sensex futures as a percentage of volume traded was 10 per cent, while in the case of weekly options it was almost 50 per cent.

Again, substantial open interest was witnessed in the September 17 call options at strike prices of Rs 5,400 and Rs 5,500.

This is for the first time BSE has offered a product that's different from its existing products in the derivatives segment.

Till now, the stock and index options were available for near, middle and far contract month series. In order to cater to demand for shorter maturity options, the bourse decided to launch the weekly series (normally Monday to Friday) in addition to the existing series.

This product will be offered for one week and two week duration with expiration on Friday.

Participants seem to welcome the move. Says a BSE broker: "We are enthusiastic and keen to take advantage of the lower entry cost in terms of smaller premiums and the market would also be able to take a short term view on the underlyings."