Options contracts see a rise in activity ahead of 2019 Lok Sabha polls

Experts say activity in derivatives could see an increase as the Lok Sabha elections come nearer

Market participants have begun taking positions in the derivatives market to protect their portfolios from any adverse election outcome. Options contracts expiring in June 2019 are seeing a rise in activity as investors look to hedge their positions in case stocks slide after the results.

Activity is maximum in put options at a strike price of 9,000 and 10,500 on the Nifty50. Put options at both these levels are out-of-the-money, which means they would be profitable only if the benchmark Nifty50 falls significantly from its Friday’s close of 10,859.90.

A put option gives the buyer the right, but not the