Description
BSE circular updating strike price intervals for 70 scrips in equity derivative contracts, effective from specified dates.
Summary
BSE has issued a circular specifying strike price intervals for equity derivative contracts across 70 securities. The strike price intervals vary based on the underlying security, ranging from ₹1 to ₹250, allowing for more granular or broader option strike selections depending on the stock’s price characteristics.
Key Points
- Strike price intervals updated for 70 equity derivative scrips
- Intervals range from ₹1 (low-priced stocks) to ₹250 (high-priced stocks)
- Major index constituents covered including ADANI ENTERPRISES (₹20), BAJAJ AUTO (₹100), HDFC BANK (₹5)
- Financial sector stocks predominantly have ₹10-₹20 intervals
- PSU banks and oil companies generally have smaller intervals (₹1-₹2.5)
- Premium stocks like BOSCH have wider intervals (₹250)
- Technology stocks like INFOSYS and HCL TECH have ₹20 intervals
Regulatory Changes
This circular establishes standardized strike price intervals for equity derivative contracts. The intervals are calibrated based on stock price levels and trading characteristics:
- High-value stocks (₹50-₹250 intervals): BOSCH, DIXON, EICHER MOTORS, BAJAJ AUTO
- Mid-range stocks (₹10-₹50 intervals): Most banking, pharma, and IT stocks
- Lower-priced stocks (₹1-₹5 intervals): PSU banks, commodity stocks, telecom
Compliance Requirements
- Trading members must use specified strike price intervals for new derivative contracts
- Market makers and option writers need to adjust strategies to align with new strike intervals
- System providers must update derivative trading platforms to reflect correct strike intervals
- Risk management systems should be calibrated for the new strike price granularity
Important Dates
Effective date not explicitly mentioned in the provided content. Implementation typically follows BSE’s standard notice period for derivative contract specifications.
Impact Assessment
Trading Impact:
- Improved liquidity concentration at standardized strike prices
- Better price discovery for option contracts
- Reduced fragmentation of liquidity across too many strikes
Market Participant Impact:
- Options traders can execute strategies with more precise strike selection for lower-interval stocks
- Market makers benefit from standardized intervals for risk management
- Retail investors get clearer option chains with logical strike progressions
Operational Impact:
- Trading systems require updates to enforce correct strike intervals
- Existing open positions unaffected; applies to new contract series
- Affects option chain display and selection interfaces across trading platforms
Impact Justification
Affects derivative trading parameters for 70 major stocks, impacting options traders and market makers. Changes strike price intervals which influences option pricing, liquidity, and trading strategies.