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Option market instruments :
(1) Index based option
(2) stock based option
Contract specification for index option : on Nse index options market are one –month, two month and three month expiry contracts with minimum nine different strikes available for trading. Hence , if there are three serial month contracts available and the scheme of strikes 6-1-6 , then there are minium 3*13*2 (call and put option) i.e. 78 option contracts available on an index . option contracts are specified as follows : DATE- EXPIRYMONTH-YEAR-CALL/PUT-AMERICAN/EUROPEAN-STRIKE.
Contract specification of S&P CNX Nifty options
| Underlying index | S&P CNX NIFTY |
| Exchange of trading | National stock exchange of india limited |
| Security descriptor | OPTIDX |
| Contract size | Permitted lot size shall be 50 (minimum value 2 lakh) |
| Price steps | 0.05 |
| Price band | A contract specific price range based on its delta value and is computed and update on a daily basis. |
| Trading cycle | Three month trading cycle – the near month (one), the next month (two)and the far month (three) |
| Expiry date | The last Thursdays of the expiry month or the previous trading day if the last Thursday is a trading holidays. |
| Settlement basis | Cash settlement on T+1 basis. |
| Style of option | European |
| Strike price interval | Depending on the index level |
| Daily settlement price | Not applicable |
| Final settlement | Closing value of the index on the last trading day. |
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