Understanding the Contract Specifications of BSE Sensex F&O

In this article, we will discuss

• Introduction
• Specifications of BSE Sensex F&O Contract
• Currency Futures Contract Specifications for Successful Trading
• Conclusion

Introduction

BSE Sensex Futures and Options (F&O) contracts are derivative contracts that allow investors to trade on the future value of the S&P BSE Sensex index. Understanding the specifications of BSE Sensex F&O contracts is crucial for investors who want to trade in these contracts. This blog discusses the specifications of BSE Sensex F&O contracts, which include index futures, stock futures, index options, and stock options.

Specifications of BSE Sensex F&O Contract

Index Futures:

The underlying asset is the S&P BSE Sensex. The contract expiry is weekly futures & monthly futures . The tick size is Rs. 0.05 in spread price terms for S&P BSE SENSEX futures contracts. The trading hours are from 9:15 a.m. to 3:30 p.m. The last trading day is the Friday for Sensex and Monday for Bankex of each contract maturity weekly. The final settlement is cash settlement, and the closing value of the underlying index on the last trading day is the final settlement price of the expiring futures contract.

Stock Futures:

The underlying asset is a single stock. The contract expiry is weekly and monthly. The tick size is Rs. 0.05. The trading hours are from 9:15 a.m. to 3:30 p.m. The last trading day is the Thursday of each contract maturing weekly. The final settlement is cash settlement, and the closing value of the underlying stock on the last trading day is the final settlement price of the expiring futures contract.

Index Options (Weekly, Monthly & Long Dated Options):

The underlying asset is the S&P BSE Sensex. The contract multiplier is 1, 2, or 3 months, weekly, or long-dated (only S&P BSE SENSEX). The exercise style is European. The tick size is Rs. 0.05 for all  index options contracts. The settlement style is cash. The trading hours are from 9:15 a.m. to 3:30 p.m. The last trading day is the last Thursday of each contract maturity month.

Stock Options (Weekly & Monthly Options):

The underlying asset is a single stock. The contract multiplier is 1, 2, or 3 months, weekly. The exercise style is European. The tick size is Rs. 0.05. The settlement style is cash settled. The trading hours are from 9:15 a.m. to 3:30 p.m. The last trading day is the last Thursday of each contract maturity month.

Currency Futures Contract Specifications for Successful Trading

Conclusion

The specifications of BSE Sensex F&O contracts, which include index futures and options, are essential for understanding the terms of trading these financial instruments. The specifications cover parameters such as the underlying index, lot size, tick size, contract period, trading hours, last trading/expiration day, and final settlement. For instance, the S&P BSE Sensex futures have a lot size of 10, tick size of Rs. 0.05, and monthly contracts expire on the last Thursday of the contract month. These details are crucial for market participants to make informed decisions and manage their positions effectively. Understanding these specifications is fundamental for anyone looking to engage in trading BSE Sensex F&O contracts. The S&P BSE Sensex is India's most tracked bellwether index, comprising 30 of the largest and most liquid companies listed on the BSE. It is calculated using a float-adjusted market capitalization-weighted methodology and is used as both a benchmark and an investable index. The index is designed to measure the performance of the 30 largest, most liquid, and financially sound companies across key sectors of the Indian economy. Therefore, a clear understanding of the F&O contracts specifications is vital for effectively participating in the trading of these important financial instruments