What will happen to current contracts?
The Bombay Stock Exchange (BSE) has announced that it will discontinue weekly derivatives contracts for the Sensex50 and Bankex indices, effective November 14 and 18, respectively. This decision is in line with the recent directives from the Securities and Exchange Board of India (SEBI) to limit weekly expiries to one per benchmark index per exchange.
Existing contracts will remain valid until their respective expiry dates. If you currently have open positions in these weekly contracts, you can continue to hold them until their expiration. After that, you will need to close or square off your positions.
Implications of the discontinuation:
- Reduced trading opportunities: Investors who rely on weekly derivatives contracts for short-term trading strategies may find fewer opportunities.
- Potential impact on volatility: The discontinuation could affect the overall volatility of the market, as weekly contracts often contribute to short-term price fluctuations.
- Shift towards monthly contracts: Investors may shift their focus to monthly or longer-term derivatives contracts as alternatives.
It’s important to note that the discontinuation of weekly contracts does not affect the overall trading of the Sensex50 and Bankex indices. Investors can still trade these indices through other instruments, such as daily derivatives or spot markets.For more information, you can refer to the official announcement from the BSE or consult with your financial advisor.