BSE to launch F&O contracts on Sensex 50 index from Mar 14

Asia's oldest bourse BSE on Wednesday said it would introduce Futures and Options (F&O) contracts on its Sensex 50 index from March 14.

S&P BSE Sensex 50 index, launched in December last year, measures the performance of the 50 largest and liquid companies listed on the BSE.

The index, which covers over 50 per cent of total market capitalisation of BSE-listed companies, was launched as part of BSE's effort to provide a more effective tool for institutional and retail investors growing need.

"Exchange shall introduce Futures and Options contracts on S&P BSE Sensex 50 index in equity derivatives segment with effect from March 14, 2017," BSE said in a circular.

Three Futures and Options (monthly) series -- March, April and May would begin.

An option gives the buyer the right, but not the obligation to buy (or sell) a certain asset at a specific price at any time during the life of the contract.

A futures contract provides the buyer the obligation to purchase a specific asset, and the seller to sell and deliver that asset at a specific future date, unless the holder's position is closed prior to expiration.