Leading bourses BSE and NSE will introduce futures and options (F&O) contracts in five companies including ICICI Prudential Life Insurance Company Ltd and Manappuram Finance Ltd from Friday. The other firms are Chennai Petroleum Corporation, SREI Infrastructure Finance and Repco Home Finance. In separate circulars, the exchanges said that futures and options contracts on these “five additional securities would be available for trading with effect from June 30, 2017”.
At present, there are over 200 securities available in the F&O segment for trade. Recently, several stocks have been added in the segment. Earlier in March, the exchanges had introduced F&O contracts in 15 companies including InterGlobe Aviation, Indian Bank, PVR, Reliance Defence and Engineering and Ujjivan Financial Services.
In July 2015, markets regulator Sebi had made a steep hike in the minimum investment size for any equity derivative product to Rs 5 lakh from Rs 2 lakh. Besides, the minimum lot size of an equity derivative contract had been increased to Rs 5 lakh.
A derivative is a security derived from a debt instrument, share, loan, whether secured or unsecured or any other form of security. It also derives its value from the prices, or index of prices, of underlying securities.