Mentoring Option Traders | Call Option Put Option | Imp Info

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The below circular will be of immense use for all those indulging in option trading and do remember to check our own in house Intraday Tips Nse Bse F&o and make daily money making a habit in stock market. It just requires a correct stock mentor to start making money in market.


With reference to SEBI circular CIR/DNPD/6/2010 dated 27th October, 2010, The National Stock Exchange (NSE) has decided to switch to European style stock option for all contracts expiring on January 27, 2011 and onwards. The decision comes close on the heels of the market regulator giving exchanges the flexibility to offer either European style or American style stock options contracts. "All stock options contracts expiring on January 27, 2011 and onwards shall have European exercise style only," said a NSE circular. "Accordingly there shall be no interim exercise available for all stock options contracts expiring on January 27, 2011 and onwards and all the in-the-money stock options contracts shall get automatically exercised on the expiry day," it added. The circular further added that all existing month stock options contracts expiring on November 25, 2010 and December 30, 2010 shall continue to have American exercise style. Currently, only the American style contracts are allowed in the stock options segment. In September 2010, the total monthly stock options turnover was around Rs 1.09 lakh crore, the lowest when compared to stock futures, index futures and index options. Market participants attribute the low volumes to the presence of a large number of illiquid stocks. With the introduction of European style stock options, however, there is a likelihood that more players would enter the space,. Meanwhile, if a stock exchange wants to switch back to American style contracts, it can do so after getting the necessary approvals from the market regulator. "After opting for a particular style of exercise, a stock exchange may change to another style of exercise only after seeking prior approval of Sebi," said the Sebi circular. The National Stock Exchange (NSE) has decided to switch to European style stock option for all contracts expiring on January 27, 2011 and onwards. The decision comes close on the heels of the market regulator giving exchanges the flexibility to offer either European style or American style stock options contracts. "All stock options contracts expiring on January 27, 2011 and onwards shall have European exercise style only," said a NSE circular. "Accordingly there shall be no interim exercise available for all stock options contracts expiring on January 27, 2011 and onwards and all the in-the-money stock options contracts shall get automatically exercised on the expiry day," it added. The circular further added that all existing month stock options contracts expiring on November 25, 2010 and December 30, 2010 shall continue to have American exercise style. Currently, only the American style contracts are allowed in the stock options segment. In September 2010, the total monthly stock options turnover was around Rs 1.09 lakh crore, the lowest when compared to stock futures, index futures and index options. Market participants attribute the low volumes to the presence of a large number of illiquid stocks. With the introduction of European style stock options, however, there is a likelihood that more players would enter the space,. Meanwhile, if a stock exchange wants to switch back to American style contracts, it can do so after getting the necessary approvals from the market regulator. "After opting for a particular style of exercise, a stock exchange may change to another style of exercise only after seeking prior approval of Sebi," said the Sebi circular. The National Stock Exchange (NSE) has decided to switch to European style stock option for all contracts expiring on January 27, 2011 and onwards. The decision comes close on the heels of the market regulator giving exchanges the flexibility to offer either European style or American style stock options contracts. "All stock options contracts expiring on January 27, 2011 and onwards shall have European exercise style only," said a NSE circular. "Accordingly there shall be no interim exercise available for all stock options contracts expiring on January 27, 2011 and onwards and all the in-the-money stock options contracts shall get automatically exercised on the expiry day," it added. The circular further added that all existing month stock options contracts expiring on November 25, 2010 and December 30, 2010 shall continue to have American exercise style. Currently, only the American style contracts are allowed in the stock options segment. In September 2010, the total monthly stock options turnover was around Rs 1.09 lakh crore, the lowest when compared to stock futures, index futures and index options. Market participants attribute the low volumes to the presence of a large number of illiquid stocks. With the introduction of European style stock options, however, there is a likelihood that more players would enter the space,. Meanwhile, if a stock exchange wants to switch back to American style contracts, it can do so after getting the necessary approvals from the market regulator. "After opting for a particular style of exercise, a stock exchange may change to another style of exercise only after seeking prior approval of Sebi," said the Sebi circular.

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