BSE to Launch Liquidity Enhancement Plan From September for Single Stock & Index Options

By Staff
Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    India's leading stock exchange BSE (Bombay Stock Exchange) will launch a liquidity enhancement scheme on monthly single stock options and index options from September. Under the liquidity enhancement scheme (LES), brokers and other market intermediaries are given incentives for a specified period of time to bring in liquidity and generate investor interest in securities which have limited trading activity.

    BSE to Launch Liquidity Enhancement Plan From September

    In a notice, BSE said, "The exchange shall be launching the liquidity enhancement scheme on monthly single stock options and index options of equity derivative segment with effect from September 1, 2018."

    Index options allow an investor the right to purchase or sell the underlying stock index for a defined time period. Besides, index options are cash settled when exercised, as opposed to options on single stocks where the underlying stock is transferred when exercised.

    The bourse said it will monitor the performance of the programme including the presence of market makers and their compliance with the quote obligations through a mix of online and offline monitoring tools. Besides, it will publish information on the programme from time to time.

    LES on stock options and index options programme may remain in force for a maximum period of three years as a part of SEBI rule. Once the scheme is discontinued, the exchange has the option to re-introduce it provided "it is less than the three year period since the introduction of the scheme on that security".

    Read more about: bse options
    Story first published: Thursday, August 16, 2018, 12:52 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more