Sensex declines as new trading system begins

By Our Special Correspondent

MUMBAI, JULY 2. The much awaited beginning of the new trading system to replace the century old badla trading finally began on the Indian bourses with the National Stock Exchange (NSE) taking the lead by launching options in individual securities from today.

The Bombay Stock Exchange (BSE) had already announced its plan to launch trading in options in individual securities from Monday.

The country's premier bourse could not launch it in the absence of the required software.

``Work is in progress and the necessary software would be ready by the end of this week to enable BSE to launch options trading in individual securities,'' a top BSE official said.

The BSE 30-share sensitive index closed at 3426, down by 31 points from Friday's close. Despite the decline, the broad market showed strengthened speculative buying in second-rung shares.

The NSE commenced trading in American style options contracts on individual securities today.

``The trading members showed considerable interest in the option contracts on individual securities,'' a release from NSE stated.

The NSE had introduced options on individual securities in all 31 securities approved by the regulator. At any point of time there will be three contracts available for trading with about one month, two months and three months to expiry.

A minimum of five strike prices for every option type (that is, call and put) were available for trading, that is, two contracts in-the-money (ITM), two contracts out-of-the money (OTM) and one contract at-the-money (ATM).

The first trade was in the near month July call option on ACC at strike price of Rs. 120 at a premium of Rs. 20.

The total number of option contracts on individual securities traded today was 379 with a notional value of the option contracts traded at around Rs. 9 crores.

Reliance Industries (Reliance) was the most active option contracts on individual securities traded today with 47 contracts being traded in the near month call, ATM, at a strike price of Rs. 360. The average premium was about Rs. 14.

Satyam Computer (Satyamcomp) was the next most active options contract with 34 contracts being traded in the near month call, ATM, at a strike price of Rs. 180. The average premium was about Rs. 10.

The Nifty futures recorded a trading volume of Rs. 31.32 crores arising out of 1,411 contracts and Nifty options saw 430 contracts getting traded at a notional value of Rs. 9.43 crores.

The total turnover of the futures and options segment on the NSE was around Rs. 50 crores.

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