Derivative Contracts and Expiry Quiz

If a derivative contract's expiry date falls on a trading holiday, the contract expires on the previous trading day.

A new derivative contract is introduced on the next trading day after the near month contract expires.

Typically 3-months, but long-dated options can be up to 3 years with quarterly or half-yearly expiries.

Option contracts with an expiry of more than 9 months.

Weekly option contracts expire on a specific day of the week.

These are cash-settled contracts.

Stock futures and options are physically settled.

Monthly stock futures and options contracts expire on the last Thursday of the expiry month, unless that day is a holiday.

Currency futures contracts have a maximum trading cycle of 12 months. A new contract is introduced after the current one expires.

Monthly currency futures contracts expire two business days before the last business day of the expiry month at 12:30 pm.

Currency futures contracts are settled in cash using the FBIL reference rate for the respective currency pair.

Monthly currency options contracts expire two working days before the last business day of the expiry month at 12:30 pm.

Currency options offer both monthly and weekly contracts. Monthly contracts include 3 consecutive monthly contracts followed by 3 quarterly contracts.

Interest rate futures contracts were the first derivative introduced for interest rate trading.

Interest rate options were introduced later, offering more flexibility for traders.

Currency futures trading started on the National Stock Exchange of India in 2008, with other exchanges like BSE and MSEI following soon after.

Exchange-traded contracts with standardized terms (quantity, quality, delivery time, and place) for settlement on a future date. They expire on a pre-specified date called the expiry date.

Contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified period.

There are two main types of options: Call options and Put options.

Agreements between two parties to exchange cash flows in the future based on a predetermined formula. They are essentially series of forward contracts.

Financial instruments whose value is derived from price movements of underlying assets, which are stocks or stock indices.

Futures and options contracts traded on stock indices like SENSEX, NIFTY 50, and sectoral indices.

Exchange-traded options with shorter maturity dates than traditional monthly options, typically expiring in one or more weeks.

Weekly and monthly equity index futures & options contracts expire on different days depending on the expiry week or month.