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What are Index Options?

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The Index Options are options contracts where the underlying is an Index e.g. Nifty 50 or S&P BSE Sensex. Each index option is a group of stocks collected based on some theme. Each stock has a weight attributed in the index according to which the price of the index is calculated.

Index Options have their own lot size, strike prices and expiry dates. All index options have a 3 month expiry cycle including 1, 2 and 3 month.

Index Options Benefits

Investing in index Options comes with various benefits like-

  • Provides broader exposure with a single trade
  • Diversification that leads to better risk management
  • Lowers trading costs and risks
  • Lowers volatility associated with the trade

Examples of Index Options in India 

  • Nifty 50 Index Options
  • NSE Bank Nifty Index Options
  • NIFTY IT Index options
  • NIFTY Infra Index options
  • NIFTY PSE Index options
  • NIFTY MID50 Index options
  • FTSE 100 Index options
  • S&P BSE SENSEX Index Options
  • BSE SENSEX MINI OPTIONS
  • BSE TECK OPTIONS
  • BSE BANKEX OPTIONS
  • BSE OIL & GAS OPTIONS
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More Options Trading Basics Questions...

  1. How do options work?
  2. What are the different types of options?
  3. What is the strike price of an option?
  4. What is the Expiration Day of Options?
  5. How do I trade options?
  6. What is the difference between futures and options?
  7. How is Nifty traded?
  8. What happens if an option expires out of the money?
  9. Is there any Margin payable in Options?
  10. How are the Options contracts settled?
  11. What are Covered Options?
  12. What are Naked Options?
  13. What is an American Option?
  14. What is an European Option?
  15. What is In-The-Money (ITM), At-the-money-option (ATM) and Out-of-the-money-option (OTM) in Options?
  16. How to decide on whether should I buy or sell Call or Put options?
  17. Can I trade on options of any stock or Index?
  18. What is the difference between square off and exercise an Option?
  19. What is intrinsic value of the option? How to calculate intrinsic value of an option?
  20. What is time value of an Option?
  21. What are moving averages in options trading?
  22. What is Assignment in Options?
  23. How are options different from futures?
  24. What are the factors that affect the value of the premium of an Option?
  25. What are different pricing models for options?
  26. How the premium paid on options is calculated?
  27. What are Option Greeks and its use in Option trading?
  28. What is shorting/writing/selling in Options trading?
  29. I have bought an option & paid the premium for it, how to settle it?
  30. Do Option buyers have the same rights that as stock buyers?
  31. What is the contract cycle for Options in India?
  32. How does the probability of price movement affects the price of an option?
  33. What is the difference between trading stocks versus options?
  34. What is open interest and volume in options?
  35. What is the options market?
  36. What is nifty futures and options?
  37. What is an option trade?
  38. Is binary options trading legal in India?
  39. What are different types of exotic options?
  40. How to trade nifty Options intraday?
  41. Can I trade in US options from India?
  42. What are options trading hours in India?
  43. What is NSE option expiry time?
  44. Can I buy/sell Options in pre-market trading session?
  45. What is call & put option in bank nifty?
  46. What is the difference between selling a call option and buying a put option?
  47. What is NSE F&O lot size?
  48. What are options trading advantages?
  49. What is options trading after hours?
  50. What are options trading charges?
  51. What are options trading exchanges in India?
  52. What is the difference between options trading and Forex trading?
  53. What is the difference between options trading and stocks trading?
  54. What is the minimum amount required for Options trading?
  55. What are Index Options?
  56. What are weekly Options?
  57. What are Long Dated Options?
  58. How to identify if a particular option contract is American or European style?
  59. What are Option contract adjustments?
  60. Why The Intrinsic Value Of Options Contracts Can Never Be Negative?

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