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Index Option is an Option contract where the underlying is an index like NIfty 50 or Bank Nifty.
An Index Option is an option contract wherein the underlying instrument is an index such as the Nifty 50 Index, NSE Bank Nifty Index or NSE NIFTY IT Index. All these indexes are a collection of selected stocks of a particular type with a weight attributed to each stock. The value of a particular index is calculated based on the current market price of the stock and the weight attributed to it. Index Options are of 2 types: Call and Put Options.
Index options contracts have a 3-month trading cycle - the near month (one), the next month (two) and the far month (three).
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