Options are excellent hedging instruments for your existing trades
Options are generally traded for a month but now stock exchanges have been introducing weekly options whose duration is only one week
Some of the important facts regarding weekly options in India –
1.Weekly expiry options are similar to monthly expiry options but time decay is faster in weekly options than monthly options.
2.Weekly options on Nifty and Banknifty expire on every Thursday. If Thursday is a market holiday then expiry will be a day before Thursday
3.There are generally four Weekly expiry in a month in which the last expiry is the weekly as well as monthly expiry. At one time 7 consecutive weekly expiry contracts are available.
4.Nowadays Weekly expiry options are more liquid than monthly expiry option.
5.Only index based Weekly Options are available in India namely Nifty and Banknifty.
6. In Currency segment only USD INR pair has Weekly Options available
USD INR Weekly options expire on every Friday. At one time 11 consecutive weekly expiry contracts are available.
7.Weekly options are generally more volatile than monthly options and the premium is also lesser as compared to monthly options.
Banknifty weekly expiry was one of the first weekly expiry contracts started by NSE in May, 2016
Nifty weekly options were introduced by NSE in February, 2019
USD INR Weekly options were introduced by NSE in November 2018
NSE may introduce Weekly options in stocks too in coming days.