If you have watched Indian markets for any length of time, you have seen the SENSEX — the Bombay Stock Exchange's index of 30 large companies, quoted all day on every business channel. What fewer people understand is that the SENSEX itself is tradeable, indirectly, through weekly options contracts listed on the BSE. This article walks through the actual contract specifications — the plumbing — because most beginners lose money not on direction, but on details they never learned.
| Specification | Value |
|---|---|
| Underlying | S&P BSE SENSEX index |
| Exchange | BSE (derivatives segment: BFO) |
| Lot size | 20 units per lot |
| Strike interval | 100 points |
| Expiry | Weekly, on Thursday |
| Settlement | Cash-settled (no delivery) |
| Tick size | ₹0.05 |
You cannot buy one unit of a SENSEX option. The minimum tradeable quantity is one lot of 20. If a call option is quoting at a premium of ₹400, one lot costs 400 × 20 = ₹8,000. Ten lots (200 quantity) would cost ₹80,000. Every rupee the premium moves is therefore ₹20 per lot to you. This multiplication is the first thing to internalise: a 25-point premium move on a 5-lot position is 25 × 100 = ₹2,500, gained or lost.
With the index near 77,600, you will find calls and puts at 77,500, 77,600, 77,700 and so on. The strike nearest the current index level is called at-the-money (ATM). For a call, strikes below the index are in-the-money (ITM); strikes above are out-of-the-money (OTM). For puts it is the mirror image. The distance you choose changes the premium you pay, how fast the option responds to index moves, and how quickly time eats it — subjects that deserve their own articles.
Every SENSEX weekly contract dies on a Thursday. On expiry day the option's value converges to its intrinsic value — the amount by which it finishes in the money — and if it finishes out of the money, it expires worth exactly zero. Two practical consequences follow. First, premiums on expiry morning are far cheaper than earlier in the week, because there are only hours of time value left. Second, moves in the premium become sharp and violent near the close, which attracts traders and destroys the unprepared in equal measure.
Because the SENSEX is an index and not a stock, nothing is delivered. If your bought option expires in the money, the difference is credited in rupees. There is no risk of waking up owning 30 companies. This also means the maximum loss for an option buyer is always capped at the premium paid — a structural property worth respecting, since sellers of options carry a very different and much larger risk profile requiring margin.
A rough, honest example. A slightly in-the-money weekly call early in the week might quote around ₹500–₹650 of premium. One lot: about ₹10,000–₹13,000. On top of the premium, every round trip pays brokerage, securities transaction tax on the sell side, exchange charges and GST — small individually, meaningful across many trades. Anyone modelling a strategy without charges is flattering their own arithmetic.
The weekly cycle means there is always a contract within a few days of expiry, keeping premiums relatively affordable and liquidity concentrated in the current week. It also compresses time: a view that needs three weeks to play out is a poor fit for an instrument that dies on Thursday. Matching the life of the contract to the timeframe of the idea is a discipline, not a detail.
A SENSEX weekly option is a cash-settled, Thursday-expiring contract in lots of 20, with strikes every 100 points. The specifications are simple; the behaviour of premiums — driven by direction, time decay and volatility — is not. Learn the plumbing first, on paper, before a single rupee of premium leaves your account. In our own work we track every signal on real market prices precisely because the arithmetic of these contracts punishes vagueness — and the numbers, wins and losses alike, are the only honest teacher.