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Strategies FAQ

Straddle contracts are specialised two-legged option contracts that allow a trader to take positions on two different option contracts belonging to the same product, at the same strike price and having the same expiry.
A straddle contract comprises of two individual legs, the first being the call option leg and the second being the put option leg, having same strike price and expiry.
To start with, straddle contracts will be offered in the SENSEX50 Options. Going forward same will be added in other products as well.
Market lot of a straddle contract will be the same as that of its corresponding individual legs i.e. the market lot of the call option leg and the put option leg.
Tick size of a straddle contract will be the same as that of its corresponding individual legs i.e. the tick size of the call option leg and the put option leg.
Straddle contracts will be made available on current & near month option contracts.
Minimum two In-the-Money, two Out-of-the-Money and one At-the-Money straddle contracts will be made available. Once created, these contracts will be retained till expiry.
Nomenclature of a straddle contract will be as follows:
< Assetsymbol > < MTH > < Year > < STD > < StrikePrice >
Given below is an example of SENSEX50 straddle contract with MAY 18 expiry and 11750.00 strike price.

SENSEX50MAY18STD11750.00 SENSEX50: - Asset Symbol as defined in contract master
MAY18 :- Expiry Month and Year
STD :- Straddle Contract
11750.00 :- Strike Price
Orders in a straddle contract will be executed as per the normal price-time priority logic and within the same straddle contract order book, i.e. a buy order shall match with a sell order in the same straddle contract order book as per their price-time priority.
Matching in straddle contract will result in two trades – one trade in the individual call option contract and other trade in the individual put option contract.
On 'Buying' a straddle contract, 2 buy trades get generated in the individual option legs – one each in call and put option contracts of the same strike price & expiry. In other words, 'Buying' a straddle contract shall create a buy position each in the call as well as put option contracts.
On 'Selling' a straddle contract, 2 sell trades get generated in the individual option legs – one each in call and put option contracts of the same strike price & expiry. In other words, 'Selling' a straddle contract shall create a sell position each in the call as well as put option contracts.
The trade executed between a buy order and a sell order in the straddle contract will be split into its respective individual contract legs, similar to the calendar spread futures contract. Kindly refer to the below example for the same.

Illustration of Straddle Contract Consider following example:

Straddle Contract SENSEX50MAY18STD11750.00
Leg 1 (Call option contract) SENSEX50MAY18CE11750.00
Leg 2 (Put option contract) SENSEX50MAY18PE11750.00
LTP (otherwise previous close price) of Leg 1 contract in normal market 30.00
LTP (otherwise previous close price) of Leg 2 contract in normal market 0.90

Client Code Buy Qty Buy Price Sell Price Sell Qty Client Code
A 1 31.00 31.00 1 B

In the above example Client A has bought SENSEX50MAY18STD11750 straddle contract at $31.00 whereas client B has sold SENSEX50MAY18STD11750.00 at $31.00

This shall result in execution of trades between client A and client B for 1 Qty @ $31.0000. The execution of trade in this straddle contract shall result into 2 trades on its individual legs. The prices at which trade shall get executed on individual legs shall be based on the trade price decomposition logic. The same is explained below:-

As per the trade price decomposition logic, the price of call leg and put leg shall get adjusted in such a manner that the sum of the prices of the two legs should be equal to the trade price of straddle contract i.e. $31.0000.

 Client A Buy SENSEX50MAY18CE11750.00 Trade Price 30.05
Buy SENSEX50MAY18PE11750.00 Trade Price 0.95

Trade details and position in case of client B in following manner:
Client B Sell SENSEX50MAY18CE11750.00 Trade Price 30.05
Sell SENSEX50MAY18PE11750.00 Trade Price 0.95

Straddle contracts will be made available to the user in the existing contract master file (INX_CO_YYYYMMDD.csv) for India INX.
There will be minor modifications in contract master file in order to accommodate straddle contracts. These have been explained vide Exchange circular no. 20180424-2 dated 24th April 2018
To enter an order in a straddle contract, a user has to add options strategies by right click on market watch and then click on add contract. Select the Inst. Type (as OPTIDX in case of SENSEX50) and then select the option Strategy from the dropdown. Click on refresh button and then click on Add button to add the contract in market watch.
Once the contract gets added then the procedure to place the order remains same as normal contracts
  • Only regular limit orders are allowed for straddle contracts.
  • Market and Stop Loss orders are not permitted.
  • Disclosed quantity orders are allowed.
  • GFD and EOSESS retention types are allowed
Yes, orders entered in straddle contracts will reflect in the RTRMS – ZT screen under the menu 'View All Pending Orders'.
Yes, the single order limits applicable for the individual contracts of an option product will also be applicable for the straddle contracts.
There will be no impact of trades resulting from orders in straddle contracts and the existing rules across various post trade processes shall be applicable. Trades generated in individual legs would result in positions in a call option leg and a put option leg of respective contract. Hence all post trade processes would be applicable in the same manner as normally done for trades on these contracts.
Orders cannot be entered in straddle contracts when a member is in RRM.

Paired options contracts are specialised two-legged contracts that allow a trader to take positions on two different option contracts belonging to the same product, at the same strike price and having the same expiry.
A paired option contract comprises of two individual legs, the first being the call option leg and the second being the put option leg, having same strike price and expiry.
To start with, Paired Option contracts will be offered in the SENSEX50 Options. However going forward same will be added in other products as well.
Market lot of a paired option contract will be the same as that of its corresponding individual legs i.e. the market lot of the call option leg and the put option leg.
Tick size of a paired option contract will be the same as that of its corresponding individual legs i.e the tick size of the call option leg and the put option leg.
Paired option contracts will be made available on current & near month option contracts.
Minimum two In-the-Money, two Out-of-the-Money and one At-the-Money paired option contracts will be made available. Once created, these contracts will be retained till expiry.
Nomenclature of a paired option contract will be as follows:
< Assetsymbol > < MTH > < Year > < CNV > < Strike Price >
Given below is an example of SENSEX50 paired option contract with MAY 18 expiry and 11750.00 strike price.

SENSEX50MAY18CNV11750.00 SENSEX50: - Asset Symbol as defined in contract master
MAY18 :- Expiry Month and Year
CNV :- Paired Option Contract
11750.00 :- Strike Price

Orders in a paired option contract will be executed as per the normal price-time priority logic and within the same paired option contract order book, i.e. a buy order shall match with a sell order in the same paired option contract order book as per their price-time priority.


Matching in each paired option contract will result in two trades – one trade in the individual call option contract and other trade in the individual put option contract.

On 'Buying' a paired option contract, a buy trade gets generated on the individual call option contract (1st leg) and a sell trade gets generated on the individual put option contract (2nd leg) with same strike price and expiry. In other words, 'Buying' a paired option contract shall create a buy position in the call option contract and sell position in the put option contract.

On 'Selling' a paired option contract, a sell trade gets generated for the individual call option contract (1st leg) and a buy trade gets generated on the individual put option contract (2nd leg) with same strike price and expiry. In other words, 'Selling' a paired option contract shall create a sell position in the call option contract and buy position in the put option contract.

The trade executed between a buy order and a sell order in the paired option contract will be split into its respective individual contract legs, similar to the calendar spread futures contract. Kindly refer to the below example for the same.

Illustration of Paired Option Contract Consider following example:

Paired Option Contract SENSEX50MAY18CNV11650.00
Leg 1 (Call option contract) SENSEX50MAY18CE11650.00
Leg 2 (Put option contract) SENSEX50MAY18PE11650.00
LTP (otherwise previous close price) of Leg 1 contract in normal market 30.00
LTP (otherwise previous close price) of Leg 2 contract in normal market 29.00

Client Code Buy Qty Buy Price Sell Price Sell Qty Client Code
A 1 0.60 0.60 1 B


In the above example Client A has bought SENSEX50MAY18CNV11650.00 paired option contract at $0.60 whereas client B has sold SENSEX50MAY18CNV11650.00 at $0.60.

This shall result in execution of trades between client A and client B for 1 Qty @ $0.60. The execution of trade in this paired option contract shall result into 2 trades on its individual legs. The prices at which trade shall get executed on individual legs shall be based on the trade price decomposition logic. The same is explained below:-

As per the trade price decomposition logic, the price of call option leg and put option leg shall get adjusted in such a manner that the price difference between the two legs should be equal to the trade price of the paired option contract i.e. $0.60.

Trade details and position in case of client A in following manner:

 Client A Buy SENSEX50MAY18CE11650.00 Trade Price 29.80
Sell SENSEX50MAY18PE11650.00 Trade Price 29.20

Trade details and position in case of client B in following manner:
Client B Sell SENSEX50MAY18CE11650.00 Trade Price 29.80
Buy SENSEX50MAY18PE11650.00 Trade Price 29.20
Separate paired options contracts will be made available to the user in the existing contract master file (INX_CO_YYYYMMDD.csv) for India INX.
There will be minor modifications in contract master file in order to accommodate paired option contracts. These have been explained vide Exchange circular no. 20180424-2 dated 24th April 2018
To enter an order in a paired option contract, a user has to add options strategies by right click on market watch and then click on add contract. Select the Inst. Type (as OPTIDX in case of SENSEX50) and then select the option Strategy from the dropdown besides it. Click on refresh button and then click on Add button to add the contract in market watch. Once the contract gets added then the procedure to place the order remains same as normal contracts
  • Only regular limit orders are allowed for paired option contracts.
  • Market and Stop Loss orders are not permitted.
  • Disclosed quantity orders are allowed.
  • GFD and EOSESS retention types are allowed

Yes, orders entered in paired option contracts will reflect in the RTRMS – ZT screen under the menu 'View All Pending Orders'.
Yes, the single order limits applicable for the individual contracts of an option product will also be applicable for the paired option contracts.
There will be no impact of trades resulting from orders in paired option contracts and the existing rules across various post trade processes shall be applicable. Trades generated in individual legs would result in positions in a call option leg and a put option leg of respective contract. Hence all post trade processes would be applicable in the same manner as normally done for trades on these contracts.
Orders cannot be entered in paired option contracts when a member is in RRM.
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