The National Stock Exchange will reintroduce the ‘Do not exercise’ (DNE) instruction in stock options from April 28. The move will help brokers and traders.
According to a NSE clearing circular on April 11, “It may be noted that facility to specify ‘Do Not Exercise’ instruction on expiry day will be re-introduced in the Stock Option contracts with effect from April 28”.
DNE will be allowed up to 3 strike prices of the stock option.
The system, which was introduced in 2017, is a fail-safe for options traders during the time of cash-settlement of options contracts.
What is an option?
An Option is a contract that gives a trader the right but not the obligation to buy or sell a share at a particular date at a specified price. In the Call option, the trader gets the right but not the obligation to buy the stock at a specified date and price.
(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)
