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Select F&O Contracts on NSE See Huge Volatility

As stock markets rose sharply, some NSE futures and options contracts, including those of index constituents, saw immense volatility on Thursday.
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Mumbai: As stock markets rose sharply, some NSE futures and options contracts, including those of index constituents, saw immense volatility on Thursday.

In NSE stock options, the Tata Consultancy Services (TCS) contract saw severe volatility as rates rose by almost 54 per cent in intraday session a day when the company reported its third quarter earnings.

TCS stock options, with a strike price of Rs 2,600, opened at Rs 48.05 and later touched a high of Rs 71.35 in intraday session, reflecting a gain of 53.93 per cent.

Similarly, stock options of Reliance Industries also saw dramatic movement where it opened at Rs 15 and surged to a high of Rs 26.35 against the last closing rate of Rs 11.35.

Traders said that short covering of positions may also be the reason behind this sudden spurt in select counters.

The huge volatility in stock options comes days after speculation about a 'fat finger trade' in a future contract of NSE benchmark index Nifty.

After markets closed for the day, the country's largest software exporter TCS reported a marginal 0.1 per cent slide in its profit at Rs 5,328 crore for the third quarter of this fiscal year, but revenues increased 15 per cent to Rs 24,501 crore.

The company had reported a net profit of Rs 5,333 crore for the corresponding period last fiscal year.

In its biggest single-day rally in over 5 years, the Sensex on Thursday zoomed by 728.73 points to reclaim the 28,000 mark while the Nifty closed at 8,494.15, up 216.60 points or 2.62 per cent.

Equity derivative is a class of derivatives whose value is at least partly derived from one or more underlying equity securities. Options and futures are by far the most common equity derivatives.



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