What are the benefits of nifty weekly options contracts?
- Because of shorter maturity periods, weekly options command a lower premium. Thus, weekly options are more affordable than monthly options.
- Traders can take bigger positions for similar capital outlay just as monthly options.
- Weekly options offer Arbitrage opportunity between:
- Weekly and monthly options
- One week to maturity options and two weeks to maturity options.
- Liquidity will improve on account of low cost, encouraging more participants to join.
- Weekly options facilitate improvement in market depth and better price discovery.
- Participants in the market can also take a short-term view of the underlying.
- Participants in weekly options are offered short term insurance for their short-term portfolio, leading to improvement in market depth and better price discovery.