What is meant by longer dated derivatives products? Why longer dated index options are required?
Longer dated derivatives products are useful for those investors who want to have a long term hedge or long term exposure in derivative market. The premiums for longer term derivatives products are higher than for standard options in the same stock because the increased expiration date gives the underlying asset more time to make a substantial move and for the investor to make a healthy profit. Currently, longer dated options on Nifty with tenure of upto 3 years are available for the investors.
