Strike Price in Indian vs U.S. Options Market: Key Differences Explained
Introduction
If you trade options in both India and the United States, you’ll quickly notice that strike prices are handled differently across these markets. From lot sizes to expiration styles, understanding these differences can help you avoid costly mistakes. This guide breaks down how strike price selection varies in the Indian vs. U.S. options markets.
1. Strike Price Intervals
India
- NSE (National Stock Exchange) options have fixed strike intervals (e.g., ₹5, ₹10, ₹20, ₹50), depending on the stock price
- For NIFTY or BANKNIFTY: intervals are usually ₹50 or ₹100
U.S.
- U.S. stocks like AAPL or AMZN offer $1, $2.50, or $5 intervals
- Highly liquid tickers have narrower intervals, even $0.50 in some ETFs
2. Lot Size vs Single Share
India
- Options are lot-based, not individual share-based
- Example: 1 lot of NIFTY = 50 units
U.S.
- Options are typically for 100 shares per contract
- More flexible for small investors through mini/micro contracts or spreads
3. Strike Availability and Liquidity
India
- Fewer strike choices
- Lower liquidity for far OTM or deep ITM options
U.S.
- Wide range of strike prices
- Strong liquidity across strikes and expiries in popular tickers
4. Settlement Style
India
- All options (index and stock) are cash-settled
- No physical delivery of shares
U.S.
- Stock options are physically settled (you receive or deliver 100 shares if exercised)
- Index options are usually cash-settled (e.g., SPX)
5. Expiration Cycles
India
- Mostly monthly and weekly expiries (every Thursday)
- New expiry for indices: Friday weekly expiry from 2023 onward
- Standardized expiration dates
U.S.
- Weekly, monthly, quarterly, and even daily expirations
- Most contracts expire on Fridays, unless adjusted for holidays
Quick Comparison Table
| Feature | India | United States |
|---|---|---|
| Lot Size | Fixed (varies by instrument) | 100 shares per contract |
| Strike Interval | ₹5/₹10/₹50 | $0.50/$1/$2.50/$5 |
| Liquidity | Lower for deep OTM/ITM | High across most strikes |
| Settlement | Cash-settled | Stock = Physical, Index = Cash |
| Expiry Day | Thursday/Friday | Mostly Friday |
Conclusion
While the core concept of strike price remains the same, its application differs significantly in India and the U.S. From the lot size to settlement types and strike availability, understanding these differences is essential if you trade in both markets. Always adapt your strike price strategy to the market you’re in.
FAQs
Q1. Are strike prices the same in India and the U.S.?
No, they differ in intervals, availability, and how contracts are structured.
Q2. Can I trade U.S. options from India?
Yes, through a global brokerage account, but it’s regulated by RBI and SEBI limits.
Q3. Is cash settlement better than physical?
It depends. Cash settlement avoids share delivery, but physical settlement gives ownership flexibility.
Q4. Why are U.S. strike prices closer together?
Higher liquidity and more active retail trading allow for narrower intervals.
Q5. Can I choose any strike price in Indian options?
No, you must choose from the available strikes listed by the exchange.
