What it means
Launched in 1986 with a base of 100 for the year 1978-79, it is India's oldest stock index. It moves almost in step with the Nifty 50, since most of its companies are in both. Sensex options have their own weekly expiry on the BSE, on Thursdays.
In practice
The Sensex is the number quoted in headlines and the benchmark for many long-term investors, though day-to-day traders more often chart the Nifty. The two tell the same story about the market's direction.
Its derivatives matter to options traders for a practical reason: Sensex weekly options expire on Thursdays, so together with the Nifty's Tuesday expiry there are two index expiries to trade each week.
What to watch for
With only 30 companies it is even more concentrated than the Nifty, so a big move in two or three of them shifts the whole index. Its contracts have their own lot size and trade on the BSE, so check both before placing an order.
Related terms
4 terms- Nifty 50The benchmark index of India's National Stock Exchange, tracking 50 of the largest companies listed on it.
- NSE and BSEIndia's two main stock exchanges: the National Stock Exchange, home of the Nifty 50, and the Bombay Stock Exchange, home of the Sensex.
- Expiry dayThe day a futures or options contract stops trading and is settled; after it, the contract no longer exists.
- IndexA single number that tracks a basket of stocks, like the S&P 500 or the Nasdaq-100.