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Gold options contract registers record turnover on MCX

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Multi Commodity Exchange of India (MCX), the country’s largest commodity derivatives exchange, witnessed record turnover and volume of Rs 2,021 crore and 6443 kilograms (kg) respectively on May 29 in its gold options contract.

“This signifies the increasing acceptance of gold options among market participants. The physical participants from bullion and jewellery segment were seen using options as a hedging tool in addition to the futures contracts,” MCX said.

The previous record turnover was Rs 1,560 crore achieved on October 17, 2017—the day the first options contract on gold futures was launched by the exchange. The gold ‘European-style’ option is based on the underlying MCX gold futures contract (1 kg).

“With an objective to encourage wider participation by creating lasting and self-sustaining liquidity and depth in the gold options contract, MCX introduced ‘Liquidity Enhancement Scheme (LES)’, a new hedging instrument, effective from April 24, 2018,” the exchange stated.

The open interest in gold options touched a record high of 2,553 kg on May 24, 2018. At expiry of May 2018 option series contracts, there were 1,254 kg of open positions. The total notional turnover of options during the above period was Rs 16,251 crore (51,777 kg) with a premium turnover of Rs 89 crore. The July 2018 contract witnessed open interest of 642 kg on May 29, 2018. Recently, MCX also launched options trading in crude oil (100 barrel), copper (1 metric tonne) and silver (30 kgs).

Courtesy: Times of India/ Image: businessnews.com.au

Section: Daily news/India

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