MCX launches Gold options trade on Dhanteras

MCX launches Gold options trade on Dhanteras

This is the first product for options trading that the regulator Sebi has allowed after 14 years of commencement of commodity exchanges in the country, he added.

Silver also recorded a fall of Rs 400 to Rs 41,000 per kg even as retailers made token buying in coins.

In the national capital, gold of 99.9 and 99.5 per cent purity fell by Rs 140 each to Rs 30,710 and Rs 30,560 per ten gram, respectively.

Globally, gold fell 0.45 per cent to trade at United States dollars 1,288.70 an ounce in Singapore, while silver shed 0.64 per cent to USD 17.09 an ounce.

MCX has now launched a Gold Option contract, keeping Gold (1 Kg) futures as the underlying asset, with expiry on November 28, 2017 and January 29, 2018.

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Meanwhile, gold prices have gone up marginally by Rs 120, or 0.39 per cent, while silver has dropped by Rs 1,700, or nearly 4 per cent from last year's Dhanteras.

Finance minister Arun Jaitley on Tuesday said options trading in gold was one of the steps towards formalising the trade in the yellow metal, launching the product on the commodities exchange MCX. The more it formalizes itself, the better it is for the consumers, jewellers, and for those trading in this.

Till now, only futures trading in gold and other commodities was available on the MCX and the launch augments the number of products available for traders to hedge their risks.

The "options give buyers the right to buy or sell the underlying asset but no obligation, at a specified price at the expiry". If an investor sees gold prices rising, then he can buy into a call option and take a position in a put option if he expects a bearish trend. The European-styled gold options will be hedger-friendly and physically settled, MCX said in a statement.

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