Ways2Capital Reviews : MCX Strengthens Its Precious Metals Suite With The Launch Of Silver Options

India’s first options contract on silver futures was launched on Multi Commodity Exchange of India Ltd. (MCX). At the end of first trading session i.e on Thursday at 05:00pm, the contract registered a total volume of 278 lots with value of Rs34.36cr.

Options contracts expiring in the months of June’18, August ‘18, November ‘18, February ‘19 and April ‘19 have been currently offered for trading with corresponding silver (30 kilograms) futures as underlying. Each option expiry has minimum twenty-one strikes available; viz. ten each for ‘In the Money’ (ITM), ten ‘out of the money’ (OTM) and one ‘near-the-money’ with strike price intervals of Rs250. The European-styled silver options with a tick size of Rs0.50 are physically settled, which means the exercised positions of the options contract post expiry shall devolve into the respective underlying future positions.

Mrugank Paranjape, MD & CEO, MCX said, “It is highly encouraging to see that the silver options contract recorded an impressive debut with strong interest from the bullion industry. The unique properties of Silver, which is regarded as Gold’s more volatile cousin, makes it attractive as both precious and industrial metal. And, Indian bullion industry and consumers are exposed to its price volatility, largely driven by global fundamentals. The performance in silver option trading clearly exhibits the market’s appetite for the new exchange-traded offering to complement the existing bullion suite, which will provide the market participants with versatility and choice in tailoring their risk management and trading strategies.”
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About Bhoomi Desai