Gold Silver Reports (GSR) – MCX (Multi Commodity Exchange) To Launch Crude Oil Options, Metals Options Dated May 15, 2018 – India is the world’s third-biggest consumer of crude oil. Crude oil futures contracts were most traded on the exchange platform in 2017/18 fiscal year ended on March 31. Two contracts expiring on June 15 and July 17 with lot size of 100 barrel will be launched next week, the exchange said.
This follows its recent launch of options contracts in gold. After that successfully took off, the Securities and Exchange Board of India (Sebi) has allowed MCX, the country’s largest in commodities, to do so in zinc (5 tonnes), silver (30 kg) and copper (1 tonne), apart from crude oil. The launch date of zinc, silver and copper will be declared later but the exchange has announced contract specifications of all new contracts.
About MCX (Multi Commodity Exchange)
The Multi Commodity Exchange of India Limited (MCX), India’s first listed exchange, is a state-of-the-art, commodity derivatives exchange that facilitates online trading, and clearing and settlement of commodity derivatives transactions, thereby providing a platform for risk management. The Exchange, which started operations in November 2003, operates under the regulatory framework of Securities and Exchange Board of India (SEBI).
Mrugank Paranjape, MD & CEO, MCX, said, “We are pleased to announce the launch of options contract in crude oil which reflects the vibrancy and excitement of participants in this market. MCX crude futures has been one of the leading futures contracts on the exchange ever since its launch in 2005.
Significantly, this is India’s first crude oil options contract and on its expiry, the open position shall devolve into the respective underlying futures position. This contract has been designed to meet crude oil stakeholders’ hedging needs so as to protect them from rapid price fluctuations following market uncertainties.
India is the world’s third-largest consumer of crude oil and is heavily dependent on imports for supply. For the SME sector, the crude options contracts would serve as hedging tool which would help them better manage their energy price exposure. Moreover, the crude oil options contract will help traders, manufacturers, and other value chain physical market participants to mitigate crude oil and its derivative products price risk; especially for industries such as petrochemicals, glass manufacturing, textiles, heat treatment, plastic, etc., which are highly exposed to crude oil price volatility.
India is the world’s third-biggest consumer of crude oil. Crude oil futures contracts were most traded on the exchange platform in 2017/18 fiscal year ended on March 31.
