Multi commodities exchange of Republic of India Ltd (MCXNSE two.76 %) can launch options mercantilism with petroleum (100 barrels) futures because the underlying on May 15, 2018. The exchange received SEBI’s approval for the launch last week. The petroleum choice contracts on the exchange platform can complement its common petroleum futures contracts and enlarge the petroleum product offerings on the exchange.
Two petroleum choices contracts expiring on Gregorian june 15, 2018 and July 17, 2018 are accessible for mercantilism on the day of the launch. The heap size of the choice contract is same because the underlying petroleum derivative instrument (100 barrels). considerably, this is often India’s 1st petroleum choices contract and on its ending, the open position shall devolve into the various underlying futures position. This contract has been designed to satisfy petroleum stakeholders’ hedging desires thus on shield them from fast value fluctuations following market uncertainties.
India is that the world's third largest shopper of petroleum and is heavily addicted to imports for provide. For the SME sector the crude option contracts would function hedging tool which might facilitate them higher manage their energy value exposure. Moreover, the petroleum choices contract can facilitate the traders, makers and different price chain physical market participants to mitigate the petroleum and its spinoff merchandise value risk; particularly for industries like petrochemicals, glass producing, textiles, heat treatment, plastic, etc., that square measure extremely exposed to petroleum value volatility.
Speaking on the event, Mrugank Paranjape, MD & CEO, MCX said, "We square measure happy to announce the launch of choices consent petroleum that reflects the timber and excitement of participants during this market. MCX crude futures has been one in all the leading futures contracts on the exchange ever since its launch in 2005. the option contract can give the physical market participants a wonderful product to trade and meet their hedging needs aboard the present futures contracts. The contract has all ingredients to become one in all the foremost favourable contracts on the exchange in times to come back.”