Comments
Market regulator Sebi has decided to simplify the exercise mechanism of option contracts on commodity futures.
On expiry, all ‘in the money’ option contracts will be exercised automatically, unless ‘contrary instruction’ has been given by long position holders, said Sebi.
Gold exchanges: SEBI notifies regulations for vault managers
All ‘out of the money’ option contracts shall expire worthless, it added.
SEBI moves SC against SAT’s aggressive remarks
Earlier, all the ‘close to money’ contracts could also be exercised on explicit instructions from long position holders.
However, with the recent changes, there will be no ‘close to money’ series of options. All ‘out of the money’ and ‘at the money’ contracts go worthless.
“All exercised contracts within an option series shall be assigned to short positions in that series in a fair and non-preferential manner,” it said.
The circular will come into effect from new series of commodity derivatives launched on or after February 1, it said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.