MCX, the country's largest commodity exchange, for the first time ever will launch options trading on spot gold mini (100 grams) and silver mini (5 kg bar).

Both the options contract are expected to be launched in couple of weeks as investors are showing good interest, said sources close to the development.

The gold mini options will have monthly expiry while that of silver mini will be once in two-months.

The expiry of both the new mini option contracts can be used to give and take delivery on futures contract. The exchange will pool prices from bullion dealers and traders for the compulsory delivery option contract.

Gold prices have rallied sharply this year due to its safe haven status amid economic turbulence triggered by Covid pandemic. Subsequently, gold futures contract volumes on MCX have increased sharply and turned very volatile.

Gold mini futures contract had registered a turnover of Rs 2.58 lakh crore in the financial year ended March, 2020. The exchange has handled delivery of 52 tonnes in gold mini futures contract.

Incidentally, both BSE and NSE last month launched gold mini option on spot prices and attracted învestment from jewellers.

Ajay Kumar, Director, Kedia Commodities said the premium on 1 kg gold futures contract are very high and the lot size of gold option on 1 kg gold futures is very big with too many charges posing artificial entry barriers for small traders.

The new options being planned on gold and silver mini will be light on the pockets of investors and attract small jewellers and traders. This will also drive volumes on MCX, he added

 

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