MCX to launch options trading in gold on Dhanteras; stock down

NEW DELHI: MCX on Tuesday said it would launch trading in gold options on the day of auspicious Dhanteras, October 17. The commodity exchange has been engaged with the members for a few months now to prepare for the launch of options.

ET Now had in September suggested options launch between October 5 and October 15, quoting MD and CEO at MCX, Mrugank Paranjape.

Options trading is seen helping hedgers minimise price risk and deepen the market by encouraging institutional participation.

In gold options, the options that end out-of the -money at expiry will be squared off at a loss. On the other hand, holders of options ending in-the -money will have a choice to either square off at a profit or to convert into a futures position. Most, it is believed, will prefer to square off rather than exercise to convert to a futures position, which entails higher margin and risk requirements, ET reported.

At 11.36 am, shares of MCX, which is listed on stock exchanges, were trading 0.73 per cent lower at Rs 1,066 on BSE.

Meanwhile peer, BSE will extend the trading session for gold exchange traded funds ( ETF) and Sovereign Gold Bond on Dhanteras, a festival celebrated two days before Diwali.