Peak margin impact: Costly futures turning Comex buyers to options by admin- Thursday, September 16th, 2021 07:54:33 AM
Average every day turnover in options buying and selling in MCX has almost tripled to ₹5,502 crore on this zone
Investors are fast shifting from commodity futures to options with trading inside the former becoming a high priced affair after levy of prematurely top margin of a hundred consistent with cent for their trades.
The common each day turnover in options buying and selling on MCX has almost tripled to ₹five,502 crore in this sector as on September 14 in opposition to ₹1,900 crore logged inside the June region.
On the other hand, futures volumes have fallen 8 in step with cent to ₹28,021 crore from ₹30,517 crore registered within the identical period because of the high price of buying and selling.
Ajay Kumar, Director, Kedia Commodity, stated the height margin on alternatives is plenty decrease as it’s far calculated best on the top class even as in futures it is levied at the cost of the commodity.
Moreover, the trading value and the commodity transaction tax on options are a good deal less as compared to futures, he brought.
On NCDEX, too, the average daily turnover in option more than tripled to ₹1.06 crore from ₹32 lakh recorded in June zone while futures volumes have been down 5 consistent with cent to ₹2,054 crore from ₹2,167 crore. NCDEX has options trading in 5 agriculture commodities.
PS Reddy, Managing Director, MCX, stated the commodity options are rapid gaining floor with the alternate recording the very best turnover of ₹12,509 crore on September nine.
The currently-launched Silver Mini (5 KG) agreement also obtained top assist from the marketplace with none liquidity enhancement scheme, he said.
More alternatives on metals, power and agricultural commodities may be launched soon, after receiving SEBI approval, he delivered. “We have additionally represented to SEBI to inform the essential regulatory framework for commodity index options,” said Reddy.
Options buying and selling
The options agreement, that is an effective hazard management tool, acts as a price-effective manner of charge coverage for hedgers. MCX has alternatives buying and selling in Gold KG, Gold Mini, Silver, Silver Mini (5 KG), Crude Oil, Copper and Zinc.
Crude oil alternatives registered the best ever turnover of ₹eleven,445 crore while the same on futures settlement became ₹four,823 crore on September 9. Following the coolest traction in crude agreement trading, MCX plans to launch futures on iCOMDEX Energy Index on October 7.
Derivatives are complicated and normally taken into consideration riskier for retail buyers as buying and selling here is done by awaiting the rate of the safety. Since expecting the rate is tough, the danger involved is better.
Also, typically tons of the derivative buying and selling is achieved the use of leverage that adds in addition hazard. SEBI currently clipped leverage in the coins marketplace with the aid of levying height margin.