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MCX Launched India’s First Copper Options Contracts Details, Importance
MCX Launched India’s First Copper Options Contracts- Details, Importance, About
India’s largest commodities exchange platform, Multi Commodity Exchange of India Limited (MCX) has launched India’s first copper options contracts.
The MCX option contract will cater physical market participant’s additional instrument to safeguard their price risk.
The MCX copper option contracts were launched with a lot size of 1 tonne in three contracts expiring in June, August and November 2018.
Options are an instrument that gives buyer right to buy or sell an underlined at present price at a future date. They are of two types: puts (right to sell) and calls (right to buy).
Importance
The MCX copper option contracts will provide an optimal tool for stakeholders to protect and mitigate price risk in copper. It gives copper industry greater flexibility with alternative opportunities to take on price risk.
The MCX copper option contracts will also help corporates to do better budgeting exercise as premiums will be known. This will help us to procure material at prices that have been envisaged especially in situations like tender or open orders.
About Multi Commodity Exchange (MCX)
MCX is India’s first listed commodity futures exchange that facilitates online trading, and clearing and settlement of commodity futures transactions, thereby providing the platform for risk management.
MCX was launched in November 2003 and operates within the regulatory framework of Forward Contracts Regulation Act, 1952 (FCRA, 1952) under SEBI. MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others).
Globally, MCX ranks no. 1 in silver and no. 2 in natural gas, no. 3 in crude oil and gold in futures trading.
