Commodity options in India

#1
We've been getting news about commodity options in Indian markets for several years now. But when are we going to have it? Commodity options seem to be the financial equivalent of the Loch Ness Monster for us traders. Is anyone privy to the latest developments in this regard. Any new information will be deeply appreciated.:cool:
 

fxgood

Well-Known Member
#2
We've been getting news about commodity options in Indian markets for several years now. But when are we going to have it? Commodity options seem to be the financial equivalent of the Loch Ness Monster for us traders. Is anyone privy to the latest developments in this regard. Any new information will be deeply appreciated.:cool:
It wont and it will be never, be happy if not futures commodity trading is alone allowed and not banned again by FMC
 
#3
It wont and it will be never, be happy if not futures commodity trading is alone allowed and not banned again by FMC
But why not? Increasing liquidity would only make the markets more efficient. Moreover, isn't the whole point of commodity trading actually allowing people to hedge? I think the farmers, whom our beloved politicians :p claim to be protecting would benefit more from commodity options than futures. If one is buyer of options, s/he can hedge without the risk of going bankrupt. In case of futures, no matter how much the pundits vouch for them, lack of proper knowledge will spell doom for the lay people. I just can't figure out the policies of our country.

PS In case I'm looking like someone who is trying to look like a saint; let's be clear about it. I'm a selfish, greedy pig. I want commodity options to be allowed in our country because of the amazing risk-reward ratios it offers and of course, LIMITED RISK. I'm too chicken to trade futures.
 

ashu1234

Well-Known Member
#4
But why not? Increasing liquidity would only make the markets more efficient. Moreover, isn't the whole point of commodity trading actually allowing people to hedge? I think the farmers, whom our beloved politicians :p claim to be protecting would benefit more from commodity options than futures. If one is buyer of options, s/he can hedge without the risk of going bankrupt. In case of futures, no matter how much the pundits vouch for them, lack of proper knowledge will spell doom for the lay people. I just can't figure out the policies of our country.

PS In case I'm looking like someone who is trying to look like a saint; let's be clear about it. I'm a selfish, greedy pig. I want commodity options to be allowed in our country because of the amazing risk-reward ratios it offers and of course, LIMITED RISK. I'm too chicken to trade futures.
Hello greedy pit!! :)
Commodities options trading is a area which is still pending in the huge list of proposed bills and after NSEL fiasco credibility of MCX might delay this process again. Your concerns of liquidity and hedging is genuine besides under the table money making opportunity for traders like us, but our infrastructure and knowledge of people trading futures is very limited so leave alone the concept of options for commodities traders(actual farmers).
By the way our NSE itself is not very efficient in regard with options with stocks, very low liquidity and depth so even with all efforts I doubt we can see anything encouraging on MCX commodities, but still new product must be introduced. Also there is no PMS allowed on mcx so there is no institutional coverage in MCX by FIIs and that may be one of the reason that options are absent from commodities.
So imo option still seems to be far cry in the present scenario but I'm also waiting eagerly for that day.
 

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