The Multi Commodity Exchange of India on Monday announced the launch of options contracts on the MCX iCOMDEX Bullion Index (MCX BULLDEX) amid investor rush for precious metals like gold and silver. The options contracts became effective today, October 27.
MCX BULLDEX constitutes the highly popular and liquid MCX Gold and Silver futures contracts. These contracts covering both gold and silver offer a balanced exposure in the bullion segment to market participants – both investors and institutions alike.
The options contracts on this index will empower market participants with a versatile risk management tool, combining the benefits of diversified underlying assets with the flexibility of options trading, MCX said in a filing.
Options on MCX BULLDEX align with MCX’s commitment to deepen India’s commodity markets through product innovation, enhanced transparency, and investor-friendly offerings, it added.
These options are also considered ideal for effective sectoral price risk management.
Speaking on the development, Praveena Rai, MD & CEO, MCX, said: “The introduction of Options on MCX BULLDEX, marks a pivotal development in India’s commodities ecosystem. This is a unique and innovative product which will enhance the range of products in the commodity derivatives ecosystem and assist market participants to take exposure to a basket of commodities in the bullion segment.”
Gold and silver prices have rallied significantly so far this year, with the yellow metal gaining over 50% and the white metal rising almost 70%.
MCX BULLDEX Options Contract Details
Here are some key details about the MCX BULLDEX options contracts:
Contract Availability: The monthly index contracts will have a maximum of a three-month trading cycle — (a) the near month, (b) mid-month and (c) far month. On expiry of the near-month contract, the new contracts are introduced for a three-month duration.
Contract Start Day: A new monthly contract is introduced on the trading day following the expiry of the nearest monthly contract.
Trading Period: Investors can trade in contracts Mondays through Fridays from 9 am to 11.30/11.55 pm, depending upon the US daylight saving time period.
Derivative Value: The derivative contract is valued at not less than ₹5 lakh at the time of its introduction in the market, MCX said.
Number of strikes:: The 35 in-the-money, 35 out-of-the-money and 1 near-the-money (71 CE and 71 PE)
Expiry day: Monthly options contracts expire one business day prior to the start of the rollover period in the underlying constituent/(s) index.
MCX shares gain on launch of contracts
Amid the launch of options for the MCX iCOMDEX Bullion Index, the MCX share price jumped 2.5% to the day’s peak of ₹9244.90 on the BSE in Monday’s trading session.
The multibagger stock is up 52% in six months, while it has gained 46% on a year-to-date basis.
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