Option trading method to assist in golds sector in consolidation says Jaitley
Finance Minister Arun Jaitley while inaugurating the Gold Commodity Trading in the Chief Commodity Exchange MCX said that this will help in organizing the business of yellow metal. MCX said that after the success of the gold option, he will also ask for permission from the Securities and Exchange Board of India (SEBI) for other commodities such as cotton, raw palm oil, silver, and copper option business. At present, MCX offers futures trading in gold and other commodities, although the industry has been demanding for other products such as options for futures (hedging) to avoid long-term financial loss.
While launching Options Business on the auspicious day of Dhanteras, Jaitley said, this is a significant change in yellow metal business. The option of these features may be hedging all risks. They said that Indians make a lot of purchase of gold. This new product will be extremely successful. The Finance Minister stressed that the government is focusing on organizing a gold business. I believe that the more you organize it, the better it will be for the customers, jewelers, and others in the business. It is in accordance with the business environment that we see in the future.
To strengthen the market, a committee has been constituted in the Policy Commission, to facilitate the integration of spot and derivatives markets. On this occasion, Finance Secretary Ashok Lavasa, Prime Minister’s Economic Advisor Vivek Devroy, MCX Chairman Saurabh Chandra, and MCX Director and Chief Executive Mr. Mrugank Paranjape were present. MCX is the country’s leading commodity exchange and its market share is more than 90%. Large presence of exchange in gold, basic metal, and energy sector.
Jaitley said that SEBI had allowed the commencement of commodity exchanges in the country about 14 years ago. Since then, this option is the first trading of trading. Under the Gold Options contract launched today, one-kilogram gold business will be allowed. When asked about the promotion of this new product, MCX Managing Director and Chief Executive Mr. Mrugank Paranjape said that this is a very low-cost product, although, in the beginning, we will not get any transaction fee until December.