Page 47 - Bullion World Volume 02 Issue 08 August 2022

Bullion World | Volume 2 | Issue 08 | August 2022

(both risk management tools) 30kg Options contract with Silver by hedging in smaller denomination
gives leverage of futures with (30 Kg) Futures as underlying was Options contract and take the
safety of Options. Hence, profit launched on May 24, 2018. Silver above listed advantages. Further,
is possible from change in Options contract registered highest Gold Mini and Silver Mini Options
future prices but losses are turnover of Rs. 740 crore on August contract has less premium making
limited via Options 26, 2020, highest volume of 113 MT it affordable and feasible to the
• Participants can devise on June 23, 2022 and highest open small retailers and investors.
numerous effective hedging interest of 172 MT on August 17,
strategies 2020. To make the Exchange’s bullion
• Better Cash-flow management derivative contracts more relevant
because of one-time payment After receiving overwhelming to the physical market players and
of Premium response for Gold 1kg and Silver in line with the broader national
• Low Transaction Cost, low 30kg options contract we received objective of ‘Atmanirbhar Bharat’,
capital intensive requests from jewelers to introduce MCX empaneled domestic refiners
• Flexible pricing via Put options: smaller denomination options as per “MCX Good Delivery Norms
Jewelers may offer the lower that would enable them to hedge for BIS-Standard Gold/Silver”
of current price / or of a future via options, as the advantages of effective from March 6, 2021 and
date, for example - Akshay options are multifold, and as listed saw a successful delivery of 1,262
Tritiya as Festive Scheme below: kg valued at 622 crore till July 2022
contract.
Gold Options (1 kg) contract Hence, MCX designed the Silver
registered it’s highest turnover (post Mini Options and Gold Mini Options This initiative of empaneling
LES) of Rs.4638 crore on May 24, contract and launched the same on domestic refiners by MCX may
2022, highest volume (post LES) July 19, 2021 and April 25, 2022 serve the nation by reducing
of 9.49 MT on March 16, 2020 and respectively. Gold Mini and Silver disparities, encouraging quality
highest open interest of 8.75 MT Mini Options contract caters to gold recycling and reducing import
on March 20, 2020. Similarly, Silver small and medium jewelers who dependence.
can easily mitigate their price risk

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