SEBI to introduce Options Trading in the Commodity Derivatives market in India.
In an effort to make overall development of the commodity derivatives market in India, the Securities and Exchange Board of India(SEBI) has decided to introduce options trading on commodity exchanges.
The move is aimed at attracting broad base participation, enhancing liquidity, facilitating hedging and bringing in more depth to the commodity derivatives market.
In his Union Budget Speech for the year 2016-17, the Hon’ble Finance Minister announced that “new derivative products will be developed by SEBI in the Commodity Derivatives market”.
In a Circular issued in this regard, the SEBI said that “The Commodity derivatives exchanges willing to start trading in options contracts shall take prior approval of SEBI for which detailed guidelines will be issued in due course.”
At present the only instrument available in the Commodity Derivatives market is futures on individual commodities. Introduction of new commodity derivatives products has been the long pending demand of the exchanges, investors and market participants.