MCX to introduce gold options in September this year

Following the market regulator the Securities and Exchange Board of India's approval for options contract, India's Multi Commodity Exchange (MCX) is set to introduce the nation's first gold options contract in September. The move will even enable the smaller companies in the bullion industry equipping them with an instrument to hedge their risk as well, without the everyday volatility.    

The Multi Commodity Exchange has already begun its mock tests for the launch of the much awaited gold options contract.     

Being the second biggest buyer of Gold on the global front, India imports nearly 800 tonnes gold every year with the metal put use for the purpose of investment, religious donations and gifting.  

The month of June also witnessed the registering of hedge funds as category III Alternative Investment Funds (AIFs) to invest in commodity derivatives as clients, thereby opening the markets to institutional investors for the first time.  
 
Harmony Hedge Fund has started trading on the MCX platform and another 35 hedge funds have approached the exchange for admission, Paranjape said. 

Gold options and entry of hedge funds is expected to rise the exchange's turnover in the coming financial year. MCX's total income dropped 7.1 per cent from the previous year to 872.4 million rupees in the June quarter.