SEBI has officially introduced commodity option trading in India. Therefore the commodity exchanges such as MCX will be allowed to have a commodity options segment for traders.
However, this is not coming into due effect immediately, as at first, all commodity exchanges will have to submit data of their indices to SEBI for approval. This data includes monthly volatility, rollover yield, monthly return etc.
In their circular SEBI has explained how the commodity option trading will work out. The regulatory body has made it clear that each option expiry will have a minimum of three strikes — one each for In the Money (ITM), Out of the Money (OTM), and At the Money (ATM).
SEBI has also made it clear that the trading hours for options on these commodity exchanges will be similar to the usual trading hours. However, the bigger question is, how are traders going to react to this new opportunity.
It is quite clear that equity market in itself is a challenge for beginner level traders and investors in India, then how will they ease into this new opportunity of trading in options contract in commodities, such as crude oil, bullion, metal etc.
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Some of the questions that this video tries to answer are: 1. Why SEBI has introduced options in commodity derivatives? 2. How should traders approach commodity options trading? 3. Is Options trading in the commodity derivatives segment good or profitable? 4. What do all traders/investors ought to know before investing in commodity options trading?
Watch the full video and you shall have all the answers to the above questions.
Chapters: 00:00 Options - The Coolest Trading Segment 01:05 Reasons Behind Introducing Options In Commodity 01:40 Is It For Beginners? 02:00 Things All Investors And Traders Should Know 02:23 The SEBI Approval Process For Commodity Exchanges 03:21 Analysis For Commodity Options Trading 03:45 Difference Between Equity Trading And Commodity Trading 04:25 FPIs Request Rejected 04:50 Why Commodity Segment Is Considered Boring In India? 05:07 SEBI Guidelines For Commodity Exchanges (ITM , ATM , OTM) 05:40 Conclusion
