How Introduction of Options will affect Commodity Markets

Finally, the wait is over for Commodities Market as MCX is all set to launch Options in Gold in the month of October. This will be a game changer for the commodities market as it will result in the participation of new players in the market as it carries low risk with it as compares to Futures.

Let’s have a basic understanding of Option First.

An option is a financial derivative that represents a contract sold by one party (the option writer) to another party (the option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date).

Main Advantage of Option over Future

In future trading, the trader is exposed to big losses whichever side of the contract you are on. If you have the obligation to buy an underlying security at a fixed price and the security moves significantly above that fixed price, then you could lose substantial sums. Conversely, if you have the obligation to sell an underlying security at a fixed price and the security moves significantly below that fixed price then you could experience sizable losses.

If you are writing options contracts and taking on an obligation to either buy or sell an underlying security at a fixed price, then you are exposed to similar risks. However, you can trade options purely by buying contracts and not writing them. This means that you can limit your potential losses on each and every trade you make to the amount of money you invest in buying specific contracts. Whenever you buy options contracts, the worst case scenario is that they expire worthless and you lose your initial investment.

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Market Live: Nifty Ranged Ahead of F&O Expiry

Market Live: Nifty Ranged Ahead of F&O Expiry, Sensex Higher; Rupee Turns Strong

Work on GE’s locomotive factory on track: US firm General Electric’s plan to build a diesel locomotive factory in eastern India is on track, the railways minister said on Thursday, seeking to allay concerns that the state-controlled network was making changes to the contract. Piyush Goyal’s comments came after GE said this week that the Indian government’s ‘Make in India’ initiative would be undermined if the railway ministry went ahead with changes to a joint venture with the conglomerate.

GE had won a USD 2.6 billion contract in 2015 to supply Indian Railways with 1,000 diesel locomotives. But the railways ministry said last week it wouldn’t need diesel after all – hoping to save on fuel and maintenance costs – and suggested GE might want to make electric engines instead.

Market Check: The volatility increased in last hour of trade, especially ahead of expiry of derivative contracts. The Nifty continued to be in a range of 50-60 points, up 19 points at 9,755.

The 30-share BSE Sensex rose 101.02 points to 31,260.83 while the broader markets gained nearly a percent as about 1,426 shares advanced against 923 declining shares on the BSE.

The rupee rebounded sharply, trading with 13 paise gains at 65.57 against the US dollar, compared with previous close of 65.72. It touched an intraday low of 65.89 before showing a recovery.

F&O cues: Nifty 8200 Put adds 4.6 lakh shares in Open Interest

F&O cues:

Nifty 8300 Call added 1.9 lakh shares in Open Interest on June 6

Nifty 8400 Call added 1.6 lakh shares in Open Interest

Nifty 8000 Put shed 1 lakh shares in Open Interest

Nifty 8200 Put added 4.6 lakh shares in Open Interest

FIIs in F&O on June 6 (Provisional data from NSE)

FII net buy Rs 517 crore in Index Futures

FII net sell Rs 96 crore in Index Options

FII net sell Rs 637 crore in Stock Futures

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F&O cues: Nifty 8100 Call adds 7.9 lakh shares in Open Interest

F&O cues:

Nifty 8100 Call added 7.9 lakh shares in Open Interest (OI) on May 26

Nifty 8300 Call added 10 lakh shares in OI

Nifty 8400 Call added 8.3 lakh shares in OI

Nifty 7900 Put added 16.5 lakh shares in OI

Nifty 8000 Put added 10.6 lakh shares in OI

FIIs in F&O on May 26 (Provisional data from NSE)

FII net buy Rs 2348 crore in Index Futures

FII net buy Rs 2146 crore in Index Options

FII net buy Rs 1215 crore in Stock Futures

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Give Missed Call at +91 830-630-830-8

F&O cues: Nifty 7900 Call sheds 34.5 Lk shares in Open Interest

F&O cues:

Nifty 7800 Call shed 38 lakh shares in Open Interest on May 25

Nifty 7900 Call shed 34.5 lakh shares in Open Interest

Nifty 7950 Call added 18.7 lakh shares in Open Interest

Nifty 7850 Put added 27.4 lakh shares in Open Interest

Nifty 7900 Put added 30 lakh shares in Open Interest

FIIs in F&O on May 25 (Provisional data from NSE)

FII net buy Rs 3343 crore in Index Futures

FII net buy Rs 2392 crore in Index Options

FII net buy Rs 168 crore in Stock Futures

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F&O cues: Nifty 8000 Call sheds 7.2 lakh shares in Open Interest

F&O cues

Nifty 7900 Call shed 4.5 lakh shares in Open Interest on May 24

Nifty 8000 Call shed 7.2 lakh shares in Open Interest

Nifty 7600 Put added 3.2 lakh shares in Open Interest

Nifty 7700 Put added 5.8 lakh shares in Open Interest

FIIs in F&O on May 24 (Provisional data from NSE)

FII net sell Rs 373 crore in Index Futures

FII net sell Rs 751 crore in Index Options

FII net buy Rs 351 crore in Stock Futures

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Give Missed Call at +91 98933-58233

F&O cues: Nifty 8000 Call adds 19.6 lakh shares in Open Interest

F&O cues:

Nifty 7900 Call added 23 lakh shares in Open Interest on May 19

Nifty 8000 Call added 19.6 lakh shares in Open Interest

Nifty 7800 Put shed 13.3 lakh shares in Open Interest

Nifty 7900 Put shed 5.4 lakh shares in Open Interest

FIIs in F&O on May 19 (Provisional data from NSE)

FII net sell Rs 293 crore in Index Futures

FII net sell Rs 1240 crore in Index Options

FII net buy Rs 427 crore in Stock Futures

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F&O cues: Nifty 7700 Put adds 7.3 lakh shares in Open Interest

F&O cues:

Nifty 7800 Call added 7.8 lakh shares in Open Interest on May 18

Nifty 7900 Call shed 3.5 lakh shares in Open Interest

Nifty 7700 Put added 7.3 lakh shares in Open Interest

Nifty 7900 Put shed 8.5 lakh shares in Open Interest

FIIs in F&O on May 18 (Provisional data from NSE)

FII net sell Rs 1282 crore in Index Futures

FII net sell Rs 112 crore in Index Options

FII net buy Rs 285 crore in Stock Futures

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Give Missed Call at +91 98933-58233

F&O cues: Nifty 7900 Put adds 15.2 lakh shares in Open Interest

F&O cues:

Nifty 7800 Call shed 4.8 lakh shares in Open Interest on May 17

Nifty 8000 Call shed 3.7 lakh shares in Open Interest

Nifty 7800 Put added 6.8 lakh shares in Open Interest

Nifty 7900 Put added 15.2 lakh shares in Open Interest

FIIs in F&O on May 17 (Provisional data from NSE)

FII net buy Rs 296 crore in Index Futures

FII net buy Rs 647 crore in Index Options

FII net buy Rs 403 crore in Stock Futures

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Give Missed Call at +91 98933-58233

F&O cues: Nifty 7900 Put adds 4.3 lakh shares in Open Interest

F&O cues:

Nifty 7800 Call shed 4 lakh shares in Open Interest on May 16

Nifty 8000 Call shed 2.6 lakh shares in Open Interest

Nifty 7700 Put added 3.5 lakh shares in Open Interest

Nifty 7900 Put added 4.3 lakh shares in Open Interest

FIIs in F&O on May 16 (Provisional data from NSE)

FII net sell Rs 193 crore in Index Futures

FII net buy Rs 1275 crore in Index Options

FII net sell Rs 405 crore in Stock Futures

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Give Missed Call at +91 98933-58233

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