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BSE to launch agri commodity trading

BSE is set to launch commodity derivative trading on October 1. The exchange plans to start with non-agricultural commodities such as precious metals and energy. BSE has signed an agreement with New Delhi-based warehouse service provider Sohan Lal Commodity Management (SLCM) for storage and assaying services. SLCM currently manages around 2,800 warehouses, with a total capacity of 650 million tonnes, across the country. SLCM will also provide its proprietary scientific storage and monitoring service, Agri Reach, at various designated centres of BSE.

Crude-oil options from MCX

The Multi Commodity Exchange (MCX) will be launching the country’s first crude-oil options contract on May 15, helping physical market participants to hedge risks from oil-price fluctuations. The options contract will have crude-oil futures as the underlying. To start with, two contracts, of expiry July 15 and 17, 2018, will be available for trading. The upper and lower price band will be determined based on the Black76 option-pricing model. The position limits for the options would be separate from the position limits applicable on futures contracts. For individual clients: 9,60,000 barrels or 5 per cent of the open position, whichever is higher for all crude-oil options contracts combined together. For all clients: 96,00,000 barrels or 20 per cent of the market wide-open position, whichever is higher for all crude-oil options contracts combined together.

On expiry of the options contract, the open position shall devolve into underlying futures position as follows: long-call position shall devolve into long position in the underlying futures contract; long-put position shall devolve into short position in the underlying futures contract; short-call position shall devolve into short position in the underlying futures contract; short-put position shall devolve into long position in the underlying futures contract.

NCDEX to set up clearing corporation

The National Commodity and Derivatives Exchange of India (NCDEX) has received in-principle approval from commodity market regulator SEBI to set up a standalone clearing corporation, to be called National Commodity Clearing Ltd (NCCL). NCDEX plans to invest ₹100 crore in the clearing corporation. Compiled by BL Research Bureau

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