Option Trading in MCX and NCDEX
We have already said the importance of commodity options many times. Now SEBI has approved trading in commodity options. It is bit late but at the right time commodity option trading had come in India.
The traders who have more experience in option trading trades in NSE option trading. In that only a certain percentage of traders earn profit at the starting time. We are not saying that the traders trading in MCX and NCDEX could not make a profit. But at the initial stage they will not able to make profit. Initially NSE option player ready to eat commodity trader’s capitals. Because lot of tricks in option trading, some NSE traders know about the option trading trick.
So the commodity traders who do not know about the option trading should learn and then need to trade in commodity option trading. The commodity option trading is going to commence in India in 2 or 3 months. More information on commodity option trading will be posted once it starts.
The expiry settlement in commodity option trading looks to be incomplete. I.e. the expiry settlement is made on the average of spot price and not on future price in NSE. In case of commodity there is no live commodity spot price in India. So the expiry settlement should be made based on the future price or the spot price closing at a particular time. According to us the expiry settlement in commodity option settlement seems to be tricky.