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Commodity Options in India – The Way Forward

7 Pages Posted: 13 Jun 2017  

Kiran Karande

Indira Gandhi Institute of Development Research (IGIDR) - Economics

Date Written: April 07, 2017

Abstract

Financial Derivatives comprising mainly of futures and options have been around in India since a long time. Though both equity and currency options have been in existence in India for quite some time now, it is only recently that commodity options have been sought to be introduced in our country. This paper attempts to study the rationale for such a move at this point in time and the way forward. It is hoped that this paper will go a long way in adding to the current debate on whether this is indeed the correct stage in the Indian financial system to commence commodity options. Second and more importantly, we study the critical issue of determining the underlying for commodity options. Specifically, we examine how commodity options should devolve – whether on futures, spot (physical commodity) or be settled in cash and offer a few suggestions.

Keywords: Commodity Options, Regulation, India

JEL Classification: G13, G18

Suggested Citation

Karande, Kiran, Commodity Options in India – The Way Forward (April 07, 2017). Available at SSRN: https://ssrn.com/abstract=2984494

Kiran Karande (Contact Author)

Indira Gandhi Institute of Development Research (IGIDR) - Economics ( email )

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