BSE becomes India’s first exchange to complete physical delivery in Gold mini ‘Options in Goods’ contract
BSE launched the first ‘options in goods’ contracts on Gold mini and Silver kg based on spot prices from June 1, 2020. These contract are converted in to physical delivery on expiry.
BSE, Asia’s oldest exchange and the world’s fastest exchange with the speed of 6 microseconds executed maiden delivery of Gold mini on ‘Options in Goods’ framework. The delivery was produced by a Delhi based member while the counterparty buyer was from Punjab. The physical delivery was successfully completed at the exchange designated vault in Ahmedabad, Gujarat. Amid this lock-down, BSE successfully managed to complete the entire process seamlessly. BSE has completed one full delivery cycle in Gold mini in ‘options in goods’ contracts.
BSE launched the first ‘options in goods’ contracts on Gold mini and Silver kg based on spot prices from June 1, 2020. These contract are converted in to physical delivery on expiry. The gold mini options trading unit on BSE is 100 grams and base value is Rs. per 10 grams. The maximum order size is 10 KG, delivery units are 100 grams and deliverable at BSE’s designated vaults at Ahmedabad.
BSE has received extremely positive response from all stakeholders for these contracts and is the market leader in the bullion options segment. In about a month since launch, BSE has surpassed the cumulative turnover of all exchanges from bullion “options” contracts. BSE registered the highest turnover of INR 2,442 crores in ‘options in goods’ contracts.
Sameer Patil, Chief Business Officer – BSE, said “Seamless and integrated delivery via the exchange mechanism is extremely beneficial for small and mid-level jewellers and bullion dealers, who can not only hedge their price risk but also avail delivery on expiry of the contract. BSE has emerged as the second largest Exchange in India as far as turnover is concerned in commodities.
Besides, delivery based on the options in goods framework will help further integrate physical and derivatives markets, and bring in more transparency, liquidity and ease of trade for buyers-sellers alike.”
Supporting the Prime Minister’s vision of “Make in India” and “Atmanirbhar Bharat” of a self-reliant nation and commitment of the Government notified standards, BSE also became India’s first exchange to issue guidelines to comply by India Good Delivery Standard on its commodity derivatives platform. The Bureau of Indian standard (BIS) has notified standards – IS 17278 : 2019, sets the standards for purity, form and provenance of gold and silver bars and the way in which they are manufactured, traded and delivered.