Options contracts are instruments that give the holder of the instrument the right, not the obligation, to buy or sell the underlying asset at a predetermined price. There are two main types of options – a “call” option or a “put” option:
DGCX offers a standardised US Dollar denominated Option contract on Gold Futures and Option contract on Indian Rupee Futures as of September 26, 2011.
A call option gives the owner the right to buy the underlying asset at a given price (also called “Strike price”), whereas the seller has only the obligation and not the right (for example; you would buy a call option in case you believe the underlying futures price will move higher. Let us say that you expect gold futures to move higher, you will want to buy a gold call option).
A put option gives the owner the right to sell the underlying asset at a given price and the seller has the obligation to buy (for example; you would buy a put option if you believe the underlying futures price will move lower. For example, if you expect gold futures to move lower, you will want to buy a gold put option).
|Contract Size||One DGCX INR Futures contract|
|Price Quotation||US Dollars in Cents per 100 Indian Rupees|
|Tick Size||US$ 0.000001 per INR or US$ 2 per tick|
|Maximum Daily Price Fluctuation||No Daily Limit#|
|Delivery Months||The nearest two (2) Contract Months are available at all times
The options are European-style and can be exercised at expiry
|Last Trading Day||Last Trading Day for INR options shall be two (2) Business Days prior to the Last Day of Trading of the month. (Same as the INR Futures)
If the Last Day of Trading falls on an Exchange holiday, Last Trading Day shall occur on the previous business day.
If the Last Day of Trading for underlying INR Futures is amended for any reason, the Last Trading Day for INR Options will be amended accordingly.
|New Contract Listing||Business day immediately following the Last Trading Day.|
|Exercise of Options||On the last trading day, all in-the-money options are exercised automatically against Daily Settlement Price.
All out-of-the-money options automatically expire worthless and will not be exercised.
|Strike Prices||For each INR Option series, there shall be an INR option chain with a strike interval of INR 0.25 converted into US cents equivalent in 2 decimal points.
At the outset, INR option chain will initially be available at an interval of INR 5 from the at the money strike converted into US cents equivalent in 2 decimal points.
At all times there will be a minimum of 3 in-the-money, 1 at-the-money and 3 out-of-money options available.
Once the settlement price reaches close to the lower end or higher end of the INR option chain, additional option strikes will be introduced for a minimum INR 5.00 with an interval of INR 0.25 converted into US cents equivalent in 2 decimal points.
|Position Limit||To be determined by the exchange|
|Margin Requirement||Buyer pays full premium, while the seller is margined on the SPAN basis|
|Trading Hours||07:00 – 23:30 Hours Dubai time (GMT+4)|
|Trading Days||Monday through to Friday|