Gold options seemed to have emerged as the most capital-efficient insurance tool for the people, if the current trade volume in bullion derivatives at India’s largest commodity exchange Multi Commodity Exchange (MCX) is any indication.
It is important to note that open interest in gold options has hit an all-time high at the MCX on March 16, 2020. Gold options Volume and Average Daily Turnover hit a one and a half year high at 9490 kg and INR 3916 crore respectively. The spurt in gold options clearly indicates that they have emerged as the most capital-efficient insurance tool in terms of two-way movements-higher margins as well as Mark to market requirements.
As of March 16, 2020, MCX Bullion derivatives recorded a total Bullion turnover of INR 35112.61 crore, the highest level since CTT was levied. While Gold volume of 55.849 MT was valued at INR 22,207 crore, Silver volume of 3504 MT was valued at 12905 crore.
The Gold options turnover was pegged at a one and a half year high level of Rs 3917 crore (9.49 MT). The Gold option OI was pegged at an all time high of 7.478 MT.
