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|