NCDEX to launch 'options in goods' contract in 3 farm commodities on Monday

Available in rapeseed/mustard seed, maize and wheat, these contracts allow both, farmers and other participants in the value chain to hedge the price risk before actual sowing season begins

After suspending 'options on futures' contracts, the National Commodity and Derivatives Exchange (NCDEX) has decided to launch 'options on goods' contracts in certain farm commodities on Monday. 

Earlier, options were devolving into futures and settlement was at a fixed price. Now Sebi allows direct settlements in options, under which the farmer will benefir from price volatility.

Available in three commodities, namely, rapeseed/mustard seed, maize and wheat to begin with, these contracts would allow both, farmers and other participants in the value chain such as aggregators, farmers producers organisations (FPOs) and farmers producers companies (FPCs) to hedge the price risk in agricultural commodities