Sebi allows options in one commodity per exchange

Mechanism to allow option-holders to give or take delivery

The Securities and Exchange Board of India (Sebi) has issued a circular allowing commodity exchanges to launch options trading in commodities.  Initially, an exchange can launch options in only one commodity and the position limits for options will be double that of the respective futures contract. 

The settlement of commodity options will be complex as they become futures contracts on settlement. This mechanism has been introduced to allow option-holders to give or take delivery, which is not possible in the current legal framework. 

Sebi has also specified criteria for commodities to be allowed for options trading. The commodity must be among the