Sebi to soon permit settling of options in goods, simplify trading

Under the existing system, options devolve into futures first and then futures are settled, making the entire process cumbersome

Commodity market regulator, the Securities and Exchange Board of India, will soon permit settling options on the basis of the underlying commodity. Under the existing system, options devolve into futures first, and then futures are settled. The new rule was announced by Nagendraa Parakh, Executive Director, Sebi, at India Commodities Day, an annual event organised by the Multi Commodities Exchange.

The settlement of commodity options on the derivatives platform will soon be possible with the government having notified the change in the Securities and Contract Regulation Act (SCRA) three weeks ago. This will make a big difference and simplify the