Story: DGCX to launch Indian Rupee options contract
Objective: to build on growth of Indian Rupee futures trading
In a press release Monday, DGCX announced plans to expand its Indian Rupee (INR) product offering with the launch of an INR Options Contract on September 26, 2011. The contract will be the only exchange?traded INR Options product offered to markets outsideIndia.
Eric Hasham, CEO of DGCX said: ?The provision of an Indian Rupee Options contract will enable us to build on the exceptional volume growth achieved by our Indian Rupee futures contract over the last 12 months and meet member demand to further strengthen our INR offering”.
?DGCX has been working closely with its members and market participants to develop this additional risk management tool. The new options contract is the result of this interaction and feedback process.? ?Our unique new Indian Rupee Options contracts will provide our members with more flexibility to hedge risk and trade in the Indian Rupee in a transparent, regulated and cleared trading environment,? the DGCX CEO further said.
Each DGCX Indian Rupee Options contract represents 2 million Rupees. Prices will be quoted in US Cents per 100 Indian Rupees, with a minimum premium fluctuation of 0.000001 US Dollars per Rupee ($2 per contract). At launch, the October 2011 expiry month will be available to trade.
This move follows the success of the Indian rupee futures trading.
??Trading in the Indian rupee is leaving India, as other offshore markets like the NDF markets are dominating. Domestic currency market should be aided to grow and protectionist measures should not be taken,? said Ajay Shah, economist at the Indira Gandhi Institute of Developmental Research. Apart from India, the Nifty index is also listed in Singapore. The rupee-dollar futures contracts generate average daily trades of around Rs 1,500 crore on DGCX.
Volumes are hitting new records every month and the rupee-dollar contracts have become the fastest growing derivative instruments on DGCX with a rise of over 16 times in 2011, compared to the last year.
DGCX will hold workshops on the INR Options contract prior to its launch on 26 September. The dates of these workshops will be announced in due course.
With futures contracts on seven currencies, including the six most traded currencies in the world, the Dubai Gold & Commodities Exchange (DGCX) offers many foreign exchange (FX) trading opportunities and benefits for both institutional and private investors. It is currently the only regulated futures marketplace in the Middle Eastwhere participants can trade and hedge their FX risk within a transparent, electronic, exchange and clearing environment.
The DGCX Indian Rupee / US Dollar futures contract is the only contract of its kind available for trading on an exchange outside of India and thus to international participants. The contract is cash settled based on the US Dollar reference rate published by the Reserve Bank ofIndiain Mumbai, providing transparency and alignment with the domestic rate in India.
This new Indian Rupee options contract will stand to expand the trading portfolio of DGCX.
Sources: dcgx, newzglobe