In a major push to deepen the commodity derivatives market, regulator Sebi on Wednesday allowed options trading on exchanges while six new products including diamond have been added to the list of commodities on which derivative contracts can be launched and traded.
The new items – diamond, tea, eggs, cocoa, pig iron and brass – have taken the total number of permitted commodities on the notified list to 91. Exchanges, investors and other market participants have been demanding options trading as also new products for a long time and they welcomed the move taken by the government and Sebi, which now regulates the commodities market as well.
So far, only futures contracts are permitted in the commodity derivatives trading space.
The decision to expand the list of notified commodities as also to allow options trading comes nearly a year after merger of erstwhile commodities market regulator FMC with Sebi.
In consultation with Sebi and on suggestions of an expert committee headed by NITI Aayog member Ramesh Chand, the government has notified a consolidated list of 91 commodities, up from 85 so far, on which a derivative contracts can be launched and traded on the exchanges.