MCX-SX gets nod to start currency options

Mumbai: MCX Stock Exchange (MCX-SX), which on July 11 got the regulatory nod to launch full-fledged stock trading platform, on Sunday said it has received the approval from the market regulator Sebi and RBI to launch currency options on its platform.      The Sebi-RBI approval came nearly four years after MCX-SX started its currency derivatives trading platform, the only one that it offers currently. At Julyend, it had a turnover of about Rs 13,500 crore in the currency derivatives segment, and a market share of 43.6%. The two other exchanges which offer currency derivatives trading platform are NSE and United Stock Exchange (USE). Of late, however, USE's turnover has dwindled and there is hardly any trading on this exchange.      This regulatory nod would enable MCX-SX to expand its offerings in the currency derivatives segment (CDS) by introducing currency options in the dollar-Rupee currency pair, a release from the exchange said. This will allow the bourse to offer its members a product which, for a large number currency traders, is a complementary as well as a hedging product for their foreign currency positions.      On Saturday to test the readiness of its currency options platform, it had successful conducted a mock trading session. The bourse will soon announce the date of live trading of currency options, the release said.      Currency options are contracts that grant the buyer of the option the right, without any obligation, to buy or sell the underlying currency at a specified exchange rate during a specified period. For this right, the buyer pays premium to the seller of the option. The seller, on the other hand, has an obligation to deliver the pre-specified currency but has not right.      Last month MCX-SX, after about three years of struggle with the regulator got the approval to offer trading platforms for equities, equity futures, interest rate futures and wholesale debt products.