Mumbai: The first settlement of gold options took place on commodity derivatives bourse MCX on November 28, with 47 lots (1 lot is 1 kilo) being converted into underlying gold futures contracts, market sources told ET. The only other product offered by extant exchanges like MCX, NCDEX and ICEX is commodity futures contracts.The expiry of options happens two days prior to the tender period beginning in gold futures contracts, from which the gold options derive their value. Around 47 lots (47 kg ) of gold options were exercised out of a total 138 lots which ended in profit and were eligible for being converted into underlying gold futures contracts, market sources said.At expiry, traders’ outstanding positions – open interest – were 858 lots, according to exchange data. Of these 138 lots ended in- or atthe- money – option’s parlance for a trader making a profit on holding the options. The options expire two days before the tender period of the futures begins.Tender period refers to traders keeping their positions open until they are marked for delivery.

Source: Economic Times November 30, 2017 05:26 UTC