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Options and the commodity market
Published in Economic and Political Weekly
2017
Volume: 52
   
Pages: 29 - 32
Abstract

The necessity of options in commodity markets in India has been discussed for a long time. It aids in improving market liquidity, information transmission, and acts as a risk transfer mechanism. However, given the nature of farm and non-farm commodity markets, fi nancial investors may be attracted more towards non-farm commodity options. This would eventually lead to illiquidity in farm commodities. The regulator and exchanges should therefore work in unison to launch options in a prudent manner, especially in farm commodities, to benefi t the concerned stakeholders, including producer groups and processors.

About the journal
JournalEconomic and Political Weekly
PublisherEconomic and Political Weekly
ISSN0012-9976
Open AccessNo