The latest approval will pave way for the exchange to enhance its offerings in the Currency Derivatives Segment (CDS) by introducing Currency Options in the Dollar-Indian Rupee (USD-INR) currency pair.
The stock exchange organized a successful mock trading session on 4 August 2012 and will soon announce the date of live trading of Currency Options, MCX-SX said.
According to the stock exchange, currency options are contracts that grant the buyer of the option the right, but not the 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.
Currency futures contracts including US Dollar-Indian Rupee, Euro-Indian Rupee, Japanese Yen-Indian Rupee and British Pound-Indian Rupee pairs are already being traded on MCX-SX.
MCX-SX captures a market share of 43.57% in the last fiscal and currently offers trading in only currency futures.
The exchange claims that the MCX-SX currency futures platform is supported by a membership base of 751 members and witnesses nationwide participation from 714 towns and cities across India.
MCX-SX md and CEO Joseph Massey said, "Introduction of this product completes the spectrum of hedging instruments available on the MCX-SX currency segment and adds further efficiency to risk mitigation mechanism in USD-INR."
The Exchange is used by SMEs, treasury of large corporate including importers and exporters, banks, institutions and individuals involved in forex transactions, among others.
