Author: Paul Ploumis
03 Jun 2015 Last updated at 08:17:02 GMT
ABU DHABI (Scrap Monster): The Dubai Gold and Commodities Exchange (DGCX) has announced diversification of its existing product portfolio with launch of four new products. The exchange plans to launch three new Futures contracts- India Gold Quanto Futures, Indian Rupee Quanto Futures and Mini Dubai Polypropylene Futures in addition to upsizing the existing Plastic Futures. The exchange communication states that all the new contracts will go live on June 5th, 2015.
According to Gaurang Desai, Interim CEO of DGCX, the new set of contracts is being launched to meet the ever-growing needs of its member community. The Quanto contracts are expected to offer immunity to market participants from extreme exchange rate fluctuations. Furthermore, it enables participants to gain access to the Indian gold and rupee market without being exposed to variations in the USD-INR exchange rate. Basically, quanto derivatives are denominated in one currency, but the instrument itself could be settled in another currency at some fixed rate.
The India Gold Quanto Futures contract will trade before and after the closure of the Indian markets, thereby providing gold trading opportunities for offshore traders. The contract, denominated in US dollars, will be cash settled.
As per exchange data, DGCX’s average trade value has already exceeded $1.3 billion so far this year, making it the largest offshore Indian Rupee futures market. The introduction of the Indian Rupee Quanto Futures contract will help the exchange to further enhance its market share. The DGCX Rupee Quanto contract will be cash settled with a multiplier of 100 to the value of 1 US Dollar in Indian Rupee terms.
DGCX had recently announced the launch of Market Watch- a content rich micro-website that provides detailed analysis of trading data and price movements of its products