NISM Series XVI - Commodity Derivatives Exam Notes

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  • where C is Call Premium, P is Put Premium, S is Underlying Price and K is Strike Price
  • Commodity options in India devolve into Commodity Futures. Buyers of commodity options would get a right to have a position in underlying commodity futures rather than getting a right to outrightly buy/sell the actual commodity on expiry. So, the underlying for a commodity options contract is a commodity futures contract of a specified month traded on the corresponding exchange.
  • Long call position shall devolve into long position in the underlying futures contract
  • Long put position shall devolve into short position in the underlying futures contract
  • Short call position shall devolve into short position in the underlying futures contract
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NISM Commodity Derivatives

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