Options Futures
Options contracts are instruments that give the holder of the instrument the right, not the obligation, to buy or sell the underlying asset at a predetermined price. There are two main types of options - a "call" option or a "put" option:

A call option gives the owner the right to buy the underlying asset at a given price (also called "Strike price"), whereas the seller has only the obligation and not the right (for example; you would buy a call option in case you believe the underlying futures price will move higher. Let us say that you expect steel futures to move higher, you will want to buy a steel call option).

A put option gives the owner the right to sell the underlying asset at a given price and the seller has the obligation to buy (for example; you would buy a put option if you believe the underlying futures price will move lower. For example, if you expect silver futures to move lower, you will want to buy a silver put option)

DGCX offers a standardised US Dollar denominated Option contract on Gold Futures and Option contract on Indian Rupee Futures as of September 26, 2011.contract on Indian Rupee Futures as of September 26, 2011.

OPTIONS ON GOLD FUTURES CONTRACT SPECIFICATION
Trading
Trading Symbol DGO
Contract Size One DGCX Gold Futures contract
Price Quotation US Dollars and cents per fine ounce
Tick Size US$ 0.10 per troy ounce
Maximum Daily Price Fluctuation No Daily Limit
Delivery Months The nearest three contract months (February, April, June, August, October and December) are available at all times
The options are American-style and can be exercised at any time up to expiration. On the first day of trading for any options contract month, there will be a minimum of 7 strike prices each for puts and calls
Last Trading Day Last trading day for gold futures options are the tenth business day prior to the start of tender period of the underlying Gold futures contract
If the last trading day falls on a Friday or an Exchange holiday, last trading day occurs on the previous business day
New Contract Listing Business day immediately following the last trading day
Exercise of Options On the last trading day, all in-the-money options are exercised automatically against Settlement Price, however, should a member choose not to exercise an in-the-money option, the member is required to notify the Exchange latest by 23:45 hrs (15 minutes after trading ceases)
All out-of-the-money options automatically expire worthless and they can not be exercised
Strike Prices For each option contract, the strike prices are at increments of US$10.00
Position Limit Initially, same as specified for Gold Futures contract
Margin Requirement Buyer pays full premium, while the seller is margined on the SPAN basis
Trading Hours 08:30 - 23:30 Hours Dubai time (GMT+4)
Trading Days Monday through to Friday
Option Settlement Premium
1. For traded contracts, The Exchange shall determine the Option Settlement Premium based on following order:
  • Value Weighted Average Price (VWAP) of trades executed in last 10 minutes for the trading day provided there were at least 15 trades executed during the last 10 minutes
  • VWAP of last 15 trades executed during the day provided 15 trades are executed
  • The Options Settlement Premium as declared by a Price Committee consisting of Exchange / Clearing Corporation officials 2.For contracts not traded on a given trading day, Options Settlement Premium will be determined based on theoretical prices