Gold mini options

26 Sep 2022|

2 min read |

by ICICI Securities Team

Options in the commodity derivatives market in India are another trading instruments for commodity traders. Against the Futures trading, Options trading is much easier and cost advantageous for retail traders. The first Options contract was launched in Gold and the exchange took a series of measures to make this product more lucrative for the participants. The response of the market participants was bleak at the beginning, but the scenario changed over the period as the market participants started understanding the advantages of Options trading. After the success of Gold Options, other Commodity Options were introduced and a recent entry to the kitty is Options on Gold Mini contracts.

Gold is one of the most widely traded commodities on commodity exchanges around the world. Because of its ability to store value, it is regarded as an inflation hedge as well as a safe-haven asset. During times of economic turmoil, when other asset classes such as equities, bonds, and currencies are underperforming, investors turn to gold to maximise their returns. Gold has a historically and statistically proven inverse relationship with stocks, bonds, and currencies. Gold is primarily supplied by two sources. The first is mining, and the second is recycled gold.

Besides jewellery, gold is being used as an investment, by central banks, and in technological applications such as medicine and dentistry.

The Multi Commodity Exchange of India is offering futures trading in four variants of gold contract and those are Gold 1 Kg, Gold Mini of 100 Grams, Gold Guinea of 8 Grams and Gold Petals of 1 gram. The options on gold 1 Kg futures contract was launched on 17^th October 2017 and on Gold Mini was launched on 25^th April 2022.

Gold options trading in India

Amongst the derivative products, Options are the best for retail customers as this product gives them an advantage over Futures contracts. Options provide the right but not the obligation to complete the transaction upon contract expiration by simply paying a premium to the counterparty. Futures contracts, on the other hand, are slightly larger and attract a higher margin when compared to Options. The development of various strategies in all types of market movement, such as bullish, bearish, and neutral, is an important aspect of Options contracts to comprehend.

Table: Options contract specification

Parameters	Crude Oil
UNDERLYING	MCX Gold Mini Futures
Expiry Day (Last Trading Day)	3 business days before expiry of the underlying futures contract
Underlying Quotation / Base Value	Rs. / 10 Grams
Strikes	25 ITM - 1 NTM - 25 OTM
Strike Price Intervals	Rs. 100
Tick Size (Minimum Price Movement)	Rs. 0.50
Settlement	On the expiry of the options contract, the open position shall devolve into the underlying futures position as follows: - long call position shall devolve into a long position in the underlying futures contract long put position shall devolve into a short position in the underlying futures contract short call position shall devolve into a short position in the underlying futures contract short put position shall devolve into a long position in the underlying futures contract All such devolved futures positions shall be opened at the strike price of the exercised options

Source; Multi Commodity Exchange of India

Summary

Gold is one of the most traded commodities in India and the only commodity with multiple variants that cater to different types of customers, including jewellers and consumers. Gold is considered to be the most auspicious during festival and marriage season, as well as a source of prestige for many Indians. Despite these factors, the Indian gold market follows the US market for pricing, so economic and political developments in the US, as well as asset class movement, will have an impact on gold prices.

There are various ways to invest in gold namely physical gold, Futures and Options, gold ETFs and sovereign gold bonds. All these types of investment cater to different set of target market. When it comes to derivatives trading, Options of Gold and Gold Mini are most attractive to retail traders.

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-69997051, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

Did you enjoy this article?

124 people liked this article. Share Feedback

Recent Articles

View all

HOW TO TRADE GOLD IN COMMODITY DERIVATIVES MARKET IN INDIA

Gold is one of the world's most actively traded precious metals and is widely used for investment, jewellery and industrial applications. It is also considered a safe-haven asset during periods of economic or market uncertainty.

318 views

3 minutes

07 Sep 2026

Global Commodity Exchanges: NYMEX, COMEX & LME and Their Link With MCX

In this article, we’ll explore the three exchanges that matter most: NYMEX, COMEX, and the London Metal Exchange (LME) and their link with MCX.

491 views

1 minutes

31 Aug 2026

Mainboard IPO: Meaning, Eligibility and Key Benefits

Explore the meaning of a mainboard IPO, SEBI's eligibility routes, NSE and BSE listing rules, key benefits, and the checks investors should make before applying.

1 k views

4 minutes

13 Aug 2026