NSE to launch options contracts on underlying WTI crude oil and natural gas futures on October 9, 2023

Starting on October 9, 2023, the exchange will introduce options contracts for November, December, and January with respect to WTI crude oil, alongside November and December contracts for natural ga

The National Stock Exchange (NSE) has announced its decision to expedite the launch of options contracts based on underlying WTI crude oil and natural gas futures in the commodity derivatives segment. Originally slated for October 16, 2023, this launch will now take place on October 9, 2023.

WTI serves as the fundamental commodity for the New York Mercantile Exchange's (NYMEX) oil futures contract, and it's worth noting that crude oil derivatives, both Brent and WTI, are among the most actively traded products within the commodity derivatives arena.

Starting on October 9, 2023, the exchange will introduce options contracts for November, December, and January with respect to WTI crude oil, alongside November and December contracts for natural gas. Trading hours for these contracts will span Monday through Friday, from 9 am to 11.30 pm or 11.55 pm, depending on US daylight saving time.

Individual clients seeking to participate in WTI contracts will face a maximum allowable open position of 9,60,000 barrels or 5 per cent of the market-wide open position, whichever is greater. For collective positions managed by a member on behalf of all clients, the limit stands at 96,00,000 barrels or 20 per cent of the market-wide open position.

In the case of natural gas, individual clients will have a limit of 120,00,000 MMBtu or 5 per cent of the market-wide open position. Similarly, for collective positions handled by a member on behalf of all clients, the limit is 12,00,00,000 MMBtu or 20 percent of the market-wide open position.

This introduction of options on futures contracts represents a significant addition to NSE's product portfolio within the broader commodity segment. These contracts are tailored to offer market participants a more efficient means of managing their commodity-related risk, as previously articulated by the NSE.