Investing in gold? Know your 'options' before taking the plunge

It will be a cheaper way to bet on gold price movement as compared to futures

For the first time in the country, those investing in gold will be able to use options contract for gold. The Multi Commodity Exchange (MCX) will launch gold option contracts on Dhanteras, October 17, with 1 kg gold futures as the underlying asset.

“Those who already deal in gold futures on commodity exchanges have been looking forward to this development. Options work out to be cheaper than futures for trading,” says Ajay Kedia, director, Kedia Commodities. He points out that the premium required for options would be much lower than the margins needed for futures. Even the brokerage fees is lower.