Local banks closer to commodities trading
India's Multi Commodity Exchange (MCX) launched the
country's first crude oil futures contracts last week (see
FO Week Vol 10 No 5).
However, market participants questioned the logic behind the
contracts' mirroring of their US equivalents. Sunny Arora,
co-founder of Mumbai-based proprietary trading and broking firm
Jaypee Capital, told FO Week that the contract gives
Indian companies the ability to hedge themselves, but pointed
out that the hedge would not be perfect as India uses different
grades of oil to the US standard.
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