Comment on Physical delivery of stock F&O & their risksĀ
WHY CANT TWO PRODUCTS BE LAUNCHED ONE WHICH IS CASH SETTLED AND ONE WHICH IS DELIVERY SETTLED?
THE AUTHORITIES WILL REALISE THE FOLLY OF HAVING COMPULSORY DELIVERY AS LIQUIDITY IN SUCH OPTIONS WILL BE LESS THAN THE CASH SETTLED OPTIONS.
AS THIS PERMITS BOTH TYPE OF MARKET AVAILABLE TO A TRADER AND A HEDGER.
IT ALSO ELIMINATES RISK TO THE ONE WHO DOESNOT WANT TO TAKE DELIVERY RISK AND IS JUST A SIMPLE TRADER