What is the underlying asset for commodity options in India?

Spot price of the commodity Commodity futures Equity index Foreign exchange rate

Which pricing model is used to calculate premiums for commodity options?

Black-Scholes model Binomial model Monte Carlo simulation Black 76 model

What is the exercise style likely to be for commodity options?

American European Bermudan Asian

How many strikes are expected to be available for a commodity option, considering one 'At the money strike' (ATM)?

15 21 31 41

What new terminology is introduced in commodity options regarding option moneyness?

In the Money (ITM) Out of the Money (OTM) Close to Money (CTM) Deep in the Money (DITM)

What action is required for 'Close to Money' (CTM) option holders upon expiry?

No action required Automatic exercise Explicit instruction for devolvement Contrary instruction to prevent exercise

What happens to an 'In the Money' (ITM) option, excluding CTM, upon expiry?

Becomes worthless Automatic settlement Requires explicit instruction for exercise Converts to a cash position

What is the purpose of 'Devolvement Margin' in commodity options?

To cover potential losses from option writing To ensure sufficient funds for futures contract conversion To pay for the option premium To offset the risk-free rate

When will the 'Devolvement Margin' be assigned by exchanges?

At the time of option purchase A day before the option expiry On the day of option expiry Few days before the option expiry based on a 'What if scenario'

What happens to a long call option position upon devolvement?

Converts to a short futures position Converts to a long futures position Becomes worthless Remains unchanged