What are the contract specifications for natural gas trading on MCX?
Natural gas trading on MCX has specific contract specifications that traders need to be aware of. In this blog post, we will discuss the key contract specifications for natural gas trading on MCX and how they affect trading decisions.
Contract Size and Trading Unit
The contract size for natural gas trading on MCX is 1250 mmBtu (metric million British thermal units). This means that each contract represents a quantity of 1250 mmBtu of natural gas. The trading unit for natural gas contracts is 1 mmBtu.
Price Quote and Tick Size
The price of natural gas contracts on MCX is quoted in rupees per mmBtu. The tick size, which refers to the minimum price movement of a contract, is 0.05 rupees per mmBtu. This means that the price can change in increments of 0.05 rupees per mmBtu.
Delivery and Expiry
Delivery for natural gas contracts on MCX is cash-settled, which means that physical delivery of natural gas is not required. The contracts expire on the last calendar day of the contract expiry month.
Margins and Position Limits
Margin requirements are an important consideration for traders. The initial margin and extreme loss margin for natural gas contracts on MCX are set by the exchange. It is crucial for traders to maintain sufficient margins to cover their positions.
The exchange also imposes position limits on natural gas contracts to prevent excessive speculation. The position limits set a maximum number of contracts that a trader or entity can hold at any given time.
Trading Hours
Trading hours for natural gas contracts on MCX are specified by the exchange. Typically, the trading hours are from Monday to Friday, starting from 10:00 AM and ending at 11:30 PM.
Conclusion
Understanding the contract specifications for natural gas trading on MCX is crucial for traders. By knowing the contract size, price quote, tick size, delivery and expiry details, margin requirements, position limits, and trading hours, traders can make informed decisions and manage their natural gas trades effectively.
By Astrobulls research pvt ltd