The nation’s largest commodity exchange, the Multi-Commodity Exchange (MCX), will launch mini-contracts for natural gas futures on Tuesday.
The contract is cash settled based on the New York Mercantile Exchange.
First, two contracts will become available for trading, expiring in April and May. Going forward, contracts of up to three months will be available for trading, he said, MCX.
“Market participants should be aware that position limits are calculated taking into account open positions in all variants of tradable natural gas futures contracts,” the exchange said.
The trading unit is 250 MMBtu and the minimum order size is 60,000 MMBtu.
The quote base is Rs/MMBtu and the tick size is 10 pies.
The exchange implements a narrower price slab of 4%. Each time a narrower slab is broken, a maximum of 6% relaxation is allowed without a trading cooling period.
If the 6% price limit per day is also breached, the price limit will be raised to 9% after a 15-minute cooling-off period.
If price volatility in international markets exceeds the maximum daily price limit of 9%, it could be eased further in steps of 3%, he added.
An individual client’s open position will be the higher of 60 lakh MMBtu or 5% of the overall market open position for all natural gas contracts combined.
According to MCX, for all customers combined members, all natural gas contracts combined will be 600 million MMBtu or 20% of the total market open position, whichever is higher.
